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I’m tired of the whining about innovation. Tired of hearing ossified academics and weary policy-meisters chronicle the decimation of corporate support for “pure” research. Tired of doomsday rhetoric that predicts the imminent demise of American technology. Tired of industrial ostriches complaining about the “short-term” focus of such high-tech pacesetters as Intel, Microsoft, and Sun.

Let’s face it: The naysayers are dead wrong. Slicing billions of dollars from corporate laboratories hasn’t made a dent in U.S. competitiveness. Indeed, from AT&T to IBM to Xerox, American industry is healthier because it has slimmed down its bloated and centralized research staffs. Across the spectrum of information technologies-from the Web to chips to software-U.S. ingenuity reigns supreme. Ditto for agrotechnology, aerospace, materials, and telecommunications. Only in biotechnology and pharmaceuticals does the United States have foreign rivals with deep pockets backed by first-class research.

This reemergence of American dominance has been led not by the national government and not by whole sectors of industry but by individual companies. To paraphrase the language of historian Thomas Hughes, we live in a time when individual companies are “transcendent”: They define the terms on which industry after industry operates.

But if individual firms reign supreme, and those same firms are trimming their research establishments, does fundamental research have any role in the resurgence we’re seeing? Absolutely. The irony is that, far from being banished from the corporate tent by cutbacks, serious researchers are playing a growing role in innovation at the level of individual firms. The explanation for this apparent paradox is that innovative companies aren’t looking for full-time scientists; they want moonlighting academics, professors willing to work on specific projects for often-lucrative piece rates.

“There’s almost no company that I’m aware of that doesn’t have heavy involvement from professors,” says Michael Crow, who oversees research and development at Columbia University. “Professors are playing a much more significant role than 25 years ago in firm-level innovation.”

Consider Barbara Hayes-Roth, a cognitive scientist at Stanford University who is a world leader in creating “intelligent agents,” or digital characters, for interactive media. The characters can carry on conversations and offer advice, playing off key words, pattern recognition, and their own “knowledge” of the world they inhabit.

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