Chemical Industries in the established industrial regions are under existential pressure to change. Output is practically stagnant and bound to relocate to China and India. There, suppliers face 5 and 3 % of established regions' labor cost respectively. As long as there is excess supply, these regions can always beat their competition on cost. Innovation and the intellectual capital are of course more important. The number of Chinese students enrolled in chemistry and engineering has doubled to 4 million in the time period from 1998 to 2001, representing 33 % of all students enrolled in these disciplines among the regions USA, Japan, Europe, India and China. Thus, intellectual output productivity of chemical processing innovation becomes critical.

Among the established regions, Japan enjoys a unique opportunity. Growing exports to China have led to temporary growth and significant profitability increase. Since chemical industry strives to drastically reduce bank lending, there is a challenge to change the way in which the industry works, in particular to save on plant cost and inventory and to enhance profitability. Microreaction Technology (MRT), Process Intensification (PI) and Reaction Process Design (RPD) are enabling technologies. They promise continuous innovation for better products at lower cost. More importantly, they enable a compression of the supply chain to end customers by providing new chemistry on specification and on demand. The technologies permit an industrial transformation in a similar manner to what has been called the revolution of automotive industries. The latter has been predominantly driven by Japanese firms. Beyond technology it brought processes to increase new product sales, shorten time to market, allow for Just-in-Time manufacture and permit continuous improvement.

Microreaction technology (MRT), PI and RPD are developing and need to be measured against their contribution to this transformation process. MRT and PI are based on continuous manufacturing, which is always more cost effective than batch manufacturing. The switch from batch to continuous manufacturing yields cost, quality and environmental benefits. Labor cost are lower, throughput time is reduced by 98 % and many non-value adding steps are avoided. In a Genzyme case study, the company had shown how a switch of their Havershill Renagel™ manufacturing operation to continuous processing reduced their plant capital investment by 40 %.

To catch up with the underlying technology, MRT, PI and RPD will be briefly described. More importantly, their implementation status will be benchmarked against their potential to drive the necessary industry transformation. Several examples of high value transformations from MRT will be referenced and the current level of new chemistry implementation addressed.

Measures and metrics of short term business success will be juxtaposed to the strategic goal of industrial sustainability.