Philips

PHILIPS CEO GERARD KLEISTERLEE: CREATING KNOWLEDGE IS NOT ENOUGH; WE NEED INNOVATIONS THAT WILL HOLD THEIR OWN IN THE MARKET

Pressmeddelande   •   Okt 07, 2005 14:22 CEST

Hamburg, Germany - During his speech at the Bucerius Law School in Hamburg today, Philips President and CEO Gerard Kleisterlee emphasised the significance of market-oriented innovation and the pioneering spirit for the future of Europe. The rapid growth of the Asian economies - China's in particular -, the expansion of the European Union to the east, as well as the continuously increasing speed of innovation and commoditization, have, he said, meant dramatic changes in economic conditions. It is no longer sufficient simply to create more knowledge. Instead, it is at least as important to market innovations successfully and to safeguard companies' intellectual property. Philips is therefore getting involved in China, for example, in order to provide support for the authorities there in developing and implementing a solid system of legal protection for commercial rights.

According to Kleisterlee, an important prerequisite for further growth is the EU's commitment to the Lisbon Agenda. After, however, the progress of the first five years, which could best be described as "patchy", the EU and governments are now showing more courage and decisiveness in bringing about the changes required: a clear reduction in bureaucracy, more flexible markets, increased investment in F&E and greater cooperation between universities and corporations. While many universities are still shying away from this partnership concept, it is still the basic prerequisite for strong research. "Companies, too, have had to rethink their ideas over the last few years. We are increasingly finding ourselves working with partners who are also our biggest competitors. And the success of these partnerships shows that we are doing the right thing. The resounding success of the Senseo coffee machine, more than 10 million of which have now been sold, was only possible because we work ed with a partner to "re-invent" the coffee brewing process."

Equally significant is the aforementioned pioneering spirit. Entrepreneurship must, Kleisterlee said, be encouraged at university level. "We need to think outside existing structures and allow ideas that others have already dismissed as absurd. After all, it's the ability to imagine the unimaginable that creates the basis for success." The drive to succeed with your own ideas is not well-developed in Europe. While 61 percent of Americans in the US would like nothing better than to be their own boss, only 45 percent of Europeans have even considered this a possibility. The higher level of risk-taking demonstrated by the Americans was also to be found in most Asian countries, which have less experience of business success and lack the associated feeling of security by which many Europeans set such great store.

Europe is, Kleisterlee says, in danger of depending on this false sense of security. "People in Europe cannot expect companies to swim against the tide of current developments and keep existing jobs in Europe open at any price. This would jeopardise the corporations' existence and the future of Europe. Our high standard of living requires us to be part of the knowledge-based society of the future." As a consequence, therefore Europe needs to specialise in highly-qualified jobs which require a high level of education. At the same time, new jobs would be created, particularly in the service sector, for those with fewer qualifications. It is up to companies to act responsibly in bringing about this change, in which economic considerations should not be allowed to replace traditional values, but should, instead, secure them. "Globalisation is not a zero-sum game with winners and losers. Instead, it forms the basis for the European growth of tomorrow and for the economic success
of countless corporations today."

For the full text of Gerard Kleisterlee's speech, see http://newscenter.philips.com/mt/lawschool

For further information, please contact:
Koen Joosse
Philips Corporate Communications
Tel: +31 20 59 77118
Email: koen.joosse@philips.com

About Royal Philips Electronics
Royal Philips Electronics of the Netherlands (NYSE: PHG, AEX: PHI) is one of the world's biggest electronics companies and Europe's largest, with sales of EUR 30.3 billion in 2004. With activities in the three interlocking domains of healthcare, lifestyle and technology and 159,700 employees in more than 60 countries, it has market leadership positions in medical diagnostic imaging and patient monitoring, color television sets, electric shavers, lighting and silicon system solutions. News from Philips is located at www.philips.com/newscenter.