Philips transforming healthcare and lighting businesses


Royal Philips started its journey over a century ago in a small serene town of Eindhoven, Netherlands, where it invited around hundred media delegates from every corner of the world to proudly announce its strategy to cater to the needs of growing urbanization in the healthcare and lighting businesses. The idea was to let the journalists experience the innovation Philips envisions in the modern world. Some of its new solutions are in practice in the developed world and a few are piloted in the deprived regions.

The Dutch company is known for its electrical appliances businesses globally, but has already, a few years ago, trimmed its business to focus more on lightening solutions, healthcare and consumer care sections through cutting edge technological advancement. The objective is to transit from linear to circular economy in an innovative world.

The idea is to decouple the economic growth from the use of natural resources and rather having economic value creation by improving ecological aspects. Its in essence, departing from ownership of products to buy services solution which can be controlled by Philips to deploy efficiently and can be reused or recycled.

According to Mckinsey research, the economic potential of durable products and solution industry is EUR 250-500 billion per annum for Europe alone in the next decade. One can assume and hope, to the likes of other innovation, this concept can have the spillover to this part of the world eventually.

Peeping into the future, a company started from a bulb factory, is all geared to attain efficiency in resources usage by tailoring to the demand of growing mega cities. “Philips is taking bold steps to meet these needs. Last week, we made the historic announcement that Philips is going to transform into two strong and focused companies: one focused on the Health Tech opportunity, the other on Lighting solutions. This is the next logical step on our journey.” informed Frans Van Houten, Philips CEO to media delegates a couple of weeks back in Eindhoven.

The company with a market capitalization of EUR 25 billion is investing heavily in Research and Development – in 2013, the R&D spending was EUR1.8 billion having filed over 1,500 patents with its innovations centers catering to the need of developed and emerging economies.

One of its big R&D facility is in its hometown, while the other two are hosted by Bengaluru (India) and Shanghai (China). This diversification is exhibiting Philips commitment to reach and improve lives of 3 billion people through its solutions by 2025.

A few examples of its lightening solutions with annual sales EUR 8.4 billion (one third of overall revenues) in various cities are renovation of 125,000 street lights with its CityTouch system in Buenos Aires, transforming 260 municipality buildings with intelligent LED solutions In Dubai and a 10 year contract to monitor and maintain 13,000 connected lightening fixtures and managing energy control for Parking garages in Washington DC.

The company tilt is more towards healthcare and consumer care business which constitutes roughly two third of its revenues. “The current model of healthcare, however, is unsustainable: it is delivered in silos, which leads to in-effective treatments and waste. To make healthcare more effective – economically and medically – we need integration and personalisation. Obviously this will also have huge benefits for patients, who will enjoy faster and better diagnosis, efficient personalised treatment and better aftercare. In short: healthcare that is more accessible, with better outcomes at lower costs, added Philips CEO.

The medical research tells that every sixth man in the world will be diagnosed with prostate cancer in his life time. But the world doesn have enough pathologists to treat. Philips is working on a technology with which a patient only needs a physician to digitally scan and share massive amount of data around the world with his colleagues. This means that a Physician in San Francisco can diagnose a patient in Sydney.

Prevention is better than cure. Philips is all sold on this idea envisaging a healthier lifestyle by developing innovative technological adaptive solutions that can be operated though smart phones and other gadgets. An example is Philips smart air purifier which provides real time air quality data inside the house. Air pollution content can be controlled through smart phones and help giving better life for those who are suffering from allergies and respiratory problems, and families living in polluted cities.

Moreover, Philips is blending its expertise to come up with drug-free solutions for people suffering through chronic pain and diseases. “This new solution, BlueControl, offers a natural, drug-free treatment using blue LED light, which can be used at home and reduces the need for hospital visits. You will see these all today.” added Philips CEO.

This all seems like a utopian world for people living in Pakistan where both energy and healthcare deficiencies coupled with higher pollution are deteriorating lifestyles in urban centers. The affordability of such solutions both at consumer and government levels are a farfetched dream here. Philips commitment to Pakistan is not translating into any foreign investment as the company had shelved its manufacturing facilities a few years back and right now company presence is only to market the products or solutions, if any.

However, in neighboring country India the company has strong footings with manufacturing and research facilities employing thousands of people there. One may hope, in a decade or two, once the trade is open with India and Philips innovative products attain economies of scale, whilst Pakistans per capita income grows, inhabitants of Karachi, Lahore and Islamabad may benefit from Philips or similar companies healthcare and lighting solutions.


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