Collaboration on R&D 'key to chemical sector beating recession'

Published on Monday 3 August 2009 21:47

CHEMICAL companies must work together to develop new products and resist the temptation to cut back on research and development during the recession, a Scottish economist will claim today.

Andrew Hagan will tell the International Union of Pure and Applied Chemistry congress in Glasgow that businesses must make a distinction between short-term cuts to survive the recession and longer-term cancellations that could affect research and development (R&D).

Hagan, a global leadership fellow at the World Economic Forum, said the trend for governments to place research requirements on whole industries rather than individual companies gave scope for international collaborations between chemicals businesses.

His comments have been endorsed by trade body Chemical Sciences Scotland, which brings together industry, academia and government.

According to Scottish Enterprise figures, Scotland's chemical sciences sector generates 9.3 billion a year and is the nation's second largest exporter. Some 14,000 people are employed directly by the 150 firms in the industry, and the sector also accounts for a further 56,000 jobs indirectly.

Hagan said: "Cutting research and development pipelines now may not have an immediate impact, but in five to seven years' time the consequences will hit home."

He added: "Rather like Adam Smith's division of labour concept, in order to meet the ever more complex and sizeable demands of innovation, the chemicals industry must collaborate as a whole in a non-competitive way and undertake a 'division of thought' approach."

Hagan said there was also "a moral driver" for chemicals companies to continue with R&D, as he believes the industry has a role to play in solutions to problems such as climate change.

Sandy Dobbie, Chemical Sciences Scotland's chairman, said: "Scotland's strength in innovation is one of its key advantages.

"The global chemicals sector is by no means immune to the recession. … However, while historically slow to react to macro-economic events, the industry has been much faster in its response to the current downturn. This speed of reaction will allow the sector the best possible platform for growth as and when the recovery begins."

Caroline Strain, head of Scottish Enterprise's chemical sciences team, said: "Innovation is something which must be nurtured throughout Scotland and the chemical sciences sector is a leading example of an industry which has fostered a collaborative culture. Last year alone, SE awarded 7 million in R&D grants to the sector."