Cobbenhagen Summit 2015, Innovation from the perspective of the industry
Growth – Our Minister of Finance Jeroen Dijsselbloem and Professor Teulings
have shared with us their views on growth and innovation from a macroeconomic perspective. It is now an honor and a pleasure for me to reflect on
innovation from the perspective of industry.
Before looking at the role of innovation, I would like to explore with you what
new sources of growth there could be in our society and what role innovation
could play in this.
Let’s look at Europe, the Netherlands, and then closer to home… Brabant.
Europe is at a crossroads on many topics and is being challenged from the outside and within. For many, the reasons for a strong Europe, or where it is going, have become blurred. The discussion seems to focus predominantly on its
financial fundamentals. In the Netherlands we are facing similar challenges.
Personally, I believe there is a strong case, however challenging, for defining or
re-defining the North Star, a spot on the horizon, or even the dream for both. If
ever there was a good time it is now.
In my view, Europe − with all the challenges it has today − can only survive if
we clearly re-state its main purpose, which is to create a safe, inclusive and
prosperous society, providing jobs in a growing economy that competes successfully on a global level, on the basis of, probably new, sustainable foundations. A master of its own destiny: for example, not reliant on energy and raw
materials from others. One could call this the North Star of Europe. To realize
this, at the very least the economy would have to be based on circular principals and renewable energy. This alone would require a tremendous amount of
investments in technological innovation.
But today I would like to stay closer to home and focus on the things that we
can influence ourselves: “Where are we going with the Netherlands? Do we
have − or dó we need − a North Star or a new dream? Who do we aspire to be?
Do we want to be the country with the highest standard of living?” Let’s call it:
“The Netherlands, a great society with perspective”. Can we maintain or afford
even our present standard of living? If not, do we have a plan how it can be
maintained for future generations? What we dó know is that the baby boomers are retiring in great numbers, with increasing life expectancy, and that the
next generation, which has to generate the income to finance it all, is shrinking. We run the risk that our national budget will shrink while costs increase.
Where is the discussion on how to break away from our focus on reducing
cost, so we can focus on generating new value and income? I firmly believe
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that to keep our living standards they should be based on new foundations. To
do this we need to define a new ambition, our North Star, or a vision that people can relate to, which they want to be part of and contribute to. This would
give context and reason both to a tremendous drive to re-invent society and,
as a consequence, much greater need for… yes…, innovation.
Last month, European data were published that indicate we have the best
quality healthsystem in Europe, and the gap between us and number 2 is widening. Are we, as a population, aware of this? Do we proudly tell the world?
No,…. we talk about healthcare as a cost issue! Indeed the affordability of the
system is under pressure. At present the main solution is cost-reduction. This is
necessary and the solution for the short term. The question is what is the solution for the longerterm. For the longer-term technological innovation in combination with the way healthcare is delivered is required! Why not see this as
an opportunity for, exportable, economic growth? Why not identify exportable
elements, treat others from outside the Netherlands here? Make supporting
the world with top healthcare a focus point?
A second example. We are, amazingly, the second agricultural exporter in the
world. But by positioning ourselves much more explicitly as a country that
helps to solve world food issues, could we not, in a sustainable way, improve
our position dramatically further? There are many other examples − water
management, bio-based chemicals and high tech, to name but a few. By changing our ambition much more explicitly we will look at these themes differently
and new opportunities will become clear.
What role does Innovation play in this? For me: value ánd productivity creation, do things smarter/cheaper, as well as making the world a better place to
live in. We should see the grand challenges facing society as an opportunity:
large-scale water management, renewable energy management, mobility,
health, food, etc. you may say we already have our 'Top-sector policy', which is
increasingly linked to societal challenges. But is that enough? Are the defined
ambitions high enough, and do they really create enough new future wealth
and economic growth? We should not forget that the Top Sector policy introduction coincided with a budget cut of 500 million euros on R&D spending. It
passed surprisingly quietly. Would this have happened if we had had a more
explicit ambition on how to maintain our standard of living and our role in the
world? I am not fully convinced. Not surprisingly, a growing number of supporters are very much in favor of formulating a more explicit, inclusive, longerterm inspirational direction for our country. This would also guide political and
budgetary choices, and innovation would be a key enabler to help us reach
these goals. Innovation as a basis for creating new ways to ensure a high
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standard of living based on new productivity and value models such as a circular economy, sustainable energy and material use, exportable value, new jobs.
We have Industry, small and large, ready to step in.
Innovation, let’s briefly look at where we are already strong and well established and then consider potential new area’s? Let’s consider examples along
the value chain.
The main strength of our region here, in particular, lies what we call quite high
up in the value chain. High-tech enabling technologies, ASML and its supplier
eco-system, enable others to make semiconductors. Further down the chain,
NXP designs and makes semiconductors. Again further down, Philips
Healthcare uses semiconductors in diagnostic equipment. All extremely innovative and high-tech, increasingly innovating in a network of Open Innovation
with suppliers, universities and knowledge centers such as Holst Institute– increasingly global but also with relatively simple B2B business sales models.
