R&D executives are making decisions today that will shape the R&D “Lab” of the future (LOF). They are doing so amidst a perfect storm of forces, the tsunamis of change, information and connectedness that make the future especially unpredictable. So how are they thinking about that future? What themes and factors frame their decisions? Where do they source information about potential trends, and how does new information get into strategic decision-making? What information might be desirable? Will there even be a lab in our future?
It was the search for answers to such questions that sparked the research project we report on here. Funded by the National Science Foundation (under grant #08-30340), the project is jointly sponsored by the Industrial Research Institute (IRI), the Center for Innovation Management Studies at North Carolina State University (CIMS), IBM, and NASA. The project is grounded in “the R&D ‘Lab’ of the Future Project” undertaken by the IRI’s Researchon-Research subcommittee.
Distant Future: 2025
Preliminary LOF findings are provocative, even as they tend to corroborate some prior research; as might be expected, issues of R&D funding, staffing, outsourcing, and off-shoring arise. Decisions on which projects to fund, what facilities to commit to, what kinds of researchers to acquire or retain, how many of them and where they are located, made today, comprise the elements of future capability, whether or not decision makers are consciously aware of the distant future.
Technological advances — in communications technology, and in computers and simulation capability, for example — may dictate that simulation or networked collaboration from abroad make up increasing amounts of industrial R&D. That is, the future “Lab” may be a computer, or a network of Internet links to remote sites (perhaps not owned by the firm), rather than a single company-owned physical facility.
Of particular interest to us were questions about which concerns were foremost in decision makers’ minds; what sources of information they were drawing on to inform their choices; how such data was processed, and whether it was included in strategic planning; and how government information availability might affect or influence decisions that, in the aggregate, would shape the U.S. innovation system over time.
We deliberately framed our questions in terms of a distant future, far enough out to discourage simple linear extensions; thus, we inquired about “the R&D ‘Lab’ circa 2025.” A brainstorming session conducted in Fall 2007 with some 200 IRI member organization representatives (R&D executives and scientists) yielded a lengthy list of characteristics of the LOF and of drivers that would, in the view of participants facilitate achievement of the imagined “Lab,” as well as constraints that would impede the LOF. That discussion encouraged us to propose the present research.
We are still gathering data, so we want to invite further participation, but avoid “leading the witnesses.” Yet preliminary results are striking, and can be summarized around four broad themes and their interactions:
• Business cycles and current downturn: R&D managers have long been familiar with the impact of business cycles on R&D funding and headcount. The current downturn, widely described as “the worst in 50 years” (or 80, take your pick) has clearly had a major effect.
• Globalization of R&D: Already well under way, globalization of R&D has been accelerated by increasing pressure for cost cutting and economies in research, as well as technical enhancements of IT, groupware and communication technology. It is, typically, cheaper to have any single piece of research done abroad: Chinese and Indian governments (among many others) incentivize moving research activities to their shores and involving their scientists, universities and research institutes. The impact on reintegration and use of such “foreign” knowledge, no less than the potential for leakage of proprietary information and the effect on the home firm’s “absorptive capacity” to make use of what is discovered, all remain unknown.
• Historic U.S. university-industry links: Long a seedbed for invention to fuel industry, U.S. university-industry links are under substantial and increasing pressure today, as the economic downturn intersects with new possibilities for globalization. Enhanced opportunities for research and technical careers are drawing home many of the foreign nationals who have increasingly filled the U.S. science, technology and engineering pipeline, both in academic research and in industry. Industrial firms have many options outside their borders, and face pressure to exploit them; U.S. universities face declining budgets, fewer U.S. national students in ST&E programs, and diminishing monetary returns for their inventions and discoveries.
• Virtual labs, virtual teams, interactions at a distance: Advances in Information and Communications Technology (ICT) create possibilities for simultaneous and asymmetric interaction among far-flung research partners. These collaborators may be firm employees in subsidiaries abroad — or they may be foreign nationals at a foreign university or research institute, or employees of a collaborating partner firm (whether U.S.- based or not).
Are managers on top of this? Do firms have “best practices”?
• Interaction effects among these factors:
Respondents mentioned numerous interaction issues, including how to manage dispersed teams, deal with cultural and regulatory differences, andstill achieve results. For example, privacy issues arise in the EU, where performance assessment information cannot be shared across national boundaries, although the R&D manager may reside in a different country from his or her direct reports performing critical R&D.
Monitoring and safeguarding of proprietary information is another concern in cross-national teams, particularly those whose members are not all employees (e.g., collaborative teams involving foreign universities or research institutes or alliance partners).
Other issues suggest potential misalignment between R&D people and senior strategic managers, who may be overly driven by immediate pressures for cost reduction. Inadequate attention to the long-term consequences of current decisions may obscure the true impact of stop-and-start directives on research projects, of diminished absorptive capacity, or erosion of historic links with U.S. universities, or failure to recognize non-traditional technological opportunities.
Interested in the Conversation?
Then join us at http://cims.ncsu.edu/lof. Click on the “LOF 2025” button at the bottom of the page, select your own password, and sign in to share your thoughts.
Richard C. Kraemer Professor of Strategy,
Mason School of Business, College of William and Mary
Former Director of the NSF’s Innovation and Organizational Change Program
Alden S. Bean
CIMS Executive Director Emeritus
Research Professor, North Carolina State University
Former NSF Program Director
They gratefully acknowledge the assistance of IRI subcommittee chairs Richard Antcliff of NASA and Erik Whalen-Pedersen of Kraft and the many committee members.