In a new report on innovative firms and institutions, the chemical industry ranks as the second most innovative sector after makers of semiconductors and electronic components.
In all, 13 chemical companies earned a spot on Thomson Reuters’ 2011 Top 100 Global Innovators list: Arkema, BASF, Cheil Industries, Chevron USA, Dow Chemical, DuPont, Nitto Denko, Rhodia (now part of Solvay), Rohm and Haas (now part of Dow), Shin-Etsu Chemical, 3M, UOP, and Wacker Chemie. Thomson Reuters is an information services provider.
In addition, of the 100 organizations in this new annual survey, which does not include rankings, U.S.-based firms were the clear patent leaders. Forty U.S. companies made the list, compared with 27 from Japan and 11 from France.
“Innovation is the cornerstone of economic development and growth,” says Bob Stembridge, an analyst with Thomson Reuters IP Solutions. As a group, the top 100 added 400,000 jobs in 2010, Thomson Reuters analysts found. That increase was 3% more than occurred at these firms in 2009 and greater than the percent rise in jobs created by companies listed on the Standard & Poor’s 500 stock index. The increase in R&D spending by the top 100 last year was more than double that of their S&P 500 counterparts.
Stembridge says he is not surprised to see the chemical industry rank so highly. “Look at the companies on the list,” he says. Companies such as Dow and BASF are respected as highly innovative, he points out.
William F. Banholzer, Dow’s chief technology officer, says Dow’s inclusion on the list validates the firm’s R&D strategy. “This important recognition from Thomson Reuters adds to our stringent R&D pipeline management system, which helps us broadly measure the importance and influence of our innovations,” he says.
Dow, which spent about $1.7 billion on R&D in 2010, says its innovation engine has generated more than $400 million in earnings since 2009, when the company acquired Rohm and Haas. It expects those earnings to reach $1 billion by 2012 and $2 billion by 2015.
Frederick J. Palensky, 3M’s chief technology officer, says the Thomson Reuters report highlights the value and importance of innovation and that 3M’s inclusion in it “is a good recruiting tool for us.” In 2010, 3M spent $1.4 billion on R&D.
Only two pharmaceutical companies, Bayer and Bristol-Myers Squibb, made the list. Stembridge suggests that an ebbing in the new drug pipeline and a shift to small biotech firms as the drug industry’s innovation source are possible reasons so few major pharma firms made the list.
Criteria for the top 100 were stringent. “There’s more to innovation than just sheer numbers,” Stembridge explains.
To create the list, Thomson started with firms that were granted 100 or more patents between 2008 and 2010. It then applied other measures, including whether firms patented their latest advances with U.S., Chinese, Japanese, or European authorities and whether patents were cited by other companies when patenting their inventions.
Interestingly, no Chinese firm was on the list. Although Chinese companies are poised to file more patents this year than firms in other countries, most Chinese companies patent their inventions only in China. Fewer than 6% of patents awarded in China are filed in other countries, Stembridge observes.
In addition, very few Chinese patents are cited in patents awarded to others. Thomson Reuters puts a weight of 50% on influence when calculating the importance of a patent. “Although China is leading the world in patent volume,” the report says, “quantity does not equate to influence and quality.”
Perhaps China is too recent a player in developing and applying for patents at this point, Stembridge says. Or perhaps most Chinese firms have chosen for now to focus on domestic markets. In any case, he expects China will be a more significant innovator in years to come.