Chemistry 4.0

Article

Chemistry 4.0

Growth through Innovation in a Changing World

Chemistry 4.0 marks the fourth stage of development in the 150-year-old sector, a stage which will be shaped throughout the next decade by digitalisation, a circular economy and sustainability. For this purpose, the study "Chemistry 4.0 - Growth through Innovation in a Changing World" was conducted by the German Chemical Industry Association (VCI), with support from Deloitte. Through the use of digital mass data in the future, our sector can extend its role in the value chain and develop new business models.

Digitalizing the Chemical Industry

The chemicals and pharma sector can extend its role in the value chain and develop new business models through the use of digital mass data in the future. Many companies have already automated their systems and use digital processes at management level. However, the use of digital mass data, according to the study, facilitates not only increased efficiency in production, for example through anticipatory maintenance using sensors, but it also leads to more innovation, such as virtual reality and advanced simulations for research and product development. "Connecting digital services with products from the chemical and pharmaceutical industries is the key to additional value creation," VCI President Kurt Bock emphasises.

Chemistry 4.0

Circular economy: Chemical options for more resource efficiency

Closed cycles of materials are becoming more important in Europe. Despite recycling measures, in the EU only 13 percent of all used materials are currently fed back into the cycle. As a rule, business models in the circular economy will comprise of networks of partners from different sectors, Deloitte states in the study. Digitalisation will make cooperation across businesses in such economic networks easier. Companies, who want to be successful in this environment, will need to combine technical skills with networking skills.

“Digitization and Circularity: It takes the two to tango on the floor of Chemistry 4.0.”

Willem Vaessen

Medium-sized companies have good opportunities

The analysis conducted by Deloitte was supplemented by a survey of medium-sized chemical-pharmaceutical companies. In total, 124 medium-sized companies from all sectors of the chemical-pharmaceutical industry took part. Henrik Follmann, Chairman of the Committee for Independent Entrepreneurs in VCI reports that, "The companies in the survey are convinced that digitalisation and the circular economy are already opening up new opportunities for medium-sized companies." There are good opportunities for chemical companies to take on a central role as "orchestrators" in these networks, thanks to their experience with complex production processes.

Medium-sized companies want to use these opportunities primarily to innovate. Two thirds of the companies in the survey have developed a digitalisation strategy or are currently working on one. The survey also brought up particular obstacles in the area of digitalisation. "It is especially necessary to promote the expansion of quick broadband in rural areas. Furthermore, digital education for all age groups must be improved," according to Follmann.

Transformation needs industrial policy momentum

The transition to Chemistry 4.0 presents a multitude of challenges for the sector, but the paradigm shift also needs support through industrial policy measures. "The transition will work best in a political and regulatory environment, which promotes new products and investments. The industrial policy of the next federal government must be one thing above all else: good innovation policy," the VCI President explains.

In order to further develop digitalisation, the study lays down three policy priorities:

  • the public sector has to expand technical infrastructure and promote digital education, as well as improve data security and review data protection regulations. 
  • A target of 2025, at the latest, has been declared for the necessary quick broadband infrastructure for telecommunication to be established. At the same time, the development of a high-performance security network in Germany and Europe between authorities, companies and research must be set up. 
  • The scale for regulatory framework in terms of data protection orients itself around empowered citizens.

Recommendations

According to the recommendations in the study, to make progress in the circular economy, future policies should undergo an innovation check, so that they do not obstruct new business models. To stimulate more investment, state-financed start-up funding for innovative projects and the simplification of access to venture capital, as well as funding of private-public partnerships in the form of pilot projects, are recommended. Policy should also promote society's fundamental understanding of a circular economy. This includes, for example, creating transparency on targets and costs.

More information about the Chemistry 4.0 study?

Do you want to know more about the Chemistry 4.0 study in corporation with VCI? Please contact Willem Vaessen at +31 (0)88 2883496.

Vond u dit nuttig?