This document provides perspectives on innovation and competitiveness in the chemical industry from Dr. Otto C C Lin. It discusses how the key factors of production have evolved from capital and resources to include technology, innovation capabilities, and entrepreneurial spirit. Examples are given of how large chemical companies have changed or disappeared over time. Trends in manufacturing technologies and the evolution of the chemical engineering field are summarized. Finally, factors for success in new business models and competitive business innovations are outlined.

1. © Dr. Otto C C. Lin 2014
Prof. Otto C C Lin
林垂宙教授
2014. 04.14
Perspectives on
Innovation Competitiveness in Chemical
Industry

2. Whatever has happened to these business giants?
Dow Chemicals
Union Carbides
Kodak
American Cyanamid
Hercules
Monsanto
Mobi Oil
Exxon
Digital Equipment Corp
Sperry Univac
Wang Laboratory
……
etc, etc

3. 3
社會經濟進步: 生產要素
•人力
•土地
•天然資源
•資本
•機器
•管理
•科技研發
•創新能力
•創業精神
工業經濟 知識經濟農業經濟

4. 4
Rank 1978 1981 1991 2002
1 GM GM GM Ford
2 Ford Ford IBM GM
3 IBM IBM Ford Pfizer
4 AT&T Boeing AT&T IBM
5 GE GE Digital Eqpt. Microsoft
6 U. Tech U. Tech E. Kodak Intel
7 E. Kodak Du Pont HP Johnson & Johnson
8 Du Pont Exxon Boeing Motorola
9 ITT E. Kodak General Electric Cisco Systems
10 Chrysler Xerox Du Pont HP
11 Xerox AT&T Dow Merck
12 Exxon ITT U. Tech Pharmacia (Pfizer)
13 Boeing Dow Motorola Lucent
14 Dow Honeywell Bristol-Myers Squibb Bristol-Myers Squibb
15 3M HP Merck GE
16 Sperry Rand Sperry Johnson & Johnson Eli Lilly
17 Honeywell 3M Chrysler Wyeth
18 P & G Johnson & Johnson 3M Sun Microsystems
19 McDonnell Douglas Merck Xerox Delphi
20 Johnson & Johnson P & G P & G Boeing
U. Carbide (23) Exxon (23) Du Pont (25)
Top 20 R&D Expenditure of US Companies (Business Week)
2013
Toyota
Novartis
Roche
Pfizer
Microsoft
Intel
GM
Nokia
Volkswagon
Johnson &
Joshson
Sanofi-Aventis
Panasonic
Honda
GSK
IBM
Cisco
Daimler
AstraZeneca
Global

5. 5
Knowledge
知識: 概念/現象/事物
/理論/方法
Invention
發明
Innovation
創新
What is Innovation?
甚麽叫創新？
Wealth/Resource
/Benefit
財富/資源/效益

6. 創 新
• 一個講求效益的經濟性程序
• 涵蓋多種形式
- 技術、產品
- 過程、制造、持續改善
- 營業模式 等
• 多種專門才能具創業精神的團隊
• 社會環境機制的配合
6

7. Most Innovative US Organizations-2013
1. Apple
2. Facebook
3. Google
4. Amazon
5. Sqaure
6. Twitter
7. Occupy Movement
8. Tencent
9. Life Technologies
10. Solar City
11. HBO
12. Southern New
Hampshire University
13. Tesla Motors
14. Patagonia
15. NFL
16. National Marrow
Donor Program
17. Greenbox
18. Jawbone
19. AirBNB
20. 72andSunny
21. Siemens AG
22. Dropbox
23. Kiva Systems
24. Starbucks
25. Genetech

8. © Dr. Otto C C Lin-2011
老子 第十一章
三十輻共一轂，當其無，有車之用;
埏埴以為器，當其無，有器之用;
鑿戶牖以為室，當其無，有室之用。
故有之以為利，無之以為用。

9. © Dr. Otto C C Lin-2009

10. © Dr. Otto C C Lin-2009

11. © Dr. Otto C C Lin-2009

12. © Dr. Otto C C Lin-2009

13. © Dr. Otto C C Lin-2011
老子 的 “自 然 相對論”
The “Natural” Relativity of Lao-tze
有 無
Have Have not
Full Empty
Solid Void
Real Virtual
Hard Soft
Hard Power Soft Power

14. © Dr. Otto C C Lin-2009

16. 32
The vertical computer industry, circa 1980
The transformation of the computer industry
FROM Only the paranoid Survive, by Andrew S. Grove, © 1996 by Andrew S. Grove
Used by permission of Doubleday, a division of Random House, Inc.
Source : Lee, Miller, Hancock and Rowen, “The Silicon Valley Edge”, 2000
IBM DEC Sperry
Univac
Wang
Sales and
distribution
Application
Software
Operating
Systems
Computer
Chips

