Dive Brief:
- 3M announced plans in a Feb. 26 investors’ event to spend $3.5 billion on research and development in a bid to accelerate its growth.
- About one-third of the funds will go toward technology supporting the company’s R&D efforts and two-thirds will be spent on product development efforts for commercial use, according to 3M’s presentation.
- The chemical manufacturer aims to launch 1,000 products over the next three years as part of a strategy to prioritize greater spending on R&D, which 3M initially announced in October 2024, Chairman and CEO Bill Brown told analysts last week.
Dive Insight:
3M’s R&D model has been “out of balance” and the chemical maker is working to rectify that, EVP and Chief Technology Officer John Banovetz said in his R&D presentation. Over the past few years, the company has shifted priorities and cut back on small, local product development efforts, some of which were not profitable nor drove growth, Banovetz said.
“But over time, we kind of lost our focus on making the small bets and innovation that we have to make, introducing a product, learning from it, iterating on it, continually building on it, so that you can actually continue to grow and iterate up around that innovation product,” Banovetz said.
The company also encountered challenges over the past few years, including supply chain issues, the COVID-19 pandemic and the ongoing discontinuation of its PFAS use by 2026. As a result, 3M moved its priorities away from R&D and corporate growth, Banovetz added.
Additionally, 3M “disproportionately invested” in its healthcare business, Banovetz said. After spinning off its healthcare segment into the independent company Solventum last year, 3M can focus on its core growth, he said.
Despite the obstacles, Brown said the company launched 169 products last year.
“We're finding a way to manage through distractions, around obstacles, without wavering on what we're trying to do to achieve our own personal goals,” Brown said. “That's really what defines this new performance culture at 3M.”
The product development will focus on vertical sectors, including aerospace, automotive, electronics, home cleaning, industrial automation, augmented and virtual reality, energy, data centers, home improvement, safety and semiconductors. The segments are ones in which 3M already has a presence and can focus its efforts on new technology and innovations.
“We can leverage our differentiated technologies in our unique channel access in each of these areas,” Brown said. “We need to systematically shift our portfolio towards high-growth, high-return markets.”
Since the initial R&D announcement, the company has made progress on its strategy, accelerating its innovation using various tools and processes, particularly ones driven by artificial intelligence, Banovetz said.
“I think artificial intelligence and AI will fundamentally change how we do research, and I can say that because I think it'll bring different capacities and capabilities within our R&D model,” Banovetz said.
For example, the chemical maker used a patented AI technique methodology to develop its Cubitron 3 brand abrasive product. The company used the technology to model the abrasive’s shape as well as predict its performance and optimize what it should look like in product development, Banovetz said.
3M also launched a digital materials hub, an AI platform with over 300 product model combinations. The hub takes technical information from the chemical maker’s materials to predict their performance, which helps reduce time and costs, Banovetz said.
Banovetz admitted, however, that launching 1,000 products over the next three years will be a challenge.
“It'll be something that we have to work at, but I have to tell you, it's a challenge that as an R&D organization, we're willing to accept and take on,” he said.