The challenge for these high-tech companies is to continuously innovate to
stay in leading positions while in parallel working on technologies with which
they at some point will re-invent themselves and the Industry. Next to this is it
our responsibility as a region, as Universities to create the conditions for a new
hightech generation to create the new ASMLs, Philips, etc.. Starting off with
large numbers of smaller companies that perhaps go on to become large
OEMs, and 10-30 years from now become the new multinationals. For sure
built on completely different fundamentals from those we know today, but
most definitely driven by the digital revolution. We have made good progress
here and should continue to do so.
I would like to return to our spot on the horizon, we called it ‘the Netherlands,
a society with perspective’. What new growth opportunities can we identify? In
addition to the high-tech examples I mentioned earlier, let’s consider opportunities further down the value chain, where we see ourselves as consumers.
Consumers, who need food, healthcare, and energy in a society struggling to
maintain its high standard of living.
Here everything comes together and the way things function is no longer simple. When considering options for new value creation and innovation, for instance in the area of healthcare, energy, food, mobility, we will need a different cooperation to achieve things. Here all parties work much concretely together, industry as technology supplier, universities as knowledge contributor
and governments (central, regional and local) participate but also many stakeholders and contribute each from their own strength and position. Govern3
ment can play a much stronger role in being a launching innovative customer.
Taking also risks. For instance in energy measures, mobility. Finding solutions
will undoubtedly give rise to significant technological innovations and economic opportunities. Grand societal challenges − an economic opportunity rather
than a threat. Exportable economic opportunities, … the challenges around the
world are very similar. The opportunities for the Netherlands with our strong
starting points are tremendous…. we just have to embrace them.
Later tonight we will discuss a number of example areas.
I would like to share the example of the challenge to maintain our high standard of healthcare, while still keeping it affordable. This is no surprise, perhaps,
considering the transformation we are going through at Philips.
We are all living longer, that's the good news, but with age, and especially over
the age of 65, the majority of us will get at least one chronic disease, such as
chronic heart-failure or diabetes. As a result of digitalization, the place where
we will be diagnosed, treated and receive aftercare will change significantly.
Digitalization and big data will enable highly personalized individual treatment
plans. As patients, we will increasingly assume co-ownership of our own health
management. And lastly, as a result of the rise in chronic diseases, we will increasingly need to be kept out of hospital while still being monitored. This will
lead to a rise in home remote monitoring and, increasingly, remote home diagnostics. In other words, healthcare organized along the complete health continuum − from healthy lifestyle and preventive care, via diagnostics and treatment to aftercare and home care. All this supported by a huge amount of data
and information in the cloud, useable wherever it is required. This is where
we, as a company, have identified a major opportunity for growth and decided
to focus as a strategic direction.
The ecosystem in which health is delivered is very complex: 1st and 2nd-line
doctors, home care, insurers, and technology suppliers (hardware and, increasingly, also software), care institutions, central, regional and local governments,
privacy considerations and…, not to forget the patient, you and me…. all interacting. A highly complex ecosystem, but one that globally needs solutions
which must and will be found, and for which we – as the Netherlands, but also
as the Brabant region – are very well positioned to create exportable hard- and
software solutions. An example of how a grand challenge can be seen as an
economic opportunity rather than a threat.
Let’s end with us, here tonight. What can we do? What initiatives could we
take? And where, how and by whom will it be taken? Within the Brainport
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committee we have started asking ourselves what we can do in addition to
creating optimal conditions within the Brainport region to support the present
industry and create new opportunities in the high-tech industry. Which new
areas could provide opportunities in the future, both in the medium and the
long term? At present we are exploring opportunities in the domains of mobility, healthcare, food, safety and energy. Some have leading global positions,
others are up and coming. We feel this region is a perfect place to explore solutions, with top players and a culture of entrepreneurship and triple-helix cooperation. A culture of ‘less talk, more action’. The idea is to create large-scale
Living Lab environments that enable technology and solution acceleration and
trials for start-ups and large companies, as well as new business models. As for
the outcome, well…, some will succeed, some will not or find unexpected spinouts. The most important thing is to get started and explore.
My plea for tonight is that we need to define a much more explicit, motivating
and ambitious goal for our country (and region), “the Netherlands, a great society with perspective” or which ever better wording. A higher, positive ambition. Let's view the grand societal challenges as an exportable opportunity,
with innovation as the key driver for success. Created in a new collaboration
between Industry, Knowledge centers and central-, regional- and local governments, but also various stakeholders from society.
The next generation is eager to join in, as l am sure you have all noticed at our
many great educational institutions, but also listening to our own children. We
just need to give them a platform.
I hope my introduction has given some food for thought and
inspiration, and also given you, Minister, something to take back to The Hague.
It comes for free, courtesy of the region of Brabant. Let us increase our ambition, embrace the new opportunities, do it now, invest and… INNOVATE!
Thank you very much.
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