We have had a royal visit here at Cisco today. His Royal Highness Prince Philippe of Belgium, next in line to the Belgian throne, regularly leads economic missions throughout the world. This month, he is presiding over a Belgian delegation in Silicon Valley. The objective of this economic mission is to put Belgian executives in contact with leading companies in the Valley so that they can exchange ideas, build business relationships and find new opportunities for economic development. Together with Edzard Overbeek, senior vice president, Cisco Services, and Guido Jouret, VP/GM and CTO of Cisco’s Emerging Technologies Group, we provided an update on Cisco’s vision and strategy, and the key economic and technology trends we see, both worldwide and in Belgium.
Focus on innovation
Cisco has always been very much committed to our country. Not only because it is the European Union’s beating heart, but Belgium also houses our technical assistance centre for the region and is now home to one of our many R&D centers, the Cisco Service Provider Video Technology Group (SPVTG) R&D center, through the acquisition of Scientific Atlanta near Kortrijk. We have 700 sales and services staff on those two sites.
European countries can’t be innovative, is often claimed. We don’t believe that. Northern Europe has always been a region with a strong commitment to advancing the technology agenda, for example. The networked readiness index is dominated by the Scandinavian countries, plus the Netherlands. Some emerging countries like Estonia are closing the gap at an incredible pace. Belgium has never been far behind, and houses one of the best educational systems. It has excellent engineers, just as we see in our Cisco SPVTG R&D center. Cisco does believe in Belgium as one of the better European performers.
However, with 2.4% of the GDP invested in R&D, Belgium is an average performer on the European innovation index. At the recent Cisco Connect event in Brussels, the president of the Federation of Belgian Enterprises (FEB/VBO) discussed weak government investments in innovation and difficult access to venture capital. According to him, Belgian companies are still not sufficiently effective in selling their products abroad. Peculiarly enough, according to research by the European Commission, 60% of the Belgian companies invested in innovation last year, be it in products, processes, marketing or operations. Only Germany performed better. It proves there’s potential for growth in Belgium.
The Boston Consulting Group advises to invest in internet infrastructure as one of the measures to stimulate innovation and the creation of jobs. For every job that is lost, the internet economy gives you 2.6 in return. With an expanding internet ahead of us, there’s a large opportunity to seize. In healthcare, education, energy management and certainly traffic management. Belgium is a small country, but has Europe’s highest traffic density, with an estimated two percent of its GDP lost due to serious traffic congestion.
We therefore talked to our guests of the Belgian economic mission about the smart cities we are building. We pointed tothe South-Korean city of Songdo, where Cisco and real estate developer Gale International are collaborating with the city to wire every square inch with synapses: from escalators to light bulbs with a proper IP address so that you can measure and improve energy management. Every house has its videoconferencing unit; all vehicles and roads can be connected as well. The cost of public transportation and pay-as-you-drive varies according to road congestion. And if you opt to take your car, intelligent parking systems guide you to the nearest free spot. We are making things intelligent so that we can convert data into wisdom. Songdo will run on information.
Another solution that could help Brussels and other cities offer their citizens the services they need, in a convenient and cost-effective way, is a new smart government initiative called ‘Virtual Citizen Services Centres’. Barcelona City Hall has announced a pioneering center in Europe, using Cisco TelePresence and remote expert collaboration technologies to allow citizens to remotely carry out various administrative processes without needing to appear at local offices. The services centre is a booth that can be installed anywhere: post offices, shopping centers, libraries and so on. It is freely accessible during business hours, from which citizens may interact face-to-face with public servants to share, sign and print documents and take care of multiple administrative processes as if they were at the office itself. It will facilitate the process of obtaining construction licenses, for instance. Such Smart+Connected Communities solutions improve every government’s service. The only thing you need is an internet connection.
That’s why Cisco is investing 12% of its turnover in research and development year over year. “If you don’t change, you get left behind”, John Chambers recently said in a Belgian financial newspaper. We are entering the next generation of the Internet where the networked connection of people, data, process and things will create unprecedented opportunities for organizations, individuals and countries. We are beginning to experience an Internet of Everything (IoE) that Cisco predicts could generate as much as $14.4 Trillion (USD) in value globally for businesses who innovate and leverage IoE to its full potential. With smart investments, Belgium will have its share of the pie and the economic conversion it is looking for.