May 2014 Philips Research 1

Philips Innovation in the ITEA perspective

Kees van der Klauw Philips Research - Lighting

May 2014

May 2014 Philips Research 2

Philips Innovation in the ITEA perspective Innovating Innovation itself

• Approaches to Innovation over time in Philips • General trends in Innovation – Saturating and emerging innovation areas – Business platforms, commoditization, integration – Need for Open Innovation

• Organising Innovation – Global leverage, local relevance – Open Innovation and industrial cooperation, coopetition – Taking an end-to-end perspective

• The relevance of ITEA3 • Conclusions

May 2014 Philips Research 3

Approaches to Innovation over time in Philips

May 2014 Philips Research 4

Philips A strong diversified industrial group leading in Health and well-being

Philips

Businesses1, 2 Geographies1

Healthcare Consumer

Lifestyle

Lighting North

America

Other Mature

Geographies

31% 8% 35%

Growth

Geographies3

41%

€24.8 Billion

Sales in 2012. Portfolio consists of ~65% B2B businesses

118,000+ People employed worldwide in over 100 countries

24% 35%

Since 1891 Headquarters in Amsterdam, the Netherlands

7% of sales invested in

R&D in 2012 54,000 patent rights, 39,000 trademark rights, 70,000 design rights

Western

Europe

26%

$9.1Billion

Brand value in 2012

1 Full year 2012 3 Growth geographies are all geographies excluding USA, Canada, Western Europe, 2 Excluding Central sector (IG&S) Australia, New Zealand, South Korea, Japan and Israel Note - All figures exclude discontinued operations

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Since 1914 Research delivers game-changing innovations

1918 Medical

X-ray tube

1919 ‘Ideezet’ radio tube

1926

Pentode

1939 Rotary heads

1963 Compact Cassette

1932 Sodium

street lamps

1971 World's first home VCR

1976 NiMH

battery

1981 Compact

Disc

1966 Local

oxidation

1995 UHP & low

Mercury TL/CFL

2002 Blu-ray

2008 Lumiramic

2004 Ambilight

TV

1996 High

resolution MR

2003 Multi-slice

CT

1992 Flat detector for cathlabs

2006 3D

displays

2010 Lumea

2010 Fall

Detector

2011 iCT Scan

2011 Digital

Pathology

2010

LumiMotion

2011 Airfloss

2011 FreeStreet

2012 BlueTouch Pain Relief

2012 Hue

2012 Lifeline GoSafe

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… but accomplished only by innovating Innovation

• Research driven innovation (R&D) – The unlimited opportunities of physics, semiconductors, digital technology – Understanding mechanisms, curiousness – Technology push (often spot on), customers not aware of the possibilities

• Business (Product Division) driven innovation (R&D) – Cheaper products – Higher feature levels (maintaining price points – IPR positions, control points (starting in 1914 already) – Roadmaps, usually not break away from existing portfolios

• Market driven innovation (beyond R&D) – Individual customer needs (how to identify?) – Societal needs of the future – Requirements management and rapid prototyping, agile

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General trends in innovation

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Technology & Innovation Platforms Enabling new economic value

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Life

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leve

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digital technology platform (Ever fewer companies)

P/C/Mem standard products

Universal software packages

Sys/SW Applications Many companies ITEA scope

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Technology & Innovation Platforms Enabling new economic value

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vati

on

ca

pit

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laim

Sys/SW Applications Many companies

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va

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stry

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General trends in Innovation Technology and business lifecycles

• Globalization • Technologies available for integration via open innovation rather DIY • Deep technology is for fewer players with ever increasing investments • Convergence of domains via digital electronics, telecom and IT – Communication networks (audio, video, voice, data… all the same) – Information sharing via digital means (databases, search engines) – Cloud storage and computing pay per use rather than local assets – Internet of things – ... most of it is readily available

• Applications of modern digital technology are ‘unlimited’ • Impact on the R&D people profiles: working in competence networks • Rapid prototyping and testing with customers and partners: Agile

Most importantly: You can’t know everything

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Organizing Innovation

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Philips Research: Innovation around the Globe More than 1500 Scientists, cooperating with ~250 universities/institutes

