During the first half of the 20th century, few figures spoke more authoritatively on national technological and economic matters than Charles Kettering. The “Boss” cofounded the Dayton Engineering Laboratories Company (Delco), where he invented the automotive self-starter and the Delco Light generator that powered hundreds of thousands of farms. Then, lured to Detroit by General Motors head Alfred P. Sloan Jr., he took the reins of GM’s research, which pioneered four-wheel brakes and ethyl fuel. Kettering believed passionately in the power of research and development, and he had this to say in a 1929 speech to the U.S. Chamber of Commerce:
“I am not pleading with you to make changes. I am telling you you have got to make them-not because I say so, but because old Father Time will take care of you if you don’t change. Advancing waves of other people’s progress sweep over the unchanging man and wash him out. Consequently, you need to organize a department of systematic change-making.”
Change-making. Few words better describe the essence of what Technology Review seeks to examine in every issue-whether the change agents come from big companies, startups, or university or government labs. This month, we’re bringing you a special view of what goes on in the first category: cutting-edge technological development at large corporations. Our annual R&D Scorecard shows at a glance which organizations are most emphatically embracing the effort to create change-and which are cutting back, risking being swept away by other people’s progress.
What does it mean for the future, for instance, that in computer hardware only a few companies, among them IBM, Canon, and Ricoh, seem to be maintaining their previous levels of funding, when inflation is factored in (Hewlett-Packard’s huge 53 percent rise is due to its merger with Compaq; otherwise spending is roughly flat)? Or that in the pharmaceutical and medicine sector, Pfizer’s R&D spending showed a healthy 6.8 percent gain to $5.2 billion (it will be more than $7 billion next year when Pfizer’s merger with Pharmacia shows up), widening the gap between it and its competitors?
These are crucial questions. As is made clear in many studies, most notably Alfred D. Chandler Jr.’s Scale and Scope, organizations that don’t make a significant commitment to R&D do not survive over the long haul-no matter how dominant they are at a given moment. The waves of other people’s progress are simply too powerful, too relentless, to be met with halfhearted efforts.
But numbers tell only part of the story. That’s why we have complemented the R&D Scorecard with two articles designed to give you a richer perspective on what’s happening in the innovation machines of both large companies and the U.S. as a whole. First, we scoured corporate labs around the globe to find the most interesting and vital projects about to be commercialized; contributing editor Erika Jonietz profiles the most compelling in “Seven Hot Projects”. From General Electric’s handheld ultrasound device, to IBM’s speech-to-speech language translator, to Microsoft’s latest tool for fighting spam, these efforts testify to the problem-solving virtuosity of large companies willing to put their minds to change-making.
That’s the fun part. Alongside the hot projects comes a fascinating article by Kenan Sahin, a megasuccessful entrepreneur who sold his software-systems company to Lucent Technologies a few years ago. After working in management at Bell Labs, Sahin founded an independent research firm, Tiax. In “Our Innovation Backlog,” Sahin takes a contrarian view of our doldrums economy. It’s not that innovation has slowed, he says; in fact, the engines of innovation are churning away at ever faster rates. Rather, it’s that the United States is slipping in its ability to commercialize those innovations. “Unquestionably, the solutions to many current problems, the treatments for many illnesses, and the pathways to new business areas have already been invented, but are waiting on the sidelines,” he writes. Sahin, it may not surprise you, has some interesting ideas on what can be done to bring those neglected technologies to market-starting from his observation that innovators are like ants.
Our R&D special report presents just a few of the change-making efforts documented in this month’s issue. So be sure to dive right in-and don’t be afraid of the waves.
Joe Chung’s New Column
This month marks the debut of Joe Chung’s bimonthly column bringing you an angel investor’s view of emerging companies. In his inaugural column, Chung looks at Ovation Products, which seeks to bring cheap, affordable, clean water to the world.
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