In the 1990s, Philips left its industrial company town, Eindhoven – only to come back and benefits from city’s post-industrial transformation.

Philips VH Building Demolishio2_Source_ytimg.com

Philips VH Building Demolishion Source: ytimg.com

In the 18th century, the position on the railway route between Belgium and Germany attracted many entrepreneurs to the area of North Brabant. In 1891, Gerard Philips settled in and with the growth of its company Royal Philips Electronics, the city boomed. “This huge growth was the immediate cause to consolidate six villages in 1920 (Strijp, Stratum, Gestel, Tongelre, Woensel and Eindhoven) into one new town “Eindhoven”. Philips built several industrial buildings, in which it produced light bulbs, radio sets, X-ray machines, televisions and other electrical equipment. Since the (Roman Catholic) Municipality and its institutions were not willing or able to help the (Liberal-Protestant) Philips family, the company built dwellings, schools, shops, sports and recreational amenities (with a theatre and a cinema) and layed out green spaces. Moreover, Philips provided medical services and organised several sporting clubs” (Havermans et al., 2008: 6).

With the crisis of the company in the 1970s, Philips externalised or closed many of its activities and focused on its core business. Manufacturing activities were moved to other locations and its headquarters was moved to Amsterdam. With its move of manufacturing and management to other locations and externalisation and closure of many activities, it lost its power and influence. But not its symbolic capital.

Never again, Philips-town

Philips benefited greatly from the vision and strategy of Eindhoven that emerged as an answer to Philips’s move and industrial downturn. Under the motto “Never again!”, a new cooperation alliance was formed to work more effectively in the future, aimed at transforming a “traditional industrial region into a top-technology and design region” (Fernandez Maldonado and Romein, 2010: 91). New policies and initiatives have been set up at local, regional, and cross-border networks.

The Samenwerkingsverband Regio Eindhoven (SRE), one of the eight Dutch “city-regions”, facilitates cooperation activities of several municipalities in the fields of housing, employment and traffic flows (Fernandez Maldonado and Romein, 2010: 92). At this level, a triple helix was organised with two main projects to tackle the industrial decline: “Stimulus (1990), a European programme for job creation and strengthening of the industrial fabric, and Horizon (2001), a strategic action plan focused on industrial innovation, reduction of shortages of skilled labour, diversification of the knowledge industry and international branding” (Fernandez Maldonado and Romein, 2010: 92). Horizon today continues as Brainport Eindhoven with a mission “to create an environment for economic and social development towards a high quality of life and, through this, to achieve a sustainable and globally competitive region“ (Fernandez Maldonado and Romein, 2010: 92).

Moreover, the recent change of the economic development strategy from innovation and research toward design and culture, reminds of Philips’s gradual reorientation from consumer products toward advanced medical technology and lifestyle and the need to complete the whole value chains from R&D to marketing. However, Philips is no longer the driver of this change.

 

Post-industrial Philips is back!

As only its R&D stayed in Eindhoven, Philips hugely expanded its technology campus in Eindhoven (van den Berg et al., 2001: 196). After the 1990s, Philips has been increasingly strengthening its innovation and research facilities in Eindhoven and has started practicing “open innovation”. After realising that the “traditional model of closed in-house innovation is blocking clever idea from entering the company from clever people outside” (Blau, 2007: 9), Philips has opened the access to their technology and started collaborating with external researchers and innovators with complementary interests in order to gain new expertise, outsider perspectives and benefit from synergies.

Hightech Campus Philips_Source_jhk.nl

Hightech Campus Philips Source: jhk.nl

By initiating High Tech Campus in Eindhoven in 1999, Philips has built an innovation district, an environment that fosters interaction, networking and knowledge sharing, and ultimately encourages the participation of research organizations, manufacturers and start-ups to jointly develop ground-breaking technologies (Blau, 2007: 9). The High Tech Campus concentrated several R&D activities of Philips in 30 buildings with more than 100,000 m2 of lab space next to Philips corporate R&D facilities and around the strip with conference rooms, restaurants and meeting facilities for researchers and business development managers. Eindhoven’s clean room facilities for microelectronics development are among the largest in the world (Blau, 2007: 9).

