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2015 Chemical Industry Outlook
Interview with Duane Dickson
“This moment in time provides an opportunity for the chemical industry to play an important role in bringing about solutions that create significant environmental improvements and positive societal change,” says Duane Dickson, Principal and US Chemicals and Specialty Materials Sector Leader, Deloitte Consulting LLP. In the following interview, Dickson shares his thoughts on growth opportunities and industry trends for chemical companies to be mindful of in 2015.
The face of the chemical industry continues to evolve, and 2015 could mark a time of accelerated transformation. This industry transformation will be driven by many factors, including global megatrends, digital discovery, biotechnology, manufacturing and materials innovations, and trans-ecosystem collaborations.
Where do you see the opportunities for growth in your sector?
Global megatrends continue to influence the chemical industry and provide potential growth opportunities for the sector. Three megatrends relevant to the industry include environmental sustainability, the rising demand for energy and alternative energy sources, and increased consumer health awareness. Additionally, the continued trend of urbanization occurring in developed and undeveloped countries
Biotechnology solutions can provide chemical companies the opportunity to assist in addressing the commensurate challenges often brought about by these megatrends. Specifically, biofuels offer an attractive alternative to fossil fuels, which contribute to climate change and the depletion of scarce resources. Biotechnology also offers an opportunity to create new products from waste — particularly agricultural waste -- also known as
The advancements in agrochemicals pertaining to more resilient crops and effective utilization of farmland should help alleviate some of the challenges being created by urban sprawl. Urban sprawl not only concentrates the demand for resources, but also compromises the amount of land available for farming around the city due to the increase in impervious surfaces such as roads, roofs, and parking lots. This decrease in nearby arable land has a profound impact on agriculture due to changes in natural water flow patterns and decreased groundwater replenishment.
Another opportunity for companies is to take a holistic and strategic approach to integrating advanced manufacturing technologies into their strategies, business and operating models, and processes. Advanced manufacturing technologies can enable a differentiated competitive advantage and the ability to position a company for future growth. Advanced manufacturing sits at the intersection of physical (materials and fabrication) and digital (software and hardware) technologies. Companies that are able to integrate advanced manufacturing into their core capabilities will likely experience an accelerated rate of innovation and growth.
What should businesses be mindful of as they plan for growth?
The pace of new materials discovery has slowed down over the past several years. Consequently, this reduced pace has caused many industry offerings to experience increased commoditization and, in some instances, has limited a company’s ability to capture value in the area of new material discovery. The need for functional solutions to meet the demand of global megatrends can be driven by systems-level engineering, balancing the inventive combination of existing materials with the application of advanced fabrication technologies.
With an Advance Material Systems (AMS) approach, companies can examine a series of emerging advanced manufacturing technologies to help maximize their market impact potential. As companies plan for growth, an AMS approach can identify the right research opportunities for new solutions, a process for designing these solutions, and ways to capture as much value as possible.
What is the next big thing? What markets do you see emerging in the sector?
The digital age is having a profound impact on the chemical sector.
We are only just beginning to get a glimpse of how the rapid acceleration of digital technologies within the chemical industry could disrupt traditional business models and operations.
Recent digital technology innovations include advanced supercomputing and processing technologies, advanced analytics, data visualization, artificial intelligence, and machine learning.
These technologies have already started to transform the industry in ways many of us are just beginning to understand. For instance, imagine a database complete with the vast array of known materials, their properties, and functional uses. This could equip researchers to quickly and affordably identify materials or material combinations (“material genomics”) that address specific functional needs. These digital technology advances should also potentially help to bring about a reversal of the materials discovery pace–not to mention a significant reduction in the cost of this process.
Digital technology can potentially also serve as the enabler for better systems and solutions for communication and collaboration. Clear communication and collaboration within supply chains and across industries is an imperative business objective. A digital solution to address this objective may just be the new approach that could differentiate a company and enable them to stand out as a market leader.
We see these various advancements as providing potential opportunities for our industry to help bring about positive environmental and societal change in the US and globally. Moreover, by embracing these advancements, astute chemical companies can be well positioned to grow, better collaborate, and stay relevant in the coming year and beyond.