In mid-October 2012, global leaders across private, public and NGO sectors convened in San Francisco to discuss innovations that will be key to growing sustainable urban environments. At the close of the conference, Triple Pundit contributor Heather King interviewed Greg Sebasky, Chairman of Phillips North America, to discuss Phillips own innovation strategies.
TriplePundit: According to Phillips’ annual reports, you are investing $645 million a year in green innovation. Help us understand what this investment means, and how it reflects your sustainability innovation strategy?
Greg Sebasky: This is more than a dollar number on paper. Our vision is to make the world healthier and more sustainable through innovation, and everyone at Philips is focused on that same goal. Innovation at Philips isn’t contained to an R&D facility; it is happening all around us. Every customer interaction helps contribute insights about needs, desires and aspirations that help us take new innovations and bring them to live in meaningful ways.
For example, clinicians want earlier detection of critical conditions, such as low blood pressure in the ICU. So we’re working on predictive algorithms and warning systems that would allow a practitioner to take action before other traditional symptoms appear. Building and city planners want more energy-efficient solutions, so we’re developing and enhancing lighting systems to deliver more energy savings while improving design and cosmetics.
Beyond the insight-driven innovations, Philips also turns to strategic partners, such as leading medical institutions, or other best-of-breed approaches to incorporate the into our solution. For example, Philips is now the exclusive distributor of Corindus’ CorPath 200 System, the world’s first robotic-assisted system for the minimally invasive treatment of obstructed coronary arteries. We are also tapping the public for their ideas on new products and services; in essence, we are testing ‘crowdsourcing’ as a laboratory for new ideas. We just closed the nominations for The Innovation Open, a contest for the best innovative ideas to help solve our business challenges.
Importantly, our global reach provides a unique opportunity to collaborate and learn from a global network of Philips locations and customers, while giving local markets the autonomy to adapt business to meet individual market needs.
3p: So how exactly are you managing the sustainability innovation process at Phillips?
GS: Phillips has a dedicated corporate venture investing team, the Phillips Healthcare Incubator. Our venture group focuses on breakaway solutions that fulfill unmet needs in areas of strategic interest to Phillips. Healthcare is a high priority focus because in order to have a healthy, sustainable planet, we need to start with healthy individuals and provide access to sustainable social systems like healthcare and education in environmentally responsible ways. In addition, better, more efficient healthcare is central to the economic and social welfare of future populations.
The Incubator’s mission is to identify unmet needs of patients and care providers, and transform these unmet needs into successful business ventures.
The key is provide the necessary resources specific to the project. Philips understands that to deliver truly innovative, breakthrough solutions, we need to make new investments. By dedicating those resources through our venture capital model, we can develop game-changing solutions without compromising the customer focus of our existing business and products.
3p: Can you provide any recent examples of breakthrough businesses that you have seeded?
GS: We have several great examples:
1. Philips Digital Pathology Solutions
Despite the advancements in healthcare technology, a significant amount of diagnosis still relies on the human eye and a microscope. Philips wants to enhance pathologists’ efficiency and productivity so that we can speed up the diagnosis and treatment of cancer and other serious diseases.
In August this year, a major hospital in the Netherlands, Erasmus MC, became the first to adopt our digital pathology system in the laboratory analysis. With our technology, Erasmus MC can very expediently obtain digital images of suspect tissue at very high resolution. This enables medical researchers to view the images efficiently from any location and to gain new insight into diseases.
On of the great challenges of healthcare around the world relates to our ability to diagnose problems effectively and screen out those that have minor issues that can be addressed at home. To this end, we are investing in point of care diagnostic systems that better enable emergency rooms, clinicians and labs to rule out medical conditions and free medical labs to focus on the more serious diagnostic cases.
3. Home Clinical Monitoring System
We are similarly helping patients and doctors manage their care more personally and cost effectively by developing home monitoring tools. For example, to help cancer patients recover at home while keeping up with their treatments, our home clinical montoring venture looks at better ways for patients and doctors to track their stats and chemotherapy progress.
3p: Aside from health related ventures, what is Phillips doing to materially advance sustainability? The Meeting of the Minds conference was all about sustainable cities. How are you active in that quest?
GS: With urban populations growing each day, the city has become a major strategic space. When you take into consideration that cities account for 70 percent of all energy consumption today, and, as they expand, so will their energy demands. It is easy to see why bringing green innovation to urban environments is a top priority. While we don’t take a focus on a particular region, we do see big gains in outdoor lighting and building lighting. We believe the time is right for the public and private sectors to join forces in stimulating innovation and accelerating market penetration.
The advent of LEDs provides a range of opportunities to create new and better lighting experiences and solutions, while at the same time preserving energy and also protecting darkness by avoiding unnecessary spilling of light. Outdoor lighting can improve city branding, pride, tourism, safety/security, social cohesion/feeling of community, and sustainability. Philips LED outdoor lighting solutions provide 40-60 percent in energy efficiency, which means that with controls systems, street lighting does not have to be on or off. The recent study by the Climate Group found that LED lighting could also remove 670 million tons of CO2 gases from the atmosphere.
3p: Interesting. So can you provide an example of work you are doing with specific cities – San Francisco, for instance?
San Francisco is a great example. Philips Color Kinetics worked with Illuminate the Arts (ITA) and acclaimed lighting designer Leo Villareal to fulfill his vision of making the Bay Bridge a one of a kind LED sculpture (expected to debut in 2013). Officials commissioned a study that found that by using energy efficient lighting that is visually appealing, they will enhance their community and bring $100 million in tourist revenue to the city. In addition, Philips lights the exterior on the Stanford Court Marriott, the sign at Davies Symphony Hall, and the building at 400 Castro Street. On the other coast, Boston switched 14,000 street lights from mercury vapor to LED, saving $1.1 million annually in electricity costs and eliminating 5,000 tons of greenhouse gas annually.
image: chuwasg via Flickr cc (some rights reserved)