OPENING REMARKS - GPCA RESEARCH & … · opening remarks dr. moayyed alqurtas ... (technical & non‐technial), ... scientific understanding • many scientist from the islamic world

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OPENING REMARKS

Dr. Moayyed AlqurtasChairman

Research & Innovation CommitteeGPCA

Dubai March, 12 20142

AGENDA

• EVOLUTION OF THE CHEMICAL INDUSTRY IN THE GULF

• ROLE OF RESEARCH AND INNOVATION IN THE EMERGENCE OF MODERN CHEMICALS INDUSTRY

• REFLECTIONS ON RESEARCH AND TECHNOLOGY MANAGEMENT

• CHALLENGES ASSOCIATED WITH TECHNOLOGY MANAGEMENT





• CHALLENGES ASSOCIATED WITH TECHNOLOGY MANAGEMENT

AGENDA


• THE ESTABLISHMENT OF THE GCC PETROCHEMICALS INDUSTRY WAS A LOGICAL CONSEQUENCE OF THE EMERGENCE OF THE ARABIAN GULF AS ONE OF THE WORLD LARGEST HUBS for OIL & GAS PRODUCTION

• ADDING VALUE TO THE FLARED ASSOCIATED GAS WAS THE DRIVER AS IT WAS WASTED RESOURCE CAUSING AN ECONOMIC LOSS AND ENVIRONMENTAL DAMAGE

• THE INDUSTRY COMMISSIONED IN IN THE EARLY 1980s SEVERAL WORLD‐SCALE PRODUCTION FACILITIES BASED ON NATURAL GAS (C1 AND C2)


EVOLUTION OF THE CHEMICAL INDUSTRY IN THE GULF

LATER ON THE INDUSTRY DIVERSIFIED ITS FEED STOCKS INTO LIQUEFIED GASES AND SUBSEQETNYL INTEGRATED OPERATIONS WITH REFINERIES TO FURTHER DIVERSIFY PRODUCTS PORTFOLIO



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Evolution Phases of the Petrochemical Industry in the Gulf Region

1981‐1994 1994 – to date 2008 onwards

Refinery Integration

Phase I Phase II Phase III

Basic & Forward Commodities (e.g. PE, MEG, MeOH, MTBE)

Differentiated Commodities (e.g. PP, PET, PS)

New set of value chains (e.g. performance polymers, speciality chemicals)

Associated Gas(C1, C2)

Mixed Feedstock (C3/C4)

Refinery Integration&

Naphtha Cracking

Increasing Value and Differentiation

0.3 0.9 3.0 3.012.2 15.5

22.5

38.4

62.4

110.7121.8

129.2

0

20

40

60

80

100

120

140

1966 1970 1975 1980 1985 1990 1995 2000 2005 2010 2011 2012

Million Tons

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Source: GPCA Analysis, 2013

CAPACITY EXPANSION IN THE GCC CHEMICALS INDUSTRY (1966‐2012)

CAGR (1970‐1990)

15.3%

CAGR (1990‐2012)

10.1%






• CHALLENGES FACING TECHNOLOGY MANAGEMENT

AGENDA


• WHAT MAKES THE CHEMICALS INDUSTRY A SCIENCE BASED INDUSTRY?

– HAS THE DISTINCTION OF BEING THE 1ST SCIENCE BASED INDUSTRY – PIONEERED THE ESTABLISHMENT OF INDUSTRIAL RESEARCH FACILITIES SINCE THE

LATER PART OF THE 19th CENTURY– INNOVATIVE AND SHIFTED THRU THE AGES ITS FEED STOCKS DEPENDING ON

EMERGING AVAILABILITY OF FEED STOCKS– AMONG THE MOST INNOVATIVE INDUSTRIES IN THE INTRODUCTION OF NEW

PRODUCTS AND APPLICATIONS

• ACCORDINGLY, RESEARCH & INNOVATION AND TECHNOLOGY MANAGEMENTARE CRITICAL FOR THE INDUSTRY’S SURVIVAL AND GROWTH

• THESE ACTIVITIES CAN REPRESENT A SIZABLE PORTION OF THE INDUSTRY’S COSTS AND THEIR OPTIMUM MANAGEMENT IS IMPORTANT FOR THE INDUSTRY


ROLE OF R&I IN EMERGENCE OF CHEMICALS INDUSTRY


• R & D CAN BE DIVIDED INTO MANY CATEGORIES STARTING WITH THE MOST INNOVATIVE AND FUNDAMENTAL BASIC RESEARCH UP TO INCREMENTAL AND IMPROVEMENT DEVELOPMENT

