Kemal sent a pointer to a special report in The Economist's latest issue on the rise and fall of corporate R&D with a different reason than the end of cold war. It also has interviews with our supreme leaders. You can read the full article at http://www.economist.com/science/displaystory.cfm?story_id=8769863.

The authors report that now the big corporate laboratories are either gone or a shadow of what they were, stating that the approach to R&D is changing because long-term research was a luxury only a monopoly could afford. They quote Eric Schmidt, a Bell Labs and PARC researcher now at the helm of Google, saying the “smart people on the hill” method no longer works. Instead, researchers have become intellectual mercenaries for product teams: they are there to solve immediate needs. And Intel's Sean Maloney with research is better “the closer the development is to the brutal market reality. Our people have that tattooed on their tonsils.”

About HP Labs they write:

The distinction between development and research is intentionally blurred at HP, epitome of the research-driven organisation. At its base in Palo Alto, the offices of its founders, “Bill” and “Dave”, are preserved in the laboratories where they pioneered products and principles like open-plan cubicles for employees and “management by walking around”. Among the company's senior scientists is Bernardo Huberman, a physicist and former PARC researcher, whose work bridges computer science, economics and sociology.

Instead of looking at fundamental questions about the universe, Mr. Huberman's prolific papers identify how “prediction markets” can be used to identify successful projects inside companies; how to price a unit of grid-computing (broadly the harnessing of the collective processing power of many computers) and how to vie best for internet users' attention. The old model of research, of “putting people in a bubble”, is over, he says. The most interesting research is now done “where technology touches people”.

Having researchers work more closely with customers pays off in other ways. For example, HP's work for DreamWorks Animation SKG, a film studio, required a highly sophisticated video-conferencing system so executives could regularly talk face-to-face without having to leap on an aeroplane. What the HP laboratories came up with was so successful that the company commercialised the system as a product, called Halo. This is now used by other companies, including PepsiCo and AMD, a chipmaker.

Such schemes represent the primacy of “D” over “R”. “Is that a bad thing?” retorts Shane Robison, who oversees HP's technology strategy, with every pore visible on his three-foot-long face over the Halo teleconferencing system. Decisions about investment research are made by betting where the industry is heading, he says. HP still does some basic research, adds Dick Lampman, who heads HP Laboratories, but when people “celebrate the other model, they lose sight of what it takes to take a good idea and make it into an exciting product.”

Continuing with their image of researchers as tattooed mercenaries, they conclude the new model of R&D turns researchers into the shock-troops of innovation. Well colleagues, are you ready to rattle your sabers?

PS: as usual, since our software does not support links in comments, I am adding the links here

• http://www.perfdynamics.com/pulse.html#tth_sEc2
• http://www.princeton.edu/~blinder/papers/07ceps142.pdf
• http://www.acm.org/globalizationreport/summary.htm

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