Dow Chemical 2010 Annual Report Download - page 18

The Dow Chemical Company
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THE RIGHT PIPELINE
Powered by science and connected to customer and societal needs, our innovation
pipeline has a net present value of $30 billion today – triple the value in 2007. We are
strategically aligning our R&D investments with key global megatrends that represent
$350 billion in addressable market opportunities. From
SmartStax ™ seeds to
revolutionary DOW™ POWERHOUSE™ solar shingles, from coating formulations
that improve indoor air quality to purification solutions that deliver
clean drinking water, our R&D engine is delivering breakthrough
technologies and driving Dow’s growth – while also
helping to shape the future.
Managing for Results
Our commitment to innovation has never wavered. In 2010,
despite a sluggish economy, we continued our strong investment
in R&D, increasing spending to $1.7 billion. Plus, our stringent
R&D pipeline management system helps ensure we optimize
our investments in these important ways:
•฀฀
A heightened customer and market focus. We systematically
identify market opportunities, then meet them with targeted
solutions that help our customers win in the marketplace.
Voice-of-the-customer research and strong cross-collaboration
between functions and businesses help pinpoint unmet needs.
•฀฀
Disciplined, cross-company portfolio management. Our
Innovation Growth Playbook is used to optimize the distribution
of long- and short-term projects in our pipeline. Based on
a 10-year horizon, these R&D projects are prioritized, first
within individual business units, and then ultimately across
the Company as a whole. This allows us to allocate our
resources to the projects with the highest potential return.
•฀ An R&D organization that targets both short-term business
objectives and long-term strategic research. In 2010,
approximately 75 percent of our Core R&D funds were
allocated directly to the businesses. This allows us to
strengthen our market leadership in existing technologies,
while capturing growth opportunities through new markets
or disruptive, technological change.
•฀ A world-class team of more than 6,000 researchers.
Increasingly, we are taking a global approach to innovation,
and in 2010, we hired more than 100 new PhDs from the
world’s top universities. We operate more than 40 R&D
facilities globally, and are planning a new R&D center at the
King Abdullah University of Science and Technology in
Saudi Arabia. This global approach to finding the best
intellectual power helps us remain competitive in local
markets and enables us to attract top talent.
Accelerating Innovation through Collaboration
Dow multiplies the power of our R&D investments and our
innovation reach through our ever-growing global network
of innovation partners.
Most recently, we teamed with Oak Ridge National Laboratory to
create a Center of Energy Excellence to research the development
of low-cost carbon fiber for wind turbines. We also work with top
R&D talent at premier educational institutions. For example, with
the California Institute of Technology, we are developing next-
generation, low-cost, high-efficiency photovoltaic materials. With
Shanghai Jiao Tong University in China, we are making advances
in polymer science. And at Northwestern University, we are
partnering to extend our expertise in catalysis.
Dow’s R&D investments are strategically aligned
to megatrends that represent $350 billion in
addressable market opportunities with growth
rates of between 1.3 and 3 times GDP.