The Chemical Industry as Driver for Innovation in Other Industries

The paper presents the results of a study carried out by the Centre for European Economic Research (ZEW) and the Lower Saxonian Institute for Economic Research (NIW) that aimed at measuring these effects, i.e. the contribution of innovations by the chemical industry to innovations in other industries. The primary objective of the study was to quantify this contribution in terms of the relative importance of the chemical industry, compared to other in-dustries and to the chemical industry's own innovation activities, in triggering other industries' innovations. Based on data from the German innovation survey, the paper arrived at the following results: - The chemical industry is the most important industry in enabling product innovations in other manufacturing sectors through providing innovative materials and technologies. Almost 18% of all inter-industrial innovation relations of this kind originate from the chemical industry. The total annual turnover by German firms with new products trig-gered by chemical innovations is nearly €3.0 bio. - The chemical industry is also an important supply-side source for process innovations. New chemical materials enable about 8 % of total cost savings in the German economy that originate from the supply of process technology or production efficiency raising com-ponents. In terms of money, the annual amount of cost savings as a result of the applica-tion of new chemical materials sums up to €1.2 bio. - The chemical industry's role as driver for product innovation in the service sector is small as is its role as client that demands innovations from its own suppliers. The results reveal the view of chemical industry as the main supplier of innovative materi-als used by other manufacturing industries to advance product innovations.

Rammer, Christian (2003), The Chemical Industry as Driver for Innovation in Other Industries, in: M. Dröscher, G. Festel, M. Jager (Eds.), Shaker Verlag, Aachen, 50-66