Buying into Open Innovation

Investing in innovation today can help producers address the challenges of tomorrow

Dr. Abdulwahab Al-Sadoun is the Secretary General of the Gulf Petrochemicals and Chemicals Association (GPCA).
Dr. Abdulwahab Al-Sadoun is the Secretary General of the Gulf Petrochemicals and Chemicals Association (GPCA).

In challenging times such as these, petrochemical producers can be tempted to cut back on the expenses devoted to scientific and technological work that underlie new products, processes and services. But take note: producers that cut R&D budget too much are in danger of saving today to the detriment of growth tomorrow.

To improve competitiveness, it is important to take a long term approach and realise that the innovation we create, the R&D we invest in, will take a long time to be fruitful. Regional producers need to formulate a clear innovation strategy that centers on a long term view of the company’s objectives, creation of Intellectual Property and value creation, all of which require long term investment in R&D.

Open Innovation is based on two insights: it assumes that most smart and capable people who should work for your company, don’t; and that most problems a company is battling with have been solved (at least partially) in a different context. In a way, Open Innovation turns the traditional R&D concept on its head: instead of working in a closed lab, the research lab becomes the world, enabling companies to access those external solutions, experiences and competencies relevant for delivering their innovation agenda.

For petrochemical producers, the benefits of Open Innovation include more than having access to external ideas and capabilities. Open Innovation also allows time-to-market and cost savings, sharing risk and avoids the creation of a tunnel vision arising from functional expertise. Stakeholders involved in the Open Innovation process in the chemical industry are obviously customers and academia, but often also feedstock suppliers, machine manufacturers, R&D consultants and contractors, competitors and even the internal workforce that is not directly involved in R&D activities.

Throughout the past decade, major petrochemical producers in the GCC such as SABIC, Tasnee, Sipchem and Borouge have heavily invested in creating dedicated R&D centers to drive innovation in the industry, but Open Innovation is still in its infancy in the Arabian Gulf region.

During the 3rd GPCA Research and Innovation Summit, taking place on 1-2nd of March in Dubai, we will discuss how we can move ahead and establish and Open Innovation platform for the industry in the region. Fortunately, some successful examples from our region are already there:

An outstanding Open Innovation project comes from the UAE’s Masdar, which supported the pioneering mission of the Solar Impulse II, the only airplane able to fly day and night on solar power without a drop of fuel, which began its historic journey last year in Abu Dhabi.

Open Innovation is also promoted in the region through a series of successful awards: think for example of the Open Innovation Challenge organised by the Saudi Aramco Entrepreneurship Center and GE Eco imagination, or the very successful SABIC Innovation Awards.

An interesting example of the GCC industry partnering with academia is Technovia, established in January 2015 in Dhahran’s Techno Valley by Saudi Aramco in partnership with the King Abdullah University for Science and Technology, the King Fahd University of Petroleum and Minerals, Taqnia, the technology branch of the Saudi Public Investment Fund; and RTI International, a research institute focused on improving lives through research and technical services.

The technologies developed by Technovia will be positioned competitively for external investment and funding. A good example from Kuwait is Equate’s program in Innovation on Polyethylene Product Development with the Leibniz Institute for Polymer research and Fraunhofer Institute for Chemical Technology in Europe.

The foundations have been laid. Now it is time to come together and share the risks and rewards of Open Innovation.


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Oil & Gas Middle East - September 2020

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