危 wēi  danger

Philips was founded in Holland in 1891 by Gerard Philips, a maternal cousin of Karl Marx.  Over the following century Philips grew to be one of the largest electronic firms in the world, in 2007 its sales were €26.79 billion.  In 1999 Philips built a High Tech Campus at its Head Office in Eindhoven as the company’s central research and development (R&D) facility, in its peak employing 1500 people.  However, after the tech bubble burst in 2000 the associated costs were tough for the company to justify – but Philips still needed to retain a stream of intellectual property to drive future growth.

机 jī opportunity

Philips’ solution was to invite other companies and their R&D teams to lease space on the campus, building a new revenue stream for Philips and thereby helping reduce the cost of the site.  The offer of space on the high-tech site and the potential to collaborate with Philips on R&D initiatives was compelling – there are now 15 companies on campus, including IBM and NXP, employing in total 7,000 people.  The campus has become so successful that it has won funding from the Dutch government to continue its growth as an innovation hub, with no company benefitting more than Philips.

How About…

• Partnering with companies to turn costs to revenues?
• Co-locating with strategic partners to lower R&D costs and improve results through collaboration?

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Principle source Harvard Business Review, Dec 2009, ‘Spotlight on Innovation’