Speech Frans van Houten, Philips Innovation Experience 2012 (English)

The spoken word prevails

November 13, 2012

The Grand Challenge: Delivering Meaningful Innovations that will Improve People’s Lives

Ladies and gentlemen,


Welcome to Philips Innovation Experience 2012. And welcome to the Klokgebouw  - for many commuters who live in Eindhoven, THE building that tells them they are back home; and for many Philips employees, THE building that way back in the 1930s started showing the world that Philips is an innovative company. Not only because the building itself was extraordinary for its time: an impressively designed, reinforced concrete structure, towering 60 meters high. But also because it formed the backdrop for a groundbreaking moment in the history of innovation: the first successful global radio network. 


On 1 June 1927, it was from the Klokgebouw that Queen Wilhelmina and Princess Juliana addressed their countrymen and women in the Netherlands East Indies, twelve thousand kilometers away. The Dutch press wrote at the time: ‘Thanks to the technical ingenuity of a Dutch company, the motherland and its colonies have suddenly been brought so much closer together’. This new technology changed our lives forever.

What better place, then, for us to exchange ideas about problems and challenges, creation and innovation, thinking differently and doing things differently?

Because as Albert Einstein once said, “We can't solve problems using the same kind of thinking we used when we created them."

So let’s start by taking a look at the global challenges, the Grand Challenges facing us today. I would suggest that there are at least three.


One: between now and 2050, the world population is expected to increase from seven billion to nine billion people. Over two-thirds of those will live in cities; in fact in Europe, that figure will be around 80%. To create livable cities that are smarter, safer and more sustainable, and to provide sufficient food and drinking water, is a huge challenge.


Two: in developed countries, populations are aging rapidly.

The good news is that in the future most of us will live longer. Whereas at this point in time, about 900 million people worldwide are aged over 60, by 2050 that figure is expected to have increased to 2.4 billion. 

The less good news is that in 2050 about 50% of people in the Western world will be suffering from some form of chronic disease, such as diabetes, cancer or COPD. It follows that the demand for top-quality, accessible healthcare will increase proportionately. That will cost money and manpower: will there be enough available?


Three: the strong growth in population will lead to a growing demand for energy, food and water. If we do nothing about demand, the expectation is that global energy consumption will increase by 50% in the next twenty years, as will the demand for food. At the same time, millions of people will be faced with a shortage of drinking water, also as a result of climate change.


That’s why Philips has made it its mission to make a genuine contribution towards solving these Grand Challenges. Our aim is to improve the lives of three billion people per year by 2025 by delivering meaningful innovative solutions, thereby contributing to a healthier, more sustainable world. 


In other words, we want to invest our talents and capabilities in things that matter to society and that can improve the lives of people across the whole world. And it needs to happen fast. Our internal transformation program, Accelerate, will assist us in the process: being more entrepreneurial, speeding up decision-making and sharpening the focus of innovation are the key elements of the program, with which we target the growth markets. We want to innovate  through cooperation. In partnership with you: other companies, knowledge institutions, social organizations, government bodies. At a national and international level. In a relevant and sustainable manner.


Sustainability will be at the very heart of our cooperation. It will be of great benefit that Philips already enjoys worldwide recognition as a leader in sustainable innovation. This is clear, for example, from our position in the prestigious Dow Jones Sustainability Index: we are in first place in our ‘super sector’ – a position we definitely want to hold on to.


Meaningful innovation geared towards sustainable development demands not only a clear vision of the future but also the will and determination to invest in continuous improvement. We have set ourselves a high standard with three sustainability objectives:

By 2015, 500 million people will have access to Philips healthcare solutions;

By 2015, 50% percent of our total revenue will be from the sale of green products. Products that on average take 50% less energy to manufacture, using a growing percentage of recycled materials.

Between now and 2015 we will double our investment in green innovations to two million euros. Ambitious objectives, but we will meet them.


In order to realize our vision for sustainability, Philips will be embracing the concept of the circular economy. In a Circular Economy, all materials are recycled, either in the same product or a different one, without compromising quality. Once we are recycling all our residual products and all those products are environmentally neutral, the loop will have been closed.   


A nice example is the use of recycled plastics in products like coffee makers, irons and vacuum cleaners. Take, for example, our green Senseo, which is made from 50% recycled plastics and 45% recycled metal. It is one of the ways in which we are stimulating innovation in the recycling industry. Philips is showing the world that it is possible to close the loop, without compromising on design or quality in the slightest.


Another example is our ‘pay per lux’ solution, designed in cooperation with architect Thomas Rau: the user pays for the amount of light he actually uses, but does not own the lighting equipment. At the end of the contract period, Philips takes the products back and recycles the components. This allows us to stimulate speed of innovation via accelerated application. That’s new. As is the fact that with this trial it is not a product we are delivering but a service.


But what about our solutions to the Grand Challenges, the global issues of our time?

In other words – and that is the first challenge we will take up: How can we improve the lives of people across the globe with meaningful innovations in healthcare?

Our vision in relation to healthcare is that we view it as a complete cycle, from diagnosis to treatment to aftercare. The patient is our top priority. We work together with clinical partners because they have a direct relationship with the patient. Our focus is on innovations that will facilitate quicker, more accurate diagnoses and less invasive treatments, such as:

Solutions that are geared towards less invasive treatments;

Solutions that help ensure that the system remains affordable.

Innovations that will benefit everybody – including people in the emerging economies in Asia and Africa.


Nice-sounding ambitions. But what are we doing right now towards achieving them?
We are working on digital imaging technologies that will enable doctors to examine and treat the body in increasingly non-invasive ways. One example is the application of this technique in the treatment of breast cancer. Philips has developed a technology whereby we can destroy tumor cells without operating. Because in the battle against breast cancer it is not only the actual treatment of the disease that matters but also how patients experience that treatment and learn to give it a place in their lives.


