Research and innovation are the basis of our success. In 2016, we spent around € 2.0 billion on research and development (R&D). We develop technologies that enrich people’s lives and are constantly on the lookout for groundbreaking developments and trends that can be translated into new products and pioneering business models. In particular, new technologies and the advance of digitalization are enabling us to create innovative products, services and business models that can positively impact lives. We intend to maximize this opportunity.
Innovation strategy and organization
Our Group function Strategy & Transformation is in the process of developing a Group-wide innovation strategy. We are analyzing current megatrends, determining the influence they have on our business models, and defining the areas in which we see potential for new business ideas. In doing so, we are thinking far beyond our core business. To find novel approaches, we enter into strategic alliances with organizations that embody different perspectives. Many such potential partners are based in Silicon Valley, CA (USA), one of the key regions in the global high-tech industry. Here, we too are expanding our presence as a science and technology company.
We are investing in forward-looking ideas. Our Corporate Ventures Fund provides up to € 300 million for investments in start-ups that will advance or complement our business models.
To maximally leverage the opportunities of digitalization, we form strategic partnerships with companies such as the California-based Palantir Technologies, with whom we joined forces in January 2017. We hope to bolster patient outcomes by using their sophisticated data analysis capabilities to improve and accelerate the development, commercialization and distribution of drugs.
You can find more information on our strategic approach under Research and Development in our Annual Report for 2016.
Innovation Center – Making room for ideas
At our Innovation Center in Darmstadt, we offer our employees and external partners space and support to cultivate their ideas. We teach them innovative methods and provide the necessary infrastructure to advance pioneering projects.
Our work focuses on four strategic projects:
- Accelerator: Numerous start-ups around the world are working on innovative business models for our business fields. Our global Accelerator program supports such start-ups in the early stages of their development. In return, we gain insight into the highly innovative start-up community and can identify market trends early on.
- Internal innovation projects: We want to better harness the great innovation power within our company. We therefore offer our employees from all over the world the opportunity to work at our Innovation Center on select projects for up to a year. As well as receiving financial support for their projects, employees have access to select experts who provide input across all stages, from the seed of the idea to product development.
- Innovation Think Tank: In our Innovation Think Tank, we work with internal and external experts, research institutes and other companies to analyze current trends and technologies.
- Innovator Academy: The Merck KGaA, Darmstadt, Germany Innovator Academy aims to bolster our company’s capacity for innovation by organizing needs-based training courses and workshops with internal project teams, think tank participants and start-ups.
Innospire – Mobilizing employees
The goal of our innovation initiative Innospire (a combination of innovation and inspiration) is to mobilize the innovative potential of our people. Every two years, we call upon them to submit ideas for new products and develop business plans during a multi-stage process. You can find more information under Employees.
Fostering young talent – An investment in the future
Well-trained talent is the best foundation for future innovations, which is why we endeavor to spark young people’s interest in science. Students who are curious about chemistry and biology can use our Junior Lab and livfe BioLab to conduct their own research and experiments. We run both laboratories together with the Technical University (TU) of Darmstadt. Furthermore, in supporting TU Darmstadt’s HIGHEST 1877 start-up program, we are promoting the innovative ideas of local start-ups.
We also collaborate with various schools in the vicinity of our global headquarters in Darmstadt. For example, we provide STEM subject teachers with educational materials and organize annual events devoted to STEM teachers such as Merck KGaA, Darmstadt, Germany Science Days, where they learn how to incorporate new technologies into their science classes. We regularly invite groups of students to Merck KGaA, Darmstadt, Germany to explore our research activities, or to our Children’s University in an attempt to stimulate their thirst for knowledge. Moreover, for over 30 years we have been hosting the “Jugend forscht” student competition.
Digitalization as a driver of innovation
Digitalization is revolutionizing markets and business models. This technological change is also an important driver of innovation and is changing the pace at which new ideas are entering the market. We are constantly exploring new ways to leverage this potential and currently expect advances in the following areas:
- Research and development: Digital technologies enable us to access large quantities of data and quickly analyze it. We can use this information to accelerate our research and development activities. Particularly in our Healthcare business sector, we hope to accelerate the development of new drugs so as to provide patients with faster access to medicine with increased efficacy.