• EACH OF THESE CATEGORIES HAVE ITS OWN MANAGEMENT CONSIDERATIONS

• INNOVATION IS A VERY GENERAL CONCEPT AS IT COMPRISES IMPROVEMENT AND DEVELOPMENT OF ALL ASPECTS OF OUR BUSINESS (TECHNICAL & NON‐TECHNIAL),

• INNOVATION IS MORE OF A CULTURE THAN A SPECIFIC TASK AND IT IS NOT CONFINED TO A SPECIFIC DEPARTMENT OR EXECUTIVE

• THE FOCUS OF THIS PRESENTATION WILL BE ON TECHNOLOGICAL INNOVATION WHICH IS HIGHLY ASSOCIATED WITH R&D AND DEALS WITH MOVING RESEARCH RESULTS TO APPLICATIONS


• CHEMISTRY EVOLVED WITH HUMANITY SINCE EARLY TIMES

• HUMANS DEVELOPED TECHNOLOGIES FOR THE PRODUCTION OF MANY CHEMICALS– METALS, MEDICINES, GLASS,

FERMENTATIONS PRODUCTS WERE AMONG MANY PRODUCTS USED BY HUMANS

• IN MANY CASES USAGE OF CERTAIN TECHNOLOGIES PRECEDED THEIR SCIENTIFIC UNDERSTANDING

• MANY SCIENTIST FROM THE ISLAMICWORLD MADE MAJOR ACHIEVEMENTS TOTHE EVOLUTION OF CHEMISTRY AS ASCIENCE



• MUSLIM SCIENTISTS WERE RECOGNIZED FOR THEIR CONTRIBUTION IN:– PRODUCTION OF MANY NEW CHEMICALS

– INTRODUCTION OF SCIENTIFIC METHODS IN RESEARCH BASED ON EXPERIMENTATION

• WILL DURANT WRITES THAT THE MUSLIM SCHOLARS "INTRODUCED PRECISE OBSERVATION, CONTROLLED EXPERIMENT, AND CAREFUL RECORDS."

• GEORGE SARTON AND MAX VINTEJOUX DESCRIBED THE ERA OF SCIENTIFIC ACHIEVEMENT THAT STARTED AFTER THE DEVELOPMENT OF THE SCIENTIFIC METHOD AS A MIRACLE.



• EARLY DEVELOPMENT OF THE CHEMICAL TECHNOLOGY DEPENDED PRIMARILY ON DISCOVERY BY CHANCE (SERENDIPITY) AND RESEARCHERS WERE LARGELY INDIVIDUALS HELPED BY ASSISTANTS OR STUDENTS.

• INSTITUTIONAL RESEARCH STARTED WITH THE ESTABLISHMENT OF RESEARCH UNIVERSITIES IN GERMANY EARLY IN THE 19TH CENTURY WHERE EMPHASIS WAS PLACED ON RESEARCH AS A FUNDAMENTAL PART OF EDUCATION

• GERMAN CHEMICAL COMPANIES ENJOYED A VERY STRONG COOPERATIVE RELATIONSHIP WITH THEIR GERMAN RESEARCH UNIVERSITIESWHICH WERE IN LEADING POSITIONS.



• SUBSTANTIAL GROWTH OF GERMAN CHEMICAL COMPANIES OPERATIONS PROMPTED THEM TO ESTABLISH THEIR OWN RESEARCH LABORATORIES– BETWEEN 1877 (BASF) AND 1886 (BAYER), THE

SEVEN LARGEST DYE FIRMS IN GERMANY SET UP THEIR RESEARCH LABORATORIES.

– BY 1890, THE BIG 3 CHEMICAL FIRMS EMPLOYED ABOUT 350 ACADEMICALLY TRAINED CHEMISTS IN A WORK FORCE OF ABOUT 30000.