Briarcliff Clinical sites Healthcare Lighting

Cambridge Home & Oral Healthcare

Paris Healthcare

Eindhoven Healthcare Lighting Lifestyle

Bangalore Emerging Markets Healthcare Lighting

Hamburg Healthcare

Shanghai Emerging Markets Healthcare Lighting, Lifestyle

May 2014 Philips Research 16

Philips Innovation Global leverage, local relevance

• Technology leverage across regions and across Philips businesses and across industries becoming increasingly important – Development and maintenance cost – Focus resources on differentiating technology – Local requirements are leading but can often be supported by global

platforms and customized software • Platforms – Philips internal or – Industry standards (third party or open)

• Examples – Use of standard (mobile) computing platforms and OS – Cloud services – Connectivity standards (wired and wireless) – Middleware (codecs, security, browsers)

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Philips Innovation Increasingly more ‘open’

• Philips portfolio moving to system integration and applications • Complex systems requiring platform and sub-system leverage with others – Computing platforms – Sensors, display, internet of things – Communication networks – Cloud services

• Smart cities, healthcare informatics and workflow management, smart office lighting… requiring new partnerships with other domains

• Philips established the High Tech Campus – 103 hectares, 45,000 m² R&D facilities – >10,000 R&D people, >125 companies – ≈ 60 startups – > 65 nationalities – ITEA office

May 2014 Philips Research 18

Philips Innovation Taking an end-to-end perspective

• Innovation in Systems and Services requiring early interaction with market partners, beyond R&D, e.g. – Smart grid requiring standardized protocols between provider and loads – Smart City data sharing across verticals, ‘Enterprise Service Bus’ – Cross modality data sharing in health care diagnostics – Simulation platforms across industries

• Non-functional requirements requiring alignment over many stages in the value chain – Security of systems, data privacy – Latency of systems, network real time performance – Standby power consumption – …

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The relevance of ITEA(3)

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The relevance of ITEA(3)

• Leveraging R&D in the pre-competitive phase • Orchestrating partnerships for future business • Defining common approaches (standards) for non-differentiating topics • Receiving governmental support (for topics you would do anyhow)

• 4 example roadmaps of healthcare projects – Diagnostics – Image guided intervention – Operating theater – Imaging technology

• More projects anticipated in ITEA3: smart cities & intelligent lighting systems

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Example of Healthcare programs Diagnostics

sequential diagnostics in the hospital

Care4Me, Care4U

integrated medical diagnostics

diagnostics in virtual environments

CHIRON

Mobiguide

care@home ITEA

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Medical Imaging Image guided intervention

2009 2011 2013 2015

interactive, interoperable & multiple

modality interventional environment

streamlined, integrated & multimodality

interventional environment

manual, non-integrated & multiple

modality interventional environment

IGIT4Health

Mediate

future projects

MiXR

Edafmis

SoRTS

ITEA

May 2014 Philips Research 24

Medical Imaging Integrated Operating Room

2009 2011 2013 2015

interactive, interoperable & multiple

modality interventional environment

streamlined, integrated & multimodality

interventional environment

manual, non-integrated & multiple

modality interventional environment

Care4Me

Mediate

future projects

Edafmis

Benefit

ITEA

May 2014 Philips Research 25

Related projects in technology

2011 2015

• basic functional imaging • energy efficiency & muti-cores

• advanced functional imaging • efficient power and control distribution

• advanced structural imaging • single system

HiPiP

Panorama

High Profile

Hidralon

THOR

ITEA

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Conclusions

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Open Innovation is part of our way of working

OEM / ODMs

Eco- systems

Universities

Knowledge Institutes

Consortia Crowd

sourcing

Suppliers

Public Private partnerships

Business alliances

NGO alliances

IP acquisition

Start-ups

Inno-mediairies

Philips Research

Clinical partners

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Conclusions

ITEA… • Is an industry driven, open innovation platform • Focusing on strong value add SW, SW applications and systems • Enables both large industrial as well as medium and small size enterprises to

cooperate • Innovation cooperation is often a blueprint for business cooperation • Can create critical mass in establishing industry platforms • Has clear targets in lean and agile approaches

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