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Funding level: In regard to funding, we have roughly the same funding scheme as our German departments. Fifty percent is funded by the divisions, 35 percent is funded out of a central budget, and 15 percent is public funding. The funding scheme for Princeton is 50/50, because I do not receive any funding from federal agencies. We are writing some proposals and hope to win some federal contracts.

Siemens Corporate Research is handled like a department, but from a legal point of view, it is a company. It has worldwide responsibility for certain Siemens core technologies.

Siemens is also integrated in our innovation activities. For example, Siemens Corporate Research is responsible for the innovation field of health care. This is just looking for new opportunities in terms of market and in terms of technology over the long term.

From the headquarters' point of view we are totally integrated. The overall Siemens budget for corporate R&D is 400 million German marks. This is roughly 5 percent of the overall R&D spending.

Again, 10 percent of sales is devoted to R&D. Out of this 10 percent, 5 percent is corporate, so that brings it down to 400 million. Ten percent of this is here in the United States.

To summarize, I am responsible for an R&D organization, and I must say we should not forget that R&D also has to do with fun, with excitement, with good people. That is the reason why I would like to tell you about a specific project, an example, of a project that we are currently working on.

We have taken an inexpensive induction motor, and have tried to make some failure predictions—to indicate in advance when the motor is breaking down. This has been a successful experiment. We have implemented a very complex neural network that can only predict approximately 90-95 percent of all the cases of breakdown and separate between good motors and bad motors. It takes into account such factors as weight and how the motor is mounted.

This is one of the technologies that I believe are important for the future. So we are happy to have such projects at Princeton.

Thank you.

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