‘Philips will invest strongly in R&D, marketing in India’

Philips Electronics spends roughly 8% or 1.6 billion euro on R&D annually. And, despite the global economic slump, Philips has shown no signs so far of slashing its generous R&D budgets. That is excellent news for India, which creates software that goes into Philips’ consumer electronics and home health-care products, which together generate over 60% of Philips’ revenues of €26.4-billion a year.     
“We have a Philips Innovation Centre in Bangalore, which is very important to us. We will continue to invest strongly in India,” said Rudy Provoost, CEO of Philips Lighting. Provoost, 50, has been a member on the company’s board since 2006.

He talked to DNA in New York about how Philips would continue to invest in India as part of the Dutch conglomerate’s push to expand its lighting, consumer electronics and medical equipment business in high-octane emerging markets.
Philips’ push into healthcare also means a sharper focus on India, Brazil, Russia and China as spending on medical equipment has been slowing in the US and Europe.

What are your investment plans for India?
India and China are among our hottest markets. That is why I spend so much time traveling in Asia. I don’t want to get into numbers but we will invest very strongly in India. We will continue to support the efforts of the Innovation Centre, which has really expanded and also make investments in marketing to ensure we remain the market leader in lighting.

We’ve put the emerging markets very high on our agenda — you have to do that to have a chance to be successful. We realise the power of these emerging markets in terms of brainpower and also as large consumer markets.

Will Philips continue to invest in innovation during hard times? 
In times of recession, you need to work harder, run faster and so you need a lot of oxygen. For me innovation is oxygen. It is a company’s lifeblood.

Are you planning to buy more medical equipment companies in India?
Since 2007, Philips has bought five medical equipment companies in Brazil, China and India. Last year, we acquired Alpha X-Ray Technologies and Meditronics in India, which will help us rapidly grow the Indian market with affordable products.

Is there a big market in India for efficient lighting technology?
There is an enormous market waiting to be tapped. We have met government officials in Delhi and pitched Philips lighting solutions for public and commercial buildings to save energy costs.

Lighting is the low-hanging fruit of reducing energy consumption: it accounts for 19% of the world’s energy use — and in India up to 80% of offices and public buildings are lit by outdated and inefficient systems. Adopting new energy-efficient lighting technologies in a country like India would save the economy billions every year.