How Saudi Aramco is preparing for a future defined by innovation

Aramco’s patent portfolio has increased by more than 2,000 US patents in the past six years

The logo of Aramco is seen as security personnel walk before the start of a press conference by Aramco at the Plaza Conference Center in Dhahran, Saudi Arabia November 3, 2019.

The logo of Aramco is seen as security personnel walk before the start of a press conference by Aramco at the Plaza Conference Center in Dhahran, Saudi Arabia November 3, 2019.

REUTERS/Hamad I Mohammed

In 2020, Saudi Aramco was granted 683 US patents, while it filed a further 1,183 applications, more than any other company in its industry. It is the latest in a year-on-year growth pattern that has pushed the company to the top of the innovation ladder among its peers. And it’s one reason why the consultancy BCG named Aramco the most innovative company in the Middle East and Africa in its 2020 Most Innovative Companies report.

Aramco’s patent portfolio has increased by more than 2,000 US patents in the past six years. A focus on securing intellectual property rights has gone hand-in-hand with an innovation revolution at the company.

But as any innovative company knows, patent volumes only tell part of the story. Along with a focus on capturing intellectual property rights has been a 20-year campaign to boost innovation at Aramco. It is a campaign that has transformed the company’s culture, acted as a catalyst for new ventures and partnerships, and helped diversify our business.

It is also bucking industry research and development trends. According to the International Energy Agency, overall spending on research and development by the hydrocarbon sector in 2018 was 45 percent lower than 2014. This trend is likely to have been exacerbated by the impact of the COVID-19 pandemic on global energy markets.

Yet sacrificing research and development in the name of cost-savings is a mistake. In fact, innovation has never been more important to this industry. Especially as it is through innovation that Aramco is able to meet the world’s demand for reliable and affordable energy, while working towards our ambition to achieve net-zero Scope 1 and Scope 2 greenhouse gas emissions across our wholly-owned operated assets by 2050.

But it is not only about the number of patents a company receives. It is about harnessing new ideas that can take a company forward, and which help others to be a part of that progress. This is the concept behind the formation of a new National Champions organization at Aramco. Our aim is to lead in establishing innovative start-ups in Saudi Arabia, helping the most viable grow into small and medium enterprises. Our aspiration is that some of these could eventually develop into unicorns – $1 billion companies – in their own right. In doing so, we anticipate thousands of new private sector jobs will be created across the country, benefitting national GDP in the process.

A commitment to innovation

We have many ideas, and we want to convert them into business opportunities. We want to build on the success of our iktva program through initiatives like the recently launched industrial investment program Namaat, which focuses on new partnerships in innovative sectors. And we are leveraging our strength to encourage foreign investment in line with the government’s Shareek program, which will add value to the broader private sector.

Aramco has come a long way since 2001, when we decided to become more innovative. Our journey involved the creation of an IP management group, and the launch of an innovation management system that included an Innovation Board and a crowdsourcing approach to generate ideas from people across the company. Monetary incentives were introduced for employees whose patents were granted, with another monetary award if the idea was commercialized. In addition, the company has adopted a Corporate Innovation Policy, included a requirement for the filing of patents within some development programs, and is currently establishing an Advanced Innovation Center.

Innovation takes off

From 2011, we expanded our research operations, opening a network of labs around the world, close to global talent hubs. In addition to advances developed in-house, patents have also been co-developed with academic organizations and other external entities for strategic purposes. And Aramco’s patent portfolio is due to grow even further over the next two years, characterized by a broad scope of applications that reflect the growing diversification of its business. New IP in the pipeline relates to everything from geology and geophysics to advances in transport and the non-metallic sector.

Digital transformation is also driving IP investment in areas such as artificial intelligence, robotics and automation. And there is enthusiasm for new patents in the chemicals, non-metallic and drilling fields, given high demand for such technologies and the associated benefits. They offer high potential for value creation, present possibilities for new jobs and could even pave the way for the establishment of new manufacturing facilities inside Saudi Arabia.

Investing in the future is crucial, even as our industry emerges from one of the most challenging environments it has experienced. And as we continue to innovate, we are keen to support others with a hunger for developing groundbreaking ideas from conception to completion. Aramco is establishing a new innovation incubator, LAB7, to do exactly this — as we seek to help a new generation of innovators turn their ideas into reality.

• Jamil Bagawi is the executive director — National Champions, Aramco.

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