Innovation and Entrepreneurship in the Chemical ... - ACS Publications

Chapter 15

Innovation and Entrepreneurship in the Chemical Enterprise Downloaded by UNIV LAVAL on April 27, 2016 | http://pubs.acs.org Publication Date (Web): September 4, 2014 | doi: 10.1021/bk-2014-1169.ch015

Pat N. Confalone* Director, American Chemical Society, Confalone Consulting, LLC, 303 Centennial Circle, Wilmington, Delaware 19807-2131 *E-mail: [email protected]

The important distinction between invention and innovation is presented. The ability to innovate and create start ups, even in the face of challenging economic environments, is illustrated from an historical perspective. Translation of real innovation into job creation and the critical role of the entrepreneur in this process is discussed. The wide range of opportunities in the twenty-first century for innovation in chemistry as the enabling science addressing major global challenges is presented. The scope of the ACS Entrepreneurship Initiative and Training programs, which afford critical assistance to budding entrepreneurs, is discussed.

Two former CEOs, Bill Gates of Microsoft and Chad Holliday of DuPont, wrote in an April 23, 2010 OpEd in the Washington Post: “The core force of innovation – vision, experimentation, and wise investments – has led to thousands of breakthroughs that benefit us all. A serious commitment to innovation can be transformative.” Indeed, the well-established linkage of R&D investment and its translation to societal benefit, a vibrant economy, an improved quality of life, and job creation has been demonstrated for centuries. This chapter will focus on the two critical intervening steps between investment in R&D and the above outcomes, namely invention and innovation. Wikipedia defines invention as “a new composition, device, or process derived from a pre-existing idea, or independently conceived in which case it may be a radical breakthrough”. Albert Szent-Gyorgyi famously stated, “Discovery consists of seeing what everybody has seen and thinking what nobody has © 2014 American Chemical Society

Cheng et al.; Careers, Entrepreneurship, and Diversity: Challenges and Opportunities in the Global Chemistry Enterprise ... ACS Symposium Series; American Chemical Society: Washington, DC, 2014.

Downloaded by UNIV LAVAL on April 27, 2016 | http://pubs.acs.org Publication Date (Web): September 4, 2014 | doi: 10.1021/bk-2014-1169.ch015

thought”. However, invention although necessary is not sufficient for translation to the marketplace and the ensuing societal benefits. “Build a better mousetrap and the world will beat a path to your door”, as Ralph Waldo Emerson has been quoted, misses the key next step in the process that must follow invention – the requirement for innovation. Referring once again to Wikipedia, innovation is defined as “an idea successfully applied to bring a value proposition to the marketplace and society. It is distinguished from invention, which are ideas made manifest”. In other words invention is the conversion of cash into ideas, whereas innovation is the conversion of ideas into cash. Consider Nikola Tesla. He was an inventor and invested a lot to create his inventions, but was unable to ever monetize them. In contrast, Thomas Edison, although the holder of over one thousand patents, also drove innovation to the marketplace, amassing a fortune while bringing incredible products to the public. We all learned at an early age that Elias Howe invented the sewing machine. Today we continue to employ Singer rather than Howe sewing machines because it was Isaac Singer who commercialized this invention and built a hugely successful business. Invention may occur in the laboratory, but innovation must take place in the market. Innovation is a highly creative process that must include all business functions to be successful. An historic list of notable innovators would include Charles Goodyear [1839, vulcanization of rubber], Louis Pasteur [1862, pasteurization], George Eastman [1885, film], Charles Hall [1888, aluminum], William Hershey [1900, milk chocolate bar], William Burton [1912, catalytic cracking], and George Washington Carver [1925, peanut products]. In Disney World’s EPCOT, “The American Adventure” features a large statue of a chemist holding up a test tube gazing intensely into its contents in front of his lab bench. The work is entitled “Spirit of Innovation” (Figure 1).

Figure 1. A statue of a chemist holding a test tube outside EPCOT. Courtesy of the American Chemical Society. 164 Cheng et al.; Careers, Entrepreneurship, and Diversity: Challenges and Opportunities in the Global Chemistry Enterprise ... ACS Symposium Series; American Chemical Society: Washington, DC, 2014.


