Episode 61 - Tech Transfer, Innovation, and the Future of Chemicals with Victoria Meyer and The Chemical Show

In our first joint podcast, I joined Victoria Meyer and The Chemical Show to explore technology transfer and innovation in the chemical industry. The chemical industry is where I got my start, with Dow Chemical and subsequently Akzo Nobel (now Nouryon), and I have maintained my deep interest in and passion for the sector over the years. The opportunity to continue this through the biobased economy, industrial and agricultural biotech, made for a really contrasting foundation to Victoria’s journey in petrochemicals at Shell, Amoco, Lyondell Basell and Clariant.

I got asked a really fundamental question being ‘what is tech transfer’ and from there, we started to explore productisation, the challenges of valuation and risk, and the need to demonstrate products and the ability to scale.

Perhaps somewhat harshly, I pointed to a general ignorance of the complexity of tech transfer as being one of the limiting factors in bringing innovation to market. In reflecting further in our discussion, we explored the different skills needed in varying business phases and strategies. Victoria raised biosurfactants as a really interesting example of how innovation works with larger organisations and their partnerships with smaller, arguably nimbler, organisations. I noted the importance of both outsourcing of risk and the criticality of an internal champion.

We also talked about the risk of internal disruption on operations as part of why larger organisations might struggle to develop and adopt innovations. Victoria noted that efficiency and effectiveness are being redesigned and that smaller scale, distributed assets may be more of the future as part of an increasing focus on resilience – which will require more innovation through supply chains.

The search for greater supply chain and production resilience will call for changed approaches to innovation and culture which will, in turn, have an organisational fitness cost. Cost, not just in economic terms, but in behavioural and cultural dimensions.

Victoria paused to reflect on how many things have to come together and we started to unpack that multidimensional problem by focusing on measuring value. We started on the dynamics of public and private ownership and finance and the leadership and executive incentives around performance. Ultimately, it’s about meeting customer needs and being relentlessly focused on these. In doing so, it may require a more porous or open innovation model compared to the days of doing it all in house. Victoria noted the ‘not invented here syndrome’ may run counter to that dynamic and then went on to note that merges and acquisitions are a path being pursued to access innovation and gave a great contemporary example of internal (human) dynamics which highlighted for me that humans to tech transfer and M&A, not organisations.

Victoria asked the question of the role of the board and the executive team in technology transfer and innovation. I suggested it’s around articulation of risk appetite and tolerance. We compared agriculture and chemicals and found chronological similarities. Victoria suggested that the onus is more on the executive team rather than the board. With smaller boards, they have greater influence, but it’s more the executive team where there are independent boards. Victoria noted that filtering and biases may be impacting what the board hears and the C-suite interpretation from the board. Ultimately, it’s about risk tolerance and management to deliver profitable organisations. However, innovation can also be seen as a means to lower risk, in contrast to a direct improvement in profitability.

Victoria introduced the question of measuring the value arising from innovation, contrasting investments in digital vs (operational) capital. I suggested that this is an eternal challenge in tech transfer and some soothsaying involved in an attempt to measure progress and set expectations. I highlighted the need to have clear assumptions and conditions for success in measuring progress. Digital is particularly interesting, and particularly AI, and looking back to internal investment in longer term R&D wondered whether the loss of internal risk appetite makes innovation investments harder to justify and/or measure. Victoria reflected on her experience with Shell’s re-entry into the polyethylene business. An observation drawn from her experience is that the more established one becomes, the riskier a misstep becomes. She also shared some of her experiences in building her current digitally enabled business. Victoria noted that there are no control group experiments with her digital innovation. We compared the need for control in some areas but not necessarily all and rely on human interpretation of results and using ai for augmentation of decisions.

We talked around regulation and its impacts following Victoria’s discussion with Chris Jahn and how  innovation and customer orientation can assist in dealing with differences between jurisdictions. Victoria highlighted that many leaders recognise the need for prudent regulation to ensure there are good operators in the industry. The challenge is that things aren’t adapting fast enough. Sustainable and safer products exist but these need to be approved and regulated. I asked about enforcement and consequence, as a lack of enforcement leads to cultural and behavioural change, reflecting on the Responsible Care program, and the risk of that weakening. Victoria suggested that, beyond punitive damages, the social, or brand damage incurred by poor or bad faith actors in the system had some deterrent effect.

Victoria noted a shift from ‘big S’ sustainability to ‘small s’ sustainability in her ACI 2025 wrap and believes that this is driven by an industry pragmatism and  shift from early 2020s to now. She drew on her personal experience with solar panel acquisition and the arising economic or commercial burden. We touched on a few examples which echo the challenge of the ‘perfect getting in the way of the good’.

We closed with Victoria highlighting that the chemical industry does take a form of waste from petroleum and converts the carbon into an array of products, with BASF Ludwigshafen being the example offered and me reflecting on the agro-industrial complexes associated with the corn, sugar and pulp & paper industries.