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Innovation LABS.

Corporate labs yield breakthroughs now that the start-up world is starved for capital.

If the technology industry caused the world's greatest wealth creation, then soon after it also caused the greatest wealth destruction. But even amid this bitter climate and dour market, rapid innovations in technology are continuing apace.

New markets are being born and new efficiencies are being created, even as technology companies go bankrupt at alarming rates. Smart companies have learned their lessons well. Previously, any company late to the Internet, to mobile communications, or even to the simple desktop computer paid a high price. Not only did the end business get sideswiped but a company's internal efficiency was often severely outmatched. Think about the advantages of a company with computers up and running over competitors without them. Or recall the fate of those brick-and-mortar companies that didn't take the Web seriously until online operators cannibalized their sales.

That's why keeping abreast of all the developing technology should always be a serious priority for a CEO, particularly at companies known to be in the forefront of technical design and innovation.

In recent years, many of the world's major technological advances could be found in many start-up businesses. New companies, often backed by venture capitalists and other individuals ready to take financial risks, rode the technology boom. But now, with capital drying up in the start-up world, those looking for breakthroughs in thinking and in technology have circled back to the old guard. That's where the innovations came from before, so why not look at those laboratories to see what the next breakthroughs might be. "Some of the smartest people in technology are now in these labs," says Paul Vabakos, a venture capitalist at Trinity Ventures, a Silicon Valley-based venture capital firm which invests in early-stage technology.

The future of technology is in the laboratory. At four respected companies, life-altering inventions such as the personal computer, the pocket calculator, the copier, and computer networks were devised, refined, and patented. These innovations not only changed the way people live and conduct business but also became profitable ventures for their companies and shareholders. Here's a look at what researchers at these major labs are working on and where they think the next breakthroughs will be.

Hewlett-Packard

A stroll through the main laboratory of this technology powerhouse in Palo Alto, CA, tells the quintessential Silicon Valley story. Near a mockup of the barn in which the company was started 62 years ago are the reminders of dozens of groundbreaking inventions over the years, such as the pocket calculator, one of many market-making technologies that propelled the company to a current market value of $58 billion. But unlike many upstarts that quickly shot to the moon in this valley, Hewlett Packard seems to have an old soul.

To H-P veterans, the core of its success has been innovation. When the company made the leap a half century ago from a simple measurement company to a global computer behemoth, being at the forefront of innovation became the company's full-fledged pursuit. And to achieve its goals, H-P built a lab in 1966 that now provides 90 percent of the products that go into development.

Mark Smith, a smooth-talking 47-year-old University of Utah bioengineering Ph.D., and his team of researchers are tackling a problem that vexes everyone from CEOs to clerks. Passwords, entry codes, and other recognition techniques delay instant access to a computer, and the steps to get started can be time-consuming, let alone inefficient and annoying. Why can't a computer just recognize who you are and let you get to work?

By experimenting with recognition techniques, Smith and his team hope to enable any device, be it a computer, cell phone, or even doorway, to know who you are, where you are, and what's going on around you -- a kind of continuous recognition -- without having you do anything.

The huge component behind the lab's research is biometrics, a technology that makes systems recognize people through unique physical characteristics like retinas, voice patterns, and thumbprints. "There are so many things unique to a person -- even their footsteps. We plan to incorporate many that aren't used at all today."

Some hand and eye recognition systems already exist, particularly at high-security companies. But H-P is moving beyond that. In the current technologies, the user has to put a hand on a screen or have a scanner scan an eye. At his lab, says Smith, the company is hoping to develop a technology that will allow a person to gain access to proprietary information such as medical records without the person having to do anything. "You'll be able to walk up to a computer or cell phone or anything else," Smith says, "and it will know who you are and immediately upload all your data."

Remote computing and wireless technology appear to be the next steps. To make this technology valuable, the system will also need to identify a user's location. H-P is using technology like global positioning systems, which allow a device to determine a user's location. It also plans to use new technology like infrared chips and Bluetooth chips. Bluetooth chips connect devices within 32 feet of each other via low-frequency radio waves, creating a network without wires or a fixed connection. That way, for example, your desktop computer can continously update data it shares with your hand-held, such as an appointment calendar.

Having continuous recognition, of course, saves valuable time. No worries about lost passwords or even keys. In fact, Smith contends that if this technology succeeds there will be no need for keys. The car will just start when it identifies the driver, and the house will unlock when you arrive.

