Design of organizational innovation systems


Major corporations are often restricted by a too-limited view of the future. This view is based on the western belief that time is linear and that the future is merely an empty space that can be 'colonized' to the present and filled with ever more technology and consumer goods. However, this technology and consumer determinism now threatens to compromise our wellbeing and prosperity. Primarily we need to go beyond the straightjacket of consumer needs and a consumer approach, and also encompass social needs and a social approach. By doing so, we can drive a new era of creativity and growth. Working with this emerging social space therefore becomes both an opportunity and a necessity. However, we must not only re-invent our social industries, but also our lifestyles and even the very growth models upon which they are based. To achieve this, the new technologies enable more radical innovation through the delivery of more context-based customized services and systems.

Shifting our emphasis from consumption to services and systems, and combining a consumer-led and socially-led approach, means that how we think about and interact with the future will change. Thus we need,

  • a market-led approach, based on consumer research and innovation, to a socially-led approach based on social research and social innovation.
  • the act of researching the future to directly engaging with the future through people who are already creating it today.
  • closed research and innovation to open co-creation with stakeholders, especially users.


In many companies there has been a shift in the last decades from a focus on technology research and innovation to a focus on consumer research and innovation. This shift mirrors the realization that technology can drive growth but often fails to be sufficiently in tune with consumers' needs and aspirations. In other words, there have been too many mistakes and too many misses. The shift from technology to consumer also reflects the increasing influence and (purchasing) power of consumers, captured in the oft-repeated mantra; 'the customer is king'. Thus, innovation plays a very important role in each and every company. Innovation has taken a new dimension for the company to be successful in the market. In late 50's till 2000 the organization was led by technology and market led. Nowadays the organizations are socially led.

Given the need to invent new ways of being and doing, together with the pressing need to re-invent many of our social industries, it makes sense to take the next step along the continuum from a technology- or consumer- to a socially-led company. Such a step, however, requires a very different mindset. A technology-led company is based on technology research and innovation, carried out primarily by experts in labs. A consumer or a market-led company is based on market or consumer research and market innovation, also primarily carried out by experts.

If social innovation is increasingly important, and if we are to go beyond a technology and/or market view of the future, then, as stated above, we need first and foremost to think about the future through a social and cultural lens, researching and understanding socio-cultural contexts and values. This is true whether we are thinking about consumers (as people first and consumers second), about social needs and social solutions, or about both, i.e. users in social solutions. Philips Design has always taken a more socio-cultural approach to research, exploring beliefs, values, aspirations etc. For more than ten years a diverse team of futurists, psychologists, historians, anthropologists and designers in Design Research and in the Foresight and Trends group have been researching society, cultures and people in terms of:

  • the deeper currents in social values and the main drivers shaping tomorrow's world, drawing on futures and social studies.
  • the cultural expressions of how these values are manifested, drawing on cultural and design studies.
  • the needs and behaviors of people in their everyday lives and activities, drawing on ethnography and the human sciences.


A Business week article has said about PHILIPS as "The former consumer electronics giant is reinventing itself as a design-led health, lifestyle, and technology player. Think in-home health-monitoring devices for heart patients, computer games with sensory effects, and energy-efficient color-changing lighting. Philips taps teams of futurists, cultural anthropologists, designers, and scientists to develop user-centered products and services". The organization is also termed as one of the world's innovative companies.

The Innovation and Emerging Businesses sector is designed to stimulate growth by leveraging Philips' brand, technology and intellectual property (IP) base. Through this sector, Philips invests in innovation and new business activities that are not currently part of the operating sectors, but which have potential to create additional organic growth or value through future spin-offs. The sector comprises Corporate Technologies, Corporate Investments, New Venture Integration and Philips Design.

Corporate Technologies feeds the innovation pipeline, enabling its business partners - principally the three Philips operating sectors - to create new business options through new technologies, venturing and intellectual property development, to improve time-to-market efficiency and to increase innovation effectiveness via focused research and development activities. Corporate Technologies encompasses Philips Corporate Research, the Philips Incubators, Philips Intellectual Property & Standards (IP&S), the Philips Innovation Campus as well as Philips Applied Technologies. In total, Corporate Technologies employs about 4,100 professionals around the globe. Corporate Technologies actively participates in 'open innovation' through relationships with academic and industrial partners, as well as via European and regional projects, in order to improve innovation efficiency and share the related financial exposure. Philips uses funnel model to roll out their products to market.

