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The Corporate Lab as Ringmaster

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The advent of the Internet era is shrinking the role of corporate research and development (R&D) laboratories in the innovation process, according to experts. Michael Schrage with the Center for Digital Business at the Massachusetts Institute of Technology forecasts that the idea-production process will continue its migration from large corporate labs' centralized model and toward "populist innovation." He says that a great deal of traditional corporate R&D has been subsidized by profits that face more and more Internet-era economic pressures.

Corporate R&D's best option at this point is to embrace a federated model that takes advantage of all the work by outsiders in learning institutions, startups, business partners, and government labs, with the corporate lab functioning as an innovation coordinator and integrator, Schrage says.

The federated strategy has been taken up by Hewlett-Packard (HP), with HP Labs devoting greater resources to fewer projects, while also systematically seeking outside ideas via an annual contest that solicits grant proposals from universities across the globe.

"We are tapping the collective intelligence, selectively, of leading academics around the world," says HP's Prith Banerjee. One such academic is University of Southern California electrical engineer Alan E. Willner, whose project with HP Labs is an attempt to reduce power consumption and raise data-transmission speeds between computers in data centers and eventually even within chips.

Although a federated approach works for certain problems, experts say corporate lab R&D is unmatched when focused on multidisciplinary challenges in projects soon going to market.

From The New York Times
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