BASF Report 2021 Management’s Report – Innovation 49 Innovation GRI 102, 302, 305 Protecting our climate and making the best use of limited natural resources while supplying the fast-growing global population with food, energy and clean water are among the greatest challenges of our time. Innovations based on chemistry play a pivotal role in overcoming these. That is why we are working together with our customers on innovative processes, technologies and products for a more sustainable future. At a glance In 2021, we generated sales of over €11 billion with products We will continue to use corporate funding to finance research of launched on the market in the past five years that stemmed from broad relevance to the BASF Group that goes beyond the industry- €2.2 billion ~820 research and development activities. In the long term, we aim to specific focus of the individual operating divisions. continue significantly increasing sales and earnings with new and Research and development New patents filed improved products – especially with products that make a substan- Research and development expenses by segment 2021 expenses tial sustainability contribution in the value chain (see page 141). Million € 17% 4% ▪ Close cooperation between research and business units Our central research is currently divided into three global divisions, Corporate research, Other Chemicals ▪ Focus on customers’ needs and requirements run from Europe, Asia Pacific and North America: Process 9% ▪ Close cooperation with universities, research institutes and Research & Chemical Engineering (Ludwigshafen, Germany); €2,216 million Materials companies Advanced Materials & Systems Research (Shanghai, China); and 41% 8% Bioscience Research (Research Triangle Park, North Carolina). Agricultural Solutions Industrial Solutions Innovation has always been the key to BASF’s success. The knowl- 13% edge and skills of our highly qualified employees is our most valuable We have already brought our research and development units closer Surface Technologies resource here and the source of our innovative strength. We had together over the past few years. We will reorganize our global 8% Nutrition & Care approximately 10,000 employees involved in research and devel- research activities in 2022 to further strengthen our innovation opment worldwide in 2021. performance and respond to our customers’ industry-specific requirements even better and more quickly going forward. Business Our research and development expenses amounted to and application-driven research units that are currently allocated to €2,216 mil lion in 2021 (2020: €2,086 million). Research and the three corporate research divisions will be integrated into the development activities in our operating divisions, which is mainly operating divisions, aligning them even more closely with the needs application and customer-related, accounted for 83% of this figure. of our customers. The aim is to further shorten the time to market Corporate research, in which we bundle cross-divisional and long- for new products and accelerate BASF’s organic growth. Research term topics, was responsible for 17% of these expenses. activities that are relevant to several operating divisions will be bundled in a central research division steered from Ludwigshafen, Our innovation focus is on developing sustainable solutions for Germany. This unit will continue to be globally organized with our customers. We ensure our long-term competitiveness by helping research centers in Europe, North America and Asia Pacific. our customers reduce their carbon footprint, use resources more Together with the development units in our operating divisions, it efficiently, or manufacture products in a more environmentally friendly forms the core of our global Know-How Verbund. way and to recycle them, to name a few examples.