"We learn how to fail and we learn how to fail fast," said Rick Harwig, chief executive officer of Philips Research.

Speaking with a group of  reporters from the Asia-Pacific region, Harwig said research was a fundamental part of Philips. The 1,600-strong workforce of Philips Research has facilities in many countries and cities - the Netherlands, Germany, England, Belgium and Shanghai - and every year produces many new inventions.

On average, a research project takes eight years before a successful product arrives in markets.

Among the products Philips Research is most proud of are the (liquid crystal display) LCD TV, of which Philips became the first manufacturer in the world 10 years ago, and its new "Ambilight" technology for flat-screen LCD TV sets.

In line with Philips long-term strategy of becoming a "healthcare, lifestyle and technology" company, research funds have been concentrated on healthcare and less towards consumer electronics, where competition is fierce and profit margins squeezed.

"We're at the end of 80 years of electronics development, and need fewer people to do that now," Harwig said. "There are many people and technologies around the globe that we can share." He said the company's "open innovation" strategy encouraged collaborations with other companies and parties, and has greatly loosened its previous vertical integration business structure. Philips' recent departure from the semiconductor business echoes the new strategy.

Asked what are the measurement benchmarks at Philips Research, Harwig said among them was the number of research works that have been transferred into businesses and market-places.

"We aren't paid to win the Noble Prize, we're paid to win product prizes," he said.

The research house targets to have 50 major research projects transferred into businesses in addition to several hundred smaller inventions. Harwig said the target was reasonable and there was no plan to increase it above 50.

Rudy Provoost, chief executive of Philips Consumer Electronics, told an International Funkausstellung (IFA) conference held in Berlin early this month that while moving forward the consumer electronics industry must focus on the context of "relevant innovation".

The industry must make innovations driven by what "deep consumer insight" to ensure that it brings meaningful applications and solutions to the market and avoids imposing existing technologies just because they're available, he said.

Provoost said the new "convergence era" that the consumer electronics industry is entering is underpinned by a number of new global trends that are dramatically changing the behaviour, needs and demands of consumers all over the world. These are consumer "empowerment and personalisation", greying baby boomers, "lifestyle balance", emerging markets in underdeveloped countries and the need for innovations to be sustainable.

The industry should expand beyond entertainment to other areas such as health and wellness, he said.

Pichaya Changsorn

The Nation

BERLIN