Innovation

Innovation has made BASF the leading chemical company worldwide. This 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 more than 11,000 employees involved in research and development in 2018. Our team grew by around 1,600 research and development employees at 17 sites around the world in 2018 as a result of the acquisition of a range of businesses and assets from Bayer. The businesses acquired include research and development activities for soybean, cotton, canola and vegetable seeds, which optimally complement our crop protection and biotechnology activities.

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.

Global network: eight Academic Research Alliances

In 2018, we generated sales of around €9 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.

Global network

• Close cooperation with universities, research institutes and companies
• Academic Research Alliances bundle partnerships by topic and region

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 and efficiently develop marketable innovations, strengthen our portfolio with creative new projects and in this way, reach our long-term growth goals. Our eight academic research alliances bundle partnerships with several research groups in a geographic 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 and in the area of 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. These academic research alliances and bilateral cooperations have been integrated into our excellence program, UNIQUE – The BASF Academic Partnership Program.

Strategic focus

• Research units closer aligned with business and customer needs
• Further development of our innovation strategies

In 2018, our research pipeline comprised around 3,000 projects. Expenses for research and development amounted to €2,028 million, above the prior-year level (€1,888 million). The increase was primarily attributable to the acquisition of the seed business from Bayer in August 2018. The operating divisions accounted for 80% of total research and development expenses in 2018. The remaining 20% related to cross-divisional corporate research focusing on long-term topics of strategic importance to the BASF Group. In the coming year, we anticipate significantly higher research and development expenses due to the acquisition of the research-intensive seed business.

We will continue to focus on developing attractive innovations for our customers. Under our updated strategy, research and development will be more closely connected organizationally in the future and thus more focused on customer needs. Our aim is to shorten the time to market and accelerate the company’s organic growth. 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 align our focus areas accordingly.

The aim of our innovation approach is to increase our company’s power of innovation and to secure our long-term competitiveness. We aim to achieve this by concentrating our research focus on topics that are strategically relevant for our business, strengthening our existing scientific processes as well as increasingly using new scientific methods and digital tools, as well as optimizing our organizational structures.

Our cross-divisional corporate research will remain closely aligned with the requirements of our operating divisions and allows space to quickly review creative research approaches. 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-Inkubator 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 these 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 is focusing on the energy-intensive underlying production processes for basic chemicals. These basic chemicals account for more than half of the CO₂ emissions produced by the European chemical industry. The program covers topics such as the development of new catalysts for methane pyrolysis and the direct conversion of syngas, as well as research into materials and safety for the electrification of steam cracker heating.

We believe that the businesses acquired from Bayer offer tremendous innovation potential. The research and breeding capabilities of the new seed businesses, for instance, provide the opportunity to further develop and market high-yielding wheat hybrids. In addition, a breeding project improving the oil quality of Brassica juncea (Indian mustard) to canola grade and certain non-selective herbicide and nematicide research projects perfectly complement our existing R&D activities.

We continued to work on harnessing the enormous opportunities of digitalization for research and development in 2018. In the years ahead, we will continue to consistently expand our expertise in fields like scientific modeling and simulation and to develop new digital applications.

Our global research and development presence is vital to our success. We want to continue advancing our research and development activities, particularly in Asia as well as in North America, and are adapting this to 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 number and quality of our patents also attest to our power of innovation and long-term competitiveness. We filed around 900 new patents worldwide in 2018. In 2018, we once again ranked among the leading companies in the Patent Asset Index, a method that compares patent portfolios industry-wide.