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The Importance of Chemical Research to the U.S. Economy (2022)

Chapter: 2 Understanding the Economic Impacts of Chemistry

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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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2

Understanding the Economic Impacts of Chemistry

Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Chemical research has contributed to economic prosperity and financial security in the United States. Products from chemical companies, such as polymers, coatings, pharmaceuticals, and pesticides, play an important role in everyday life. These chemicals are all derived from products and processes that started in some way as fundamental chemical research. Of course, all products have a unique trajectory from fundamental research to final product, but this movement frequently requires many iterations, steps, and decades of complementary research discoveries. These research and development (R&D) efforts, when successful, are converted into products or processes that are used by the chemical industry to increase quality of life. The outcome can produce a novel chemical or technique, or can improve upon an entity that already exists by, for example, making a better product or decreasing the environmental impact of a process.

As the committee discussed the size and impact of chemical research on the chemical economy, it took a very broad approach to defining what is included in the chemical economy. As noted in Chapter 1, the chemical economy includes all parts of any value chain that rely on chemical knowledge and transformation processes for advancement and growth. This broad approach is important when considering fundamental research that has impacted the chemical economy, and the breadth will be reflected in any subsequent analyses and examples of success.

To evaluate the impact of chemical research on the chemical economy, as well as the U.S. economy more broadly, the committee used several approaches. Two lines of evidence used were economic output of and employment from chemical companies and the chemical sector. The committee relied on previous assessments of the chemical economy and the impacts of chemical research on the economy, as well as an economic analysis that was produced by an independent consulting firm. To try to evaluate the size of the chemical economy, as well as the impact of R&D on the chemical economy, Vertex Evaluation and Research, LLC (Vertex) assembled a team led by Lee Fleming of the University of California, Berkeley’s Haas School of Business and Daniel Basco from Vertex, and included a group of collaborators from IP Checkups, an organization that specializes in patent analysis, to address these questions. In response to a Request for Proposal from the study committee (Appendix B), Vertex put together an analysis plan with three phases, which included plans to “assess the economic value of the chemical economy, assess industries where chemical research is driving employment opportunities and value creation, and assess how chemical research is contributing to sustainable economic progress” (Fleming and Basco, 2021). Most of the material related to the size of the chemical economy, and importance and impact of chemical research in the chemical economy came in their first phase of work. Most of their analysis relied on chemical patents and their valuation, which served as a proxy for chemical research since there are economic methods for valuating patents. Throughout this chapter, there are discussions of various aspects of the report from Vertex, including the interesting findings and important caveats.

The use of this report and the other collected data helped to paint a picture of the impact of the chemical industry but frequently fell short of helping the committee gain an understanding of the economic impact of fundamental research. To better understand the economic impacts of chemical research, individual case studies were selected that highlight chemical discoveries that led to a product or process with widespread implications for society.

2.1 BRIEF HISTORY OF THE U.S. CHEMICAL INDUSTRY

The chemical industry in the United States has been a prominent player on the world’s stage since the early 20th century. While it is notable that the United States emerged later than many European countries, the U.S. domestic market, transportation system, and R&D infrastructure propelled it to become one of the largest chemical producers in the world. With the boost in chemical production from World War I and World War II, the United States established and maintained

Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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a strong presence in the chemical marketplace from 1920 to 1960, sometimes referred to as the “golden age of innovation in the chemical industry” (Arora and Gambardella, 2010).

While it is impossible to name all of the products and processes that were responsible for the thriving industry, it is important to note that these inventions included chemicals and materials that improved and saved lives, as well as those that wrought tremendous harm. Many of the prominent examples include chemical weapons that were researched and used during this period of invention, and include, but are not limited to, mustard gas in World War I and, later, the herbicide Agent Orange during the Vietnam War (Everts, 2015). Half a century to more than a century later, we continue to struggle with the use of chemical agents in conflicts despite widespread international support limiting their production and use (OPCW, 2020). A prominent example of a product that improved quality of life is the discovery of nylon by Wallace Carothers of DuPont. This discovery was a major breakthrough in polymer chemistry and led to the production of the first fully synthetic fibers. It was noted by Hounshell and Smith (1988) that the success of this innovation encouraged a research-based approach at DuPont. In addition to the production of nylon, basic research by industrial chemists led to the discovery and production of a large number of polymers such as polyester, various acrylics, neoprene, and many more. Underpinning the massive commercial success of these products was the research and innovation that led to them. This fundamental research also laid important groundwork in the chemical understanding of materials and their interactions.

The U.S. chemical industry was also particularly good at developing processes for the production of chemical goods. Scaling up chemical production, like in the case of sulfuric acid or fertilizers, was a fruitful collaboration between chemical researchers and engineers (Arora and Gambardella, 2010). The growing popularity of the automobile and the resulting need for refined petroleum were partially responsible for the development of chemical engineering in America (NASEM, 2022a). The ability of the United States to produce large quantities of usable feedstock, especially the refining of crude oil, and to synthesize commodity chemicals was an additional boon to the economic success of the U.S. chemical industry. These industrial capabilities were also important for laying the groundwork for developing and understanding industrial chemical processes that are critical now, and will be used and refined even as commodity chemicals need to be increasingly produced from new feedstocks.

Developing successful large-scale production processes was also important to improving human health. In 1939, the first large-scale production of the antibiotic penicillin was accomplished in Brooklyn, New York (Aldridge et al., 1999). While the synthesis of this life-saving molecule was done by biological fermentation, it was chemists and chemical engineers who developed new fermentation conditions that allowed for the extraction, purification, and stabilization of the final molecule. The design and commercial-scale production of this antibiotic led the way for the large-scale production of other specialty chemicals and pharmaceuticals.

The U.S. chemical industry was also responsible for technological advances that moved computation forward, including revolutionizing the semiconductor. In 1979, researchers at IBM developed chemically amplified photoresists, the result of R&D of new polymers capable of a photoactivated chemical “chain reaction.” This new chemical amplification process gave a 30-fold improvement in light sensitivity over its predecessor (Brock, 2007). The increased sensitivity made it ideal for a growing electronics industry that was constantly searching to perform computational tasks at faster speeds and smaller scales. Chemically amplified resists are now integrated into most electronic devices and are important to billions of people around the world.

As the U.S. chemical industry continued to innovate throughout the late 20th century, chemical production grew and adversely affected the environment. This had a disproportionate impact on local and indigenous communities (Borunda, 2021; Langston, 2010). With heavy influence from these communities, a growing environmental movement sought accountability for the environmental damages that the chemical industry played a prominent role in accelerating. The interplay

Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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between environmental sustainability and the chemical sciences is covered in more detail in Chapter 3 but remains an important consideration as we look further at the history and impact of the chemical economy.

2.2 ESTIMATING CURRENT SIZE AND IMPACT OF THE CHEMICAL ECONOMY

The chemical industry has a significant direct impact on the economy through its contribution to gross domestic product (GDP), employment, and national competitiveness (Figure 2-1). An expanded analysis shows that there is also a significant indirect impact, noting that chemical knowledge is used in a wide variety of areas, and chemical products are used and consumed by almost every sector of the U.S. economy. This section highlights the direct economic impacts of the chemical economy by showing the value and employment added by the chemical sector. Several methods of indirect impact are also shown, primarily focusing on measurable impacts such as the use of chemical knowledge in other economic sectors or the reliance that patents have on chemical knowledge. Another aspect of indirect impacts is considered later in the chapter where the report notes the wide social, health, environmental, and economic impacts that specific chemical products can have on the entire national population. It can be difficult to measure the widespread impacts of every chemical product in every economic sector, but this can be displayed through specific examples as shown later in this chapter (see Section 2.3.3). Some of these examples include the widespread use and environmental potential of batteries, the economic and societal improvements afforded by oral contraception, and the immediate helpfulness and economic revival afforded by treatments for COVID-19.

