Sector Futures provides specialised reports based on current foresight studies and reliable data sources. December 2005 features the second and third article in the series on the future of the chemicals sector, excluding pharmaceuticals. The articles explore the trends and drivers likely to shape the sector’s future as well as four alternative scenarios for the chemicals industry in the light of the main pressures on it. The series concludes with a review of the major policy issues and challenges facing the sector, by analysing their timely, geographical and structural impact on the industry, as well as the gender dimension.
The chemicals industry is one of the largest and internationally most successful of European industries. Chemicals are typically intermediate products and therefore innovation is highly important, as it is for all downstream industries. Many chemicals products thus require a high level of research and development. Chemicals is also a capital-intensive industry and that has made it appropriate for its production to be located in mature industrialised countries. In the era of globalisation and capital mobility, however, this no longer holds for the manufacture of commodities and, consequently, there is substantial foreign investment in chemicals production in the booming markets of Asia. Because commodities have a substantial share in the product portfolio of the chemicals industry, the European industry has to accelerate its pace of innovation to stay in the lead. Economic policymakers currently face the challenge of providing conditions that promote a more knowledge-driven industry with a sound basis for production in Europe.
From defining trends and drivers…
The first of three articles in this series, European chemicals industry - what future?, delineates the chemicals industry sector and examines its market size, structure and nature of employment. The article then goes on to explore the trends and drivers likely to shape the sector’s future. The feature explores, in particular, the challenges to the European chemicals sector posed by globalisation.
…towards visions for the future
The second article in this series, Chemicals - visions of the future, builds on the first article’s discussion on the trends and drivers likely to shape the sector’s future and the challenges it faces in the era of globalisation. In particular, it looks at issues related to employment, innovation, EU regulation, notably the REACH Proposal, and the factors influencing relocation of client industries outside the EU. The article also explores four alternative scenarios for the chemicals industry in the light of the main pressures on it, and concludes that the most optimistic one is unlikely to be realised.
Policy implications
The third and last article in this series, Chemicals sector - challenges, policy issues and the future, reviews major policy issues and challenges facing the chemicals industry sector, by analysing their timely, geographical and structural impact on the industry, as well as the gender dimension. In particular, it looks at the REACH proposal, at forces driving the decline of the European chemicals industry, and at aspects of the unfavourable political environment.
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