In 2003, Philips opened High Tech Campus to other companies and it has since attracted several private and public high-profile research institutes – the number of firms, institutes and jobs in Eindhoven has significantly increased after this move (Fernandez Maldonado and Romein, 2010). This is crucial to Philips’s internal strategic innovation programmes as Philips entered with them into several state-funded research consortiums. Through twinning, Philips and smaller firms contribute to each other’s activities and achieve synergies. The main results of these activities are in the pre-competitive phases that give participating companies non-exclusive rights to the research findings. In further phases, Philips Incubators, launched in 2002, creates new business ventures based on novel technologies created by Philips corporate R&D and transforms research projects into new businesses (Blau, 2007: 10).

High Tech Campus, build by Philips, is the most innovative km2 in the world_Source_hightechcampus.com

High Tech Campus, build by Philips, is the most innovative km2 in the world Source: hightechcampus.com

In 2012, Philips sold High Tech Campus Eindhoven to Ramphastos Investments, a private consortium of investors that has since been managing the campus. Philips remained a tenant. Today, the High Tech Campus houses more than 140 companies and institutions with over 10,000 researchers, innovators and entrepreneurs of 85 nationalities. On average, campus residents file four patents a day.

Moreover, Philips Innovation Services is supporting outside researchers and research institutions in their activities: conducting development projects, creating engineering samples, prototypes and products in its pilot factory or MEMS foundry, contributing with its staff in research teams, and providing on-site technology support consultations (Philips Innovation Services, 2016).

Freeloading on Eindhoven brand

Moreover, with the move of Philips’s production and management, a lot of real estate became vacant and available for conversion into new, post-industrial and post-Fordist use through several public and private initiatives (Fernandez Maldonado and Romein, 2010: 83).

Nowadays, Eindhoven is not dominated by Philips buildings and facilities anymore – but the company still benefits from the city in the marketing terms:

the city brand based on state-of-the-art innovation and design increases Philips position as an innovative and creative brand,

redevelopment of old Philips factories is always referenced to Philips.

Due to the diminishing influence of Philips, Eindhoven has become less and less associated with The City of Light brand. Several new slogans and images were used in order to characterize the city (“Eindhoven city of sports”, “Eindhoven leading in technology”, “Eindhoven the city of knowledge”, “The city as a laboratory”, “Eindhoven the city of design” “Eindhoven creative city”, “Eindhoven Brainport of the Netherlands” (Havermans et al., 2008: 9). Most of them have stressed the innovative business environment: local city marketing agency Eindhoven365 has the goal to establish a fixed position in the top 10 most innovative regions in the world and the top 3 in Europe by 2020 (Eindhoven365, 2016). Eindhoven365 thus “encourages, supports and facilitates initiatives, joint ventures, innovation, inspiration, knowledge and content deployed in strengthening the brand Eindhoven, in people’s hearts and minds” (Eindhoven365, 2016).

Philips’ former headquarters (the so-called ‘The White Lady’) in the centre of Eindhoven_Source_kingofwallpapers.com

Philips’ former headquarters (the so-called ‘The White Lady’) in the centre of Eindhoven Source: kingofwallpapers.com

In the recent years, the focus on innovation branding is supplemented with branding Eindhoven as a design and creative industries node, as many of the old Philips buildings are being transformed to house new cultural and design functions, e.g. Eindhoven organises the annual Dutch Design Week, the main design centre, the Design Academy, is currently located in Philips’s former headquarters building (the so-called “White Lady”) in the centre of Eindhoven, while Strijp S, Philips’s former factories and research labs, are being transformed into a “creative city” of 27 hectares (Fernandez Maldonado and Romein, 2010: 89).

This change of direction from “innovative city” to “creative/cultural city”, is happening in parallel to Philips’s changing unique selling proposition (UPS) and products/services. ”In 2004, Philips Electronics changed its motto ‘Let’s make things better’ – which referred to technical innovation – into ‘sense and simplicity’, symbolising its new orientation” (Fernandez Maldonado and Romein, 2010: 88). The change signifies Philips’s gradual move from consumer electronics toward advanced medical technology and lifestyle.

