August 21, 2019
We are entering a new era of innovation in the chemicals industry. What are the indicators?
1. Market demand for new categories of products
2. New technologies like big data, artificial intelligence and machine learning
Chemicals companies are starting to embrace digital technologies. This new era of innovation is enabled by a concurrent advent of numerous hardware and software technologies including artificial intelligence, machine learning, and quantum computing. These technologies will enable chemists to innovate like never before. In fact, some of the world’s bleeding edge innovators such as AWS, Beyond Meat, and SpaceX have been leveraging these tools to gain an edge for years.
3. New entrant competitors
We are seeing new entrants to the chemicals market like Carbon 3D in 3D printing. These non-traditional competitors are aggressively pursuing advances in chemistry and leveraging the best technology available while armed with funding from venture capitalists looking for equity upside. They are innovating quickly with unique and highly performant materials. While the end market size of their products may be hard to calculate and/or growing daily, they will have few, if any, direct substitutes and, therefore, relatively inelastic demand for their high-margin products.
Taken together, these factors - demand for entirely new product categories, new digital technologies, and new competitors - set the stage for a new era of competition based on innovation where being first to market will reap huge rewards. Scale and global presence will matter less than the ability to innovate as customers place a higher premium on the chemistry itself.
Winners in the new era will be those who can innovate quickly and get new products to market. This requires an investment in digital transformation strategies and technologies. Future market winners will use digital technologies to accelerate innovation processes and get new products to market faster. Customers will choose the companies that can help them advance their products with new chemistry. Companies that can’t innovate and commercialize as fast will be left behind in this new era.
We started Alchemy to help specialty chemicals companies thrive in this new era of innovation. Our customers are already accelerating their innovation process and are well positioned to thrive as the market evolves. Please contact us if you’d like to learn more.