2.2.1 Measuring Direct Contribution to the U.S. Economy

There are many measures of the size of the chemical economy, both domestically and internationally, and it is important to provide a short digest of some of the most prominent resources in order to get an idea of the size and impact of the chemical industry. To accomplish this, the

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FIGURE 2-1 Representation of the different types of economic impact, including both direct and indirect impacts. SOURCE: ICCA and OE, 2019.
Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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committee looked to two prominent resources: a report from the International Council of Chemical Associations (ICCA) and Oxford Economics (OE) published in 2019, and the 2021 Guide to the Business of Chemistry, produced by the American Chemistry Council (ACC, 2021). Here the chapter includes ICCA/OE and ACC reports of sales, imports, exports, employment, and value added from the chemical industry. Both reports measured the size of the chemical industry and the impact that it has on the overall economy. An important caveat is that these analyses exclude pharmaceuticals and medical manufacturing, and only include equipment when specified. Based on the definition of the chemical economy established by this report, pharmaceuticals would be included, and their impacts will be addressed throughout the report.

2.2.1.1 Monetary Impact of the Chemical Economy

It is first important to look at the direct value added and sales from the chemical economy, and the chemical economy’s impact on the overall economy. The ICCA and OE (2019) report estimated that the chemical industry contributed $5.7 trillion to the global GDP in 2017, or approximately 7% of the world’s GDP that year. The ACC reports numbers that are specific to the United States and notes that, in 2020, the “final sales” of the industry were $457 billion, of which $123 billion were intraindustry sales to other chemical producers (ACC, 2021). Of the remaining $334 billion, the leading buying sectors were rubber and plastic, pharmaceuticals, health care, other manufacturing, paper, and agriculture (Figure 2-2). Note that these were direct sales and do not include indirect uses, for example, if car manufacturers buy from tire manufacturers.

Additionally, in 2020, the value added in the U.S. economy from the chemical industry was $225 billion. The report from ICCA and OE estimated the chemical industry’s contribution to North American GDP to be $866 billion in 2017, of which $235 billion is the direct impact of the chemical industry, a number comparable to what was reported by the ACC. Importantly, the ICCA and OE report did not assess individual contributions of different countries in North America.

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FIGURE 2-2 Economic analysis of the business of chemistry, including a breakdown of the sectors where products were sold. All dollar values are in billions. SOURCE: ACC, 2021.
Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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The ACC report also noted that exports and imports have grown roughly threefold over the past two decades, and the United States has maintained a positive trade balance since 2016, which has been around $20 billion to $30 billion (Figure 2-3). Despite this growth, the output of the chemical industry has grown more slowly in recent years, with only a 3% increase in output between 2012 and 2019. In some ways, this slow growth indicates that the chemical industry as a whole is mature. This is especially true since innovation is mostly incremental, and changes in how products are customized and delivered to the customer are growing in importance, relative to fundamental advances.

As mentioned previously, the committee defined the chemical economy to include all products and parts of a value chain that rely on chemical knowledge, meaning that pharmaceuticals, but not biopharmaceuticals (see Section 1.2.1 for further explanation), should be included in any analysis of the chemical economy. Although most analyses do not include pharmaceutical impact, some data do describe the value of the pharmaceutical industry in the United States. When considering pharmaceutical manufacturing, which falls under the North American Industry Classification System (NAICS) code 3254, the committee was careful to exclude “Biological Product Manufacturing,” which is a subsection of this sector, designated as NAICS 325414. The value of production for the pharmaceutical industry that contributed to the chemical economy, excluding biological products, was around $160 billion in 2020 (Figure 2-4). The value of production has also been steadily increasing since 2000. While it is challenging to consider these numbers within the same analysis as the rest of the chemical economy, it is important to note that the value added from the pharmaceutical industry to the chemical economy in the United States is on a scale relatively similar to the value added from the rest of the chemical industry (BLS, 2022).

2.2.1.2 Employment

Another important aspect of the chemical economy’s impact is through employment numbers and employment potential. The ICCA and OE (2019) report noted that the chemical industry in 2017 supported 120 million jobs related to “all aspects of the global chemical industry.” The report also notes that the North American chemical industry supported 6.1 million jobs in 2017, of which 600,000 jobs were supported directly in the chemistry industry itself. The ACC annual report documents similar employment numbers that are specific for the United States, showing that in 2020, in addition to directly employing 529,000 workers, the entire chemical enterprise supported 4.1 million individuals who were interacting with the chemical economy (ACC, 2021). Employment in the industry within the United States has remained relatively steady with direct employment numbers staying between 525,000 and 550,000 since 2016.

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FIGURE 2-3 U.S. imports, exports, and trade balance in the chemical industry. SOURCE: ACC, 2021.
Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
×
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FIGURE 2-4 Value of production over time for pharmaceutical and medicine manufacturing (NAICS 3254). The blue line is the total value of production while the red line excludes an estimate of the added value from biological product manufacturing. The value for the red line was calculated using a data point from the Bureau of Economic Analysis that showed Biological Product Manufacturing (NAICS 325414) as 15.5% of the total value added from pharmaceutical and medicine manufacturing in 2012. The 2012 percentage data were used for all years, and it is therefore highly likely that this percentage is an underestimate, especially with the increased use of biologics and vaccines from pharmaceutical companies. SOURCE: Data from BLS, 2022, and the U.S. Bureau of Economic Analysis.

The North American chemical industry holds the top global position in terms of GDP/employees, when compared to other global regions (Figure 2-5). This is one of the reasons that the U.S. chemical industry pays its employees so well. The ACC (2021) report showed that employees are paid 23% more than those in other U.S. manufacturing jobs. Additionally, the job outlook for chemists and materials scientists is fairly positive, and employment is expected to grow approximately 6% over the next decade, which is similar to the average growth of all occupations (BLS, 2021).

2.2.2 Indirect Contributions of Chemistry to the U.S. Economy

To better understand the impact of chemistry on the U.S. economy, we must also consider its indirect impacts, such as the chemical knowledge that is used in a much wider range of industries. We touched on the indirect impacts in relation to economic output and employment that are supported by, but not directly within, the chemical economy. Some of the industries that are dependent on the spillover of knowledge, products, and processes from the chemical economy include strategically important industries such as semiconductors, computers, aerospace, medical equipment, and electrical equipment, in addition to other economically significant industries such as construction, food agriculture, and vehicles (ACC, 2021). Overall, the ACC report estimates that, based on dependent industries, the “business of chemistry” was responsible for adding approximately $5.2 trillion to the U.S. economy in 2020, which was about 25% of the U.S. GDP.

A report from the consulting group Vertex, which was prepared for this study (see Section 1.4 for more details), similarly noted that chemical knowledge and chemical inventions spill over into other industries (Fleming and Basco, 2021). The report first notes that chemistry patents accounted for approximately 18% of all patents filed by the U.S. Patent and Trademark Office from 2000 to 2020, with a much higher share of patents in years before 2006 (Figure 2-6). One publication

Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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FIGURE 2-5 Chemical industry’s total global economic output by region in 2017. SOURCE: Data from ICCA and OE, 2019.
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FIGURE 2-6 Share of chemistry patents in relation to all issued patents. SOURCE: Fleming and Basco, 2021.

explained this decrease by showing that, following a trend of increasing numbers of chemical patents between 1975 and 1991, the number of chemistry patents began to stagnate between 1991 and 2007 (Figure 2-7) (Autor et al., 2019). During this entire time period (1975–2007), computer patents had a boom, partially explaining the stagnation of chemical patenting as the new tech industry started to have major breakthroughs. This also explains why we see a decreasing trend in the percentage of chemistry patents in the Vertex analysis, which runs from 2000 to 2020.

