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100 years of Philips Research: Reinventing ourselves to stay fit for the future

 

 

This year marks the centenary of Philips Research, the institution that our CEO Frans van Houten calls "the lifeblood of the company". It's an epithet I'm very proud of. But it's also one we had to fight hard to retain.
As little as a decade ago, Philips Research faced an enormous challenge: reinvent itself very fast, or risk becoming irrelevant. For many years we excelled in setting some of the world's most important industry standards, such as in Optical Data Storage, MPEG Data Compression, and Zigbee Connectivity. This work has had great impact worldwide, and is still a source of considerable license income for Philips.

We realized that in much of our work we were relying on the continued validity of Moore’s law, which dates back to 1965, saying that the number of transistors on a chip would double every 18 months (later changed to two years) and that the cost would drop at a similar rate. This had enabled the dramatic progress in audio and video quality in consumer electronics, the drop in cost of data storage and telecommunications, and even the improvement of medical imaging equipment. So we were living in a world where the future could be mapped out by extrapolating past progress – and in Philips Research we relied heavily on chasing the physical limits to make products more precise, faster, and smaller.  

 

But early on in the last decade, we became acutely aware that Moore's Law was heading for irrelevance, both because we were approaching fundamental limits, and also because raw computer power was becoming abundantly available. Picture quality is now simply taken for granted in the consumer world – and the same will be true in healthcare soon.

 

We anticipated this was coming, and that we needed to change our game. So we decided to shift away from the technology race and setting industry standards for high volume electronics, and instead focus on improving people’s quality of life. For example, we invented the AirFloss, which makes it easy for people who do not floss to improve gum health and reduce inflammation. In healthcare, we now focus on improving diagnostics, instead of just aiming at better performing imaging equipment. And we’re now going beyond our technological achievements of producing more lumens per watt with LED, to exploring how we can use connected light to enhance life at home, in the office, outdoors on the road or in bustling cities.

 

In doing so, Philips Research adopted the innovation philosophy of what is sometimes called a ‘need seeker’. Instead of focusing on improving one machine, like a CT scanner, we are now creating smart workflow and decision support systems for hospitals. We want to create solutions that improve the experiences and outcomes of individual patients and the people who care for them – and that also address healthcare system issues important to the governments that budget and plan the care of entire societies.

 

I am convinced that this tremendous but timely change from pushing a technology roadmap to focusing on uncharted, unmet end-user needs will lead our company into the future. We are stepping out of the comfort zone offered by our research labs, and becoming an integral part of the company, strengthening our collaboration with functions like Marketing and Design to better understand customer needs experienced in different settings. Crucially, we also need to work with external business partners to make sure we meet those needs as effectively as possible, because one company can't hope to cover solutions required for smart homes, hospitals, or cities all by itself.

 

The key is that we change lives, not machines, in a spirit of co-creation. It's what makes us the lifeblood of Philips today and what I hope will ensure we remain business savvy well into the future.

Henk van Houten  

Executive President & General Manager Philips Research

Dutch-born Henk van Houten joined Philips Research in 1985, where he investigated quantum transport phenomena in semiconductor nanostructures – work awarded with the Royal Dutch Shell prize.

 

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