GERMAN industrial group Siemens is to raise research spending and expand activities with start-ups to help to keep its innovative edge as industry rapidly turns digital.
The trains-to-turbines group said it would raise research and development spending by 7 per cent this year to 4.8 billion euros ($F11b), with the bulk of this flowing to its major strengths of automation, digitisation and energy systems.
The Munich-based group has been instrumental in the development of the telegraph, X-ray machines and the trolley bus and depends on its ability to keep innovating to maintain pricing power and outpace the markets in which it is active.
“Innovation is part of our DNA,” Chief Technology Officer Siegfried Russwurm told analysts and reporters at a capital markets day.
But Siemens increasingly has to compete with software companies who can develop technology faster without the legacy of physical machinery or the complexity of eight different industrial businesses that Siemens has to manage. About 5 per cent of its 350,000 staff are software engineers.
To become more nimble, Siemens said it would bundle and expand its activities with start-ups into a kind of incubator that would be a consultant, promoter and risk capital provider for businesses and projects. Siemens Venture Capital has invested more than 800 million euros ($F1.86b) in start-ups over 20 years.