17. 33
The transformation of the computer industry
FROM Only the paranoid Survive, by Andrew S. Grove, © 1996 by Andrew S. Grove
Used by permission of Doubleday, a division of Random House, Inc.
Source : Lee, Miller, Hancock and Rowen, “The Silicon Valley Edge”, 2000
The horizontal computer industry, circa 1995
Sales and
distribution
Application
Software
Operating
Systems
computer
chips

18. © Dr. Otto C C Lin 2008
34
Dell NB PC
Inspiron 600M
ODM: Taiwan
Austin,TX
Micro-
processor
Graphic Card
Memory
Cooling Fan
Mother Board
DVD/CD Dr
Removable M
Power ADPT
LCD Display
Wireless Card
Moderm
Battery
Hard Disk Dr
Carrying Bag
Power Cord
Key Board
Intel-Philipines
Intel-Costa Rica
Intel-Malaysia
Intel-China
Samsung-Sha/Korea
Quanta-Sha/Taiwan
Compal/taiwan
Wistron/Taiwan
Samsung-Korea
Nanya-Taiwan
Infineon-Germany
Elpida-Japan
Samsung-Korea
LG-Philips-Korea
Toshiba-Japan
Sharp-Japan
ChiMei-Taiwan
Hannstar-Taiwan
AU Optronics-
Taiwan
Austek-XZ/Taiwan
Liteon-GZ/Taiwan
Foxconn-SZ/
Taiwan
Seagate-Sg/USA
Hitachi-Thai/Japan
Fujitsu-Thai/Japan
Toshiba-Php/Japan
Delta-Thai/Taiwan
Liteon-Sha/Taiwan
Samsung-SZ/Korea
Mobility-Sha/USA
Alps-Tianjin/Japan
Sunrex-SZ/Taiwan
Darfon-XZ/Taiwan
Source:
Thomas L Friedman,
“World is Flat”, 2003
The Dell NB Computer
Family-2000
Penang, Malaysia

19. Cloud Computing, circa 2010

20. Trend of Advanced Manufacturing
先進製造技術發展之趨勢
Engineering
Focus
Production
Requirement
Process
Focus
Quality
Business
Strategy
Numerical
Control
Stability
Automated
Machines
(NCs, CNCs, …)
TQM &SPC
Proprietary
Computer-aided
Design and
Manufacturing
Flexibility
Factory Automation
(DNC, CAD/CAM
FMS, CIM, QC, TPM)
Six-Sigma
Standard
Design,
Manufacturing
and Service
Agility
Business Automation
E- Mfg/ E-Enterprise
Life Cycle Optimization
Collaboration
1970 1990 2010
Reference: Prof. Jay Lee, U. Wisconsin, 2004

21. 1910 1930 1950 1970 1990 2010
Industrial
Chemistry
Unit
Operations
Transport
Phenomena
Computational
Science,
Simulations
Innovation Networks
Valueadded Evolution of Chemical Engineering 1900-2000
(Ref. O. C. C. Lin, 2004)
Molecular &
Surface
Sciences
Nano-, Bio-
Sciences
Basic Chemicals
Dyestuffs
Rayon, Bakelite
Nylon, Textiles
Polymers/Plastics: PVC, PE, PP
PS, ABS,PU, Epoxy, PTFE, Acrylics
Consumer Products Chemicals
Fine/Specialty Chemicals
Bioengineering Products
Coatings, films, additives
Electronic chemicals
G M Products
Pharmaceuticals
Pharmaceutical chemicals
Microelectronics
Penicillin, DDT
Fertilizers
Low
Carbon
Economy
Sustainable
Development

22. Chemical Industry Trends (O.C. C. Lin, 2004)
化學工業技術發展的趨勢
1960s 2000s
Material Homogeneous Composite, Structured
Processing Large scale, Continuous Small scale, Flexible
Resources Capital Intensive Information Intensive
Business
Strategy
Cost, Efficiency Quality, Value, Innovation
Business Scope National Global
Business
Content
Product Manufacturer Solution Provider
Driver
Technology
Microelectronics IT, BT, NT
Technology Base Intra-disciplinary Inter-disciplinary
Tech. Focus Macro-,Meso-, Scale Micro-, Nano-, Scalability
Social Concern Pollution Control Global Warming

23. Business Models of the Future
(Reference: H. Felcht, 2001)
• Traditional chemical conglomerates and diversified groups
restructure into four types of focused companies
Molecule Supplier
Problem Solver
Traditional
Conglomerates
Life
Sciences
Specialty
Chemicals
Fine
Chemicals
Commodities

24. Specialties have a low ratio of purchase cost savings to
associated substitution cost for the customer
Commodities
Specialties
Cost Savings
for Customers
if substitution product
is 1% cheaper
High
Low
Low High
Risk for Customers
of product substitution
Source:
U -H. Felcht, 2003
Specialties
• higher growth rates
• lower cyclicity
• higher margins