In looking at chemistry-related patents, Vertex noted that a spillover of knowledge from chemical patents occurs when these patents are cited by patents from other areas such as human necessities, transport, materials, and new technology. Vertex data further suggest that 8.5% of patents rely on chemical research, as measured by citations, found within patents, to scientific publications

Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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FIGURE 2-7 Patent growth in chemicals and computers in the time periods of 1975–1991 and 1991–2007. SOURCE: Autor et al., 2019.

in chemistry-related journals (Table 2-1). In addition, of the patents that cite chemical research issued between 2000 and 2020, 73% are chemistry patents, and the rest (approximately 27%) are nonchemistry patents.

The Vertex report also presented the proportion of patents that cite chemical research in relation to patents that cite any scientific research. Figure 2-8 shows the time trend of number of patents by publicly traded U.S. corporations that cite chemistry research versus patents by the same set of corporations that cite nonchemistry scientific research. All of the cited research is designated as nonpatent literature (NPL). Among patents that cite any research, 20% of them specifically cited chemistry research over the period from 2000 to 2020, but this number has declined from 25% in 2000 to 14.4% in 2020.

To better understand the indirect impacts related to the spillover of chemical knowledge into other areas of R&D, Vertex analyzed the value of all patents that use chemical knowledge. To

TABLE 2-1 Number of Chemistry and Nonchemistry Patents That Cite Chemistry Research from Scientific Publications in Chemistry-Related Journals

Patent Cites Chemical Research Chemistry Patents Totals
Yes No
Yes 298,911 34% 73% 109,731 3% 27% 408,642 (8.5%)
No 574,454 66% 13% 3,851,322 97% 87% 4,425,776 (91.5%)
873,365 (18.1%) 3,961,053 (81.9%) 4,834,418

SOURCE: Data from Fleming and Basco, 2021.

Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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FIGURE 2-8 Share of patents that cite chemistry NPL and nonchemistry NPL. NOTE: Patents for this figure were selected conditional on having cited any NPL, such that the shares of patents citing chemical and nonchemical patents add up to 100%. These patents are also limited to those that have been assigned to public firms in the United States for purposes of evaluating the value of the patent using the methods described in Kogan et al. (2017). Within the sample period of 2000–2020, 592,831 patents cited at least one NPL and were issued by public firms. SOURCE: Data from Fleming and Basco, 2021.

perform this valuation, they matched each patent to estimates of patent values for corporate patents from Kogan et al. (2017) to calculate the value (known as the KPSS value). Importantly, the Kogan et al. estimates rely on the change in the stock market value of a company 3 days following the filing of a patent. Although this is an imperfect measurement, it is considered state of the art for global patent valuation. When considering the value of each patent, the average KPSS value of patents citing chemistry research versus patents citing other NPL can be graphed (Figure 2-9). Patents citing chemical research are more valuable on average than other patents citing nonchemical research.

These data show that the use of chemical knowledge produces products and processes with a higher valuation than the average use of other types of scientific knowledge. The ICCA and OE (2019) report points out the importance of chemical patents, and notes that “chemical products also fuel innovations and patents in other industries, such as photovoltaic cells for electricity production, lightweight vehicle parts, germ-resistant coating for medical instruments, etc.” If we consider this, together with the information that chemistry supports approximately 25% of U.S. GDP, it shows that chemical knowledge and innovation have a high impact on a large portion of the U.S. economy.

2.3 RESEARCH AND INNOVATION IN THE CHEMICAL INDUSTRY

The chemical industry has historically been a hub of innovation and discovery. ICCA and OE (2019) reported that in 2017, the global chemical industry spent $51 billion on R&D, with the United States being the second-largest contributor ($12 billion) after China ($14 billion). That

Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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FIGURE 2-9 Comparison of average KPSS valuation of patents that cite chemistry and nonchemistry NPL. (a) Average KPSS value of patents that cite chemistry NPL in each year, and the average KPSS value for patents that cite nonchemistry NPL. (b) Ratio of the average KPSS value of patents that cite chemistry NPL over the average KPSS value of patents that cite nonchemistry NPL. SOURCE: Data from Fleming and Basco, 2021.

report also notes that the patent intensity1 for the United States is 50% higher for chemistry than for the economy as a whole (Hu and Png, 2013). Greater patent intensity means that individual patents have a higher impact on a particular sector of the economy. These values reveal the impact of innovation in the chemical industry.

Universities spent about $4 billion in 2019 on chemistry-related basic and applied R&D (Figure 2-9) (Fleming and Basco, 2021). Funding sources of this $4 billion include about $2.1 billion from federal sources and about $250 million from “business sources” (Figure 2-10). Including the money they spent on university R&D, industry spent about $10 billion on R&D in 2019: 46% on

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1 According to the ICCA and OE (2019) report, “patent intensity is measured as the number of U.S. patents awarded to an industry relative to total industry sales in the United States.”

Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
×
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FIGURE 2-10 Chemistry-related R&D expenditures at universities by year, separated by funding sources. SOURCE: Fleming and Basco, 2021.

basic and applied research (defined as “fundamental research” in this report), and the remainder on development (ACC, 2020). This money does not include funding from the pharmaceutical sector, which spent about $72.8 billion in the United States on R&D in 2020 (ACC, 2020; Mikulic, 2021).2 Further details on funding and R&D spending is covered in Chapter 6.

2.3.1 Measuring the Value of Chemical Research

The large expenditure on R&D clearly establishes the importance of chemical research and innovation to the chemical industry. To better address the Statement of Task, the committee sought to understand the connection between fundamental chemical research and the chemical economy. It is important to note that there are substantial challenges associated with this task. Understanding the impact of chemical research is nontrivial because chemical discoveries can take years or even decades before their economic impacts are measurable. In addition, most chemical discoveries that are considered “breakthroughs” are based on a large body of knowledge that took decades, or even centuries, to build. Continuing to build this expansive knowledge base that researchers are able to pull from is one of the most important arguments for funding chemical research. But, it makes assessing the economic impact of chemical research very challenging, because it is difficult to make a global assessment of how research dollars that build a pool of chemical knowledge translate into economic output.

Using the best information and methods available, Vertex looked at the valuation of all chemistry-related patents, using patents as a proxy for chemical research in their analysis. This is a valuation similar to what was described in Section 2.2.2, except here, Vertex considered all chemistry-related patents, not just those that rely on chemical research. Vertex estimated the value of chemical patents in 2021 dollars to be between $132 billion and $555 billion per year from 2000 to 2020 (Figure 2-11). Acknowledging the caveats of these measurements and assuming that these may be

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2 Research at pharmaceutical companies ranges from small-molecule drug discovery and synthesis all the way to clinical trials, and therefore does not neatly fall under the umbrella of chemical research. Additionally, pharmaceutical companies spent money in 2019 and 2020 to research vaccines, prophylactics, tests, antibody therapies, and small-molecule drugs to combat SARS-CoV-2.

Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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FIGURE 2-11 Value of chemistry-related patents by year using KPSS data in 2021 dollars. SOURCE: Fleming and Basco, 2021.

overestimates, Vertex deflated the values by 33%3 and arrived at a conservative estimate of $221 billion/year to $370 billion/year, in 2021 dollars. Vertex also showed that chemical patents tend to be more valuable than the average patent (Figure 2-8). This indicates that chemical research has a higher private payoff than the average product or process that is patented after research. To quantify this, Vertex showed that while chemical patents accounted for 14% of all corporate patents between 2000 and 2020, they accounted for 23% of all value in the same time period. There are some other important caveats to this patent valuation, including

  • The calculation only values corporate patents and is mute on the value of patents assigned to start-ups, universities, and other organizations not listed on the stock market.
  • Based on the way the values were calculated, patents issued to a firm on the same day take the same value, even if one patent is more valuable to the firm than the others.
  • These values are sensitive to stock market volatility.
  • When chemical knowledge is used in the chemical industry, it is sometimes not patented and instead remains as a trade secret, so that the chemistries can only be used by the company who discovered or developed the process or product.

