Role of Research

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Role of Research

• Masao Kato
• Chairman
• FX PALO ALTO LAB INC

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Xerox Corporation
FX Palo Alto Xerox PARC
Fuji Xerox
Fuji Xerox Asia Pacific
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Role of Research in Industry

• Invention Golden age of research
• Nylon, Penicillin, Rader, Transistor
• Industrial Innovation Dinosaur project
• Computer, Operating system, High density
  memory device
• Paradigm Shift
• Bell break up, Trade deficit, Down sizing
  Companies without research lab thrive
• Bubble born, grow and gone
• A look at future

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Future of Industrial ResearchPanel Discussion
Harvard Business SchoolJanuary 1993

• Industrial RD in the United States
• David A. Hounshell CMU
• Notes on the Future of Industrial Research
• Richard S. Rosenbloom HBS

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Participants

• Gordon (Intel)
• Lucky (ATT)
• Meyers (Xerox)
• Spencer (Sematech)
• Branscomb (HBS)
• Kato (FujiXerox)
• Watanabe (Sony)
• - - -

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Eighties to Nineties

• Companies without research lab thrive
• Industrial research as national asset
• US competitiveness and consortia
• Multiplicity of research avenues
• internal and external university, joint
  ventures and consortia etc
• Globalization and diversification of research
  outposts

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Question

• Is industrial research a financial burden or
• nutrient essential to competitive vigor?
• How must industrial research be adapted to the
  competitive realities of the 1990s?
• What must CEO and senior management do to the
  adaptation?
• What need to be considered in regard to the US
  competitiveness

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What happened in nineties

• Internet fueled
• Less concern for US competitiveness
• Vigorous venture and startup involvement
• Invention to Innovation immediate path
• Staged transfer from research to development,
  development to commercialization does not apply

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Where we go from here
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Reinventing Corporation

• Xerox Parc Challenges

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Parc Spinoff Examples

• 3Com Ethernet Metcalfe
• VLSI IC design tools Balletto
• Adobe Page description Warnock
• Synoptics Network Ludwick
• SDLI Laser diode Scifres
• Liveworks Groupware Bruce
• Uppercase e-book Halaz
• etc

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Shifting main business

• Established technology
• vs
• disrupting technology

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Behavior of large corporation

• Many talented person in main business
• Many steps to go up the ladder for approval
• Many groups to go around for agreement
• Many able persons for procedural debate
• Delegates study and decision

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Small Start Ups

• Lack of experience of organizational work
• Coordination of groups in expansion
• Deal with large established companies
• Large corporation become supplier of talent with
  organizational experience for startups

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Main Business and New Business
Established Main Business
New Business
Disruptive Technology
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Company Lords and company Outlaws

• Main Business
• supported by talented company lords
• years of distilled knowledge of the company
• precise rules, procedures
• control of resources

• New Business
• supported by few company outlaws
• disruptive force
• breaking rules, procedures and assigned resources

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FOR RESEARCH INFLUENTIAL AT HEADQUARTER DECISIONS

• Not just scientist but well qualified and trusted
  for strategic and political decisions at
  corporate level management
• Needs to be respected for his/her scientific
  accomplishment. Mandatory for researchers support
• Systematic motivation, screening and training

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WHEN IT GOLD RUSH SATURATES

• BUSINESS SCENARIOS ENUMERATED
• ANOTHER LEAP NEEDED IN THE MATERIALS AND DEVICE
  SCIENCE
• LOGIC AND DISPLAY
• OPTICAL TRANSISSION AND DISTRIBUTION
• BATTERY AND ENERGY

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MERGING INDUSTRY SECTOR

• TELECOMMUNICATION
• COMPUTER
• BROADCASTING
• HOME ELECTRONICS

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Shifting research attention

• From technology for making boxes to technology
  for providing services
• Technology for making boxes
• Machine speed, performance and functions
• Technology for providing services
• Less sales skill, less sales costs and less
  customer visit time

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From selling boxes to offering services

• Technology for selling boxes
• Design defined by Input and Output conditions.
• Stable design when algorithm is fixed.
• Text book culture

• Technology for offering services
• Design defined by business scenarios
• Design dependent on customer reactions
• Unstable and progressive

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Information RepresentationAnalogue v.s. Digital

• Analogue
• Unique format and associated technology in each
  industry sector protected invasion from other
  sector.
• Digital
• Common format and technology across sectors of
  industry has lowered industry barrier.

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INDUSTRY STRUCTURE IN THE 80S
Telecomm
ATT
NEC
FUJITSU
TOSHIBA
HITACHI
Computer
IBM
Semi-conductor
TI Intel
Home electronics
RCA
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Japanese Industrycompetitiveness and weakness

• Every one doing the same generated severe
  competition in 80s
• Worked nicely for increased competitiveness in
  quality and cost
• Invited weakness in unique concept and products
  to meet the environment in 90s

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Japan to look ahead

• Cell phones becoming digital camera, video phone,
  GPS equipped locator and electronic ticket(60 M
  cell phones 20M internet mobile access)
• High speed ADSL and Optical fiber
• 40Mb/s ADSL at 25/month
• 100Mb/s Fiber access 40-25 (400,000
  subscribers increasing 50,000 /mo.)
• Internet connected generation Digital Television
  supported by NHK, MITI, SONY

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Research and Development

• Lessons learned in RD management

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THE HIGHEST POINT OF MOUNTAINTHE LOWEST POINT
OF VALLEY
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Its Not My Job Syndrome
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FAILURE TEACHES A LOT, SUCCESS LEARNS LITTLE
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RESEARCH NEVER FAILS JUST CHANGES ITS TITLE
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Role of Research Lab

• Experimenting future of corporation

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physics
Electrical engineering
telecommunications
computers
Information technology