Royal Philips announced on Thursday plans to move its North American headquarters from Andover to Cambridge — about 22 miles south within the state of Mass.

“This is a major step for Philips, and comes with our realization that the health care company of the future is going to need to be in a vibrant community where there are startups and academic and clinical institutions within close reach, to allow us to move things forward,” Dr. Joe Frassica, chief medical officer and head of research at Philips, told HCB News.

This will unite Philips’ innovation and commercial teams with its North America Research Center, which relocated from upstate New York to Cambridge two years ago. The 243,000 square-foot new site is currently under construction and is expected to be completed by quarter one of 2020.

Philips chose the Cambridge area because it’s in close proximity to academic institutions that it collaborates with, including the Massachusetts Institute of Technology, as well as startups that it can co-create new technologies with.

The company developed a startup program within its innovation facility to provide expertise and support to the startups in the area. It also runs a campus recruiting program and an internship program at MIT and Boston University to recruit talented individuals.

“There is direct access to a really deep talent pool in areas such as artificial intelligence, genomics and imaging,” said Frassica.

In recent years, Philips has slowly transitioned from a conglomerate to a company solely focused on health care. It sold its lighting business in March 2015 for $2.8 billion, and acquired a slew of health care companies — most recently Forcare and VitalHealth.

“With the focus now purely laser-like on health care and maintenance of health, Philips felt we needed to be deeply committed to a health care ecosystem and collaborative ecosystem where health care innovation was happening,” he added.

Business Affairs Homepage