During their analysis, Vertex had many challenges drawing connections between R&D and economic impact. Importantly, they noted that “data limitations inhibit a comprehensive analysis.” Specifically, they noted data limitations related to “patent value estimation, wide-spread availability of licensing terms data, and wide-spread availability of government grant data.” To lessen the gaps, and assist future economic evaluations, the Vertex report noted several possible changes that could make an analysis more comprehensive. The first is the continued support of social science and business research by government and philanthropic organizations, especially in the pursuit of new and improved patent valuation methods. Vertex noted that the state of the art for global patent

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3 Based on an alternative measure that estimates value of chemical patents using a Tobin’s q regression (Lindenberg and Ross, 1981).

Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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valuation is likely a significant overestimate and improvements are needed. Second, they suggest supporting “efforts to collect data on how government research funding benefits the economy.” One example they point to is Michigan’s Institute for Research on Innovation and Science,4 which is aggregating data on grants and personnel. Last, they note that if the U.S. Patent and Trade Office were to “strengthen data collection and publication,” this would help any analyses on intellectual property and its connection to the economy.

2.3.2 Future Analyses to Help Understand the Impact of Chemical Research on the Economy

To continue building a full picture of how chemical research impacts the chemical economy, there are a number of other areas and analyses that could help the community gain a quantitative assessment of this relationship. Although the use of global patent valuation gives some insights, it falls short of a full understanding. Some ideas that might produce valuable results include the following:

  • An in-depth patent analysis that focuses on one or more top companies in the United States. The committee heard from a Dutch patent attorney who put together tools for in-depth patent analyses at the companies where she was employed as a patent attorney (van Tol-Koutstaal, 2021). These analyses require a large amount of concerted time and effort for each company, but help to minimize the complications around global patent valuation metrics and the unknown sources of some patents. A valuation such as this could give a precise overall picture of how the products of research are converted into economic output but with the caveat of being specific to the sectors occupied by the company.
  • An analysis of licensing revenues generated from patents. Although an analysis like this would require a special effort because the data are not easily available, it would provide useful data around what types of research produce patents that interest external groups. It would be most useful if this was done for a particular company or a specific patent category, and the data would likely show interesting trends on what technologies are most desired.
  • Drawing correlations between the number of patents and economic growth. While the current study looked at direct evidence of economic performance, a concerted effort to correlate the number of patents with economic growth for a particular area or company would provide further useful information. This is a very challenging analysis, and some efforts have shown that the number of patents filed by a particular country do not necessarily relate to the impact or economic growth of that country, due to the large number of confounding factors (Elsevier Analytical Services, 2021). To figure out if a correlation exists, researchers would have to develop a way to link data from patents to the firms where they are generated, and then link that information to economic growth. These data would be helpful for understanding how research that generates patented technologies helps to directly impact economic growth.

All of these ideas provide avenues for future analysis and research as we continue to understand the impact of chemical discovery on the U.S. economy. Many, though, come with the caveat that they are analyzing a small sector or a single company. This report took a global and comprehensive view of chemical research and the chemical enterprise. Both types of information are needed for a complete picture.

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4 See https://iris.isr.umich.edu/.

Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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2.3.3 Examples of Chemistry Research That Have Benefited the Economy

While we have noted the challenges in assessing the scale of the chemical economy, as well as the impact of R&D on the economy, one of the best ways to understand both concepts is through specific examples. There are many cases where chemical research has led to widespread economic and societal improvements. Many of these examples make it clear that fundamental chemical research has brought about pivotal discoveries that have led to new products or processes. Some of these examples also show the sprawling impact that such inventions have had. Six examples spanning from the 1960s to today are highlighted: rechargeable batteries, therapeutics, silicon chips, oral contraceptives, catalytic converters, and treatments for COVID-19.

2.3.3.1 Secondary (Rechargeable) Batteries

Modern secondary (rechargeable) batteries have contributed significantly to important economic, energy, and sustainability objectives. Lithium-ion and nickel-metal hydride batteries began widescale commercial production in the 1990s and were essential to the introduction of electric and hybrid electric vehicles that are competitive with their internal combustion counterparts in terms of performance and cost (Sepulveda et al., 2021). They have made possible ubiquitous mobile technologies, including telephones and portable computers, and are particularly beneficial in establishing reliable telecommunication and financial infrastructures in developing countries (NASEM, 2021b). The cost and performance characteristics of nickel-metal hydride batteries allow them to directly replace cylindrical primary (nonrechargeable) alkaline and Leclanché (carbon-zinc) batteries in virtually all applications (Revankar, 2019). The significance of lithium-ion battery research was recognized with the award of the 2019 Nobel Prize in Chemistry (Smithsonian Magazine, 2019).

Complementary breakthroughs in industry and academia led to the development of lithium-ion batteries. Stanley Whittingham, who worked for ExxonMobil, started working on a fast-charging battery, but the lithium and titanium combination he used was unstable. John B. Goodenough, an engineer at the University of Texas at Austin, made a cathode of lithium cobalt oxide and discovered that the battery power and capacity doubled while making it safer to use. Akira Yoshino at Meijo University in Nagoya improved the battery’s capacity and safety (Smithsonian Magazine, 2019). Philips Research Laboratories demonstrated the first prototype nickel-metal hydride battery in 1984, building on fundamental research on metal hydrides that began in the 1800s.

The development and improvement of battery technology has important implications for environmental sustainability and plays a large role in the U.S. economy. Batteries are an important method of energy storage that enable the introduction of environmentally sustainable technologies such as electric vehicles and renewable energy sources that include solar and wind power. Additionally, a report produced for Battery Council International estimated the economic impact of the U.S. lead battery industry, and noted that the entire enterprise annually supports $10.9 billion in U.S. GDP and 92,200 jobs (EDR Group, 2019).

2.3.3.2 Biocatalysis in Synthetic Chemistry

The basic research from Frances Arnold and her lab has had a significant impact on the development of simpler and more sustainable synthetic processes to make new molecules (Turner, 2003). She uses “directed evolution” to develop new enzymes with new functionality. Directed evolution of enzymes for biocatalysis is built on a foundation of chemical knowledge from biophysical chemists and analytical chemists working together to understand the structural interactions and reaction mechanisms of different enzymes. The first protein structures of myoglobin and hemoglobin were published in 1958 and 1960, respectively, with a subsequent Nobel Prize in Chemistry awarded in

Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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1962 (Dauter and Wlodawer, 2016). The ability to visualize protein structures allowed chemists to model and understand enzymatic reactions, leading eventually to work on directed evolution that has been widely adopted by the chemical industry. This technology is the basis of the company Codexis, which develops highly specific and efficient enzymes used in DNA and RNA synthesis and in biopharma manufacturing. Begun in 2002, Codexis had 165 employees and revenues of $64 million by 2020.

An enzyme engineered using this technology was recognized in the 2010 Presidential Green Chemistry Challenge. Merck and Codexis were given the Greener Reaction Conditions Award for their development of a second-generation green synthesis of sitagliptin, the active ingredient in Januvia, a treatment for type 2 diabetes (Codexis, 2021). Merck notes that “this collaboration has led to an enzymatic process that reduces waste, improves yield and safety and eliminates the need for a metal catalyst” (EPA, 2010). Before the use of this greener synthesis, the initial manufacturing process filed in 2005 and approved in 2006 had some inherent liabilities including inadequate stereoselectivity, which required a crystallization step; high-pressure hydrogenation (at 250 psi), which required expensive, specialized manufacturing equipment; and the need for a rhodium catalyst (EPA, 2010). Using directed evolution, a transaminase catalyst was developed by Codexis which enabled a new manufacturing process to supplant many of these concerns. The evolved transaminase improved the catalytic activity of the original enzyme by more than 25,000-fold. The challenge award website from the U.S. Environmental Protection Agency notes that

[t]he streamlined, enzymatic process eliminates the high-pressure hydrogenation, all metals (rhodium and iron), and the wasteful chiral purification step. The benefits of the new process include a 56 percent improvement in productivity with the existing equipment, a 10–13 percent overall increase in yield, and a 19 percent reduction in overall waste generation. (EPA, 2010)

This new process has been used in manufacturing since 2012 for this critical drug (EPA, 2010).

