opening up corporate...
TRANSCRIPT
Philips Research,Ronald Wolf, 10/08 1
January 27, 2005
Opening up Corporate Innovation
Ronald.M.Wolf, Director Venturing,Philips Research
Philips Research,Ronald Wolf, 10/08 2
Royal Philips Electronics
• One of the largest market driven global electronics company with sales of EUR 27 billion in 2007
• A people centric company with a multinational workforce of 123,801 employees (December 2007)
• Active in the areas of Consumer Lifestyle, Healthcare & Lighting
• Manufacturing sites in 28 countries, sales outlets in 150 countries
• R&D expenditures are 6.1% of sales (2007)
• 80000 patents in IPR portfolio, no 1 in European patent filings
Headquarters: Amsterdam, The Netherlands
Philips Research,Ronald Wolf, 10/08
20th century: Technology stimulated growth
Philips Research,Ronald Wolf, 10/08
Ferroxcube Plumbicon
ELECTRONICCOMPONENTS
LIGHTINGIllumination DischargeLampsLight Bulbs
X-rayimaging
Image-intensifier
MEDICALSYSTEMSX-ray Tube
20th century: Technology stimulated growth
Oscilloscope
Picture Tube
Radio Valve CONSUMERELECTRONICS
DOMESTICAPPLIANCES
Radio/TV Loud-speakers
Philips Research,Ronald Wolf, 10/08
Philips: Towards more Sense, Simplicity and Maturity
1996
20002008
ASML
Domestic appliancesSound and VisionCommunicationsMediaPolygramGrundigMedical SystemsBusiness ElectronicsIndustrial ElectronicsCar Systems
LightingComponentsSemiconductors
Origin
Medical Systems
Domestic appliances
Consumer Electronics
Lighting
Components
Semiconductors
Corp.Research + IP
Healthcare
Consumer Lifestyle
Lighting
Philips Research,Ronald Wolf, 10/08 6
Philips main problem: Need growth to counter shrink
Historic Philips sales
010000200003000040000
1996 1998 2000 2002 2004 2006Year
Sale
s
Philips Research,Ronald Wolf, 10/08
Strengthening the brand in new Market SectorsPhilips Healthcare Philips Consumer LifestylePhilips Lighting
• Domestic Appliances• Health and Wellness
• Avent• Shaving and Beauty• Connected Displays• Peripherals and Accessories
• Power Sentry, DLO• Home Networks• Video and Multimedia • Audio and Multimedia• Professional and Business
Solutions
• Imaging Systems•Intermagnetics•Witt•VMI
• Customer Services• Healthcare Informatics
•Stentor• Ultrasound & Monitoring
Solutions• Home Healthcare Solutions
•Lifeline, HealthWatch•Respironics
• Lamps• Professional Luminaires &
Systems•Color Kinetics•Genlyte
• Home Luminaires & Systems•PLI
• Lighting Electronics•Bodine
• Automotive• Solid State Modules
•TIR Systems•Lumileds
• Special Lighting ApplicationsAcquisitions in Blue made in the last 2 years. Abbreviations: PLI: Partners in Lighting; TIR: TIR Sstems; DLO: Digital Lifestyle Outfitters; 12.3BEuro
Philips Research,Ronald Wolf, 10/08
Dual track innovation mechanism, adopted venturing as second development tool
Consum
er Lifestyle
Healthcare
Lighting
Philips Research,Ronald Wolf, 10/08
Roadmap innovation …….
Philips Research,Ronald Wolf, 10/08
Venturing …….
