“Innovation can’t be driven without the right skills”: an interview with BASF’s Ross Pilling

The role of STEM skills in economic prosperity has been a hot topic lately. Brent Balinski spoke to BASF’s Australia and New Zealand boss Ross Pilling about the importance of science and of asking the right questions.

Part of encouraging a more competitive nation, according to Ross Pilling, involves encouraging children to ask the question “how does this work?”

Pilling is the chairman and managing director of German chemicals giant BASF in Australia and New Zealand, and having sufficient numbers of STEM discipline graduates around is no small matter to him and other business leaders.

As part of their effort to encourage more youngsters to grow into the scientists of tomorrow, Pilling’s company runs a global program, BASF Kids' Lab, aimed at getting those aged 6 – 12 interested in chemistry.

“We take primary aged kids and spend a morning with them doing safe, fun, hands-on experiments with chemistry,” Pilling told Manufacturers’ Monthly.

“And what we find is that they ask questions about the ‘how’. How does this work? Why is this happening? Not ‘what do I do with this thing?’”

Nurturing this scientific inquiry is no small matter, either. Pilling points out that most of Australia’s competitors – such as the US, Malaysia and India – have programs to increase the number of graduates in science and engineering.

However, Australia, as the nation’s chief scientist Professor Ian Chubb recently pointed out, doesn’t have a science, technology or innovation strategy. It is the only OECD country for which this is the case, according to Chubb.

The declining participation rate in so-called STEM disciplines in Australia is a “source of profound frustration” for Pilling and others in the business community.

Access to the right scientific minds within Australia and the rest of the region is, of course, important for BASF.

Within the region, the chemicals maker has ambitious and well defined plans for growth to 25 billion Euros in annual revenue by 2020. The strategy includes increasing the number of R&D personnel it employs from a 2012 figure of 800 to 3,500 by 2020. The goal is to carry out a quarter of global research activities in the region.

In Australia, BASF operates a global mining R&D centre at the Australian Minerals Research Centre in Perth, and is involved in a number of research collaborations with leading universities and other institutes like the Cooperative Research Centre for Polymers.

The so-called Asian Century is an important part of the company’s strategy, and it forecasts compound annual growth for chemical production of 6.2 per cent in Asia Pacific (outstripping 4.0 per cent globally) up to the decade’s end.

BASF also plans to manufacture 75 per cent of what it sells in the region within the region, and to invest 10 billion Euros, with its partners, up to 2020. It has about 100 production sites in Asia Pacific and 12 in Australia, where it has been operating under its own name for over half a century.

Within Australia, the company plays a major part of the country’s chemicals and plastics sector, which itself provides inputs for 109 of the 111 industry sectors in the country.

To seize the opportunities “at the intersection of global opportunity and Australian advantage”, believes Pilling, industry must take a value chain perspective, building on Australian advantage both along individual value chains and synergies between these value chains.

One example is dairy, part of the agriculture value chain. Plastics is part of the dairy value chain from beginning (in silage wrap) and at the end (within milk bottles). It’s also found in places such as waterpipes at dairy processing plants.

Pilling also cited two well-known manufacturers, Boeing Australia and Textor Technologies – in aerospace and textiles respectively – as two stand-out examples of the type of advanced manufacturing that can be successful in Australia.

“What’s interesting about these two companies is that they’ve both got advanced technology, they’ve both worked with researchers, with the CSIRO, with universities, and they both understood their value chain and their market,” he offered.

“And they both developed production processes and transitioned technology and technical ideas into products that are sold on a massive scale.”

Both are also underpinned by chemistry, for example in adhesives, resins, and an understanding of materials science in terms of strength/flexibility or absorbency.

Chemistry, Pilling proudly pointed out, was “the ultimate enabler” underpinning both high-technology manufacturing operations.

For the success and growth of the chemicals and plastics industry – an advanced manufacturing sector in its own right – the current issues around energy costs and availability, as well as education are two major issues.

The availability of affordable Australian gas is sometimes mentioned in a connection with BASF, given the firm’s plans to expand within the region.

Reports earlier this year (and repeated last week) that Australia was at risk of missing out on $1.5 billion in investment from BASF were purely speculative, said its managing director.

“What I actually said was ‘wouldn’t it be nice if we could attract at least $1 billion of BASF's planned 10 billion Euros expenditure to Australia as an investment in a world-scale chemical plant?’” explained Pilling.

“And what would it take to attract that investment to Australia? Obviously it has to be the best place to invest.

“But one of the things that could make it the best place to invest was access to well-priced gas in a sufficient volume with a sufficient certainty to allow us to make that investment.”

The issues around east coast gas shortages are unlikely to be resolved anytime soon, with effective bans (or very significant restrictions) on onshore drilling currently in place in NSW and Victoria, and LNG exports from massive projects in Queensland to begin later this year.

In terms of education, Pilling believes a science and innovation strategy such as that recommended by Chubb, is a very good starting point.

However, things need to be “broader than that”, and there is a role for business to play, both in communicating what’s needed from educators and in helping to enthuse kids about a career in science.

Innovation can’t be driven without the right skills, he said. And it can start with encouraging children to ask the right types of questions, for example, of the phones they so often seem stuck to.

“The thing they think about it is ‘what can it do? I can surf the net, I can contact my mates, access knowledge, I can connect to the world,’” said Pilling.

“What they don’t ask is ‘how on earth does it do it? How does this little technical miracle do all of this data processing without getting so hot it burns my hand? How does it manage to work for 48 hours without me having to recharge it?’

“So they don’t ask ‘how?’ And at the core of the answer to every single one of those questions is chemistry.”

 

Images: supplied