- Supply chain management: Digital technologies help us enhance our supply chain management process. By collecting all data pertaining to our supply chain centrally, we have access to crucial real-time information. This allows us to predict and respond quickly to issues such as supply bottlenecks worldwide, ensuring a more reliable supply of medicines.
- Customer interaction: Thanks to modern data collection and analysis techniques, we can make more efficient use of customer-relevant data to more fully understand our customers. Furthermore, digital platforms offer us new ways to interact with our clientele. By better understanding their needs, we can adapt our products and services accordingly.
- Digital product innovations: Digitalization is enabling us to expand our existing products and develop new products, services and business models. For instance, we are enhancing existing products with new digital services such as Baby Wish. This platform educates couples on fertility issues and provides healthcare professionals with scientific information. Moreover, we are working to raise health awareness and improve patient treatment through e-health programs such as the Diabetes Online Risk Assessment (DORA).
Vocational training and continuing education
Innovation culture and digitalization are new topics at our Merck KGaA, Darmstadt, Germany University for managers. In early 2017, we entered into a partnership with the Stanford Graduate School of Business, which will be teaching classes on these topics for us. Furthermore, under the banner of “Work 4.0”, we are integrating new digital technologies into our vocational training programs and offering our employees a modern, innovative working environment. You can find more information under Employees.
Data protection is essential to implementing digitalization in a responsible manner, which is why we strictly adhere to all data protection guidelines, monitor the various regulatory frameworks, and respond immediately to changes. You can find more information on data protection under Strategy & management.
Intelligent packaging processes and drug information in real time
Our Smart Packaging project allows us to make our drug packaging processes more efficient and flexible. By connecting our packaging machines via an Internet of Things, we can improve their accuracy and reliability while also increasing their output. Additionally, our new predictive maintenance capabilities will reduce machine breakdowns. By connecting systems across the entire organization and using advanced analytics, we will be able to decrease packaging waste and lead times when changes have to be made to the product information. This also means that, when new information about a product is discovered, we can inform our customers more quickly. We are also exploring options for active packaging that will allow patients to look up the latest information in real time on their smartphones.
In good hands: the Baby Wish digital platform
Through our fertility medicines, technologies and services, we are providing the support clinics need to help couples conceive. We also offer more direct aid to impacted individuals. Launched in April 2017, our Baby Wish digital platform features information on infertility and treatment options. In July 2016, we launched a different platform that provides healthcare professionals with access to the latest digital scientific information on infertility. Through this medium, we are helping providers offer the best care for couples seeking advice.
First Merck KGaA, Darmstadt, Germany hackathon in Africa
As part of our Accelerator program, we support and organize hackathons in which young entrepreneurs from various sectors collaborate to quickly develop solutions to specific issues. In 2016, we hosted a hackathon in Accra, Ghana that was attended by approximately 150 social entrepreneurs from western Africa. At this gathering, dubbed Health Hack Accra, 29 teams of biomedical engineers, scientists, programmers, and university students had 48 hours to create solutions and business models to tackle Africa's toughest health challenges. With a focus on reproductive and maternal health, access to health, non-communicable diseases, and infectious diseases, this hackathon led to the development of 28 innovative solutions. Our Innovation Center is supporting the top three solutions in partnership with the Impact Hub in Accra:
- CrowdAfrica: A crowdfunding platform for healthcare.
- Peach Technologies: An electronic patient file.
- dynaMix: An awareness platform for reproductive health that also aims to increase the availability of contraceptives in rural regions.
Online campaign for diabetes
In Africa, approximately 62% of diabetes cases go undiagnosed. To improve early diagnosis and promote awareness for diabetes, we joined forces with various partners in March 2015 to launch a digital initiative known as DORA (Diabetes Online Risk Assessment). People in South Africa, Namibia, Kenya, Ethiopia, Ghana, Nigeria, Mozambique, and Mauritius can use their smartphones or computers to take an online test. In just a few clicks, they can ascertain whether they are at risk of developing diabetes. Since its launch, the DORA website has received more than 401,500 hits, with 74,294 coming from people who took the assessment.