Secondly, the change in city branding comes from the need “to complete the whole value chains, with R&D as starting point and including design, testing, producing, marketing and distribution of advanced goods” (Fernandez Maldonado and Romein, 2010: 88) and finally business services.

Besides top-down strategic brand management, also small, individual private and public urban redevelopments strengthen Philips’s position as an innovation- and design-oriented company. Out of 10 million m2 of disposable land between 2000 and 2006 in the Netherlands, 2 million was Philips’s former industrial land, of which 1.5 million m2 were located in Eindhoven (Havermans et al., 2008: 8). In the last decade, several redevelopment projects were initiated on these sites, all referencing to the history of Philips:

Strijp S, the former Philips manufacturing and research estate, is being transformed by a private investor in a 27-hectare “creative city”, a mixed-use complex with a strong cultural and design focus. When completed, the area will include residential (2,500–3,000 housing units, including atelier dwellings and lofts), office (90,000 m2), cultural and leisure (30,000 m2) functions. Currently, many of its premises are temporary rented to artists as ateliers (Fernandez Maldonado and Romein, 2010: 89).

  1. Strijp R, the former industrial area of Philips, is being transformed by private investors into a residential and recreational area with approximately 500 houses amongst greenery and heritage buildings (Strijp R, 2016).The White Lady, the former Philips’s headquarters, now houses the public Design Academy.

Moreover, the main city festival Glow Festival, organised by public Eindhoven365, searches for inspiration in the history of Philips as a light bulb manufacturer, the history of Eindhoven as a pioneering city and a breeding ground for creative, artistic and technical talent, and combines these with new approaches to light and energy saving, light and emotion, light and health, LED-lighting (Glow Eindhoven, 2016).

Philips Museum tells the story of Philips and Eindhoven_Source_eindhoven-actueel.nl

Philips Museum tells the story of Philips and Eindhoven Source: eindhoven-actueel.nl

Philips’s marketing activities in Eindhoven are thus rather minimal as it relies heavily on activities of other actors. It does, however, have a Philips Museum, which displays the history of the company from a small incandescent lamp manufacturer into a major, leading global company with significant impact on people’s lives (Philips Museum, 2016).

The brand and marketing activities of private and public actors in Eindhoven thus support and facilitate Philips’s activities and help in attracting labour, investments, start-ups, knowledge, research grants and finally tourists to a rather small Dutch city, while Philips pays relatively little for it.

Bibliography:

Blau, J. (2007) Philips Tears Down Eindhoven R&D Fence. Available at: https://www.questia.com/library/journal/1G1-171139458/philips-tears-down-eindhoven-r-d-fence (Accessed 1 April 2016).

Fernández-Maldonado, A. M., and Romein, A. (2010) ‘The role of organisational capacity and knowledge-based development: the reinvention of Eindhoven’. Int. J. Knowledge-Based Development, 1 (1/2).

Eindhoven365 (2016) Eindhoven365. Available at: http://eindhoven365.nl (Accessed 1 April 2016).

Havemans, D., Appel-Meulenbroek, R., and Smeets, J. (2008) Rebranding the City – The Case of Eindhoven. Corporations and Cities: Envisioning Corporate Real Estate in the Urban Future. Available at: www.corporationsandcities.org (Accessed 1 April 2016).

Philips Museum (2016) Philips Museum. Available at: http://www.philips.nl/en/a-w/philips-museum (Accessed 1 April 2016).

Glow Eindhoven (2016) Glow Eindhoven. Available at: http://www.gloweindhoven.nl (Accessed 1 April 2016).

Philips Innovation Services (2016) Philips Innovation Services. Available at: http://www.innovationservices.philips.com (Accessed 1 April 2016).

Strijp R (2016) Strijp R. Available at: http://strijpr.nl/en (Accessed 1 April 2016).

van den Berg, L., Braun, E. and van Winden, W. (2001) ‘Growth Clusters in European Cities: An Integral Approach’. Urban studies, 38 (1): 185-205.