Corporate R&D March 15, 2007

Posted by gordonwatts in science

The March 3rd edition of the Economist had a good article on the state of corporate R&D. You know — the people the brought us the transistor? This survey points out how the boom of technology has really changed how research is done. In the old days places like AT&T had Bell laboratories — places where research was done that didn’t focus on an immediate product. Sure — the research was more applied than what goes on in some university lab where there is absolutely no pressure to produce a product — but still the product horizon was pretty far off. No so much any longer, however. According to this survey research departments in companies (if they still have them) are much more focused on solving the problems of product teams — indeed, research groups are often paired with product teams which was rarely the case previously. It was a science advisor for Franklin Roosevelt that setup this system: universities would do only pure research and companies would do applied. This model with separation of scientists and engineers was duplicated in companies. Obviously, it worked quite well. But it has changed. The Economist’s argument for this change (now)?

The approach to R&D is changing because long-term research was a luxury only a monopoly could afford. … “The fusion of research and development is meant to solve the central shortcoming of [Roosevelt’s science advisor’s] plan: how to turn ideas into commercial innovations. … … the nature of IT has changed so much. … the science that went into computing was itself closer to basic research. By contrast, many of the big scientific questions in computing have been answered — at least well enough for companies to find that innovation emerges from new ways of arranging today’s technologies rather than inventing new ones.

What is the new model?

Companies tinker with today’s products rather than pay researchers to think big thoughts. More often than not, firms hungry for innovation look to mergers and acquisitions with their peers, partnerships with universities and takeovers of venture-capital-backed start-ups.

There is (at least one) one ironic passage in the article:

But making this vision work technically is hard. Academics, he says, cannot do this, since they continually struggle for funds. This forces them into projects of just one or two years — even shorter than industry horizons. “It’s insane,” says Mr. Drucker [a Microsoft media applications researcher]. He reckons it means corporate research can look farther ahead, do bigger things and risk more money for a big payout.

You can’t have it both ways, right? You can’t depend on universities for start ups and long term research and also talk about really short event horizons. Sadly, there is truth to this split. Perhaps they are right. All the important big questions that require years of work have been answered in computing (where have we heard that before!?), and it is fitting that companies, most motivated to put out a working product, are the right place for further research.

But this product driven model won’t work for the next big thing. If transistors powered this revolution — what will power the next? You’ll need something hidden away, insulated from the corporate winds, to do that research. Currently only the government has a “business model” that can fund that sort of research.

Now, if only they had enough cash to carry out that mission…