2.3.3.3 Chemistry of Silicon Computer Chips

Modern computation is a product of many different fields of research, but chemical research has played a big part in increasing the computing speed and miniaturization of the computational technology that we enjoy today. The social, economic, and health impacts of portable computers and mobile phones are enormous.

In the mid-20th century, fundamental research at the intersection of physics, engineering, and chemistry produced innovations that led directly to modern computer architectures and the present computing ecosystem. The first patents for semiconductor devices appeared in the early 1900s (Ward, 2014), and the 1956 Nobel Prize in Physics was awarded to William Shockley, John Bardeen, and Walter Brattain for their research creating the first semiconductor-based transistor (Nobel Prize Outreach, 2022d). One of the next major advances was research in photolithography in the 1950s, which enabled printing of miniaturized integrated circuits (Computer History Museum, 2022). In particular, fundamental research in photoresists and catalysts at different length scales facilitated technology development and drove Moore’s Law for computer chip manufacturing at companies such as IBM (Figure 2-12). As an example, research on photoacid generators (small molecules that react with specific wavelengths of light to form a superacid in the solid state) led to the development of material combinations needed for sub-10-nm technology. At the time of this report, a remarkable 2-nm feature size had been reached, made possible with technology based on these early discoveries derived from fundamental chemistry, polymer chemistry, and materials science. Because of these advances in chemistry, the size of computer chips has decreased steadily over the years, leading to the incorporation of more and more transistors on computer chips and concomitantly faster computation speeds (Shalf, 2020).

Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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FIGURE 2-12 Display of Moore’s Law showing the number of transistors per microchip in each year. SOURCE: Our World in Data, 2017.

The rapidly growing need for computational technologies has caused silicon chips to be more critical to the U.S. economy than ever before. As chemistry, engineering, and physics have allowed for increased performance of semiconductors, the semiconductor industry is now directly responsible for a large amount of the U.S. GDP. According to a report from the Semiconductor Industry Association (SIA) and OE, “the U.S. semiconductor industry is substantial, directly contributing $246.4 billion to U.S. GDP and directly employing over 277,000 workers in 2020” (SIA and OE, 2021). Similar to the chemical industry as a whole, the semiconductor industry has a wide range of indirect economic impacts due to the use of semiconductors in such a wide variety of technologies. The report notes that “300 downstream economic sectors accounting for over 26 million U.S. workers are consumers of and are therefore enabled by semiconductors” (SIA and OE, 2021).

2.3.3.4 Oral Contraceptives

Oral contraception for women has had an undeniably large effect on the economy and on the role of women in society. Norethindrone (also known as norethisterone), the original compound that was used in birth control pills in the 1950s, was still the 143rd most prescribed drug in the United States in 2019, while a combination drug of norethisterone and ethinyl estradiol was the 42nd most prescribed drug (ClinCal, 2019). Oral contraceptives provided women a level of control over their own reproductive health and the ability to make decisions about family planning that they never had before.

The adoption of the “Pill” for use in contraception took a long time. When it was introduced in the 1960s, it was only used for “cycle control” in married women. But, in the 1980s, the Pill became more widely accepted as a method of family planning, especially with the increasing number of women who were in medicine and other professional careers (Liao and Dollin, 2012). Oral contraception has also empowered women around the world, providing them with reproductive autonomy and helping to balance the power dynamic in reproductive decision making. According to the United States Agency for International Development, family planning provides a large number of benefits, including protecting women and children’s health, reducing HIV and AIDS, decreasing

Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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abortions, improving educational and employment opportunities for women, and reducing poverty (USAID, 2021).

The original synthesis of norethindrone, a steroid derivative, was completed on October 15, 1951, by Luis Miramontes, a young Mexican chemist working under the supervision of Carl Djerassi at the company Syntex (Figure 2-13) (Djerassi, 2006). Syntex, located in Mexico City, was a unique company at the time, because it invested heavily in basic research around steroid hormone synthesis and was responsible for approximately 30% of the industrial publications on the topic prior to 1960 (Olofson and Gortler, 1999). Much of the reason for this heavy investment in steroid chemistry was related to the discovery that a native yam plant, Dioscorea mexicana, contained a substantial amount of the natural product diosgenin. In the 1930s, a chemist named Russell Marker, from Pennsylvania State University, discovered a simple synthetic route, termed the “marker degradation,” to convert diosgenin to the steroid hormone progesterone (Olofson and Gortler, 1999). Progesterone was the main focus of the steroid hormone industry at the time because “of its value in treating various menstrual disorders and preventing certain types of miscarriages” (Olofson and Gortler, 1999).

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FIGURE 2-13 Lab notebook of Luis Miramontes from October 15, 1951, showing the final step in the synthesis of norethindrone. SOURCE: Djerassi, 2006.
Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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By the time Djerassi came to Syntex in 1949, his research program was less interested in the synthesis of progesterone and instead focused on cortisone, recently discovered as a treatment for rheumatoid arthritis. While working on the cortisone synthesis from the diosgenin precursor, Djerassi was also interested in another possible line of research around progesterone derivatives. At the time, modifying progesterone was widely considered to be useless because any modifications seemed to cause the molecule to lose biological potency. However, a researcher at the University of Pennsylvania performed a really messy and impure synthesis to create a derivative of progesterone that removed a methyl group. This “19-norprogesterone” seemed to display hints of activity that were higher than progesterone and opened the door for progesterone modifications that might lead to higher potencies. After researching and trying out a large number of different progesterone derivatives, a final formulation was synthesized and then sent out for biological evaluation.

The final formulation of the “Pill” produced by Djerassi and Miramontes provided a simple synthesis derived from an abundant natural product. Norethindrone also had higher potency than progesterone, a characteristic that was critical for oral administration. Progesterone, while still effective, cannot be taken as an oral medication. The flood of research in natural products synthesis and steroid hormone development was a critical scientific endeavor that led to the final formulation of oral contraceptives and led to a simpler synthesis of many other important compounds, including progesterone, cortisone, and estrogen.

2.3.3.5 Catalytic Converters

As noted later in this report, in Section 3.4.4.1, the invention of the catalytic converter led to a significant decrease in air pollution from internal combustion engines. The introduction of the catalytic converter in the 1970s produced huge economic and environmental benefits by reducing airborne particulates, acid rain, smog, and these pollutants’ concomitant health effects.

While there are several chemical strategies used inside a catalytic converter, all of them deploy some combination of platinum group metals (PGMs) platinum, palladium, and rhodium with other components to provide functions such as oxygen and hydrocarbon storage (Farrauto et al., 2019). Two separate National Medals of Technology and Innovation were awarded in 2002 related to the invention and development of catalytic converters. One went to John J. Mooney and Carl D. Keith at Engelhard (now BASF) for the invention and development of the three-way catalyst system that allowed the simultaneous control of Carbon Monoxide, hydrocarbons, and NOx. A second award went to Haren S. Gandhi of Ford Motor Company both for his contributions toward developing these systems as well as for driving the focus on recycling of spent converters, which improved the sustainability of PGMs in their deployment (USPTO, 2002). Despite the current maturity of these catalytic systems, their performance continues to improve thanks to the application of advances from fundamental studies (Paolucci et al., 2017).