The High Tech Campus in Eindhoven, the Philips Innovation Campus in Bangalore India, Research Shanghai China and InnoHub are prime examples of eco-systems enabling open innovation.

Philips Research is a key innovation partner for Philips' business sectors. It has three main roles. Firstly, it creates new technologies that help to spur the growth of the Philips businesses. Secondly, it develops unique IP, which will enable longer-term business and creates standardization opportunities for Philips. Lastly, it sets up ventures that can grow into new adjacent businesses for the sectors.

In 2008, Research started to develop a novel ultrasound based drug delivery technology that could potentially increase the effectiveness of chemotherapy treatment and reduce its side effects. Research is also working on, among other things, improved water purification technology for home use. It is compact, powerful and cost-effective, bringing clean, safe drinking water within everyone's reach. Philips has established three corporate venturing organizations: the Healthcare, Lifestyle and Lighting & Cleantech Incubators. The main purpose of venturing is to create strategic growth opportunities for Philips. In some cases spin-out or technology licensing will be considered. In 2008, Philips, together with Prime Technology Ventures (PTV III), arranged for the spin-out of five technology companies from the Incubators: amBX, Civolution, Intrinsic-ID, priv-ID and Serious Toys. Philips IP&S proactively pursues the creation of new intellectual property. Its portfolio currently consists of about 55,000 patent rights, 33,000 trademarks, 49,000 design rights and 2,600 domain name registrations. Philips filed approximately 1,640 patents in 2008. Over the past five years Philips has reshaped its intellectual property portfolio in line with its new strategic focus on health and well-being. Philips believes its business as a whole is not materially dependent on any particular patent or license, or any particular group of patents and licenses. Philips Applied Technologies supports customers both inside and outside Philips through new technologies, new business ideas, consultancy and new product introduction services. In 2008, it announced the commercial roll-out of the Ambient Experience for Hospitality concept, with the first implementation by the citizen M hotel chain, in Amsterdam - which went on to win the European Hotel Design Award as the most innovative hotel of 2008.


Philips Design is one of the longest-established design organizations of its kind in the world. It is headquartered in Eindhoven, Netherlands, with eight branch studios in Europe, the USA and Asia Pacific. Its creative force of some 550 professionals - representing more than 30 nationalities - embraces disciplines as diverse as psychology, cultural sociology, anthropology and trend research, in addition to the more conventional design-related skills. Philips Design's people-centric design approach, known as High Design, is human-focused and research-based, and uses a deep understanding of people's needs as the starting point for the design process. It also provides the framework for taking these insights and translating them into imaginative yet feasible solutions.

Philips tries to create an environment and structures which promote interactions, networking and knowledge-sharing, leading to joint projects and joint ventures among the companies. For Philips this means that the company canspin in ideas and innovations from outside, enriching the services it can offer Philips' business divisions. It can alsospin out technologies from its own extensive IPR portfolio to high-tech companies in the innovation campus, which can bring innovations to market more quickly. For the companies on the campus, networking and co-operation on ideas is reinforced by shared facilities and technology - for example, through the Mi Plaza, a microsystems and nanotechnology facility including a world-class 'clean room' with laboratory and materials-analysis services. In most cases, start-ups can make free use of those facilities.

This case clearly shows how companies can create a stimulating environment for cooperation and open innovation. It also underlines that open innovation is much broader than opening up to lead users or crowds alone, in contrast with what is being written sometimes.Therefore, the Open Campus idea perfectly embodies what open innovation originally was about.

PHILIPS has its motto of research innovation to think globally and to act locally. The organization has extended its research centers across the globe. They include,

  • Briarcliff (Newyork) - Clinical sites and health care
  • London - New businesses
  • Hamburg - Health care
  • Eindhoven - Health care, lifestyle and technology
  • Aachen - Lighting and Healthcare
  • Bangalore - Emerging markets
  • Shangai - Emerging markets and Network.

The scope of innovation has continued to change from closed innovation to selective partners to open innovation over years in this organization. Early in 1980's the organization is concerned more about technology research. The company was in hunt for new technologies and ideas. The funding for research is mainly corporate funding. Every resource allocated is incurred by organization itself. The new technology identified is within organization and for the organization. Later in 1990's the innovation has led to its step to selected partners. This research is mostly product concerned. The thirst for engineering marvels is satisfied by having new innovative products. The resource allocated for research is by selected organizational collaboration. The final leap on innovation is because of entrepreneurship. The solutions and services are based on technology transfer between organizations. The following figure explains the transition from closed to open innovation strategy.