• THAT TREND SPREAD AROUND THE WORLD AS THE INDUSTRY WAS EXPANDING, DIVERSIFYING AND PROVING TO BE OF STRATEGIC IMPORTANCE IN ADDITION TO ITS CONTRIBUTION TO THE RISE IN THE STANDARD OF LIVING


14Dubai March, 12 2014

ROLE OF R&I IN THE EMERGENCE OF MODERN CHEMICALS INDUSTRY

EVER SINCE, THE INVESTMENT IN MODERN RESEARCH IN THE CHEMICALS INDUSTRY CONTINUED UNABATED, PARTICULARY IN THE DEVELOPING REGIONS EVELOPMENT OF


AGENDA




• CHALLENGES TO THE TECHNOLOGY MANAGEMENT


RESEARCH & TECHNOLOGY MANAGEMENT

THE APPLICATION OF SCIENCE FOR COMMERCIAL

VALUE”,

REFLECTIONS ON RESEARCH & TECHNOLOGY MANAGEMENT

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“TRANSFORMATION OF SCIENCE THROUGH A

COMBINATION OF SKILLS AND RESOURCES INTO VALUE ADDED IN A PRODUCT, A PROCESS OR A SYSTEM”.

TECHNOLOGY TECHNOLOGY MANAGEMENT


WHICH IS FIRST SCIENCE OR TECHNOLOGY?

SCIENCE, TECHNOLOGY & INNOVATIONS HAVE AN INTERTWINING RELATIONSHIP:

• SCIENCE PRECEDED TECHNOLOGY; IN MANY CASES, SCIENTIFIC DISCOVERIES PRECEDED BY YEARS OR DECADES TECHNOLOGICAL INNOVATIONS, WHICH WERE BASED ON THOSE SCIENTIFIC DISCOVERIES.

• TECHNOLOGY LED TO SCIENCE; IN MANY CASES TECHNOLOGICAL DISCOVERIES LED TO SCIENTIFIC ENQUIRY AND DISCOVERY. THIS PHENOMENON IS VERY OLD AS HUMAN CURIOSITY HAS ALWAYS BEEN A MAIN DRIVER OF SCIENTIFIC ENQUIRYAND UNTIL RECENTLY MOST OF THE TECHNOLOGICAL DISCOVERIES THROUGH THE HISTORY OF HUMANITY WERE MADE WITHOUT UNDERSTANDING THEIR SCIENTIFIC BASIS UNTIL CENTURIES OR MORE LATER.

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SCIENCE AND TECHNOLOGY

• TECHNOLOGY NEEDED MORE THAN SCIENCE TO DEVELOP A PROCESS OR A PRODUCT.

• THE EXPLOITATION OF THE SCIENTIFIC DISCOVERY IN AN INNOVATION USUALLY REQUIRES THE DEPLOYMENT OF MANY TECHNOLOGIES AND SKILLS; MANY OF THEM CAN BE CRITICAL FOR THE SUCCESS OF THE INNOVATION.

• THE SCALE UP OF DESIGN FROM LAB SCALE LED TO THE DEVELOPMENT OF PILOTING (I.E. THE DEMONSTRATION OF THE INNOVATIVE PROCESS ON A SMALL SCALE IN A PILOT PLANT), WHICH ALLOWED EXPERIMENTING TO ENSURE A HIGHER DEGREE OF SUCCESS OF THE INNOVATION. RELIABLE DESIGNS WILL ONLY BE ACHIEVED THROUGH COOPERATION OF MANY DISCIPLINES OF ENGINEERING.

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RESEARCH MANAGEMENT AND UNCERTAINTY

• MANAGEMENT OF R&D, ESPECIALLY IN THE MOST INNOVATIVE ‘BASIC RESEARCH’FIELD IS A CHALLENGING TASK. “IT WILL BE DIFFICULT TO REDUCE THIS FAILURE RATEBY BETTER MANAGEMENT OF INNOVATION OR PROJECT SELECTION AND CONTROL TECHNIQUES, EXCEPT FOR THE ADAPTIVE AND IMITATIVE TYPE OF PROJECT”.

• THIS UNCERTAINTY DID NOT DETER CHEMICALS INDUSTRY FROM PURSUING BASIC RESEARCH AS PART OF ITS RESEARCH PORTFOLIO ALTHOUGH IT CONSTITUTED SMALLER BUT SIGNIFICANT PORTION OF THE R&D EXPENDITURE

• THE ASSOCIATED RISKSWITH THE OTHER TWO CLASSES OF R&D (I.E. APPLIED RESEARCH AND DEVELOPMENT) ARE SOMEWHAT LOWER HOWEVER; THEY ARE NOT NEGLIGIBLE, WHILE THE LEVEL OF EXPENDITURE FOR THE LATTER CLASSES OF R&D IS MUCH HIGHER THAN BASIC RESEARCH WHICH MAKES THE CONSEQUENCES OF FAILURE MUCH LARGER

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RESEARCH MANAGEMENT AND UNCERTAINTY

• THE UNCERTAINTY LEVEL OF INNOVATIONS IS NATURALLY REDUCED AS THE INNOVATION MOVES TOWARD COMMERCIALIZATION AND AS THE INNOVATIONS ATTRIBUTES BECOME MORE DEFINABLE. HOWEVER THE COSTS OF INNOVATION INCREASE SUBSTANTIALLY AT THE SAME TIME, WHICH MAKES FAILURES AT THAT STAGE MORE COSTLY.