Chemical and materials sciences were critical in the development of other catalytic converter components beyond the catalysts. The bulk structure is a ceramic honeycomb typically made of cordierite, which has been extruded into a form factor that allows high gas flow while minimizing backpressure (Farrauto et al., 2019). The science needed to produce these structures was based on years of fundamental studies in rheology, surfactants, and oxide chemistries (Govender and Friedrich, 2017). Rodney D. Bagley, Irwin W. Lachman, and Ronald M. Lewis of Owens Corning (now Corning) were awarded a National Medal of Technology and Innovation in 2003 in recognition of the impact that their development of ceramic substrates for catalytic converters has had (USPTO, 2003). Chemical exploration of improved honeycomb designs remains an opportunity for fundamental research. One exciting development is the use of 3-D printing combined with advanced computational methods to design and manufacture the honeycombs (Kovacev et al., 2021). There

Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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are also great opportunities to expand the use of these materials and related substrates into other environmental research areas (Hosseini et al., 2020).

2.3.3.6 Chemical Research Toward the COVID-19 Response

A timely example of the large-scale benefits of fundamental chemical research is its impact on the response to COVID-19, the pandemic that cost nearly 1,000,000 American lives as of February 2022 (NCHS, 2019). The Congressional Budget Office estimates $7.6 trillion in lost output for a decade from COVID-19 (Cutler and Summers, 2020). Estimates that account for mortality, morbidity, mental health conditions, and direct economic losses place the economic cost at $19 trillion, assuming the pandemic had been largely controlled by fall 2021 (CBO, 2020). Response to a pandemic of this magnitude requires a multipronged approach including public health measures, vaccines that can reduce the incidence and severity of disease, and therapeutics that target multiple parts of the viral life cycle. This multipronged approach requires a multidisciplinary effort, with inputs from scientific researchers, health care workers, public health professionals, and so many more. Chemical research continues to play a significant role in this effort and has contributed to a number of areas, including the development of nonnatural nucleotides (Nance and Meier, 2021) and lipid nanoparticles (Eygeris et al., 2022) that are crucial for the stability and delivery of mRNA vaccines. Additionally, fundamental chemical research from the late 1980s onward continues to be pivotal for the discovery of oral medications that have shown efficacy in clinical trials for COVID-19, including remdesivir (Gottlieb et al., 2022), molnupiravir (Bernal et al., 2022), and nirmatrelvir (Paxlovid) (Hammond et al., 2022).

Remdesivir and molnupiravir are two in a large class of drugs that are chemically modified variations of nucleotides, the molecules that are building blocks for both RNA and DNA. Early examples of this class of therapeutics were created in the 1960s as possible anticancer drugs and in the 1980s were discovered to be promising therapies for HIV/AIDS. Modified nucleotides have subsequently been used as therapies for hepatitis, Ebola, and other viral diseases (NIAID, 2018). Fundamental research in the chemical synthesis of modified nucleotides directly enabled applied research in the use and manufacture of these molecules as drugs. As a concrete example, fundamental research in the 1980s and early 1990s discovered novel strategies to control the geometric arrangement of atoms in the modified nucleotides and therefore synthesize the specific enantiomer that is effective for safely treating disease (Wilson and Liotta, 1990).

This entire body of work enabled the discovery of molnupiravir, which was first investigated as a potential therapy for Venezuelan equine encephalitis virus (VEEV) but was later shown to have broad-antiviral activity against other diseases, including Ebola (Painter et al., 2021). Finding drugs for VEEV was a priority for the Department of Defense (DoD), and DoD, along with other government agencies, provided $35 million between 2013 and 2020 to Emory University researchers for the development of molnupiravir. This included 6 years of nonclinical testing for the drug, and the testing of its use to fight MERS-CoV (Abinader, 2021). Emory has five published U.S. patent applications directed to derivatives of N4-hydroxycytidine, the molnupiravir parent compound, which acknowledges U.S. government funding for the development of these patents (Abinader, 2021). Emory University subsequently licensed molnupiravir to Ridgeback Biotherapeutics, which in turn collaborated with Merck for clinical trials of molnupiravir for COVID-19 and for molnupiravir manufacturing (Abinader, 2021).

In the case of molnupiravir, the U.S. Food and Drug Administration issued an emergency use authorization (EUA) in March 2022 (FDA, 2022). The drug’s use is restricted to high-risk individuals who contract COVID-19, but Merck is already projecting between $5 billion and $5.5 billion worth of sales in 2022 (Dunleavy, 2022). Paxlovid was similarly issued an EUA in December 2021 (Katella, 2022), and analysts are predicting $22 billion in sales after reporting $1.5 billion in the

Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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first quarter of 2022 (Kimball, 2022). Both of these pharmacueticals are having an immediate and noticeable economic and public health impact.

2.4 UNDERSTANDING U.S. COMPETITIVENESS IN THE CHEMICAL ECONOMY

To fully understand the economic impact of the U.S. chemical economy, it is important to evaluate its role on the global economic stage and understand changes or shifts that have occurred over time. The U.S. chemical economy is also part of a complex ecosystem that, while competitive with chemical industries in other countries, is also heavily reliant on them for collaboration, innovation, and workforce needs. These factors must be considered as a part of the same ecosystem and kept in mind in creating policies for improving the chemical economy.

2.4.1 Comparative Global Research Output in Chemistry

To analyze global competitiveness, we can compare research outputs of different countries in the form of publications, economic outputs, and several other points of analysis. It is important first to look at the research portfolio of individual countries for the purposes of understanding where the research interests are in different nations. In 2020, more than 50% of the publications from the United States were in the life sciences (37% health sciences and 14% biological and biomedical sciences) (Figure 2-14) (NSB, 2021). In contrast, only 4% of U.S. publications focused on chemistry and materials science. Inevitably, chemical knowledge informed some of the publications in the life sciences, but it is important to note that chemistry-specific publications are a low percentage of U.S. research output. China, India, and Japan each had 8% of their publication output in chemistry-specific research, with 5%, 7%, and 3% in materials science, respectively. These differing portfolio shares in chemistry are one indicator of a relative advantage of China in the area of chemistry publication (Figure 2-14).

In addition to the data showing research portfolios, it is helpful to understand the relative abundance of publications and patents in particular areas. The metrics for scientific productivity are imperfect because of the many caveats associated with using quantitation such as number of publications or number of patents in a particular area. However, these numbers, when considered as a part of a holistic picture, can help to understand trends and intensity of inventions in a scientific field during specific time periods. The National Science Foundation’s (NSF’s) National Science Board measures publication numbers using fractional article counts, which means that “each country receives fractional credit on the basis of the proportion of its participating authors” (NSB, 2021). The U.S. fractional share in all science and engineering (S&E) articles has declined by about half (from 31.6% to 15.5%) in the period between 1996 and 2020, and the U.S. share in chemistry-specific articles has also declined by about half over the same period (from 19.8% to 8.8%) (Figure 2-15c and d) (NSB, 2021). Interestingly, while the U.S. percentages have declined, the total fractional count of articles published by U.S. authors has increased when looking at all S&E fields (313,000 in 1996 to 456,000 in 2020) and remained stagnant when considering chemistry-specific S&E articles (between 10,000 and 20,000 over the same time period) (Figure 2-15a and b). The decrease in percentage of fractional S&E publications is therefore largely because China’s total numbers of all S&E articles and chemistry-specific S&E articles increased dramatically. China’s fractional publication count of all S&E articles was 34,000 in 1996 and increased 20-fold by 2020 to 670,000. Similarly, the number of chemistry articles saw an 11-fold increase, going from 4,700 in 1996 to 55,600 in 2020. This increase in total fractional counts led to China’s share in overall S&E articles increasing more than sixfold (from 3% to 23%) in the period between 1996 and 2020. Additionally, China’s share in chemistry has also increased more than fourfold over the same period

Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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FIGURE 2-14 S&E research portfolios, by the eight largest fields of science and by selected country or economy in 2020. The numbers represent a percentage of total research, measured in publication output, for each country. SOURCE: NSB, 2021, fig. PBS-3.

