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'Will Shell still exist in 10 years?'

What is the background to this rhetorical, or if you like, suggestive question I hear you think? Of course, we all know Shell as an oil, gas and (still) chemical mastodon. It seems impossible that such a giant will no longer exist in 10 years' time. Yet, the feeling crept over me that this is not an impossible scenario. Immediately after reading the book Bold by Peter Diamandis and Steven Kotler, this crossed my mind. The book begins with the story of George Eastman. In 1878, Eastman was 24 years old and went on a holiday. He wanted to record his journey in photographs. The large amount of equipment that he thento bring you made him decide never to embark on that journey, but on another. Eastman was obsessed with chemistry and developed the roll of film at the time. In 1892, the Eastman Kodak Company was born. A revolutionary company that made photography feasible for consumers. For the next 100 years, Eastman did nothing but that. In 1975, an Eastman technician was commissioned to look at the possibilities of capturing images with the newly developed CCD chips. He succeeded and expected a lot of questions when he demonstrated his development. He got them, but instead of: How did you do this? he got questions like: Why would anyone want to use this? In 1996, Kodak employed 140,000 people, had a market value of $28 billion and a monopoly in their market. The digital camera had a resolution of 0.01 megapixels, so in the eyes of the Eastman elite, it could not compete with the quality of their printed photos. As they saw this technology as a threat to their own business model, they decided to shelve it. A wrong decision, as it turned out later. What they did not know is that the development of digital photography was on an exponential rather than linear path. By the time Kodak realised this, they were too late. In 1976 Kodak controlled 85% of the camera market, in 2008 after the introduction of the first iPhone this market no longer existed. In 2012 they filed for bankruptcy and nowadays they focus entirely on consulting work for companies.

Goodbye linear thinking..., welcome, exponential'.

A number of steps in exponential growth can be distinguished:

  • Digitilization Innovation occurs when people exchange ideas. In today's digital age, this goes much faster and easier than before. When a product or process shifts from physical to digital, it enters an exponential growth curve. A telling example is a competition that was held on the Internet platform XPRIZE when oil kept flowing into the ocean during the BP disaster in the Gulf of Mexico in 2010. The eventual winners were veterans of the oil industry who came up with a system that had an oil capture capacity 400% better than the technologies known at the time. Even more interesting is the team that did not win: they doubled the oil capture capacity compared to the previous known technology, but the remarkable thing is that they did not have any experience in the oil industry. One of the members of this team, a tattoo artist, when asked by the press how many years of experience they had in the oil industry, replied, "including today?"
  • Deception (= denial) As long as the development remains below "0", it is hardly noticeable and is labelled as not significant. In Kodak's case: 0.02 megapixel, 0.04, 0.08, so practically "0", however, as soon as it exceeds 1 it goes fast: 1, 2, 4, 8, 16 etc. and then you are too late to catch up. An exponential technology can and will force existing technology out of the market within a foreseeable time and tap into a new market. According to a study by the Babson School of Business, by 2020 40% of today's top companies will no longer exist and 75% of the biggest companies will be companies we have never heard of.
  • Demonitisation (= disappearance of paying money for the product or service) This sounds very unreal, but it is making money by giving things away for free. Look at what the competition is offering and give it away for free, watch what happens.
  • Dematerialisation (= disappearance of the product or service itself) In the case of Kodak, just after they came out with digital cameras, they disappeared from the scene. Nowadays, every smartphone is equipped with a good digital camera as standard, so there is hardly any need for a separate camera. A number of luxury items from the 80s no longer exist and are now standard in any smartphone. The average value of applications in a smartphone, compared to the price in the 80s, is nowadays almost 1 million € (video conference via Skype, encyclopaedia, video camera, photo camera, clock etc.).
  • Democratisation (= completely accepted by a large group of users) Your first impression after reading the above points might be that a digital camera is something else than an oil product. A digital camera is also something else than a car or a rocket and yet, here too, exponential companies have been shown to disrupt existing markets (Elon Musk with his Tesla and SpaceX for example). On top of that, we know that fossil fuels are finite and so the current linear business models of today's oil companies will certainly come to an end.

Who are these exponential companies in the chemical industry? '

Will the blow come from equipment suppliers such as Flowid (innovative reactor technology) or Emerson Process Management (3D printed control valves)? Or from biochemical production companies(a bumper crop of sugar) such as Avantium? Or from the corner of sustainable energy (spin-offs from Voltachem, a consortium of TNO and ECN in which solar energy is stored in chemicals such as methanol and ammonia). Okay, Shell has recently announced large-scale investments in wind energy(https://nos.nl/artikel/2148050-shell-bouwt-megawindpark-met-stroom-voor-1-miljoen-huishoudens.html), but isn't this the digital camera within Kodak? I don't know, nobody knows yet, but big linear multinationals:


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