May 2000

The Corporate Logic

Continued from page 1

By Robert Buderi

The answer is that there are many "hidden" benefits to engaging in basic science-from creating a climate of discovery to staying in touch with the cutting edge. Indeed, the extras are so compelling that the firms bankrolling these studies often don't expect their researchers to produce much of direct market value. "Why is any curiosity-driven research supported in industrial labs?" former IBM vice president for science and technology John A. Armstrong once asked. "There are several reasons, but they do not include the expectation that out of the company's own scientific left field,' so to speak, will come new insights or inventions that will radically alter the nature of the company's business."

If Armstrong's statement appears to run counter to the popular notion that far-sighted corporations invest in basic science to plant the seeds of future growth, it shouldn't. The two views actually complement each other. For one thing, betting on basic research does sometimes pay off financially: DuPont's fundamental polymer studies led to the invention of nylon, and Irving Langmuir's Nobel Prize-winning surface chemistry investigations enabled GE to build a revolutionary light bulb.

Yet by its very nature, most exploratory work fails. What's more, scientific leadership has never been a prerequisite of marketplace triumphs. Witness Japan's dominance in steel, autos, consumer electronics and semiconductor memories-or the rise of Dell, Compaq and Gateway in personal computers.

These truths have led many, Intel co-founder Gordon Moore among them, to conclude that wide-ranging basic research simply isn't worth it. Moore, formulator of the "law" that has long governed semiconductor manufacturing, points to IBM's Nobel Prize-winning invention of the scanning tunneling microscope (STM)-which does not fit into any of the company's business lines-as a case in point. The STM "is really a great tool," he says, "but IBM is not going to get anything out of it." Moore stresses that society benefits tremendously from basic research-and that Uncle Sam should support it vigorously. But don't expect Intel to dive into the realm of biological processing or quantum computing anytime soon.

Still, not every company shares Intel's philosophy. IBM, Hewlett-Packard, AT&T, Lucent-Bell Labs, NEC and Hitachi are among those supporting world-class investigations into quantum systems, carbon nanotubes, biological processing, molecular computing or other alternative means of data crunching.

This work is so important to IBM that it went gangbusters to nab quantum hotshot Isaac Chuang two years ago, beating out a pack of university and corporate rivals with the lure of a generous salary and state-of-the-art equipment.