Bright Sparks

In the face of stiff global competition, European media technology companies seeking growth have only one option. Frans van Houten, president and CEO of NXP, believes that they must innovate.

Innovation is vital for a young company, and for a modern, united Europe, and for a technology industry assailed by competition from every part of the globe. Innovation is the positive face of change. It is the lifeblood of growth.

NXP is all about vibrant media technologies. Those who use the company's technologies in their devices want to create better sensory experiences. Digital technologies must offer consumers rich, pin-sharp sensory experiences: better video on mobile phones or in the car, better audio on phones or MP3 players, crisper photos.

What's more, they must allow users to access and share information and entertainment in an intuitive, user-friendly fashion wherever they are. Makers of these devices need an underlying 'chip intelligence' that can deliver a genuine 'wow' factor.

NXP's has chosen to focus on five broad areas: the home, mobile, automotive, identification and multimarket segments.

In the home, NXP helps manufacturers innovate embedded multimedia features and next-generation, connected multimedia appliances. The company's aim is to make it easier to enjoy and share multimedia content in every room.

NXP's mobile multimedia solutions enable everything from high-end smartphones to ultra-low-cost handsets to deliver TV-on-mobile, connectivity, gaming, MP3 audio, MP4 video, digital imaging and GPS location-based services.

Contactless technologies track inventory, improve logistics and protect people's lives. NXP technologies can be found in everything from radio frequency identification (RFID) tags that authenticate medicines, to e-ticketing systems and e-passports.

Near Field Communication, a technology NXP co-invented, gives instant yet completely secure access to entertainment, information and services, so your NFC-enabled mobile phone can be your wallet, entertainment centre, travel guide and house keys.

NXP's processors for automotives offer the same incredible sights and sounds you experience at home, with seamless connectivity to your personal media player.

NXP also has one of the largest portfolios of multimarket semiconductors in the industry. These standard products are the building blocks for most electronic systems.

ENDLESS INNOVATION

The secret of success is that innovation can never stop. The drive to improve and develop is inherent in everything NXP does.

One recent development brings semiconductors out of the sometimes invisible spaces they traditionally inhabit. Using clusters of light-emitting diodes (LEDs), solid-state lighting is creating new flexible installations that can change colour and intensity. Meanwhile, applying NXP expertise in RFID to the fast-evolving healthcare market empowers a new generation of applications.

EUROPEAN CONTEXT

For everyone in the semiconductor industry, what we do can be expressed in one word: innovation. So let's look at Europe's progress on the innovation front.

The European Commission has been sending out a must-do-better message since the original Lisbon commitments were agreed and has called for Europe to play a leading role in the knowledge economy. The competition Europe faces has increased markedly. In China, two million engineers are being produced every year. In India, one million. These people are driven and hungry for success. We assume their work is inferior to Europe's at our peril.

So what can Europe do to maintain a competitive edge? I believe that the answer lies in adding value, and not merely emulating what is going on elsewhere. And we do that through innovation, and by staying close to our markets. We must constantly stay ahead of the curve. We must help shape and predict the expectations, desires and needs of the marketplace. I believe five factors are critical to success:

• We must improve education and get higher participation in technical studies
• We must become more competitive – this means working more intensely and reviewing our working conditions – we may have to work longer for less
• Governments must lend more support
• Greater and stronger links must be forged between academia and industry
• Businesses leaders must be strong and decisive, and show entrepreneurial spirit

We must also develop insights into market needs and then dare to innovate. We must find the creative and intellectual power to feed the development process, engineer a manageable cost-base to drive growth and discover passionate leaders. And we must build an environment that is conducive to growth.

European political leaders must help create an environment in which we can thrive and they must foster a debate on changing our expectations on working conditions and pay. It is, I think, highly significant that Ségolène Royal, the Socialist candidate in France's forthcoming presidential election, has questioned the future of France's 35-hour week. Perhaps realism is finally taking hold in Europe.

Europe needs to make a concerted effort to develop new markets. Building scale quickly gives everyone the opportunity to achieve the returns needed to create sustainable business models. This is not so much about numbers as about creating a complementary network of skills that can deliver products and services.

THE POWER OF PARTNERSHIPS

It is important to remember that none of us is alone. Partner with others to promote the standard, then work to develop your own differentiation. Inevitably, a word has been coined to express this process: 'co-opetition'.

Thus semiconductor companies find themselves in alliances or co-opetition with new and unexpected partners, some of them arch-competitors. Philips, for example, formed the NFC consortium with Sony, the business with which it had probably crossed swords most often in the battlefield of consumer electronics.

One great example of co-opetition is Point One – the high-tech hotspot under construction in the Netherlands, where a world-class nanoelectronics and embedded systems industry is being created that aspires to rival Silicon Valley.

Point One is short for Pole of Innovative Technology on Nanoelectronics and Embedded Systems. It's an import of the French construct, the Pôle de Compétitivité. We use the French word because the Crolles high-tech hotspot near Grenoble remains the best example of a successful Pôle de Compétitivité.

Bringing together academic research, industrial and institutional partners in a shared and creative hotspot is what ensuring Europe's future in innovation is all about.