• Insights

Published on November 17, 2022 by Jenny Maat

Today’s chemical industry - where to from here?

It’s been a relatively fraught time for the chemical industry everywhere, especially in Europe. Aside from the obvious macro-economic and socio-political challenges of the day, new legislative frameworks such as REACH are changing how business is done.


Amidst all of this, the industry must sustain its mission to boost innovation in order to keep pace with fast-growing Asian markets.


Despite the seemingly insurmountable challenges, some new opportunities exist for the chemical industry. One large factor in grasping those opportunities will be its capacity to embrace the potential of digital technology.

Business intelligence - an ingredient for good formulations

As the pandemic complicated traditional research and development, companies that had already embraced digital were best placed to respond. Those who were already familiar with activities such as cloud based collaboration emerged from that crisis in relatively better shape.


In making digital tech deliver, a key element will be a company’s propensity to gather and share data. Formulating is one area that will benefit enormously. Storing and sharing data on formulations is comparatively new, but is set to deliver new exciting sources of business intelligence. For R&D, that means coming out of the silos to work across teams, even looking to outside companies when needed. In sectors such as paint and coatings where physical prototypes are the modus operandi, this is a new, but essential way of thinking.

Finding and reporting on new sources of value

As consumers increasingly demand more sustainable end products, chemical companies can survive and even thrive by seeking out, measuring and promoting new sources of value. By sharing progress on these items with key stakeholders, they can protect the brand and position as a leader in their industry.


These new sources of value, such as ESG targets, can be included in measurement and reporting. Digital R&D plays a role here, empowering companies to track information, while reducing the amount of trial and error, (thus chemicals used) in product research.

Using simulations to streamline research

As an industry, pharma has engaged in various digital activities for some time. This sector is experienced in running predictive simulations to optimize formulations. Data from past experiments is actively mined to build efficiencies. While some chemical companies have used these techniques, traditional differences such as smaller sample sizes often rendered them economically impractical. 


This is changing, however, as the cost of large-scale computing falls, making digital R&D a more realistic option in this space. Developments in technology such as micro or nanoelectronics have cut the cost of memory, making it easier and faster to work on large data sets.


Being able to experiment digitally builds capacity to understand formulations, while conducting less physical experiments. Scientists can make formulations work with different ingredients. Digital R&D can offer quicker insights on the efficacy of alternative chemicals in delivering stable formulations and end product properties. That offers massive potential to alleviate the supply chain and material scarcity issues of recent years.

Letting go of the silo approach

As this sector grapples with new consumer demands and a relatively unstable macro environment, it can still find new opportunities. Digital R&D is designed to help them do so. Research teams can capitalize on digital to work smarter, especially in creating formulations, which is key to helping R&D scale up quickly and drive innovation.


Now is the time for the industry to move beyond a fragmented, one-off use of technology. The capacity to work digitally can be shared across teams to encompass the entire R&D department. A new environment demands a new approach and the organizations that move first will most likely come out best, just as we saw after the pandemic.