Research basic to Philips

Transcription

1 1 Research basic to Philips OECD Workshop on Basic Research Oslo, October 29-30, 2001 Jan van den Biesen Vice President, Philips Research 2 Contents 3

2 Royal Philips Electronics Global electronics company, established in 1891 as a lamp factory Headquarters: Amsterdam The Netherlands Shares listed on New York, London, Amsterdam and other stock exchanges Results 2000 in millions EUR USD Sales 37,862 34,864 Net income 9,602 8,842 Multinational workforce of 212,390 employees Sales and service in 150 countries 4 Selected global market positions # 1 in Lighting # 3 in Consumer Electronics # 1 in Shavers # 1 in LCD Display Systems # 3 in Medical Imaging # 3 in Optical Storage 5 Invented by Philips 6

3 Technology focus Connectivity Display Digital Video Storage 7 Philips R&D R&D costs: 7.3% of sales (EUR 2,766 million) Including nearly 1 % of sales for Philips Research R&D staff: 22,000 19,000 in Product Divisions and Centre for Industrial Technology 3,000 in Philips Research Strong IPR portfolio 70,000 patent rights 22,000 trademark registrations 6,000 design rights 8 Philips Research Eindhoven [1650] Redhill [260] Briarcliff Manor [250] Aachen [400] Suresnes [180] Shanghai [100] Total staff of nearly 3,000 includes branch labs in Bangalore (India) Monza (Italy) Hamburg (Germany) Taipei (Taiwan) Leuven (Belgium) Xi an (China) 9

4 Philips Innovation Centre Bangalore 10 Philips Research Labs Xi an opened 11 Contents 12

5 Growth based on Research Building on combining glass, metal and vacuum Light Bulb Illumination Discharge Lamps LIGHTING X-ray Tube X-ray imaging Imageintensifier MEDICAL SYSTEMS Radio Valve Audio Loudspeakers PolyGram Oscilloscope ELECTRONIC TWT COMPONENTS Plumbicon Ferroxcube CONSUMER ELECTRONICS Picture Tube Television 13 Line Output Domestic Appl. Transformers & Personal Care Philips Research Period of growth and diversification Gilles Holst hired to start Research on Jan. 2, 1914 Research guided by Holst s 10 Commandments #8: Don t budget per project and don t give Business Groups financial authority over research programmes 14 Philips Research Period of expansion Research leads to new products The sky is the limit Appointment of Hendrik Casimir Theoretical Casimir effect : applicable after 60 years? Science - Technology spiral: innovation is nonlinear Ample room for basic research Physics, materials 15

6 Philips Research present Research much more tied to industrial activities 2/3 of Philips Research geared to Product Divisions Contract research introduced in /3 of Philips Research kept more exploratory Corporate funding Emphasis shifted from physical sciences to multi- disciplinary work on devices, systems and software Theoretical & Experiments Physics Groups terminated 16 Balanced portfolio of research projects Long-term goals with short-term deliverables Ambition of Project proposal Long-Range Technical Objective Time to Deliver 17 Technology alone is not enough Some statistics from literature 60 % of R&D projects reach technical completion 10 % of R&D projects earn economic profit Main lesson: business analysis at start of innovation improves probability of economic success Adapting innovation to results of business analysis Preparing other parts of company for dealing with innovation Assess economic potential as soon as possible! 18

7 Creating value is key From technology-rich company to rich technology company Transfer to existing Line of Business Transfer of skilled people Selling knowhow to third parties Creating new Line of Business RESEARCH HRESULT RESULTS S Spinning out new businesses Brand image & Customer support Licensing IPR 19 Why basic research lost its relevance to Philips Firms invest if expected return exceeds cost of capital Basic research (Frascati( definition) no longer creates enough value to warrant active involvement by Philips Shorter product life cycles leave less time to recoup R&D costs Competitive pressures reduce times-to-market New basic discoveries in ICT take longer to become applicable Innovation requires much more than basic research alone ICT dynamics make long-term research riskier Basic research remains of indirect interest to Philips Education and training of good researchers at universities General advancement of science 20 Philips windows on world of S&T Partnering with other R&D actors has economic and strategic advantages Increases added value per employee by 6% R&D partnerships in recent/current European programmes EU Framework Programme, EUREKA Including 370 partnerships with universities and research institutes 200 research contracts between Philips Research Eindhoven and universities or institutes 30 part-time professors from Philips Research Numerous students, R&D trainees, postdocs 1. A. Poot and E. Brouwer, Ministry of Economic Affairs, The Hague,

8 Flexible displays Non rectangular, flat displays Conformal, curved displays Wearables Display on flexible devices Rollable displays 22 Contents 23 Rationale for public funding of R&D R&D boosts economic growth [OECD/DSTI, 2001] 1 % more public R&D generates 0.17 % productivity growth 1 % more business R&D generates 0.13 % productivity growth, in addition to extra private returns Public support for R&D is justified For basic research because of public good characteristics For business R&D because of positive externalities Public support compensates for spill-over to society Social return on private R&D is at least double of private return ICT is increasing social return on R&D, but not necessarily private return [Luc Soete,, MERIT] 24

9 Public funding for private R&D: a balancing act Pro Correcting market failures Stimulating R&D and growth Creating welfare Contra Distorting competition Destroying welfare GATT Agreement of 1994 and EU State aid rules of 1996 impose restrictions on public funding for R&D Fundamental research: 100 % max Precompetitive development: 50 % max Industrial research: 75 % max Beyond first prototype: 0 % 25 Outdated distinctions WTO and EU rules build on linear innovation model Separated, sequential stages from fundamental research through industrial research and precompetitive development to first prototypes Successful innovation requires cyclical process with interaction between knowledge creation and application R&D stages have blurred and become partly concurrent R&D definitions in WTO and EU rules hamper effectiveness of governmental programmes to stimulate R&D Outdated straitjacket doesn t fit reality of business R&D 26 Contents 27

10 Dividing labour in R&D goals long-term short-term industrial research industrial development academic research X Enhance applicability of academic research through interaction with industry Leave near-market R&D to private sector short-term deliverables long-term 28 Contents 29 Patenting policy for public research Bayh-Dole Act (1980) enabled/urged patenting of results from federally funded research by US universities and public research institutes Licensing now provides considerable income (?) Controversial AWT report ( Dutch S&T Advisory Council) recommends academe to leave patenting to industry Proper use of knowledge is key, not licensing income Fair price to be paid for knowledge from academia 30

11 Contents 31 Concluding remarks Research is basic to Philips The Technology Company Basic research has lost direct relevance to Philips R&D definitions in restrictions of WTO and EU on public funding do not match reality of innovation Reviewing definitions of R&D is needed Is basic research closer to new products in biotech? In biotech, European Commission describes basic research as research that can have many indirect commercial applications but that is not necessarily commercially applicable itself [COM(2001)454] 32