With talks of potential federal rate cuts and signs of easing inflation, how would you assess the current state of global markets from a global CEO perspective?
If I look at the market, I think there are two perspectives. We see an improvement compared to last year, and we expect that to continue. However, there is still a lot of volatility and differing geographical trends. In India, growth remains strong, but neighbouring China faces challenges. North America is picking up nicely with a strengthening economy, while Europe is still slower in growth. Overall, global growth is more modest than in a booming economy, still influenced by inflation and interest rates. But with those trending in the right direction, we can see this reflected in the strengthening of the global economy, and that is something we can build on.
Let’s talk about Indian economy’s resilience, even with global market fluctuations in recent years. Since establishing this PIC campus here last year, what key factors strengthened your belief in India, and what motivated your strong commitment to the country?
India has several fundamental drivers that contribute to its strength and ongoing growth. These include a growing population, increasing education, rising wealth, and overall prosperity, which are strengthening the economy and evolving the ecosystem. Additionally, global trends, particularly in AI technology, support India’s role as a key player in the global talent pool and economy. These factors together favour India’s continued strong development.
You inaugurated this campus last year with a focus on innovation. How has the emphasis on innovation developed over the past year? What was the initial motivation behind this focus, and how has it manifested since last year?
I am excited to see the impact of the campus, returning here after 10 months. While the building itself was inaugurated last year, it truly comes to life when people use it to create impact. This innovation campus focuses on enhancing our software and AI capabilities, which are crucial for Philips’ mission to innovate in consumer and healthcare technologies. We’ve seen tangible examples of this innovation in action here. For instance, we developed AI technology that streamlines the ultrasound scanning process, reducing the time needed and improving patient care. Another advancement involves speeding up MRI scan times by a factor of three and simplifying minimally invasive procedures. These improvements benefit both patients and healthcare professionals.
Additionally, we’ve engaged with local clinical partners in Bangalore such as Manipal, ensuring that our solutions are tailored to the Indian healthcare context while also serving global needs. This approach allows us to develop innovations that are relevant both locally and internationally.
You mentioned several areas, including AI and local context. Could you provide a breakdown of how Philips is addressing different segments in India? Specifically, how are these segments performing, and what is the outlook for each?
Healthcare in India faces huge challenges, including a growing patient population, increasing chronic and complex diseases, and pressure on staff due to shortages of doctors, nurses, and technicians. To address these needs affordably, technology and innovation are crucial. Philips focuses on several key areas. First, improving patient monitoring both in hospitals and outside them, with an emphasis on software and AI to track patient health across different settings. Second, enhancing data diagnosis by combining advanced imaging equipment with algorithms and insights to manage the data overload faced by radiologists and other practitioners. This includes making images accessible across various care settings. Third, advancing minimally invasive treatments, such as those for heart disease, to reduce recovery times and enhance patient monitoring post-treatment.
India’s unique ecosystem, which includes innovation, manufacturing, commercial, and service capabilities, supports these efforts and allows Philips to develop and apply technology effectively within the country.
It is interesting to hear about your focus on ramping up capabilities in India. What factors have driven this increased focus over the past few years? Additionally, how do you plan to scale up this investment?
India has become a major focus for Philips, with 12.5 per cent of our global employees now based out of here. In 2024 alone, the company added 1,000 new employees in India and invested Rs 700 crore across its Healthcare Innovation Centre (HIC), Pune and Philips Innovation Campus (PIC), Bengaluru. Beyond financial investment, we are also enhancing our leadership presence in India, with several global businesses, such as mobile surgery and imaging, being managed from there.
India is emerging as a global hub for AI and services expertise, and we are leveraging these world-class capabilities. Additionally, we continue to innovate in consumer products, including male grooming, oral care, beauty, and childcare, addressing the needs of a growing population and providing essential care for families and infants.
Given the changes in AI since 2022, driven by the generative AI wave, how do you view the current state of AI investments? Is this a bubble, or are these investments grounded in real progress? What’s working and what’s not, and where do you think we stand in relation to the hype cycle?
AI is here to stay and has significant potential to improve lives. At Philips, AI is embedded in all our products. For example, our MRI scanners use AI to triple scan speeds, and our oral care products use AI to track brush usage. Generative AI enhances these applications, like automating administrative tasks in healthcare, which saves time for professionals. However, AI must be used responsibly, especially in healthcare, where rigorous testing and regulation are crucial.
India is a leading AI hub, is integral to our strategy. Philips benefits from its strong presence, local talent, and connections with consumers, hospitals, and government to advance healthcare innovation.
Given the current global labour disruptions and shifting roles due to AI, how is Philips adapting its workforce and automation strategies? What is your outlook on the impact of these changes on the company’s operations and labor dynamics?
AI can enhance productivity and competitiveness by addressing labour shortages, particularly in software and data expertise. For instance, AI can assist in coding and developing new algorithms, effectively augmenting our capacity. In healthcare, while AI won’t replace doctors, it can alleviate pressure on them by increasing capacity and reducing patient wait times.
Philips has also streamlined operations by reducing 10,000 roles to become more agile. AI supports this transition, but its primary value lies in improving product and service delivery. AI is crucial for optimising supply chains, adapting quickly to disruptions, and managing geopolitical challenges. Additionally, AI enhances patient safety and product quality by enabling more rigorous testing and quality control. It helps identify and address issues faster, ensuring high-quality products.
What is Philips’ vision for the next three to five years in India? How do you plan to build on current momentum and advance Philips’ growth in the Indian market over the medium and long term?
I see two main tracks for Philips in India. First, we aim to better serve Indian consumers by providing top-notch solutions in shaving, oral care, childcare, and healthcare, addressing the pressing needs of the growing population and economy. Second, India plays a crucial role in the Philips ecosystem. It would be difficult for Philips to operate effectively without India. The country provides crucial capabilities, competencies, and services, including backend support, innovations, and technologies used globally. Additionally, India contributes hugely through manufacturing products that are exported worldwide, making a significant impact on Philips’ global operations and purpose.