Table 1. Selected Chemical Innovations by Decade 1930-1940

poly(vinyl chloride), polyethylene, synthetic rubber, nylon, methyl methacrylate, poly(vinyl butyral), cellulose acetate, ion-exchange resins, invisible transparent glass, glass fibers, Vinyon

1940-1950

styrene-butadiene, poly(vinylidene chloride) (Saran), acrylic fibers, synthetic detergents, color photographic film, insecticides and herbicides, fluorocarbon refrigerants and propellants, tetrafluoroethylene polymers (Teflon), styrene-divinylbenzene resins, metal-coated fibers, Modacrylic, titanium dioxide

1950-1960

acrylic fibers, polyesters, polyester films and fibers, adhesives, ethylene oxide production of acrylics, low- and high-density polyethylene, ABS polymers, Spandex, olefin fibers, tetraethyl lead

1960-1970

propylene-ammonia production of acrylics, Surlyns, Hypalon, Lexan, Delrin, Celcon, PPO, paralenes, polysulfones, Anidex fibers, superconductors, Kevlar

1970-1980

conductive polymers, dendrimers, statins, PCR techniques

1980-1990

fullerenes, nanomaterials, HIV protease inhibitors

1990-2000

industrial applications of ionic liquids, metallocene based polyethylene

2000-2010

biotech synthesis of 1,3-propanediol )PDO) from corn, thin films of cadmium telluride or copper indium gallium selenide

We shall see that the opportunities for innovation in the chemical enterprise have never been better! Innovation must be market driven, guided by accurate insight and foresight. The perceived opportunity has to be data driven and fact based. The innovation process must be stage gated as it progresses to the marketplace and, in today’s environment, sustainability focused. It is not sufficient to “do the work right” which means excellent science and collaboration, etc. but on must also “do the right work”, hence the important of market driven innovation. Strive for relevance and uniqueness in the unmet market need that is targeted, ensuring that all aspects of the journey from “eureka” to the customer as resourced to win. True innovation begins with market need, succeeds through collaboration, and really doesn’t count until you get paid. In summary, identify opportunities based on deep market knowledge, select the best opportunities for the business, integrate with core and/or accessible competencies, and manage and execute the projects with a clear intent to win. These series of state gated steps constitute a deliberate innovation process and will successfully drive invention to the market. Too often unmet market needs continue to remain unmet because of a resistance to change, thereby creating opportunity for the entrepreneur. Henry Ford in his 1922 book My Life and Times said, “Businessmen go down with their businesses because they like the old way so well, they cannot bring themselves to change.” An examination of chemical innovations by the decade reveals a disturbing downtrend in the number of disruptive breakthroughs (Table 1). 165



This downtrend was a key finding of the ACS Presidential Task Force report Innovation, Chemistry, and Jobs (Figure 2), which can be found at www.acs.org/ CreatingJobs. A second key finding was that start ups and small to medium sized companies create about 3 million jobs a year, in contrast to the 2 million that are lost in large companies. This surprising fact held true in all sectors of the economy over a span of several decades (Figure 3).

Figure 2. Front cover of the ACS Presidential Task Force Report on “Innovation, Chemistry, and Jobs”. Courtesy of the American Chemical Society.

Figure 3. Job creation vs. job loss, 1977-2005. Courtesy of the American Chemical Society. 166 Cheng et al.; Careers, Entrepreneurship, and Diversity: Challenges and Opportunities in the Global Chemistry Enterprise ... ACS Symposium Series; American Chemical Society: Washington, DC, 2014.


It’s clear that the role of the entrepreneur in job creation is not only essential but also has been key to our robust economic growth. Of course, all the fortune 500 companies were at one time start ups, e.g. DuPont, founded in 1803, which basically manufactured gunpowder and did little else for the nineteenth century. In the middle of the deep recession of 1973-4, the following companies were start-ups: FedEx, Microsoft, Oracle, and Southwest Airlines. Bill Hewlett and David Packard started their company in a Palo Alto garage in 1939 investing the grand sum of $ 538. In the midst of the great panic of 1837, William Proctor, a candle maker, and James Gamble, a soap-making apprentice, joined forces. P&G had sales revenues of $ 82.6 billion in 2011. So even in tough economic times, the entrepreneur has risen to the occasion and created great companies that have prospered long after their early struggles. A third key finding of the task force is that about 300,000 U.S. based jobs in chemistry have been lost over the last twenty years, in sectors that are unlikely to recover (Figure 4).

Figure 4. Trends in the U.S.-based chemistry jobs, 1989-2009. Courtesy of the American Chemical Society. So, how do we win in these uncertain times? Consider the following facts which are the basis for maintaining an optimistic view of our future: 1) The United States has the best research universities in the world. This global leadership is unlikely to be seriously challenged in the next decade. 2) There are vast sums of angel and venture capital available. California, for example, has more venture capital than any country [except, of course, the U.S.] 3) We have a long tradition of science and technology driven innovation. 4) Centuries of U.S. entrepreneurship have led to the great companies of today, as a non-exhaustive set of examples shown above demonstrates. Moreover, there is now an unprecedented need for chemical innovation. Most of the start ups in the past several decades have been 167



in biotechnology, driven by the continuing requirement for new medicines for the treatment of a myriad of unmet medical needs. These drivers will continue, of course, but consider the major challenges facing the planet as we move forward in the 21st century (Figure 5).

