Creating Value at Abengoa through Innovation

Its ability to generate knowledge and extract value from it has made Abengoa a leader in creating new technologies, processes and know-how designed to provide innovative solutions that help preserve the environment, create value over the long term and provide a competitive edge.

Investment in research and development makes technology the foundation of Abengoa’s sustainable growth and plays a central role in its strategic objectives. Research and development is managed on business lines - result-oriented and closely aligned with strategy.

In 2010, Abengoa’s investment in R&D amounted to €92.6 M, 3.2 % up on the previous year and equivalent to about 1.2 % of its total sales;meaning a 8 % annual growth rate in R&D investment during the last five years.This figure does not include investment in innovation, which, though not readily quantifiable, is a key element of Abengoa’s strategy.

The table below shows how Abengoa’s investment in R&D&I has evolved over the past few years in each distinct sector.

 

Innovation management at Abengoa is a central part of the strategy implemented by each business unit. Innovation is regarded as having three aspects: New products, new processes and improvements to existing assets. R&D&I programs are general in scope, and are tied to strategic lines of development.

Research and development programs take a long-term view (up to 30 years) and are undertaken as phased programs (each covering a ten-year period) and as specific projects (3-4 years). It is these specific projects that put Abengoa’s research, development and innovation (R&D&I) effort into practice. At Abengoa, most R&D&I investment is channeled into applied research and the development of technological innovation geared towards the achievement of strategic sustainability goals and new products.

Abengoa’s focus on innovation entails a commitment to a range of initiatives. Some of these are already in progress, while others are at the preparatory stage:

• A ten-year strategic plan that clearly specifies the company’s research and development activities over the coming years, setting out precisely defined targets for technological advance in terms of specific subject matter and timeframes, tied to McKinsey’s “Three Horizons”.
• R&D&I evaluation: Economic appraisal of research and development so as to oversee profitability and traceability.
• High-caliber research and development staff capable of living up to these new demands, with mechanisms being designed to ensure the success of their career entry and professional development.
• Major increase in the research and development budget, with funds being set aside for highly innovative projects.