60 R&DMagazine December 2013 www.rdmag.com
The chemicals and advanced materials industry consists of large
multinational companies serving nearly every other market, key
single market material and application development firms and an
array of smaller, niche chemical and material companies.
Research plays a unique role within this industry, driven by production costs (and ultimately the cost of the material to the market) perhaps more than any other industry examined. R&D operations are
managed as a cost component like other operations within the firms,
but provide the intellectual property enabling new, higher value, and
hence higher margin materials and products.
The forecast for R&D growth in the chemical and advanced materials industry reflects the improving global economy and the key
markets the industry serves. U.S. R&D spending in chemicals and
advanced materials is forecast to grow by 3.6% to reach $12 billion
in 2014. Overall global R&D is forecast to grow at a slightly higher
4.7% rate to $45 billion in 2014.
Trends and Forecast
The chemicals and advanced materials industry includes traditional
chemical/polymer firms, all of which continue to push the envelope
in feedstock and material development, as well as to niche material companies both large and small that focus research activities
on unique material properties and the development of applications
to exploit these properties. R&D in this industry also works to
improve process efficiency and reduce the costs of the large scale
The increasingly global nature of materials supply and research
continues to drive the rapid growth of new materials capabilities and
processing methodologies, driving down costs while greatly enhancing chemical and physical properties and production. This is driving
the integration of both chemical and biologically based materials
into new medical, industrial and ecological applications. For U.S. advanced materials firms, the global nature of the industry is a double-edged sword. More than a third (35%) of our industry respondents
expect to increase their level of foreign collaboration over the next
2014 GLOBAL R&D FUNDING FORECAST
year, yet nearly half (45%) feel that the U.S. is at a moderate to significant risk of losing its leadership position in key material areas.
U.S. industry has taken advantage of reduced feedstock costs due to
significant increases in the domestic production of natural gas via
shale gas deposits. These deposits stabilize the cost of key feedstocks, so U.S. chemical and material companies are feeling more
confident and are seeking to bring new, higher value added advanced
materials and formulations to market.
The forecast for R&D activities within the chemical and advanced
materials industry reflects improvements in the U.S. and global economy, and the role this industry plays in support of other demand-driven industries. We forecast U.S. chemical and advanced materials
R&D to increase by 3.6% in 2014, reaching $12.2 billion. Worldwide
R&D is expected to increase by 4.7% to $45.3 billion.
Factors Driving R&D Investment
Like most industries, resources to fund R&D activities are strongly
connected to industry bottom lines. As the markets for chemical and
advanced materials products have rebounded post-recession, investments in industry R&D also have increased. These investments
Chemicals & Advanced Mat’ls Industry R&D Spending
43.0 43. 3 45. 3
10. 7 11. 5 11. 8 12. 2 $10
2011 2012 2013 2014