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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

Buderi.

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: