Siemens to Spend EU1 Billion on ‘Disruptive Ideas’ Startups

  • Next47 will operate from Berkeley, Shanghai and Munich
  • CEO Kaeser aims to foster a more nimble corporate culture

Siemens AG is setting up a unit to invest 1 billion euros ($1.1 billion) over five years on “disruptive ideas,” the latest bid by Europe’s largest engineering company to move into digitalization and shed a reputation for being slow and cautious.

Named next47, the unit will initially be overseen by Chief Technology Officer Siegfried Russwurm and begin operations Oct. 1 from Berkeley, Shanghai and Munich, Siemens said in an e-mailed statement Tuesday.

Siemens, whose products span gas turbines to trains and medical scanners, is trying to preempt emerging technologies capable of harming its businesses. In a 2014 interview, Chief Executive Officer Joe Kaeser cited the example of Cisco Systems Inc.. Siemens turned down an offer to invest in the internet protocol-based supplier of telephony that ultimately helped bring about the demise of its own telecom operations.

“Next47 creates room to experiment and grow without the group’s organizational constraints,” Russwurm said in the statement.

The plan to foster a more nimble culture was broadly outlined in December by Kaeser. The unit’s first project, agreed in April with Airbus Group SE, is to demonstrate whether electric propulsion is feasible for air traffic. Other topics include artificial intelligence, autonomous machines, decentralized electrification, interconnected mobility and block chain applications, Siemens said.

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