Siemens, the largest engineering company in Europe, has announced its plans to set up a separate unit to foster disruptive ideas more vigorously and to accelerate the development of new technologies.

The new unit “next47”, effective October 1, 2016, will have funding of €1 billion for the first five years and will be headed by Siegfried Russwurm, Siemens Chief Technology Officer. next47 will build on Siemens' existing startup activities and will enable the company to unite the best of two worlds: next47 will couple agility, speed and independence with a global customer base, extensive experience, credibility and financial strength.

"Siemens itself was a startup in 1847 – founded in a rear courtyard in Berlin," said Joe Kaeser, President and CEO of Siemens AG. "With next47, we're living up to our company founder's ideals and creating an important basis for fostering innovation as we continue Siemens' development."

ext47 will focus on innovative technologies including artificial intelligence, autonomous machines, decentralized electrification and networked mobility. It will also concern itself with blockchain applications that are designed to make data transfer in industry and in energy trading simpler and more secure.

The new unit will have offices in Berkeley, Shanghai and Munich, Siemens said. It will be open to employees, founders, external startups and established companies that are interested in pursuing business ideas in the company's strategic innovation fields.

"next47 will provide the freedom to experiment and grow – without the organizational restrictions of a large company. Our new unit will rigorously pursue Siemens' strategy and enable us to tap into disruptive ideas in our core areas of electrification, automation and digitalization," said Russwurm.

The first project at next47, following an agreement with Airbus in April 2016, will be the electrification of aviation. The two companies aim to demonstrate by 2020 the technical feasibility of hybrid/electric propulsion systems for small planes to medium-sized passenger aircraft.