Role of Research

Masao Kato

Chairman

FX PALO ALTO LAB INC

Fuji Xerox

Fuji Xerox Asia Pacific

FX Palo Alto Xerox PARC

Xerox Corporation

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 ShiftBell break up, Trade deficit, Down sizing

Companies without research lab thrive

• Bubble: born, grow and goneA look at future

Future of Industrial ResearchPanel Discussion

Harvard Business SchoolJanuary 1993

• Industrial R&D in the United States

David A. Hounshell CMU

• Notes on the Future of Industrial Research

Richard S. Rosenbloom HBS

Participants

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

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

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

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

Where we go from here

Reinventing Corporation

Xerox Parc Challenges

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

Shifting main business

Established technology

vs

disrupting technology

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

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

Established Main Business

Disruptive Technology

Main Business and New Business

New Business

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

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

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

MERGING INDUSTRY SECTOR

• TELECOMMUNICATION

• COMPUTER

• BROADCASTING

• HOME ELECTRONICS

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

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

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.

INDUSTRY STRUCTURE IN THE 80’S

Telecomm

Computer

Semi-conductor

Home electronics

ATT

IBM

TI Intel

RCA

NEC

FUJITSU

TOSHIBA

HITACHI

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

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

“Research” and “Development”

Lessons learned in R&D management

THE HIGHEST POINT OF MOUNTAIN

THE LOWEST POINT OF VALLEY

It’s Not My Job Syndrome

FAILURE TEACHES A LOT,

SUCCESS LEARNS LITTLE

RESEARCH NEVER FAILS

JUST CHANGES ITS TITLE

Role of Research Lab

Experimenting future of corporation

physics

Electrical engineering

telecommunications

computers

Information technology