Siemens' Entrepreneurial Vision: A Conversation With CTO Roland Busch

On October 1st 2016, Siemens unveiled its venture capital and called it 'Next47', playing on the fact that Siemens was founded in 1847. On that occasion, Siemens' President and CEO Joe Kaeser highlighted that his company was itself a startup in 1847, founded in a rear courtyard in Berlin. "With Next47, we’re living up to our company founder’s ideals and creating an important basis for fostering innovation as we continue Siemens’ development.”

As of this announcement, Next47 was planned to have funding of €1 billion for the first five years; two of which have already passed. Leadership of this VC was to be waved to Siegfried Russwurm, Siemens' Chief Technology Officer (CTO) at that time. Next47 is purposed to build on Siemens' existing startup activities. The VC is open to employees as well as to founders, external startups and established companies who wish to pursue business ideas in Siemens' strategic innovation fields.

In Munich's Siemens headquarters, we meet with Roland Busch who took Russwurm's office as CTO of Siemens last year.  Busch is responsible for the company’s central research and development unit, corporate technology, and for Next47. 

"Entrepreneurship and ownership culture is an important milestone of our vision 2020 strategy program," Busch tells Startup Scene. "And we’re on a very good way: Eighty percent of all Siemens employees worldwide are now also Siemens shareholders."

In the past 20 years, Siemens says it has invested more than €800 million in approximately 180 startups, and that it engages with more than 1,000 startups per year. In its latest fiscal year, Siemens generated revenue of €75.6 billion and net income of €7.4 billion, with approximately 348,000 employees worldwide. "In total, around 300,000 of the company's 377,000 employees worldwide hold Siemens shares," the CTO adds. "The company had aimed to have about 200,000 employee shareholders by 2020."

Last August, Siemens announced the launch of what they called Vision 2020+. After 2020, Siemens aims to adopt a simplified and leaner company structure, by following a new strategy to give individual businesses significantly more entrepreneurial freedom. The organisational level of the current divisions will be eliminated, the regional organisation realigned to further increase its customer orientation, and company headquarters streamlined. Below the Group level, there will be three operating companies; Gas and Power, Smart Infrastructure, and Digital Industries, as well as three strategic companies; Siemens Healthineers, Siemens Gamesa and the planned company Siemens Alstom.

"Our Vision 2020 strategy programme has been largely completed or its implementation is well on its way – successfully and faster than planned," says Busch. "We are heading toward another year with outstanding results. And the best time to reinvent yourself is when you’re strong."

The company's plans also call for strengthening its growth portfolio through investments in new growth fields such as Internet of Things (IoT) integration services, distributed energy management and infrastructure solutions for electric mobility. With the newly formed business unit for IoT Integration Services, Siemens is expanding its IoT platform offering. The company plans to hire around 10,000 employees in this area by 2025. 

Siemens is also venturing in the field of biotechnology, with a 'Living Lab' in its Vienna headquarters paving the way to make future medicine accessible to everyone. Medical engineers work together to prototype technologies that monitor quality specifications and critical parameters in real time. That means that if a deviation occurs during an operation, the process can be readjusted without interrupting the doctors and the patient. These technologies aim to make sure that quality control doesn’t just take place on the final product, but that it has already been applied at multiple points throughout the process. Errors can therefore be detected or avoided altogether.

"Many companies try to avoid changes until they are in troubles," he adds. "With our new Vision 2020 strategy programme, we will shift from a one-size-fits-all setup to a purpose-driven and market-focused setup that can easily adapt to disruption and consolidation." Siemens has a life-long purpose to serve society and create value for all stakeholders, by providing technology to improve the quality of life all over the world.

Business has been driving Siemens' purpose since it was first launched in the rear courtyard in Berlin back in 1847; "In our future Siemens, the regions and countries will be part of this business." In terms of cross-sector regional scope, Busch also oversees the activities of Siemens' businesses in the Middle East. While Next47 has no immediate plans yet to expand into the MENA region, the VC is closely monitoring innovation ecosystems globally for future opportunities.

“Dubai has ambitious plans for the next decade and we want to continue supporting its development and growth," Busch says. Currently, Siemens is working with Expo 2020 Dubai to create the world's most connected expo using MindSphere, Siemens' cloud-based, open IoT system. As part of contributing to the UAE’s digital transformation, Siemens has also made a software grant, valued at $100 million, available to UAE universities so they can use the company's Product Lifecycle Management (PLM) software for education and academic purposes.

"At Dubai Airports, we are helping the company save 20 percent of its energy with our smart building technology and data analytics," adds Busch. "These are some of the examples of our contribution to Dubai and its development, not to mention power generation, transmission and distribution and other.”

Main Image: Roland Busch, courtesy of Siemens.