A growing need for food, energy and clean water for a booming world population, limited resources and protecting the climate – reconciling all these factors is the greatest challenge of our time. Innovations based on chemistry play a key role here, as they contribute decisively to new solutions. Effective and efficient research and development is a prerequisite for innovation as well as an important growth engine for BASF. We develop innovative processes, technologies and products for a sustainable future and drive forward digitalization in research worldwide. This is how we ensure our long-term business success with chemistry-based solutions for our customers in almost all industry sectors.
Innovation has always been the key to BASF’s success, especially in a challenging market environment. Our innovative strength is based on a global team of highly qualified employees with various specializations. We had approximately 11,000 employees involved in research and development in 2019. Our three global research divisions are run from our key regions – Europe, Asia Pacific and North America: Process Research & Chemical Engineering (Ludwigshafen, Germany), Advanced Materials & Systems Research (Shanghai, China) and Bioscience Research (Research Triangle Park, North Carolina). Together with the development units in our operating divisions, they form the core of our global Know-How Verbund. BASF New Business GmbH and BASF Venture Capital GmbH supplement this network with the task of using new technologies to tap into attractive markets and new business models for BASF.
In 2019, we generated sales of around €10 billion with products launched on the market in the past five years that stemmed from research and development activities. In the long term, we aim to continue significantly increasing sales and earnings with new and improved products – especially with Accelerator products, which make a substantial sustainability contribution in the value chain.
Our global network of outstanding universities, research institutes and companies forms an important part of our Know-How Verbund. It gives us direct access to external scientific expertise, talented minds from various disciplines as well as new technologies, and helps us to quickly develop targeted, marketable innovations, strengthen our portfolio with creative new projects and in this way, reach our growth goals.
Our eight academic research alliances bundle partnerships with several research groups in a region or with a specific research focus. The Northeast Research Alliance (NORA, previously the North American Center for Research on Advanced Materials) and the California Research Alliance (CARA) are located in the United States. NORA focuses on materials science and biosciences, catalysis research, digitalization and cooperation with startups, while the interdisciplinary CARA research center works on new functional materials, formulations, digital methods, catalysis, chemical synthesis, and in engineering sciences and biosciences. The Joint Research Network on Advanced Materials and Systems (JONAS) research center is active in Europe. Research here concentrates on supramolecular chemistry as well as nanotechnology and polymer chemistry. At the Network for Asian Open Research (NAO) in the Asia Pacific region, research focuses on polymer and colloid chemistry, catalysis and machine learning.
We are working on innovative components and materials for electrochemical energy storage with the Karlsruhe Institute of Technology (KIT) at the Battery and Electrochemistry Laboratory (BELLA). At the joint Catalysis Research Laboratory (CaRLa), BASF is researching homogeneous catalysis in cooperation with the University of Heidelberg. BasCat is a joint laboratory operated by the UniCat cluster of excellence and BASF at the Technical University of Berlin, where new heterogenous catalysis concepts are being explored together with the Fritz Haber Institute of the Max Planck Society. The iL ( Innovation Lab) in Heidelberg, Germany, focuses on functional printing, printed sensors and IoT (internet of things) applications.
Our eight Academic Research Alliances are complemented by cooperations with around 300 universities and research institutes as well as collaborations with a large number of companies.
Research and development expenses amounted to €2,158 million, above the prior-year level (€1,994 million). The increase was mainly attributable to the research-intensive seed business, which BASF acquired from Bayer in August 2018. The operating divisions accounted for 81% of total research and development expenses in 2019. The remaining 19% related to cross-divisional corporate research focusing on long-term topics of strategic importance to the BASF Group.
Our focus is on the development of value-adding innovations for our customers to secure our long-term competitiveness. Under our updated strategy, we have brought research and development even closer together from an organizational perspective, and thus better aligned with the needs of our customers. Our aim is to continue to shorten the time to market and accelerate the company’s organic growth. A strong customer focus, digitalization, creativity, efficiency and collaboration with external partners are among the most important success factors here. In order to bring promising ideas to market as quickly as possible, we regularly assess our research projects using a multistep process and prioritize our focus areas accordingly.
Our cross-divisional corporate research will remain closely aligned with the requirements of our operating divisions and allows space to review creative research approaches quickly and in an agile way. We strengthen existing and continually develop new, key technologies that are of central significance for our operating divisions, such as polymer technologies, catalyst processes or biotechnological methods.
We are fine-tuning our innovation strategies in all of our business areas to ensure a balanced portfolio of incremental and breakthrough innovation, as well as of process, product and business model innovation. One of the steps taken in 2018 to further promote breakthrough innovation was the establishment of BASF’s incubator, Chemovator GmbH, based in Mannheim, Germany. This actively nurtures promising business ideas with the help of external experts, who act as consultants, coaches, mentors or intermediaries, and quickly bring them to market readiness. We have also identified additional, far-sighted topics that go above and beyond the current focus areas of our divisions. The aim is to use these to exploit new business opportunities within the next few years. Above and beyond this, we are working on overarching projects with a high technological, social or regulatory relevance. For instance, one global research and development program, Carbon Management R&D Program, is focusing on the energy-intensive underlying production processes for basic chemicals. These basic chemicals account for around 70% of the CO2 emissions produced by the European chemical industry.1 The program covers topics such as the development of new catalysts for dry reforming methane with CO2 to produce syngas, and using methane pyrolysis to produce hydrogen from natural gas.
Our global research and development presence is vital to our success. We want to continue advancing our research and development activities, especially in Asia and North America, with a focus on growth in regional markets. A stronger presence outside Europe creates new opportunities for developing and expanding customer relationships and scientific collaborations as well as for gaining access to talented employees. This strengthens our Research and Development Verbund and makes BASF an even more attractive partner and employer. The Ludwigshafen site in Germany is and will remain the largest in our Research Verbund. This was once again underlined with the investment in a new research center, which was opened in 2019. It houses highly automated experimental facilities for new process development and testing process catalysts. In addition, three state-of- the- art electron microscopes started operation in Ludwigshafen in 2019. These particularly benefit research in inorganic material systems, such as catalyst and battery research.
The number and quality of our patents also attest to our power of innovation and long-term competitiveness. In 2019, we filed around 1,000 new patents worldwide. Also in 2019, we once again also ranked among the leading companies in the Patent Asset Index, a method that compares patent portfolios industry-wide.
1 Sources: JRC (Energy efficiency and GHG emissions: Prospective scenarios for the Chemical and Petrochemical Industry 2017, Boulamanti A., Moya J.A.); DECHEMA Technology Study (Low carbon energy and feedstock for the European chemical Industry, 2017)