Siemens 2007 Annual Report Download - page 114

114 Management’s discussion and analysis
Demand in the global rail industry also increased, with energy effi cient solu-
tions gaining importance. Asia-Pacifi c’s growing economies and concentration of
population in cities continued to increase demand for urban transit solutions.
Asia-Pacifi c led growth in the general lighting market as well, and OEMs con-
tinued to shift manufacturing to these lower-cost, faster-growing markets.
Demand also grew for advanced solutions, such as light emitting diodes (LEDs)
and precision components, and for energy-effi cient, environmentally friendly
products.
In the energy sector, China’s rapid modernization continued to drive global
demand for fossil power generation and transmission systems, followed by rising
power infrastructure needs in the Middle East and the CIS countries. In the U.S.
and Europe, concerns about rising energy costs and security of supply continued
to stimulate investment in alternative power generation, particularly large off-
shore wind farms.
In healthcare, aging populations and increased emphasis on preventative care
in developed countries continued to fuel demand for advanced diagnostic solu-
tions, including medical imaging such as computed tomography (CT) and mag-
netic resonance imaging (MRI) and the full spectrum of in-vitro diagnostic test-
ing. The need to improve the quality of care and reduce healthcare costs leads to
a growing importance of integrated diagnostic solutions and the overall improve-
ment of clinical workfl ow, facilitated by integrated healthcare IT systems. In the
U.S. the Defi cit Reduction Act (DRA) took effect in January 2007, curtailing govern-
ment reimbursement for medical imaging procedures in the non-hospital (out-
patient) setting, imposing pressure on the U.S. medical imaging market.
Research and Development
In fi scal 2007, Siemens increased its research and development (R&D) expenses to
€3.399 billion, compared to €3.091 billion in the prior year. The average number
of employees engaged in R&D in fi scal 2007 was 30.9 thousand, up from 26.4 thou-
sand in fi scal 2006. A&D focused its R&D activities on manufacturing automation.
Osram focused its R&D activities on fostering sustainable products, increased
brightness and lower production costs of LEDs. PG’s R&D activities emphasized
rotating machinery such as gas and steam turbines, generators, compressors,
wind turbines, instrumentation and control systems for renewable, nuclear and
fossil power generation and improved power plant solutions, especially power
plants with carbon capture and other diversifi cation of the power generation port-
folio, e.g. coal gasifi cation, fuel cells and energy storage technologies. Med
invested in R&D particularly to improve technology and clinical applications for
medical imaging systems, such as such as magnetic resonance imaging, computed
tomography, x-ray angiography, ultrasound and information technology.