Globalization Global RD GDP Definition Gross Domestic Product

Globalization & Global R&D

GDP Definition Gross Domestic Product is defined as the total market value of all final goods and services produced within a given country in a given period of time (usually a year). GDP= consumption + gross investment + government spending + (exports – imports)

The World Economy, 2007 Country GDP (PPP), $trillion World $65. 61 1 European Union $14. 43 2 USA 3 China $7. 10 4 Japan $4. 27 5 India $2. 97 6 Germany $2. 81 7 UK $2. 13 8 Russia $2. 10 9 Brazil $1. 85 10 Italy $1. 80 Rank PPP = Purchasing Power Parity Source: CIA, The World Factbook $13. 78 (21%)

U. S. EU Asia

Africa Asia-10 Middle East Latin America EU

Productivity output per employed individual, 1985 -2005 • China had a productivity rate of 6. 6% • India had a productivity rate of 4. 4% • US, EU, and Japan did not achieve the productivity rate achieved by Asian economies – 3 -4% during 1985 -2005 • However, the gap widened because of the high starting base for U. S. ! Source: National Science Board, Science and Engineering Indicators 2008

The good news! • The U. S. economy maintains a strong competitive position. • U. S. has maintained its advantage in purchasing power and productivity • The large initial U. S. advantage in per capita GDP helps to keep widening the absolute dollar gap. Source: National Science Board, Science and Engineering Indicators 2008

Where are we going from here?

The current trend • Globalization • Knowledge intensive economies

Globalization • Industrial: Emergence of worldwide production markets and broader access to a range of goods for consumers and companies • The Encyclopedia Britannica: A process by which the experience of everyday life. . . is becoming standardized around the world. • Scholars and observers: Convergence of patterns of production and consumption and a resulting homogenization of culture.

Manufacturing direct labor cost, an example Source: The National Academies Press Website

Thomas Friedman’s new book Hot, Flat, and Crowded Check Scientific American Website for a preview

Knowledge-intensive Economies • Industries that rely heavily on the application and exploitation of knowledge are driving growth in both manufacturing and services • They create well-paying jobs, contribute to high-value output, and stimulate economic activity. Source: National Science Board, Science and Engineering Indicators 2008

China U. S. Asia EU

High-technology trend • China’s share of total manufacturing has increased rapidly over the past 20 years • However, U. S. has a healthy lead in hightechnology manufacturing • To maintain/increase the lead, U. S. must continue to create intellectual property through research and development.

R&D: Essential foundation for U. S. competitiveness in global economy • Our hope is that there will be full employment, and that production of goods and services will serve to raise our standard of living…Surely, we will not get there by standing still, merely by making the same things we made before and selling them at the same or higher prices. We will not get ahead in international trade unless we offer new and more attractive and cheaper products…There must be a stream of new scientific knowledge to turn the wheels of private and public enterprise. (Vannevar Bush, 1945) Vannevar Bush, Science-The Endless Frontier. National Science Foundation, Washington, D. C. 1980: 18.

The magic words • Products that are: – New – More attractive – Cheaper – Environmentally friendly (green!)

Research & Development is the engine of growth!

Basic Research • Systematic study directed toward fuller knowledge or understanding of the fundamental aspects of phenomena and of observable facts without specific applications towards processes or products in mind. National Science Board, 2008

Applied Research • Systematic study to gain knowledge or understanding necessary to determine the means by which a recognized and specific need may be met! National Science Board, 2008

Development • Systematic application of knowledge or understanding, directed toward the production of useful materials, devices, and systems or methods, including design, development and improvement of prototypes and new processes to meet specific requirements. National Science Board, 2008

Intellectual Property (IP) • The results of research are captured in scientific articles in public domain • The results of applied research and development are documented in patents • In US, patents give 20 years of exclusive rights to the owner of IP.

Global R&D Spending Source: R&D Magazine, 2008

National R&D by category, U. S. A. Basic Research 18% Development 60% Applied research 22% Source: National Science Board, Science and Engineering Indicators 2008

Basic research by performing sector Nonprofit, 12 Industry, 15% Federal, 16% U & C, 57% Source: National Science Board, Science and Engineering Indicators 2008

Industrial R&D in USA ($MM)

Distribution of Industrial R&D Source: National Science Board, Science and Engineering Indicators 2008

Stage-Gate Process Idea generation $ Feasibility studies $$ Development $$$ Scale-up & P. D. $$$$$ Manufacturing

Examples • • Betamax (1975 Sony) vs. VHS (1976 JVC) VCD, DVD (read the history in Wikipedia!) HD DVD vs. Blue Ray Windows 98, 2000, XP, and Vista Vioxx and Ibuprofen Round-up vs. other herbicides Genetically modified organisms – GMO Corn, Soybean, Rice, etc?

Where did we end up? • • • Generated a large IP estate Product performed in lab and in compressors Product was cost competitive Large quantities were produced in pilot plant However, – Competition was ahead of us by about a year – Competitors were basic in raw materials – They succeeded in getting their products in field tests at refrigerator manufacturers faster than us!