This technology also has potentially significant business applications. For example, a retailer might have information about a person's favorite shirts based on buying history. When the shirts go on sale, they can be sent and billed with credit card swipes, if the customer has stored such data with the store or on a predetermined electronic site.

A little further down the hail at the lab, Stan Williams, director of quantum science research--he has a Ph.D. in physical chemistry from University of California, Berkeley--is working on something very different, yet it is research that could have an even greater impact on the business world.

The shaggy-looking 19-year-old and his team of physicists, chemists, and engineers are working on the siliconless microchip in a joint project with U.C.L.A. Williams' theory is that much-touted Moore's Law will die out. Gordon Moore, one of the founders of Intel, asserted that the speed of microprocessors doubles every 18 months. And since the advent of the integrated circuit in 1959, this has proven true. But Williams says that with the current technology this exponential expansion will end by 2010 because eventually fabrication plants will not be able to feasibly continue to scale up to meet this capacity need. More important, the chip itself is also running out of space. "We're going to run up against a brick wall in 10 years," Williams says.

This could have significant ramifications. If processor speeds don't continue to accelerate then computers won't be able to increase power, altering the progress of all things technological. Growth in industries like software development, online media, and hardware innovation could be severely hampered.

Williams and his group are experimenting with a chip that uses molecular technology to replace simple silicon. The chip is just a hundred nanometers wide, which is smaller than a bacterium. This chip could easily fit into a wristwatch; smaller is better. More important, however, it will eliminate the two factors that will stymie processor acceleration: increased capacity will fit into these smaller chips and the fabrication process will be significantly cheaper. "Our goal is to make a chip so cheaply and easily that a 12-year-old with a chemistry set could do it," says Williams.

Panasonic

Research and development has always been a priority for large Japanese corporations, enabling them to succeed globally throughout the '70s and '80s starting with transistors and going on to wireless Internet to new features on basic appliances. For example, Matsushita, Panasonic's parent company, spent approximately $4.5 billion on research and development during the fiscal year that ended in March 2001. (Sales for that period reached $58.1 billion.) As a producer of nearly every appliance involving technology, from TVs to refrigerators, CD players to washer and dryers, Panasonic's money mine is the home.

To maintain its status as one of Japan's largest companies, Panasonic is constantly putting that money to work to refine its vision of the future of the home. And that vision, which has become much clearer recently, looks a lot more like "The Jetsons" than "The Waltons."

The company developed a dream home, thought up in various labs around its headquarters in Osaka, Japan. Now on display nearby in Chinagala, the home has one very defining feature: ubiquitous connectivity. The entire house is connected to the Internet. And everything in the house, from the refrigerator to the microwave, is linked through a local area network, or LAN.

You want to turn on your microwave from your cell phone? Easy. Remind your children of their dentist appointment? Also easy. You can send a message from your office computer to be electronically posted on the display on the refrigerator. And if you feel that it's a little colder than normal, you can turn up the heat at your home from the office so when you arrive it's toasty.

"Our vision is that the Internet is the next huge utility in civilization," says Paul Liao, the chief technology officer of Panasonic North America.

The company has figured out a scheme in which every appliance is connected to the public network, or the Internet. Not only does this change the way families communicate with one another, it also changes the whole method of entertainment distribution.

Even though Liao says the realization of this research is at least five years away, the company has already taken the first steps into the market by developing a media server. It will be available to consumers shortly. Essentially, it is a home entertainment distribution device, going out on the Internet, corralling and then serving up DVD movies to a TV and MP3s to a CD player without external storage devices.

Further, Liao says there could be all kinds of interaction between the Internet and the home. Cameras, for example, could be set up in a house that allows monitoring of children from a cell phone. Or your oven could notify your Palm Pilot when the Thanksgiving turkey is on fire. Futuristic as it sounds, it's very realistic. "The technology is almost there," says Liao, referring to the fact that embedding appliances with Internet capabilities is not a problem right now. The obstacles, he said, are more about having the bandwidth and the networks, which are taking longer to develop than expected. "The realization is now more about broadband and deploying networks."

Nokia

Many continents away, the reigning king of mobile technology is working on something quite complementary. In Helsinki, Finland, ground zero for the global mobile phone maker, researchers are thinking well beyond relatively simple mobile Internet. Nokia is developing a new type of phone, and the necessary networks, that it hopes will make the cell phone the nexus of all communications--incorporating audio, video, and data.

