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R&D Investments Shift East, Challenging Traditional Research Centers

Posted on June 22nd, 2017 by in Chemical R&D


The chemical industry has served as a key driver of China’s “turbo-charged” GDP growth, which has remained above 7 percent since 2011. Meanwhile, R&D spending across Asia continues to increase, accounting for more than 32 percent of global spending on science. China alone accounts  for a full 20 percent of worldwide research spend.

Meanwhile, Asian chemical companies increasingly seek partnerships with European organizations, while Chinese power players attempt takeovers of large Western chemical firms – even as American giants Dow and DuPont conduct mass layoffs and slash research budgets.

As more global R&D investments continue to shift east, European and American chemical companies face increasing pressure to keep up. This worldwide shift emphasizes the importance of collaborative research and data sharing – both in the West and around the world – in the industry’s ongoing progress toward a stable, sustainable future.

Investments and partnerships

The primary force pushing R&D eastward is simple economics: Asian companies have become the primary sources of sales for a growing number of European chemical companies. The German firm Wacker, for example, says that Asia now accounts for 40 percent of its annual sales. And while Wacker – like many other firms – has fought to retain its local staff, nine of its 21 technical centers are now located in various Asian countries, while three of its R&D hubs are based in China.

Wacker is far from alone in its increasing dependence on Asian collaboration. German firm Evonik Industries recently formed a partnership with India’s Institute of Chemical Technology, and the Danish catalyst supplier Haldor Topsøe has set up its first R&D center on Chinese soil. China National Chemical Corp. appears to be on track for a $43 billion takeover of Swiss seed and pesticide developer Syngenta AG, and many Israeli chemical companies are actively seeking partnerships with firms in India; while South Korean labs seek R&D collaborators in the West. These are just a few of a profusion of examples from the past five years – and the list is growing.

However, immediate profit is not the only motive for Asian and European firms who aim to coordinate their work.

Shifts in spending

Throughout the decade between 2003 and 2013, China increased its R&D investments by an average rate of 19.5 percent every year. Not only did this rate far exceed that of the U.S. over the same time period – many American chemical firms have, in fact, significantly reduced their R&D budgets and staff in recent years. Only two of the world’s top 10 chemical R&D spenders are now U.S.-based.

Just like the factors that have led to increased Asian investment, many of the causes driving R&D reductions have been rooted in economics. The American chemical industry, in particular, has grown increasingly competitive over the past five years. Companies have faced intensifying pressure from investors to cut open-ended research funding and focus on projects with clear potential for profit.

This means a growing body of widely useful, freely available chemical data is coming not from the U.S., but from Asian research centers – many of which have, so far, been eager to share their work with collaborators around the globe.

The need for collaboration

Teams seeking to develop, test and market new compounds can often spend months – or even years – seeking significant correlations that enable them to proceed to the next phase of research. The crucial insight they need may not come from their own lab, or even the same hemisphere. A growing number of teams are reporting that they’ve avoided or escaped dead ends by discovering research reported in Asian journals, to which their firms may not even subscribe.

This is why forward-thinking R&D teams need access to a powerful target search platform that enables them to target investigations based on the specifics of their own work – and obtain the insights they need in order to move forward.

 Elsevier Recommends:

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All opinions shared in this post are the author’s own.

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