U. S. R&D focus in st 21 century • Biotechnology • Nanotechnology • Homeland security • Environment? ?

Conclusions • World is moving rapidly towards Knowledge Intensive Economies • R&D is the engine for economic growth • Globalization is leveling the playing field • US has a large advantage in high technology research and manufacturing

And……. It is up to YOU to maintain this advantage in the future!

Albemarle Corp. • Catalyst division – Serving: Energy, transportation, packaging • Products: • • FCC HPC Polyolefin and chemical catalysis Alternative fuel technologies

Albemarle Corp. – Polymer additives division – Serving: electronics, construction, packaging, automotive, packaging, national security • • Flame retardants Antioxidants Curatives Stabilizers

Albemarle Corp. – Fine chemicals division • Serving: Agro chemicals, pharmaceuticals, solvent cleaners, biocides, paper chemicals, and more • Pharmaceuticals • Bromine chemicals • Fine chemistry services • Specialty chemicals

Engine oil antioxidants for 21 st century • Develop antioxidants that: – Are not toxic – Do not accumulate in environment – Perform better than existing products • Longer life, no need for oil change! – Do not cost more than was is in the market • Would the consumer pay a premium? ?

Nanotechnology • R&D Investment in 2007 about $1. 4 B • Areas of research & development: – Fundamental phenomena & processes – Nanomaterials – Nanoscale devices & systems – Instrument research, metrology, & standards – Nanomanufacturing – Societal dimensions

Biotechnology • Areas of research – Alternative & renewable energy • Harvesting light • Fuels • Motors – Health and medicine • Clinical diagnostics • Drug delivery • Prosthetics – National security • Sensors – Next generation bioinspired metaridals • Supermaterials • Materials with information content • Self-evolving, self-healing, and self-replicating materials – Enabling tools • Experimental probes • Theoretical and computational probes • Chemical synthesis Source: Inspired by biology, National Research Council

Homeland security • • • Borders and maritime security research Command, control, and interoperability Explosives research Human factors research Infrastructure and geophysical research Homeland Security Centers of Excellence Homeland Security Advanced Research Project Agency

Environment • US will follow European Union’s lead for environment protection • Global warming will force US to act • Alternative energy sources will be explored • A major shift toward “green” processes and practices will take over

R&D performed by U. S. affiliates of foreign companies in U. S. , and performed by foreign affiliates of U. S. multinational corporations, 2004 or most recent year (in billion $$) Source: National Science Board, Science and Engineering Indicators 2008

Distribution of industrial R&D funds in U. S. Source: National Science Board, Science and Engineering Indicators 2008

Intellectual Property • The outcome of R&D is the creation of an Intellectual Property Estate • This will provide 20 years of exclusive rights for the owner of the IP.

Growth • Progression from simple to complex forms • An increase in the capital value of an asset • Expansion in production, jobs, & revenues. The success of a development program is measured by growth

Chemistry and possibilities • …curiosity has been credited as the driving force behind American inventions. Whether it was creating a new product or finding a cure for a disease, inquisitiveness got the ball rolling. • Yet, it is chemistry that turns ideas to reality. From cough syrup to car seats, an inventor using chemistry made these possible… From American Chemistry Council website: americanchemistry. com

Ozone friendly soil fumigant

Focus areas for chemistry research • • Biotechnology in chemical production Nanomaterials New inorganic chemistry Water-based coatings Sustainable chemistry (Green chemistry) Integration of artificial intelligence New fibers, including corn-based “Smart” plastics and fibers with “shape memory” and other attributes • Microelectronics

Chemistry careers-A future of possibilities • Business of chemistry: – Leading innovation in nearly every major industry – Invests $26 B annually in R&D – Employs 80, 000 scientists and engineers – Contributes $500 B each year to US economy – Generated 868, 700 jobs in 2006 – Is responsible for 5. 7 million jobs in industries that directly depend on chemistry products – Creates more than 70, 000 products today. From American Chemistry Council website: americanchemistry. com

Chemistry careers-A future of possibilities • Employees of chemical industry are among the most highly compensated individuals in U. S. – In 2006, total compensation (salary & benefits) averaged $98000 – This is 51% higher than the average for all manufacturing jobs – It is 97% higher than the average wage for the service sector. • However, only 17. 5% of employees said this is the reason they are satisfied with their jobs From American Chemistry Council website: americanchemistry. com

Chemistry careers-A future of possibilities • The increasingly complex nature of the industry requires: – New and more highly developed skills – Better educated workers – Better-trained empolyees From American Chemistry Council website: americanchemistry. com

Chemistry careers-A future of possibilities • The top reason for job satisfaction was: a challenging workload!

Conclusions • Globalization is here to stay! • Knowledge is and will be driving the economies • Intellectual property is the key in knowledge intensive economies • Well educated work force required • Chemical industry will continue to evolve but remains an economic force

Research • Systematic study directed toward fuller scientific knowledge or understanding of the subject studied. It is classified as basic or applied according to the objectives of the sponsoring agencies. National Science Board, 2008

Business Survival 101* • Innovate or Die! • Companies spend more every year to come up with new or better products or new or better ways of doing business • Change leapfrogs change, and woe to those who can’t keep pace. * From Microsoft website

Basic research share of R&D by country % of total R&D Source: National Science Board, Science and Engineering Indicators 2008