With its most advanced Nokia phone to date, the Communicator 9210, introduced in Europe in June, users can download data off the Internet, store information, and send and receive faxes. Nokia will release the U.S. version of this phone, the 9290, next year. Basically it's a Palm Pilot and a cell phone combined.

"The key to the next generation of phones is that they will multitask," says Yrjo Neuvo, chief technology officer of mobile phones.

Nokia's vision is that every phone will be hooked into high-bandwidth, third-generation networks that will be able to run advanced applications across the world. To jibe with the network, researchers at Nokia's Helsinki and American labs have conceived of a phone with a small camera that transmits video images of the person and simultaneously allows the user to download information off corporate databases or the Internet. "You could stare into the phone with someone's face on the display and talk to him while you both surf the Web together," says Neuvo.

The phone, he adds, will incorporate voice recognition. It won't be used to translate messages into text, however. Neuvo says that's too complex, because of background noise. Moreover, it will be unnecessary, considering the fact that video files will be transmitted directly. But rather than having your fingers tap out directions, your voice will be recognized by the phone and you can order it to do things. And it will have an embedded intelligence that allows the person not only to say, "Call home," but also "Please call the cinema and tell me what's playing and at what time."

Similar to Panasonic and its wired home, Nokia has to overcome the primary obstacle of network and band width before its futuristic mobile phone can be realized. The rollout of the third-generation network is already coming later than expected across the world. But with the tremendous growth in cell phones--Neuvo predicts 1 billion cell phone users by 2002, which would be one-sixth of the world population--new features in the market are still going to have to develop rapidly. "This reality is not that far off," he says.

Xerox PARC

Though nowadays most people associate Xerox largely with copiers (and financial turmoil), this company has one of the most prestigious legacies in broad-based technology. Out of its Palo Alto Research Center, known by the acronym PARC, Xerox's famous laboratory perched above Stanford, company researchers have conceived many mind-boggling--and breakthrough--inventions.

Perhaps the most famous led to a decision Xerox made about the personal computer with a graphic user interface and the mouse. In one of the gravest errors in business history, the company decided it wouldn't leave its knitting, the bread-and-butter copying business, and make computers. So it let the engineers of an upstart company it had invested in called Apple take a look at the laboratory's invention. The rest is history: Apple pioneered the PC with a graphic user interface and a mouse and Xerox continued to make copiers. Nevertheless, since 1970, when the lab was created, Xerox has been at the forefront of almost every advanced computing technology, from laser printers to ethernets.

The physical facilities haven't changed much. The carpeting and furniture retain a '70s look and feel, with funky beanbags scattered around the brainstorming center. But the technology within the lab, despite the company's earnings troubles, continues to stay with the times. In fact, the lab is looking for a partner to give it a needed cash infusion and make it even more autonomous from headquarters.

Within the lab, major work is proceeding on a grouping of integrated circuit machines, with sensors and actuators that can sense the environment and then manipulate it. The system, the backbone to many creations within the lab, is known as the Micro-Electro Mechanical System or MEMS.

The lab is studying many applications to this technology. Considering that the company's copiers need to move paper along efficiently, researchers have used MEMS to replace independent mechanical devices in copiers. A sensor can determine when the paper is coming, then send a message to the actuator that will start the process to move it along.

Besides being able to print more pages per minute, what separates this technology from mechanical devices is that when a part breaks down, a message is sent to the actuator that can then send out orders to other parts to compensate for it.

The technology can extend far beyond copiers, says Mark Bernstein, associate director of PARC. Already most car manufacturers use this process in deploying air bags, controlling fuel pressure, and building navigation systems. But it needs to be scaled down, Bernstein says, before it can be adopted in other areas of manufacturing.

Xerox itself has gone outside the company's normal focal points and built a robot based on this technology. This snakelike robot can sense the environment around it and adapt. When something needs to be pulled out of a tight hole, the robot can change shape, fit in the hole, and re-form after there's an opening--surely an asset in an earthquake prone region.

This type of adaptive technology could also have wide money-making repercussions that shouldn't be ignored by a company looking for a manufacturing edge or a new system of production. "CEOs will have to know that this digital process will be here from now on," says Bernstein.
COPYRIGHT 2001 Chief Executive Publishing
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2001, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:technological advances and company laboratories
Author:LIPSCHULTZ, DAVID
Publication:Chief Executive (U.S.)
Geographic Code:1USA
Date:Oct 1, 2001
Words:2787
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