In 2017, Clariant successfully expanded its intellectual capital. The number of patents and active innovation projects increased, new scientific collaborations were established, and new product developments were screened for sustainability. Clariant also progressed on its digitalization journey by embracing the rapid innovation method for developing new digital business models.

2.1. Innovation and technological advances

Clariant is focused on achieving its growth target by developing innovative and sustainable products based on state-of-the-art technologies. In 2017, Clariant achieved 2.5% growth through its innovation projects, surpassing its 1 – 2% target. Research and Development spending in 2017 was CHF 211 million, compared to CHF 206 million in 2016. As a share of sales, R&D spending was 3.3%, a decrease from 3.5% in 2016 given that sales exceeded expectations, particularly in the fourth quarter. As a result, the relative target of 3.5% was not met. The number of active projects in the innovation pipeline increased from 320 in 2016 to more than 370 in 2017. This was mainly due to the increase in ideation sessions conducted with suppliers, customers, and partners from academia, as well as a stronger focus on regional unmet needs and high-potential projects involving more than one Business Unit.

The investments in capability building and organizational improvements over the last few years started paying off in 2017. Clariant established shared targets and focused sharply on training, project management, and an up-to-date user-friendly toolbox. State-of-the-art equipment and infrastructure in eight R&D and over fifty Technical Centers built the basis for successful innovation. The increased number of trained innovation belts was a key factor in improving the project pipeline and increasing the number of Class 1 projects (those with a double-digit million sales potential) from 60 to more than 65 in 2017.

After Clariant revised its Intellectual Property strategy in 2015 and 2016, it abandoned patents that were no longer of strategic relevance, leading to an overall drop in the number of patents. Having concluded this strategy adjustment, the number of patents is increasing again, from 6 500 in 2016 to 6 600 in 2017.

In 2017, Clariant increased its innovation footprint in high-growth markets in Asia. It signed a Memorandum of Understanding with the Shanghai University, embarking on a long-term collaboration that will strengthen the link between industry and academia, provide students with the opportunity to gain business exposure, and offer Clariant the possibility of recruiting promising graduates. In the same year, Clariant also hosted the Innovation Fair in Shanghai, which served as a platform to network and discuss potential collaborations to address Asian market needs with innovative solutions. With these initiatives, Clariant continued to build its reputation as the most innovative specialty chemicals company in China.

2.2. Digitalization

In 2017, Clariant took significant steps to further tap into the huge potential offered by digitalization. Clariant’s Digital4Clariant program launched at the end of 2016 established three core workstreams. Such workstreams focused on finding business models around digital offerings, improving Clariant’s production with digital means, and utilizing the potential of big data and advanced analytics. Clariant realized from day one that topics related to cyber security, legal and tax have the potential to be a show stopper for digital innovation and created corresponding workstreams. The early involvement in particular of legal and tax experts already in the innovation phase proved vital. Clariant’s digital innovation approach is inspired by rapid innovation methods widely used in the technology sector and incorporates elements of design thinking, agile project management and SCRUM.

To guarantee new solutions satisfy customer needs, Clariant starts its innovation sprints with customer interviews and continuously refines ideas with customers. As a principle, ideas are also rigorously sorted out embracing the spirit of fail fast, fail early, fail cheaply. For instance, three Business Units that ran digital sprints led more than 80 customer interviews, follow-up calls and pitches, developed more than 200 idea seeds, discarded more than 20 already more refined ideas, and incubated the remaining ideas in close contact with the customers. The Digital@Operations workstream identified a suitable way of work to improve Clariant’s production with digital solutions: Bringing on digital change in operations is not only about technology but also about people. This is why Clariant’s production system team, with its proven optimization and skill-building track record, will tackle six digital clusters identified by Clariant in 2017. The six clusters identified as particular promising are predictive quality control, predictive maintenance, digital material flow, connected workforce, retrofitting, and robotics.