Philips China upping research and tech capabilities to better serve China, and the world

Philips’ CTO Henk Van Houten visits Shanghai frequently because China has become a “second home” to Philips, especially when it moved its regional research headquarters to Shanghai. Now the Philips China Innovation Hub has become one of the top four research institutions for Philips globally.

The Holland-based firm is seeking business opportunities and innovation in China, which face challenges like polluted air, limited medical resources and an aging society.

As CTO, Mr. Van Houten has the right to say how to spend the company’s research fund, which hits 1.7 billion euros (US$1.97 billion) annually, 60 percent of which is spent on software.

The latest tools in Mr. Van Houten’s arsenal are AI (artificial intelligence) and cloud, both of which are tools to help the company fly when it is transforming into a “solution company” besides just selling products.

With the opening of the new AI lab in Shanghai this April, Philips aims to offer solutions to consumers, patients and hospitals. It helps clients to reduce the cost, complexity and burden with innovative solutions using AI and cloud.

In China, Philips has already established and strengthened with deeper collaboration with its local partners, including Digital China Health, Huawei and Alibaba. The latest stage for Philips to show “muscle” is the CIIE, China International Import Expo, a top-level international business cooperation and innovation platform to be held in Shanghai in Nov.

During his recent visit to Shanghai, Mr.Van Houten talked with Shanghai Daily on topics covering Philips innovation strategy, AI presence and deployment in China, as well as local talent strategy. He mentioned the company’s mission to lead “meaningful innovation” to improve people’s lives. And he also shed lights on digital revolution and its implication in the healthcare industry.

Wang Xi, Philips China CTO, was also present during the talk.

Q: How do you position Shanghai and China in your global innovation strategy?

A: I come here every year. The (regional) research center was in Taiwan before moving to Shanghai. It was a very conscious choice to go to Shanghai, one of most important vibrant cities in the world, where industry meets academic innovation and entrepreneurship.

China is a second home, presenting a very significant part to Philips. As a solution company, we need to tailor made our solutions to local needs and local customers. So we need to work, for instance, on Chinese natural language processing and optimal solutions for radiology in China.

What we want is a configurable solution with a lot of usable building blocks, so we work on the unified architecture and common assets across Philips with the help of the HealthSuite Digital Platform(HSDP). It is important that we have innovation center here, to work with market people, and the innovation could be used globally to benefit people in other countries. As an example, we started an air business in China because of the pressing needs of air purification. But now we grow air purification businesses in other countries, that’s also “local for global.”

Q: What are the latest missions of Philips in China?

A: Our mission is always to improve the lives of people, and this is what we call “meaningful innovation.” We work to connect lower-tier hospitals to premier hospitals to make sure that people here can get meaningful diagnoses frequently.

Overall, we have a workforce of over 1,000 for innovation in Shanghai, Suzhou, Shenzhen, Shenyang, Jiaxing, Zhuhai and Chengdu. We hope to increase the number by 20 percent annually. Though with competition with dot-com firms happening in China and rest of world, we can still attract top talents to work with us. They often like to come to work for us because they feel they can help people to live better.

On technology partnership in China, Philips has established strategic collaborations with Huawei, BAT in different fields. We have made our partnership go deep by establishing strategic ties with academia, enterprises, and local start-ups.

Answered by Wang Xi:

If you look at the Philips company strategy “Health Continuum,” we are really looking at the entire journey of a patient from healthy living, prevention, diagnosis, treatment and then home care. Of course, this strategy aligns very well with the Chinese government’s top health reform agenda.

We pioneer these innovation activities here and they can be certainly leveraged not just for the Chinese populations’ well-being, but can be beneficial to other parts of the world as well.

Q: In your opinion, what are the unique challenges and opportunities of the domestic market?

A: First of all, there are society drivers – the aging society. With better living conditions, people live longer but they also face more diseases and health issues. Like in the West, you see cardiology disease and cancer but also lifestyle-leading disease like diabetes, COPD, now is coming in a big way in China. So that’s putting a lot of stress on the healthcare system, due to lack of skilled staff, overburdened hospitals, as well as increasing cost of healthcare.

Meanwhile, we also see a big technology enabler, as digital revolution. Like traditional photography evolvement into digital one, it is also happening in healthcare right now. So, like the smart cameras in the latest cool mobile phones, our MR and CT are also run by software and AI, which make them smarter with better efficiency and higher quality. And they are not siloed in their own departments, we are building integrated solution to link whole clinic practices together to deliver bigger value. That is one of our key strategies, transforming to a solution company.

Q: How do you position AI’s influence in the industry?

A: In Philips, we believe AI is not just an pure isolated technology but it need to work hand in hand with people.

That’s what we mean about “Adaptive Intelligence” that helps people do their work, and also helps patients and consumers at home. AI is computer science linking to human science, for example we need to understand how to change people’s behavior — if patients don’t take their pills, how can we motivate them to take medical prescriptions, or if children are overweight, how do we convince them to have healthy nutrition? So we think AI can really help there, in this case it’s about combining computer science with behavioral science.

AI is embedded in almost every product, software and service of Philips. AI makes our products smart and responsive to people, that can be applied for household appliances like smart shavers, smart toothbrushes or imaging equipment and monitoring equipment. It will go all the way from AI for setting the best premier MR scanner to decide what kind of scan it will take, and also to use AI to visualize and interpret the images.

That’s also why we establish AI research departments in our key countries, not just in Shanghai, but also in Eindhoven in the Netherlands, Cambridge in North America and Bangalore in India.

We are very interested in exploring new business models, delivering more for applications in China. And we think that cloud will have a significant impact in making health care applications available to China, so we are working with local partner to create cloud-based solution in a SaaS model.

Answer by Wang Xi:

In China, natural language processing in Mandarin is very important to be able to pivot the best user experience for products at home or in hospitals or even online. The NPL and big data research need to be localized. Philips has been undertaking open innovation with local hospitals and research institutions in this field.

Q: What’s your plan for the CIIE expo in Shanghai?

Answer by Wang Xi:

Philips will showcase products and services with three spotlights covering connection, digital and AI-enabled solution across health continuum during the CIIE expo. At Philips’ pavilion, four highlights will be presented to the CIIE audience: a world-leading digital imaging system and intelligent informatics system to usher in a precision-health care era; connected care and AI-driven solutions; smart consumer health solutions; our AI strategy and transforming data into insights to benefit healthcare professionals.