That’s why we are currently working together with the University Medical Centre in Utrecht to investigate whether – and if so, how – we can use one of our MR-HIFU innovations to treat breast cancer. MR-HIFU is a revolutionary system that combines MR imaging with high-intensity ultrasound waves to essentially burn away a tumor. The body then disposes of the destroyed tissue itself. On the other side of the world, in India, this same Philips innovation is making it possible to treat uterine fibroid tumors non-operatively. We expect that this innovation will also play an important role in the treatment of other sorts of tumors in the future. All of these are examples of meaningful innovations that are contributing to global healthcare. But we still have a lot to accomplish.


We are also working on solutions to the second Grand Challenge: how to make cities more livable and more sustainable.

The challenge is huge. More and more people are moving to live in cities; the urban areas are growing steadily. In 2009 there were 21 so-called megacities in the world: metropolises with a population of over 10 million. Between now and 2025 at least another eight will be added. 

City dwellers don’t just want to live in a city; equally important to them are quality of life, identity, safety, food, drinking water and sustainability.  Energy-efficient LED lighting has an important role to play. Smart management systems are needed in order to gain maximum effect from LED. One such solution is CityTouch. CityTouch enables the wireless, flexible management of an entire city’s street lighting and public lighting infrastructure from one central point. Last summer during the UN conference Rio+20, our system was included in the Sustania100 list – the list of the world’s most outstanding sustainable solutions. Of course we are proud to have received such recognition.


But also when it comes to illuminating highways, smart, energy-efficient lighting systems offer a less expensive and sustainable solution.  Turning the lights off altogether, as the Ministry of Waterways and Public Works recently proposed, in order to save money and reduce light pollution, is not necessary. Our lighting systems are smarter, because the people in the control room can adjust the amount of light automatically to match lighting demand. They are more sustainable, because they enable us to reduce CO2 emissions by one third – and that is just in the Netherlands.


There is another way in which our lighting innovations can contribute to livable, sustainable cities. We believe city farming to be a rapidly emerging, burgeoning trend: growing food in an urban environment. Research shows that just twenty buildings dedicated to city farming would be sufficient to provide the whole city of New York with fruit and vegetables! Our solution for LED lighting in the market gardening sector would make city farming economically viable, whether it takes place in unoccupied vertical high-rise blocks or in purpose-built ecological buildings. Light is essential in order to grow good-quality crops all year round. What’s more, we can prepare an optimal ‘LED lighting recipe’ for each edible crop – a recipe that facilitates maximum yield and minimum energy consumption in each stage of growth. That represents a revolution in the area of food production.


Many city dwellers are not just looking for a safe, sustainable city. They also want to feel proud of their city. No doubt you are all familiar with the Empire State Building, icon and symbol of the city of New York.  A magnificent, striking building of about the same age as our Klokgebouw. Recently we helped the city to turn this building into a true work of art. With the help of LED technology designed by Philips, this 443-meter high skyscraper is now illuminated in a palette of no less than 16 million colors. Unique, hauntingly beautiful, but at the same time optimally energy-efficient and reliable. The color palette was also used to keep the residents of New York informed of developments during the recent American elections.


And the same effect can be achieved in the home too. On a slightly smaller and more modest scale, true, but with the same potential in principle: with Philips hue you can control the LED lamps in your home directly or from a distance using your smart phone or tablet. As well as simply switching them on or off, you can also set the color temperature by making a selection from a color palette or based, for example, on a color featured in one of your own photos.

Alongside LEDs, we are also working on developing OLEDs – organic LEDs. This form of lighting opens up entirely new possibilities in lighting design, thanks to the soft, diffuse light OLEDs emit, their flat shape and their larger surface area. Just take a look at the OLED chandeliers in this room.

And finally: How can innovations contribute to a healthier, better life?

That is a challenge that has been central to Philips’ history from the start. Recently, for example, we joined forces with top chef Jamie Oliver to develop a new gadget that makes preparing a nutritious evening meal simple: the HomeCooker. A piece of equipment that supports his mission to teach everyone – children and adults – to eat healthily and to reduce the risk of obesitas.


There are more Philips innovations geared towards optimizing the health and well-being of our customers. We now know, for example, that there is a direct link between oral and dental health and certain diseases, such as the link between damaged gums and heart disease and diabetes. We have therefore developed a number of products that combine to form a comprehensive oral care system, covering brushing and flossing, keeping healthy and looking good. 


The future trend in technology is towards greater personalisation and connectedness. Smart phones and tablets  help make this possible. That’s why digital intelligence is being incorporated into more and more of our products: smarter, more relevant designs for today’s consumers and the consumers of the future. Take, for example, our anti-ageing system, RéAura, which is supported by a special app that gives customers feedback for an optimal result. And we are looking into the possibility of replacing the menus and displays in our espresso machines with an app that would be far more user-friendly and that could also help with, say, descaling. The Philips hue we showed you earlier is another example. And there are countless other possibilities out there. Whether we are talking about health and well-being, skin care, cooking, coffee, light or air, the point is that we are establishing a connection between the consumer and the product and hence also between the consumer and the manufacturer. Our users learn from us, but we also learn from them. That is one of the great advantages of this age of digital innovation.


Developing meaningful solutions to the global problems impacting our world. That is our mission. Not alone, but in close cooperation with others. This morning you have been introduced to a number of our innovations. You will see more this afternoon. During this Philips Innovation Experience, we want to share experiences, and stimulate and inspire each other to work towards a better world.


After all, you know what they say: “The best way to predict the future is to create it.”