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Ventures minimize risks based on stepping stone market approach and stage gating
reducing financial risk by entering learning curve on initial focus on niche market
Philips Research,Ronald Wolf, 10/08 12
need a common language (Bell‐Mason)
ResearchProject Opportunity Preseed Seed Alpha Beta Growth
Philips Research,Ronald Wolf, 10/08
Venture Dive Business rationale
Lab Venture Initial Business plan
Research
Mile
ston
e re
porti
ng
Mile
ston
e re
porti
ng
Mile
ston
e re
porti
ng
Business rationale
Transfer Document
Stage gating process
Star
t LV
Tran
sfer
LV
Allo
w V
entu
re D
ive
Programme +EM funnels
Sectors
Incubators
Licensing
External
SeedIdeation Preseed
Venturing Stage 1: develop PreSeed in Research
Finances Legal evaluation
IP Landscape
Financial forecasting
Business case pitch, PR
Customer, market insights
Business plan, ppt with pitch and proof
Philips Research,Ronald Wolf, 10/08
Vent
ure
fully
op
erat
iona
l ge
arin
g to
war
ds
grow
thStage gating process
Def
inin
g de
taile
d bu
sine
ss p
lan
Setti
ng u
p bu
sine
ssResearch + Sectors + Externals
GrowthPreSeed Seed
Stage 2: development from Seed in Incubators
α β
Con
sum
er L
ifest
yle
Hea
lthca
reLi
ghtin
g
Detailed business plan
Marketing, Communica-tions ready to go public
Incubator board
New Business Development board
Firs
t pro
duct
s/se
rvic
es th
roug
h op
erat
iona
l pro
toty
ping
Ref
ined
pro
duct
offe
ring,
fu
ll pa
rtner
eng
agem
ent,
mar
ketin
g st
rate
gy
Philips Research,Ronald Wolf, 10/08
~ 60 ventures in the funnel
Home dialogue systems Content identification
3D solutions
Polymer vision
Entertaible
Magnetic biosensors
Philips Research,Ronald Wolf, 10/08
Most stay in, some stop or spin‐out ..
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Next step is to focus on mature external ventures
reducing financial risk by entering learning curve on initial focus on niche market
Philips Research,Ronald Wolf, 10/08
Other corporates already do so; spin‐in …
General approaches – Strategy oriented
• Corporate strategy• BL strategy
– Regular processes– Significant numbers– Idea and venture spin‐in– Often in separate funds
SVC
TTB
Observe, learn and break even
BASF Future Business
Philips Research,Ronald Wolf, 10/08
Philips needs: how to spin‐in?
How to organise for Roadmap, adjacency and technology spin‐in
Philips Research,Ronald Wolf, 10/08 20
Philips and Open Innovation
People• Good people are everywhere (but best close by)
Business expansion• A better business model beats a better technology
Knowledge• Good ideas are widely distributed today; no one has monopoly: IP• First to discover is neither sufficient nor necessary for commercial success• Infrastructure is key, sharing reduces cost and risk
Philips Research,Ronald Wolf, 10/08 21
People and Knowledge
Academic collaborations• Deal with all major universities worldwide with recent emphasis on China• ~20 parttime professorships• ~ 600 grad students passing through the labs yearly focusing on most innovative research topics• On Campus Nano optical university group
Joint development• not so many, difficult to shape such that the win‐win is OK (spread the wealth problem) • Senseo deal with Douwe Egberts works fine• Licensing
Philips Research,Ronald Wolf, 10/08
50000
100000
150000
200000
250000
300000
350000
400000
1840 1890 1940 1990Year
Total US Patent applications
Total US Patents
Total non-US Patents
Source:United States Patent and Trademark Office http://www.uspto.gov/web/offices/ac/ido/oeip/taf/h_counts.htm
For knowledge, patents are the currency….
80.000 patent rights – 1 patent/researcher/yearPhilips is one of the biggest licensing players worldwide – current focus on outlicensing, technology licensing and venture based licensing
Philips Research,Ronald Wolf, 10/08 3
What about infrastructure: Innovation is expensive
ICTembedded
systemsmechatronicsmicro -electronics
electromechanics
nano & bio-technologies
• Explosion of complexity in electronics and applications • Rapid expansion of technology palette• Immense growth of applications based on electronics
Philips Research,Ronald Wolf, 10/08
2003: We broke up the fortress …
Philips Research,Ronald Wolf, 10/08
.. and started the High Tech Campus Eindhoven
500MEuro investment inWorld‐class technology centre of high tech companies workingtogether in the development of newtechnologies
Becoming facility co‐userAnd land lord (for the time being)
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Bringing in the right partners – Open innovation
> 75 companies and > 7000 people at High Tech Campus Eindhoven
Research institutes
Economic development companies
Corporate innovators
Consultancy & services
Philips Research,Ronald Wolf, 10/08 27
But also world wide opening up innovation globally based on local strenghts
Briarcliff (NY)Clinical sitesHealthcare
Eindhoven• Healthcare• Lifestyle• Technology
CambridgeNew business
HamburgHealthcare
Aachen• Lighting• Healthcare
BangaloreEmerging markets
Shanghai• Emerging
markets new business
• Network
Over 10% of all Philips employees are dedicated to R&D, from which 15% (1800) are within Philips Research
Philips Research,Ronald Wolf, 10/08 28