(from 7% to 31%). No other country experienced such a drastic increase in publication output over this time period, although notably, India doubled its percentage of all S&E articles published. Most other countries have remained relatively static (Figure 2-15d).

Although the number of S&E articles from the United States increased from 1996 to 2020, chemistry-specific articles remained at around 10,000–20,000 articles per year (Figure 2-15a and b). There are several possible explanations for this trend. The first is that the chemical industry and its related chemical research and publication output has stagnated. Another possibility is that chemistry research in the United States has become a science that is now used to support and inform other topic areas such as the life sciences, and publications in these areas, while they might be based on chemical discovery, are not counted toward chemistry publications. Likely, it is some combination of these and other factors. As shown in Figure 2-15, China’s publication rate has been steadily increasing over the past 20 years, likely due to its strong history of seeing the value in investing in the chemical sciences (Jia, 2018).

Another way to look at publications is to consider the share of S&E articles that are the most cited (e.g., top 1% cited), with citations normalized by subfield and year. Articles published in the United States in 2018 were about 60% above the world average for all S&E articles and 55% above the world average in chemistry (Figure 2-15). The only other countries to have an above-average number of highly cited papers are the United Kingdom and, in later years, Germany. This correlates well with countries that have well-established scientific research programs. When looking at China’s share of the top 1% of cited S&E articles, the numbers in 2018 seem to be on par with the world average, while the share in the top 1% of cited articles in chemistry is 39% above the world average.

Looking at the trends over time for the share of highly cited articles per country, it is notable that the U.S. share in all S&E articles had been stagnant from 1996 to 2015 and then declined in more recent years, from 72% above the world average to 60% above the world average. Compared to this overall trend, the United States has had a steeper decline in chemistry, dipping from 93% above the world average to 55% above the world average (Figure 2-16).

Aside from publications, another possible metric of research productivity is to look at the share of patents published by different countries in the area of chemistry. In several different subfields of chemistry, the United States was the dominant publisher in 2017–2019 (WIPO, 2021). For example, the United States filed the most overall patent applications in biotechnology and pharmaceuticals (Table 2-2). China was more active than all other countries in basic materials chemistry, chemical

Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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FIGURE 2-15 Fractional counts of total S&E articles and chemistry-specific S&E articles by country and publication year. The fractional count indicates that for every publication, “each country receives fractional credit on the basis of the proportion of its participating authors.” (a) Total fractional article counts for all S&E articles. (b) Total fractional article counts for chemistry articles. (c) Percentage of fractional article counts as a part of all published articles for all S&E areas. (d) Percentage of fractional article counts as a part of all published chemistry articles. SOURCE: Data from NSB, 2021, table SPBS-6.

engineering, and environmental technology (Table 2-2). Several other countries, such as Russia, Germany, and Japan, were leaders in other areas of chemistry, but there are no particularly strong indicators that one country holds an advantage in patenting over another. Additionally, there are many caveats associated with patent data that were laid out in detail earlier in the chapter.

2.4.2 Comparative Global Economic Output

We can further consider the value added of chemicals and chemical products by industry in order to assess the competitiveness of the chemical economy. Between 2002 and 2010, the United States was the unparalleled leader in the share of value added by chemical industry (IHS Markit, 2022). However, throughout that period, the U.S. chemical industry saw a steady decline. In 2011, the value-added chemical and chemical products industry in China surpassed that of the United

Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Image
FIGURE 2-16 Fractional count of top 1% cited S&E articles compared to the world average. SOURCE: Data from NSB, 2021, tables SPBS-58 and SPBS-62.
Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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TABLE 2-2 Share of Total Published Patent Applications by Country and Subfield, 2017–2019

Chemistry Subfield Share of Total Published Patent Applications, 2017–2019) Total Published Applications in 2019
United States Germany Japan China Russian Federation South Korea
Organic fine chemistry 2.8 3.0 1.4 1.9 1.8 1.9 65,540
Biotechnology 4.0 1.9 1.1 1.6 1.7 1.6 70,520
Pharmaceuticals 5.9 2.5 1.3 2.5 4.3 2.1 96,737
Macromolecular chemistry, polymers 1.3 2.0 2.3 1.8 0.9 1.4 53,901
Food chemistry 1.2 0.4 0.8 3.2 8.0 2.1 56,343
Basic materials chemistry 2.6 3.1 2.2 3.5 2.8 1.8 81,429
Materials, metallurgy 1.2 1.9 2.4 3.2 4.6 1.8 76,570
Surface technology, coating 1.3 1.7 2.5 1.4 1.5 1.5 48,716
Microstructural and nanotechnology 0.2 0.2 0.1 0.2 0.8 0.1 5,724
Chemical engineering 2.1 2.7 1.4 4.1 3.9 2.3 91,855
Environmental technology 1.1 1.5 1.1 2.9 2.8 1.6 63,462

NOTE: Numbers in bold indicate top number of patent applications for a particular field. SOURCE: Data from WIPO, 2021.

States, following a steady increase in China’s output over the entire period. Importantly, the U.S. share in the international chemical economy held steady and even saw a slight increase between 2010 and 2018, indicating that, despite China’s continual increase, the United States was also experiencing growth. This was in large part due to the extraction and increased supply of natural gas (see Box 2-1). By 2018, the U.S. chemical industry value added was 0.216 trillion current U.S. dollars, second to China’s value added in the chemical industry at 0.298 trillion current U.S. dollars. That year, China and the United States accounted for 50% of the world chemical output (IHS Markit, 2022).

Another metric of the economic competitiveness of chemistry in the United States and in the world is sales of the leading chemical companies globally. In 2020, as reported by Chemical & Engineering News, the top 50 chemical companies, headquartered in 19 countries around the world, had total combined sales of nearly $796 billion. Ten of those companies are headquartered in the United States (Table 2-3) and had combined total sales in 2020 of $154 billion (Tullo, 2021). Among the U.S. chemical companies in the top 50, only two, Dow Chemical (#3) and LyondellBasell (#10), are in the top 10. Nonetheless, the 10 U.S. companies claim the largest percentage of total sales (19.3%) among the 19 countries on the list.

All of these factors taken together paint a picture of several countries who are dominant in the chemical sciences enterprise, with leadership in various facets from the United States, China, Japan, Germany, and the UK. Before making decisions about international competitiveness and leadership, it is important to consider a wide swath of data and a number of different metrics. The United States continues to be an important player in chemical research and the chemical industry. To continue being a leader in this space, the United States has to consider making data-driven and aspirational investment decisions relating to the chemical sciences enterprise.

Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
×
Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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TABLE 2-3 Top 50 Chemical Companies by Sales

