The chemical industry has been on an upswing since its decline in 2016, with companies investing more in R&D in 2017. Collectively, 18 leading US and European chemical companies increased R&D spending in 2017 by 0.6% to $9.9 billion. Although minimal, the increase is a welcome change after the 5.3% drop in R&D spending in 2016. Although chemical companies’ R&D spending has risen and fallen over the past 10 years, it has largely remained the same; R&D spending in 2017 was essentially the same as it was in 2007, after adjusting for inflation.

In 2017, capital spending fell 5.8% for the 18 leading chemical companies, which is an improvement from the 15.3% drop in capital spending in 2016. Combined spending on R&D and capital projects for this group of companies in 2017 reached $25.9 billion.

R&D budgets accounted for 36% of future-oriented spending in 2017. Companies such as DowDuPont, AkzoNobel and BASF have also been forming business incubators as an alternative to investing in startups. This is also contributing to the companies’ R&D and innovation efforts, as it allows the companies to align themselves with possible disruptive technologies.

In 2017, the largest increase in R&D spending was by W.R. Grace, which increased it 10.2%, while the largest drop in R&D spending was by Air Products, for which it plummeted 56.1%.

Source: Chemical & Engineering News