Open innovation leads to PHILIPS businesses integrated with external suppliers and joint ventures of PHILIPS. Simply, the world is our lab where we use most ideas. Open innovation is all aboutcollaboration. With the current state of technology, a single-firm solution is a thing of the past. Specialist companies, knowledge institutes and governments are increasingly joining forces. This has its benefits. Using each other's strengths, knowledge, experience and expensive research equipment will result in efficient and effective technology developments. Combining views and visions will create synergy. The success rate of new initiatives that emerge from open innovation is substantially higher than the success rate of closed research centres. Open innovation also creates space for specialist companies to develop their core business at a high level and to market new products effectively.


As discussed earlier PHILIPS has extended its innovation service by establishing three innovation campuses across globe. These campus include,

  1. Innovation campus at Shangai
  2. Innovation campus at Eindhoven
  3. Innovation campus at Bangalore
  4. Innovation campus at Singapore


The Philips innovation campus is like a Chinese fan which can easily expand and contract when required. It reflects Chinese culture at international environment. The Philips campus at Shangai is technology housing for following two groups comprising 38,000 sq.m of campus area and an investment of EUR 40 million.

The two groups of the innovation campus include:

  • Philips Lighting Electronics, Shangai (PLES) which comprises 20,000 sq.m
  • Philips Research and Development centre (R&D) comprising 18,000 sq.m

It is also enabled with provisions for future participation with national organization and national sales organization (NO/NSO) with 23,000 sq.m gross area spent.

The above campus is set under construction with two phases.


High Tech Campus Eindhoven covers 103 hectare. The foundation stone for the Campus was laid in July 1999. Originally, the site was Philips Research premises. After opening the site for other companies besides Philips, in 2003, the population grew. Nowadays, over 90 companies are located on the Campus. High Tech Campus Eindhoven wants to attract a mix of companies and organizations that will create an entrepreneurial and collaborative environment. The Campus aims on companies that can be classified in one of the following technology domains:

  • Microsystems
  • High Tech Systems
  • Embedded systems
  • Life Sciences
  • Infotainment

The application areas High Tech Campus Eindhoven focuses on are Health and Experience. The gross area of campus includes,

  • 10,000 m2 for facilities including The Strip
  • 45,000 m2 R&D facilities including lab and
  • clean rooms
  • 185,000 m2 office space
  • 150,000 m2 additional (re)development space
  • 6,000 m reserved for start-up companies (Bta)
  • Philips carries extensive work on Eindhoven campus. Their sector spread includes,

  • Philips Applied technologies
  • Philips Consumer Life style
  • Philips Corporate Investments & New Venture Integration
  • Philips 3D Solutions
  • Philips Electro MagneticsCompetence Center
  • Philips Healthcare Incubator
  • Philips Intellectual Property & Standards
  • Philips IT Applications
  • Philips IT Infrastructure
  • Philips Lifestyle Incubator
  • Philips Lighting & Cleantech Incubator
  • Philips Research
  • Philips Translation Services

    Philips Innovation Campus (PIC) at Bangalore, India is home to hundreds of talented engineers finding expression for their creativity and passion for innovation and involvement.

    The vision of Bangalore campus is, 'Be an innovation hub creating next generation products, solutions and services for health and wellbeing.'

    Mission: Generate profitable growth for our partners by:

  • Creating value through customer-centric innovations.
  • Leveraging in-house and external competences.
  • Attracting and developing best talent.
  • Creating an exciting work environment and a high performance culture.

Beyond Software, PIC's commitment to people goes beyond its people, to the people in the community in which it operates. This commitment is mission-driven, guided by certain principles and policies. CIT or Community Involvement Team, are those people who take an extra mile on the community route. PICians who do reach out feel an inner satisfaction almost on par with that they derive from their jobs. PIC's active community involvement program is aimed at improving the quality of life in our community. CIT is headed by the CEO, Alexius Collette himself. Twenty three employees of PIC who are project leaders take an active part in organizing trips to schools & NGO's.