TIME

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SERENDIPITY• SERENDIPITY (DISCOVERY BY ACCIDENT) IS AN

IMPORTANT FACTOR TO BE UNDERSTOOD ALTHOUGH IT CONTRIBUTED TO MAJOR DISCOVERIES THRU THE HISTORY OF THE INDUSTRY IT CANT BE MANAGED, HOWEVER, IT MAY GET US TO UNEXPECTED RESULTS! AMONG THE FAMOUS EXAMPLES ARE:

– THE SYNTHESIS OF TEFLON,

– THE USE OF OXYGEN AS INITIATOR FOR LDPE,

– THE SYNTHESIS OF ARTIFICIAL SWEETENERS,

– THE IMPACT OF COLD DRAWING OF NYLON ON ORIENTING THE POLYMER MOLECULES … ETC.

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SERENDIPITY• AN IMPORTANT CRITERION OF SERENDIPITY

IS THAT IT FAVORS THE PREPARED MIND; ACCORDINGLY IT IS NOT COMPLETELY RELIANT ON LUCK.

• PAUL FLORY, THE NOBEL LAUREATE OBSERVED, “SIGNIFICANT INVENTIONS ARE NOT MERE ACCIDENTS. … UNLESS THE MIND IS THOROUGHLY CHARGED BEFOREHAND, THE PROVERBIAL SPARK OF GENIUS, IF IT SHOULD MANIFEST ITSELF, PROBABLY WILL FIND NOTHING TO IGNITE”.

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TECHNOLOGY MANAGEMENT• DIFFERENT CHEMICAL COMPANIES PURSUED DIFFERENT POLICIES IN MANAGING

THEIR EMERGING TECHNOLOGIES;

– SOME PURSUED POLICIES OF PROFIT MAXIMIZATION THROUGH HIGH PRICES

– OTHERS DID THE REVERSE TO DISCOURAGE COMPETITION FROM ENTERING IN THEIR FIELDS.

• COMPANIES ADOPTED DIFFERNET “TECHNOLOGY MANAGEMENT APPROACHES”:

– LICENSED THEIR NEW TECHNOLOGIES;

– KEPT THEM ONLY FOR THEIR OWN USE,

– FOLLOWED SELECTIVE LICENSING POLICIES LEVERAGING THEIR TECHNOLOGY POSITION SOME TIMES TO CREATE TECHNOLOGY CLUBS OR EFFECTIVELY GLOBAL CARTELS.

• THE BASIC AIM OF ALL POLICIES IS TO MAXIMIZE THE RETURNS FOR CONCERNED COMPANIES.

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TECHNOLOGY MANAGEMENT• IF TECHNOLOGY IS AVAILABLE ON REASONABLE TERMS THAT WILL NOT IMPACT THE

PROJECT ECONOMIC VIABILITY; LICENSING IS PREFERRED TO DEVELOPMENT

• DEVELOPMENT OF TECHNOLOGY TO COMMERCIAL SCALE CAN TAKE MANY YEARS AND NORMALLY SHOULDN’T BE CONSIDERED UNLESS THE TECHNOLOGY IS UNAVAILABLE FOR LICENSING OR THE NEW PROCESS HAS MAJOR ADVANTAGES

• TECHNOLOGIES CAN BE IMITATED AND USUALLY THAT HAPPENS WITHIN FEW YEARS, ONE MAIN METHOD TO DEFEND SUCH TECHNOLOGIES IS RESTRICTIVE LICENSING TO REDUCE THE INCENTIVE OF EXISTING OR POTENTIAL COMPETITORS TO PUT EFFORTS INTO COPYING THE TECHNOLOGY WORKING AROUND THE PATENTS RESTRICTIONS

• PATENTING IS A MIXED BAG AS IT IS BASICALLY DISCLOSURE FOR PROTECTION, IT CAN BE USELESS IF PATENTS VIOLATION CAN’T BE DETECTED AND STOPPED, ALSO WRITING A PATENT SHOULD BE GIVEN CAREFUL CONSIDERATIONS