2020 Rank Company Chemical Sales ($ millions) Headquarters Country
1 BASF 67,491 Germany
2 Sinopec 46,656 China
3 Dow 38,542 U.S.
4 Ineos 31,310 UK
5 Sabic 28,792 Saudi Arabia
6 Formosa Plastics 27,711 Taiwan
7 LG Chem 25,477 South Korea
8 Mitsubishi Chemical 25,323 Japan
9 Linde 24,392 UK
10 LyondellBasell Industries 23,407 U.S.
11 ExxonMobil Chemical 23,091 U.S.
12 Air Liquide 23,089 France
13 PetroChina 21,769 China
14 DuPont 20,397 U.S.
15 Hengli Petrochemical 17,265 China
16 Sumitomo Chemical 15,822 Japan
17 Toray Industries 15,196 Japan
18 Shin-Etsu Chemical 14,019 Japan
19 Evonik Industries 13,919 Germany
20 Reliance Industries 13,600 India
21 Covestro 12,216 Germany
22 Shell Chemicals 11,721 Netherlands
23 Yara 11,591 Norway
24 Braskem 11,348 Brazil
25 Mitsui Chemicals 11,348 Japan
26 Syngenta 11,208 Switzerland
27 Bayer 11,204 Germany
28 Solvay 11,084 Belgium
29 Wanhua Chemical 10,636 China
30 Indorama 10,589 Thailand
31 Lotte Chemical 10,354 South Korea
32 Johnson Matthey 9,951 UK
33 Umicore 9,738 Belgium
34 Asahi Kasei 9,283 Japan
35 DSM 9,249 Netherlands
36 Arkema 8,996 France
37 Air Products 8,856 U.S.
Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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2020 Rank Company Chemical Sales ($ millions) Headquarters Country
38 Mosaic 8,682 U.S.
39 Hanwha Solutions 8,596 South Korea
40 Eastman Chemical 8,473 U.S.
41 Chevron Phillips Chemical 8,439 U.S.
42 Rongsheng Petrochemical 8,359 China
43 Borealis 7,780 Austria
44 Westlake Chemical 7,504 U.S.
45 Sasol 7,288 South Africa
46 Nutrien 7,156 Canada
47 Lanxess 6,965 Germany
48 Tosoh 6,864 Japan
49 DIC 6,567 Japan
50 Corteva Agriscience 6,461 U.S.

SOURCE: Data from Tullo, 2021.

2.4.3 Impact of International Researchers on the U.S. Chemical Economy

The U.S. chemical economy is part of a complex ecosystem that is heavily reliant on other countries for collaboration, innovation, and workforce needs. The Science and Engineering Indicators produced by NSF’s National Science Board noted that in 2017, 30% of workers in S&E occupations were foreign-born. When looking specifically at the workforce in the physical sciences, approximately 34% of Ph.D.-level scientists were foreign-born (Figure 2-17). Additionally, approximately 27% and 23% of physical sciences workforce bachelors and masters recipients, respectively, were foreign-born (Figure 2-17) (NSB, 2019). Importantly, these data do not specify what sector these individuals are working in, and they do not specify chemists or chemical engineers, but the number of foreign-born workers in the United States is still large. The highest percentage of this workforce is from Asia, with China, India, and South Korea in the top three places (NSB, 2019). If you also look at those receiving degrees, 36.2% of doctoral-degree chemists and 47.3% of doctoral-degree chemical engineers in the United States between 2010 and 2020 were foreign-born citizens (NCSES, 2020b). Based on the 2020 NCSES data, approximately 73% of these graduates say they plan to stay in the United States, and these numbers held true with doctoral recipients from 2011 to 2013 staying in the United States at 71% and those recipients from 2006 to 2008 staying at 72%, when the data were collected in 2017 (NCSES, 2020b).

As an additional example, while the Nobel Prizes are an imperfect measure of impact, it is notable that the number of researchers that make up the category of “foreign-born U.S. laureate” is greater than the number of prizes won by most countries. Including the 2021 Nobel Prize, 46% of all prizes have been given to researchers in the United States, and of that, 16% of all prize recipients are foreign-born U.S. laureates (Figure 2-18). It becomes fairly clear that in a highly competitive international environment, the United States remains a desirable place to perform groundbreaking research.

Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Image
FIGURE 2-17 Foreign-born individuals in S&E occupations in the United States. SOURCE: NSB, 2019.
Image
FIGURE 2-18 Analysis of foreign- and native-born U.S. Nobel Prize winners from 1901 to 2021. SOURCE: Farago and Waslin, 2021.
Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
×

2.5 CONCLUSIONS

This chapter outlines the scope and impact of the U.S. chemical economy and identifies linkages between chemical research and the chemical economy using various measurable parameters and case studies. The data show that the chemical economy in the United States is still strong but could be stronger if we want to experience leadership growth. Some of the quantitative data from this chapter show that in 2020, the U.S. chemical economy, excluding pharmaceuticals, had $457 billion in sales, directly added $225 billion to the overall economy, and employed 529,000 individuals. These numbers have been relatively steady for the past 5 years. The chemical economy additionally has indirect impacts on the U.S. economy, and in 2020 the “business of chemistry” was estimated to be responsible for $5.2 trillion, or 25% of U.S. GDP, and the employment of 4.1 million individuals who in some way interact with the chemical economy.

This chapter also highlights the great difficulty in quantifying the true impact of fundamental chemical research. Despite this, the importance of chemical discovery is quite evident in specific technologies that have a huge impact on the economy and society, such as batteries, biocatalysis in synthesis, silicon chips, oral contraceptives, catalytic converters, and pharmaceuticals to fight SARS-CoV-2. In each of these cases, a large body of chemical knowledge that was built over decades or centuries contributed to a chemical discovery that enabled important advances. From the information gathered about the size and impact of fundamental chemical research and the U.S. chemical economy, the committee highlighted several conclusions.

Conclusion 2-1: Chemical research has an outsized economic value based on the spillover of chemical knowledge and products into other areas and the fact that chemical patents, as well as patents that rely on chemical knowledge, have a higher average value than other patents. Chemical patents accounted for 14% of all corporate patents between 2000 and 2020, but they accounted for 23% of all value in the same time period.

Conclusion 2-2: It is challenging to directly link chemical research to economic impact because each chemical product or process relies on a broad body of chemical knowledge and discovery that is built over decades or centuries, and chemical knowledge is also deeply integrated into other disciplines, making the specific impacts of chemistry in the broad scientific enterprise difficult to deconvolute. Additionally, analyzing the economic impact of chemical research suffers from a lack of data, including patent value estimations, widely available licensing terms data, and government grant data.

Conclusion 2-3: Chemistry is a foundational and central scientific discipline, and sustained investment in fundamental chemical research provides the chemical knowledge for technology development, generating unexpected discoveries that are the basis for innovation. These innovations directly influence the chemical economy, environment, and quality of life and also advance knowledge and discovery in many other scientific and technological disciplines, such as the life sciences, information technology, earth sciences, and engineering.

Conclusion 2-4: The chemical economy is critically important for our national economy and our leadership in the international chemical enterprise. This leadership relies heavily on advances in fundamental chemistry that drive the creation of new tools, technologies, processes, and products and enables environmental considerations. However, our nation’s

Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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leadership in the chemical industry cannot be taken for granted, and this leadership needs continued and sustained nurturing and support.

Conclusion 2-5: The success of the chemical economy relies on a large group of employees who work both within and proximal to the chemical enterprise. Continuing to attract and retain diverse talent in the chemical sciences, both internationally and domestically, is critically important to a thriving chemical economy.

Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Suggested Citation:"2 Understanding the Economic Impacts of Chemistry." National Academies of Sciences, Engineering, and Medicine. 2022. The Importance of Chemical Research to the U.S. Economy. Washington, DC: The National Academies Press. doi: 10.17226/26568.
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Chemistry plays a pivotal role in the strength of the U.S. economy and the advancement of humankind. Chemists' achievements include life-saving pharmaceuticals, advanced energy solutions, improved agricultural productivity, and novel materials used in products from clothing to electronic devices. The many sectors reliant on the U.S. chemical economy account for about 25% of the U.S. GDP and support 4.1 million U.S. jobs. However, a new and evolving chemistry landscape requires changes with regard to funding, training, and a focus on integrating sustainability into manufacturing, product usage, and product disposal.

This report identifies strategies and options for research investments that will support U.S. leadership while considering environmental sustainability and developing a diverse chemical economy workforce with equitable opportunities for all chemistry talent. The report recommends that funding agencies and philanthropic organizations who support the chemical sciences fund as large a breadth of fundamental research projects as possible. Chemical industry and their partners at universities, scientific research institutions, and national laboratories should align the objectives of fundamental research to directly assist with new practices toward environmental stewardship, sustainability, and clean energy. Additionally, the report recommends that funding agencies make substantial investment toward education research to enable innovative ways of teaching about emerging concepts, tools and technologies.

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