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Published in U.S. 1 Newspaper on May 17, 2000. All rights reserved.
R&D Forum: `Engines of Tomorrow’
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:
job difficulty, or loyalty. You must expect your R&D people to produce
and reward them accordingly.
break them into shorter segments, with measurable goals at each phase.
advance, increase, investigate, study, explore. All are false goals
truly unique ideas. Encourage them.
who understand technology, explain it clearly, and can push ideas
through corporate barriers. These traits typically elude top researchers.
budget is sometimes the only way to pursue ideas that break the mold.
not increase even one year per annum. In a high tech lab, a nice average
is under 35.
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
— Melinda Sherwood
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
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,"
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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