| Summary: | Clayton Christensen (1997) introduced the innovator’s dilemma – the managerial conundrum where incumbents tend to fail in the face of a paradigm shift caused by disruptive innovation. Christensen proposes various reasons why incumbents struggle to innovate in disruptive ways, but the focus of his thesis lies in technology and machinery industries. The curiosity this study tries to address is whether Christensen’s thesis extends to the petrochemical industry. The petrochemical industry, traditionally, is a sector that has been very innovative. It plays an integral role in our standard of living but also has factors at play that differentiate it from other domains of business. Sustainability and the environmental movement have a major gravitational pull on the industry. Other factors may drive innovation, but the sector’s high barriers to entry may also discourage innovation. Incumbents in the petrochemical industry are not that innovative anymore and tend only to focus on sustaining innovation in production processes. The expected continued growth of the industry, as well as the significantly high barriers to entry, provide a considerable safety net for incumbents. The industry is unlikely to experience any true disruptive paradigm shift, as development and commercialization is costly and time-consuming. The environmental movement, as well as digital transformation, may change this, but adoption is slow. Thus, there is reason for concern, as extensive reluctance may in the long run lead to failure.
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