25. Development of Companies in the Chemical Industry
(Reference: H.Felcht, 2001)
Rhone
Poulenc Hoechst Sandoz
Ciba
Geigy ICI
Rhodia Celanese Clariant
Ciba
Special. ICIZeneca
Aventis Novartis Avecia
AstraAstra
Zeneca
Novartis Syngenta Astra
Zeneca
• Conglomerate
• Commodities
• Specialties
• Life Sciences
• Pharma
• Agro
(Based on: A. Riemann, CITplus 3 (2000) 6, 8-11)

26. 老子: 有無相生
Lao tze:Symbios of Real and Virtual
Chapter 40 (第四十章)
天下萬物生于有，有生于無。
All thing exists on the real,
and flourishes from the virtual.
© Dr. Otto C C Lin-2013

27. Competitiveness:
Symbiosis of Real and Virtual 有無共生
The Real (實體)
- Hardware (硬件)
- Vehicle (載具)
- Platform (平台)
- Hard Power (硬實力)
The Virtual (空虛)
- Software (軟件)
- Inventiveness (創意)
- Functions (功能 )
- Soft Power (軟實力)
Competi-
tiveness
© Dr. Otto C C Lin-2013
Ref: Otto. C. C. Lin, “The Technology Innovation Quartet”, 2013
.

28. Industrial Trend:
Profitability of Technology Giants (2013)
Company Type Revenue, USB Gross Margin
VMWare Software 5.2 86.0 %
Oracle Software 37.2 80.9 %
Microsoft Software 77.8 74.0 %
EMC Hardware 23.2 62.3 %
Cisco Hardware 48.6 60.6 %
Intel Hardware 52.7 59.8 %
Google Software 59.8 56.8 %
IBM Hardware 99.8 48.6 %
H-P Hardware 112.3 23.1 %
Source: Wall Street Journal, 2014-03-07

29. Cloud Computing: Product Innovations
Twitter
Dropbox
Facebook
Youtube Google Apps
Social
Outreach
Services Multiple
Small
Large
Simple
Source: ITRI Today, 2011

30. Chemical Engineering Business Management
o * Front End – Electronic commerce
o * Back End – Global supply chain management
o * Zero environment Impact: Reduce, Reuse, Recycle
o * Minimum inventory & warehousing
o * Maximum marketing & tech service
o * Globalization of market, technology and capital
o * Local strength for competitive advantage
o * Values for customer
o
Ref: Otto. C. C. Lin, “The Technology Innovation Quartet”, 2013

31. 42
Energy & Environment
Product Strategy & Planning VALUE
as
PERCEIVED
by Market
Materials Supply & Logistics
Research & Development
Manufacture
Marketing & Distribution
Sales & Customer Services
Accounting & Financial Planning
HumanResources
Management
Behind a Successful Business
(Source: O.C.C. Lin, 2009)
PriceCost

32. Success Factors in the New Business Models
Molecule Supplier
Problem Solver
Traditional
Conglomerates
Life
Sciences
Specialty
Chemicals
Fine
Chemicals
Commodities
• Process Tech
•Raw Materials
•Energy
•Supply Chain Mgmt
•Customer Orientation
•Technical
Capabilities
•R&D Competence
•Patents
•Business Plan
•Sales &
Distribution
•Know market needs
•Application
Technologies
•“Magic Ingredient”
Source: U-H Felcht, 2003

33. 33
團 隊 與 分 工 管 理 與 文 化
商業計畫
( O.C.C. Lin, 2009)
能源 與環保
產品策略與規畫
研究 開發 製造
行銷與通路
業務與客戶服務
財務規畫
供應者-使用者 關係
商業模式
物料供應
物流管理

34. Competitive Business Innovations
•Product concept: Niche advantage
•State-of-art hardware
•Compatible software
•Simplified manufacturing process
•Up-gradable values-in-use
-Customer needs
- Societal Trends
•Changing Challenges of Globalization
• Management Agility
• Sustainable Innovation Culture
• Soft Power in Business Management
© Dr. Otto C C Lin- 2014

35. 成功創業者的價值觀
品質
至善
信義
立業
以人
為本
堅忍
毅力
團隊
精神
創造
利基
機敏
策略
Ref: Otto. C. C. Lin, “The Technology Innovation Quartet”, 2013

36. Otto C. C. Lin
The Technology Innovation
Quartet:
Secrets of Successful
Entrepreneurship
Commerce & Culture Press
Taipei, 2013
ISBN
978-986-5812-02-7

37. © Dr. Otto C C3Lin-2013
Thank You,
Discussions Welcomed
謝謝, 歡迎討論 ！
occlin@ust.hk
occlin@gmail.com
http://www.occlin.net