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TECHNOLOGY MANAGEMENT• PROCESS AND PRODUCTS DEVELOPMENT OF

LICENSED TECHNOLOGIES OR ACQUIRED PROCESS UNITS IS WORTHY OF ATTENTION, THRU ESTABLISHMENT OF ADVANCE TECHNOLOGICAL CAPABILITIES INCLUDING R&D CENTRES

• SEVERAL SUCCESFUL EXAMPLES MADE BY GULF COMPANIES IN USING INDIGENOUS TECHNOLOGICAL CAPABILITIES TO DEVELOP PROCESSES & APPLICATION BEYOND THE LIMITS OF LICENSED TECHNOLOGY

• INITIAL FOCUS SHOULD BE ON INCREMENTAL R&D AND TROUBLE SHOOTING

• PARTNERING WITH ACADEMIC INSTITUTIONS ON BASIC FUNDAMENTAL RESEARCH CAN BE USEFUL

GRADE XYZ: A POLYMER TECHNOLOGY WAS LICENSED ALTHOUGH THE LICENSOR

STATED THAT THEY DON’T HAVE TECHNOLOGY FOR A CERTAIN DESIRABLE APPLICATION.

AFTER START UP THE OPERATING COMPANY IT WAS FOUND THAT A CERTAIN GRADE FROM THAT TECHNOLOGY CAN BE USED EFFECTIVELY FOR THAT

APPLICATION, AND SUBSEQUENTLY A MORE FINE

TUNED GRADE WAS DEVELOPED FOR THAT APPLICATION

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AGENDA




• CHALLENGES TO THE TECHNOLOGY MANAGEMENT


TO SUM UP, THIS SUMMIT IS A PLATFORM TO ADDRESS RELEVANT QUESTIONS, INCLUDING:

• HOW MUCH A COMPANY NEEDS TO SPEND ON R&D? HOW TO ALLOCATE ITS RESOURCES? AND HOW TO ACCOMMODATE THE IMPACT OF BUSINESS CYCLES ON THE LONG TERMS STEADY FUNDING REQUIREMENTS OF THE R&D EFFORT?

• HOW TO ESTABLISH TECHNOLOGICAL DIRECTION AND BALANCE SHORT‐TERM INCREMENTAL R&D EFFORT WITH THE LONG‐TERM MORE RADICAL EFFORT?

• HOW TO INTEGRATE THE MANAGEMENT OF R&D WITH THE REST OF THE CORPORATE FUNCTIONS, MAINLY PRODUCTION AND MARKETING?

• HOW TO ASSESS THE HIGH DEGREE OF UNCERTAINTY SURROUNDING TECHNOLOGICAL DEVELOPMENTS, MARKET REACTION TO NEW PRODUCTS, THEIR GROWTH PATTERNS, COMPETITORS RESPONSES THROUGH EITHER IMITATING NEW PRODUCTS, IMPROVING EXISTING PRODUCTS OR DEVELOPING NEW ONES ?

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CHALLENGES TO THE TECHNOLOGY MANAGEMENT


• HOW TO MEASURE RETURNS FROM THE R&D EFFORT AND ITS EFFECTIVENESS?

• HOW TO PROTECT THE TECHNOLOGICAL ASSETS, AND WHETHER PATENTING IS ADVISABLE ?

• HOW TO EXPLOIT THE TECHNOLOGICAL BREAKTHROUGHS AND WHETHER TECHNOLOGY SHOULD BE LICENSED OR EXPLOITED INTERNALLY ?

• WHAT IS THE IMPACT OF EXTERNAL FACTORS INCLUDING THE GOVERNMENTAL ANTI‐MONOPOLISTIC POLICIES, PATENTING LAWS AND POLICIES, ENVIRONMENTAL PROTECTION REGULATIONS, ETC. ... ON THE CHEMICAL INDUSTRY ?

• HOW TO MANAGE AND MOTIVATE RESEARCHERS AND WHAT FREEDOM RESEARCHERS WILL HAVE IN DECIDING ON THEIR RESEARCH EFFORTS AND HOW RIGID THE RESEARCH PLANNING WILL BE ?

CHALLENGES TO THE TECHNOLOGY MANAGEMENT


THANK YOU


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OPENING REMARKS - GPCA RESEARCH & … · opening remarks dr. moayyed alqurtas ... (technical & non‐technial), ... scientific understanding • many scientist from the islamic world