Figure 5. Mega trends and growth opportunities for the future global chemistry enterprise. Courtesy of the American Chemical Society.

Each one of the global challenges in this list of megatrends will require chemical innovation as a key component of the potential solutions. Opportunities to impact human health through new medicines and medical devices, increasing crop yields, developing alternative energy, improved energy storage and battery technologies, communication, electronics, the potable water challenge, climate change, advanced materials – all demand the application of chemistry across this palate of global opportunities. Even today, 96% of all industrial processes have a chemical component, requiring the need for improved processes as well as products – all solved by disruptive or sustaining innovation throughout the chemical enterprise. The final key finding of the task force reinforces this view of great opportunities for entrepreneurship. Chemistry related R&D expenditures in companies are shifting from large companies to businesses with under 1,000 employees, a fact that spans three decades (Figure 6). Even as big pharma, which for over fifty years has been among the most innovative and profitable branches of the chemical enterprise, continues to undergo unprecedented contraction, biotech start-ups and development stage companies continue to innovate and create jobs.

168 Cheng et al.; Careers, Entrepreneurship, and Diversity: Challenges and Opportunities in the Global Chemistry Enterprise ... ACS Symposium Series; American Chemical Society: Washington, DC, 2014.


Figure 6. Industrial R&D spending by U.S. chemical companies by employee number, 1981-2007. Courtesy of the American Chemical Society. In this environment of the new realities, called by some the new normal, in which expectations, threats, and opportunities have been reset, four conclusions can be made: 1) There is no intrinsic structural reason to believe that chemistry start-ups could not prosper in chemistry under the right circumstances, even in difficult economic times 2) There is an opportunity for the chemical enterprise to rebuild its leadership position through disruptive technology, enabled by innovative start-ups 3) Early stage companies provide a promising opportunity to create new jobs for innovative young chemists and seasoned professionals alike 4) There are major opportunities for the ACS to facilitate entrepreneurship and enable the creation of new companies, thereby creating high quality careers for U.S. chemists Clearly the ACS has a role and opportunity, even an obligation to enable our members to initiate and execute entrepreneurial activities. For most of our history, the focus has been on the large chemical companies that comprised the bulk of our industry-based membership. It’s now time to turn the dial toward the creation of new chemical businesses and assist our members in this timely and important endeavor. This can be accomplished in four major thrusts: 1) Help entrepreneurs create jobs by facilitating more affordable access to key resources like information, expertise, important services for start ups [HR, finance, etc.], and mentorship 169



2) Improve the business environment for startups by increasing advocacy of relevant policies at the federal and state levels 3) Partner with academic institutions to promote awareness of career options that involve entrepreneurship 4) Publicize the challenges and successes of entrepreneurs and entrepreneurship in the chemical enterprise Indeed, implementation of all of these recommendations has begun. In particular, the ACS Entrepreneurship Initiative, moving beyond its pilot stage, is an important advance and consists of both a training component as well as a resource center for budding entrepreneurs. These programs are designed to help overcome the barriers that exist en route to the all important seed funding that launches a start up company. Hurdles consist of understanding the regulatory environment, intellectual property concepts [and expenses incurred in filling and maintaining patents], building a credible business plan, market insight, etc. (Figure 7).

Figure 7. Barriers to formation and growth in chemical start-ups. Courtesy of the American Chemical Society. The training component is called the ACS Entrepreneurial Training Program [ETP] and consists of course content licensed from the prestigious Kauffman FastTrac™ content. This experience provides business basics with real examples from actual ACS entrepreneurs and business professionals specializing in chemistry related start-ups, employing online support materials, including helpful video content. The second program, the ACS Entrepreneurial Resources Center [ERC] provides free or discounted access to important service providers, access to CAS SciFinder™ as well as ACS publications, and advice and mentoring from volunteer ACS entrepreneurs. In addition, the ACS has conducted 170 Cheng et al.; Careers, Entrepreneurship, and Diversity: Challenges and Opportunities in the Global Chemistry Enterprise ... ACS Symposium Series; American Chemical Society: Washington, DC, 2014.


both an Entrepreneurial Summit, which featured an educational forum, and Entrepreneurial Showcase events in La Jolla and Boston. As we’ve seen, the opportunities for chemical innovation have never been better and the ACS is ready, willing, and able to assist our members to be a significant participant in bringing important inventions forward to their ultimate realization as true innovation. Society will reap the benefits of innovation enabled by entrepreneurship as the ACS continues to drive forward its mission to “Improve people’s lives through the transforming power of chemistry”.

171 Cheng et al.; Careers, Entrepreneurship, and Diversity: Challenges and Opportunities in the Global Chemistry Enterprise ... ACS Symposium Series; American Chemical Society: Washington, DC, 2014.

Innovation and Entrepreneurship in the Chemical ... - ACS Publications

Recommend Documents