Solid state route to technirvana

Technology Fountainheads
February 13, 1998

Collaboration between high-tech competitors does not come naturally. But faced with the right opportunity, or threat, corporations will form R&D consortia to do collaborative research, development and technology diffusion.

The aim of the game varies from one consortium to another: to create or progress some technology, or gain some knowhow, or generate intellectual property ready for transfer to the consortium members or licensing to non-members. The state often has a role to play, to the dismay of free-marketeers. When the state perceives a national threat it tends to twist industrial arms, and even change anti-trust laws to encourage research and development collaboration, as did Japan in 1961 and the Americans in 1984.

In the United States, Sematech has provided a paradigm. In the mid-1980s, US chip manufacturers and the Department of Defense agonised over the penetration of Japanese semiconductor manufacturing equipment.

The Sematech consortium was formed in 1987 to respond to the Japanese threat. The Defense Advanced Research Projects Agency provided funding. Fourteen US semiconductor manufacturers joined. US market share has recovered dramatically in the years from 1987, and Sematech has evolved from state-supported chrysalis into privatised butterfly, now funded only by its member contributions. Research consortia, in the modern sense, were in fact a British invention. In 1917 the British government part funded industry alliances set up to address the threat of German technology. The United Kingdom Department of Trade and Industry continues to fund individual industry/university collaborative projects to the present day.

The Japanese created the (once much feared) Ministry of International Trade and Industry, MITI, on the British model in the mid-1950s. MITI, in its time, has done some heavy-duty consortium-building, sometimes successfully, sometimes not.

The most notorious unsuccess so far has been ICOT, alias the Fifth Generation Project, which aimed to produce a truly intelligent computer. The project ran for ten years starting in 1982. In one respect ICOT has been a resounding failure. There really is no truly intelligent computer on the horizon in Japan or anywhere else. But in another, less tangible respect the project was a great success. ICOT helped bootstrap the nascent Japanese computing industry and made the Japanese aware of the importance of information technology. Consortia and collaborations are best positioned to deliver soft, intangible results like these.

Technology Fountainheads is essential reading for anyone, senior manager or academic, involved in R&D collaboration. The kernel of the book is a detailed comparison of half a dozen very different American consortia of the past two to three decades, including the relatively successful Sematech, the oldest and still surviving EPRI (the Electric Power Research Institute), and Bellcore. Some of the consortia have six or seven members, some have 700. Annual budgets range from $25 million to $1 billion. Some are xenophobic and have excluded non-American companies, some have not. Some hire staff, some take staff seconded from their members.

Professor Corey provides a useful taxonomy with which the different consortia can be characterised, as well as comparisons with Japanese consortia and the European Framework programmes, though the latter are really collections of projects rather than consortia proper.

Corey is a professor of marketing at Harvard Business School. The most interesting chapter in the book treats the process of technology transfer as marketing. Transferring technology is never easy. Sending technical reports to consortium members, and even filing patents is not enough. Corey prefers to see technology transfer as "technology diffusion", a complex process of interaction between R&D staff and industry, something at which the Japanese excel.

The techniques of technology diffusion will vary from one consortium type to another. But an inevitable requirement of western consortia, in Corey's view, is that researchers must acquire the unfamiliar and sometimes undervalued skill of selling new technology into their consortium members.

Peter Gibbins is executive director of the Virtual Centre of Excellence in Digital Broadcasting and Multimedia Technology and visiting professor in computer science, University of Exeter.

Technology Fountainheads: The Management Challenge of R&D Consortia

Author - E. Raymond Corey
ISBN - 0 87584 723 4
Publisher - Harvard Business School Press
Price - £22.99
Pages - 192

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