A Clearinghouse for Technologies

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Published in U.S. 1 Newspaper on May 17, 2000. All rights reserved.

R&D Forum: `Engines of Tomorrow’

E-mail: MelindaSherwood@princetoninfo.com

Not too long ago, pundits were calling technical innovation

in America dead. With big cutbacks in research centers at companies

like IBM, Lockheed, and Bell Atlantic, it seemed likely that American

companies would be left in the dust by their foreign rivals.

Then R&D made a comeback. In the late 1990s the United States became

the envy of the world once again with its homegrown technology and

its more focused approach to R&D. What happened to cause that turnaround?

Robert Buderi, a former Business Week technology editor and

author of "The Invention That Changed The World," examines

that question in his latest book, "Engines of Tomorrow: How the

World’s Best Companies Are Using Their Research Labs to Win the Future"

(Simon & Schuster, 2000, $27.50).

In this first-hand report, Buderi looks at the battles facing today’s

most influential companies — how IBM returned from a near-death

experience in the 1990s to conduct groundbreaking research in semiconductors

and deep computing; how Xerox, in an attempt to reinvent itself, sent

out a half-dozen anthropologists to study the hidden and intuitive

ways people do their jobs. "As a pivotal force behind a plethora

of key industries," writes Buderi, "research can be critical

not only to winning in the marketplace but to national economic viability.

Yet serious discussion of the subject — examining the nature and

evolution of successful research, and who still manages to pull it

off — has been missing from virtually every popular management

treatise in vogue today."

Buderi continues his discussion of R&D on Monday, May 22, at Siemens

Corporate Research, 755 College Road, at 2 p.m. Call 609-734-3311.

Buderi’s tells how two CEOs, one at Bell Labs and another at IBM,

revamped their research facilities first by slashing budgets, and

second by abandoning the philosophy of research that had dominated

American companies for four decades.

During the 1950s, writes Buderi, R&D was at its height and the biggest

companies housed large research facilities where scientist played

freely, often unfettered by the demands of the market. "When General

Motors and Ford opened major labs in the 1950s, for example, they

saw fit to probe subjects in basic chemistry and physics far beyond

anything likely to impact automotive technology," writes Buderi.

It wasn’t long, however, before "the Japanese started outmaneuvering

American companies with innovations from everything from cars to televisions

to Walkmans," writes Buderi.

The problem with corporate research, explains Buderi, is that it existed

within an Ivory Tower climate, a culture of inefficiency. Even good

ideas rarely ever made it to market. "The often chasm-like divides

between the labs and the corporate mainstream made it extremely difficult

to consistently translate good research into products," writes


Cumbersome and no longer relevant, R&D spending was cut back dramatically

in the 1990s as CEOs began to look for new way to remain innovative.

"The axed laboratories and slashed budgets that characterized

much of the 1990s obscured a vitally needed realignment — and

the revival of corporate research has been almost universally missed,"

writes Buderi. "Rid of many of their vestigial ways and bad habits,

the best labs today have moved research into another dimension —

shifting their orientation beyond the old standards of merely inventing

things to the more ambitious problem of innovation."

Today corporate research is enjoying a kind of renaissance because

pioneering companies have removed the barriers that separate research

from product development, says Buderi. Since 1996, reports Buderi,

industrial research has increased roughly 5 percent annually. One

of the fundamental changes in many companies, says Buderi, is that

scientists are granted more responsibility for getting products to

market. Thus, IBM was able to bring an update of its antivirus application

from conception to market in five months — an unprecedented event.

"This drive for innovation takes a different face at every company

and evolves at varying times and rates for each," writes Buderi.

"But everywhere the aim is to vanquish the old linear model that

says ideas progress from research to development to manufacturing

to market in favor of a much more dynamic enterprise that includes

constant interactions along this entire chain."

How today’s premier high-tech corporations can churn out technological

innovation at a rapid clip comes down to some fundamental managerial

principles, which Buderi outlines. The "Seven Rules for Innovation"

by Lee Davenport, the research director for General Telephone

and Electronics, are still being used today:

1.) Success is based on schedules and results, not effort,

job difficulty, or loyalty. You must expect your R&D people to produce

and reward them accordingly.

2.) Since most projects last several years, managers must

break them into shorter segments, with measurable goals at each phase.

3.) Never allow general goals. Avoid such words as: approve,

advance, increase, investigate, study, explore. All are false goals

— immeasurable.

4.) Look for idea people. Only a few individuals have

truly unique ideas. Encourage them.

5.) Find product champions — internal entrepreneurs

who understand technology, explain it clearly, and can push ideas

through corporate barriers. These traits typically elude top researchers.

6.) Keep a little something on the side. A bootleg research

budget is sometimes the only way to pursue ideas that break the mold.

7.) Hire young blood. A research staff’s average age must

not increase even one year per annum. In a high tech lab, a nice average

is under 35.

For those who just want to know what the future holds, Buderi

offers a look at some of the inventions coming down the pike from

companies like Hewlett Packard, Xerox, and Siemens, from car radios

that surf the Web to sharp-screened e-Book readers that simulate the

look and feel of paper tomes; from grain-sized sensors equipped with

microphones, to transmitters that can increase data transmission speeds

a thousand-fold.

— Melinda Sherwood

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A Clearinghouse for Technologies

Universities have long been a hot-bed of new technologies,

but unfortunately, many never see it to market. Without the personnel

to broker licensing agreements, universities and research institutions

are working at half capacity, and consumers suffer as a result. At

Cornell, for example, only 700 of 3,000 new technologies were licensed

out, according to an article in the May 1 issue of InternetWeek.

To help siphon technology to the companies that need it, Craig

Zolan launched University Ventures (www.uventures.com, 212-268-0154),

a clearinghouse of the technology coming out of universities and research

institutes from around the world. Members companies log on, do a search,

and shop around for the technology they need, be it a speech-recognition

technology, streaming video technology, or even drug compounds for

vaccine development (one of the participants is the National Institutes

of Health).

University Ventures will be one of the featured tools at the New Jersey

Technology Transfer Conference on Wednesday, May 24, at 7:30 a.m.

at the Rutgers Cook College Center. Organized by the Council and the

New Jersey Commission on Science and Technology, the conference addresses

small business innovation research financing, independent not-for-profit

research centers, seed fund financing, and success stories. Call 856-787-9700

or visit www.njtc.org.

A lawyer who formerly represented Internet and new media companies,

Zolan has a BA from Skidmore in business/government (Class of 1991)

and a law degree from University of Colorado. With $2 million in seed

capital, he launched the website in 1998. University Ventures takes

a commission on each transaction, but so far, universities have been

more than agreeable to the idea — there are 50 research organization

and universities from around the world participating. "We’ve had

one instance in which a university didn’t want to work with us and

the primary concern was that we’d generate too much work for them,"

says Zolan.

University Ventures is in the process of closing $10 million in additional

funding. "We’re going to bring in experts in pharma and biotech

so we can act as a more intelligent liaison between the buyers and

sellers of technologies," he says.

The final negotiation, however, is left to the buyer and seller. "If

there were two buyers, ultimately it’s the seller that determines

who they license to," he says. But it’s entirely possible that

two or more non-exclusive licenses could come out of the technology.

Says Zolan: "The one nice thing about intellectual property is

that it can be divvied up in numerous ways."

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