Critical factors of innovation success and profitability – A quantitative empirical study for the chemical and pharma industry

Innovation is considered a key factor to profitability of industrial businesses; however, empiric proof to substantiate a general association of innovation to profitability is still scarce and sometimes inconsistent. The chemical and pharmaceutical are regarded as a high-technology research intensive industry currently in a process of commoditization accompanied by an ongoing shift of production to China and India in recent years. To maintain high profit margins on products, the industry relied on product and production process innovation.
Publicly listed chemical companies in both industries have a long tradition in disclosing not only their research and development expenses in their annual reports but also details on their innovation intiatives and organisation.
With this and additional publicly availabe information this project shall lead to identification of factors responsible for innovation success in both industries, utilizing a thorough academic approach to support innovation managers within the industry in identifying and tackling the important issues of innovation within their companies.