CIT has three divisions, which deal with different areas of community involvement - education, healthcare & employment. The Centre of Competency for Consumer Lifestyle (CL) located at the Philips Innovation Campus (PIC) Bangalore is a Philips wide recognized knowledge & development centre. Here Philips design and develop the software for CL products. Our technical experts work on a wide range of domains developing some of the most innovative products. Philips achieved the prestigious CMMI L3 in our journey towards higher quality assessed as per the Philips Appraisal Method.

The Television team, established in 1996, is one of the oldest at the Philips Innovation Campus. This team has evolved over a decade with experiences spanning various display technologies, broadcast standards, architecture, product requirements, understanding user requirements in-depth and delivering differentiators. This team has built up competence in Middleware & User interface on the development front. The team leverages it vast expertise in the areas of Digital broadcast, Connectivity standards & protocols, SW Integration, Product validation making TV viewing more enjoyable and reflecting the consumer's holistic interest in better well-being. One of the divisions in the Philips Innovation Campus, Bangalore is a development lab for PH. Philips offers a robust portfolio of medical systems. The goal of each product is clear - faster and more accurate diagnosis and treatment. Our product line includes best-in-class technologies in X-ray, ultrasound, magnetic resonance, computed tomography, nuclear medicine, PET, radiation oncology systems, patient monitoring, information management and resuscitation products. Philips also offer a wide range of services including, but not limited to, training and education, business consultancy, financial services and e-care business services. The Philips Medical Systems Software Competence Centre (PH-SCC) works with other development labs around the world to provide state-of-the-art systems and solutions to our customers - the doctors and hospitals that use our modalities to provide care to patients.


The Philips Innovation Campus (PIC) in Singapore is one of the company's largest product development center outside the Netherlands with over 800 design and development engineers. More than US$280 million in investments have been committed to the Innovation Campus since it was set up in 2000.

Products developed at the PIC in Singapore generated over US$6 billion in sales for Philips globally. More than 1,000 new products are developed by the PIC every year - a very productive average output of 4 new products each working day. To date, PIC is also responsible for 300 new inventions which resulted in 2,400 patents filed by Philips worldwide in the last eight years.

The PIC houses highly complementary and related product groups carrying out development efforts in an integrated environment - connected displays, home entertainment systems, home controls, technology management, intellectual property management and industrial design.

This structure provides a conducive environment for the various units to tap on one another's strengths. Each unit is responsible for its own development work but still enjoys greater opportunities for cross-fertilization of ideas and the sharing of technology, development capabilities, expertise, infrastructure and equipment.

The combination of expertise puts the PIC in an ideal position to spearhead the industry's drive to move from wired to wireless, from analog to digital and from standalone to connected. The PIC is also the leading product development center for Philips in convergence technologies, spearheading development, test-bedding and business model creation.

The PIC's successful participation in the Singapore IDA's Connected Home project has led to its further involvement in the expanded connecting the Community Project, which was launched in early 2005. Consumer insights obtained from research carried out for the Connected Home project has helped Philips to fine-tune the functionalities and features of its connectivity range of products.

Adding value to Singapore's knowledge-based economy

Philips' enhanced development focus, via the PIC, complements Singapore's efforts to become a knowledge-based economy and further strengthens the mutually beneficial, long-term partnership between the nation and the organization.

It is also Singapore's economic goal to develop into a vibrant and robust global hub of knowledge-driven industries by establishing world-class capabilities, top talents and a strong knowledge base. These assets, together with the government's active support of R&D and comprehensive technology infrastructure, have enabled the PIC to thrive.

The Campus, in turn, enhances the skills of Singapore's talent pool through knowledge transfer, international exposure and collaborations with local research institutions and universities. Development work at the Campus also gives birth to new design ideas and innovations that generate economic spin-offs and add value to Singapore's knowledge-based economy.


Philips Innovation Campus provides a conducive environment for the various product divisions to tap on one another's strengths. Each product division will be responsible for its own development work but will also enjoy greater opportunities for a cross-fertilization of ideas and the sharing of technology, development capabilities, expertise, infrastructure and equipment.

Greater synergy, more innovative ideas, a dynamic and stimulating environment for talent. All of which will help Philips to sharpen its competitive edge and stay relevant in a world of constant change.


  1. Schilling and Mellisa A,"Strategic Managemennt of Technological Innovation", 3rd Edition.
  2. Milder and Christophe, "Working on Innovation"
  3. Rastogi.P.N., "Management of Technology and Innovation: Competing through technological excellence".
  6. Philips Intranet Source.

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