When it comes to R&D, high tech corporations have no choice but to "run as fast as they can in the innovation race just to keep up with the others," says economist and New York University professor of economics, William J. Baumol, in a recent interview with IEEE Spectrum.
According to Spectrum's first annual Top 100 R&D Spenders survey, the world's 100 biggest corporate R&D spenders fueled the race to the tune of one-third of all 2001 R&D funding in the 30-member Organization for Economic Cooperation and Development. Their total: $215 billion.
On average, the Top 100, which consists of companies hailing from the United States (45), Japan (22), and Germany (11), among others, spent 5.25 percent more on R&D in 2001 than in 2000. Compared to the year before, 43 of the top 100 increased R&D spending by an average of almost 22 percent, while 53 cut spending an average of 8 percent.
Predictably, most of the big drops were in the telcom sector, including beleaguered Lucent Technologies (ranked 17 among the Top 100 R&D Spenders) and Nortel Networks (19), which slashed their respective R&D outlays by 30 and 35 percent.
But even in depressed sectors, companies went on investing, with some posting surprisingly aggressive increases over 2000. JDS Uniphase (91) bucked the R&D slide in the telecommunications equipment sector by boosting its R&D spending more than 50 percent. Several companies tied to the corporate networking and database markets also increased spending substantially, including EMC (77), which upped R&D spending 18.6. percent; Cisco Systems (8), up 17.2 percent; Microsoft (12), up 16 percent; and Oracle (66), up 12.7 percent.
To find out where the world's biggest R&D spenders are spending their money, Spectrum editors visited some of the world's most productive R&D operations to report on five technologies that should pay off big within the next five years.
AUTONOMIC COMPUTING: Enabling a computer system to diagnose and optimize its own performance and allocate its own computer and storage resources automatically should increase efficiency and boost an already mammoth market for information technology services, as discussed in "Helping Computers Help Themselves" by David Pescovitz. IBM calls its approach "autonomic computing," and it is banking at least half its research budget on the concept, while rivals Sun, Hewlett-Packard, and Microsoft push similar initiatives.
ORGANIC ELECTRONICS: In portable electronics and flat-panel displays, plastic organic light-emitting diode (OLED) displays will soon give liquid-crystal displays (LCD) a run for their money, according to "Just One Word--Plastics" by Samuel K. Moore. Cross-industry alliances are sprouting to meet a vast array of technical challenges. Giants in electronics such as Motorola (13), Xerox (73), and Lucent are collaborating with chemical power houses E. I. DuPont de Nemours (54), Dow Chemical (65), and Bayer AG (40).
SPEECH RECOGNITION: Replacing keyboards, pushbuttons, and knobs with speech input could transform human-machine interaction, says Jean Kumagai in "Talk to the Machine." But even after 50 years of basic research, only now is this a market in the making, and the companies involved are choosing to go it alone for a piece of a market projected to be worth about $277 million in 2006. The prospective growth has lured both big and small fish, IBM and Royal Philips Electronics (24) as well as Voice Signal Technologies and Sensory Inc.
SEMANTIC WEB: Too often, the billions of pages on today's Web frustrate searches or yield only inconclusive results. As discussed by Steven M. Cherry in "Weaving a Web of Ideas," better search mechanisms and personal agents that could automatically perform searches would be a boon to multibillion-dollar e-commerce sectors like travel. Semantic web research is spearheaded by Tim Berners-Lee and the members of the World Wide Web Consortium (35 of which are to be found among the Top 100 R&D Spenders).
SOLID-STATE LIGHTING: White-light LEDs are poised to claim a large chunk of the $12-billion-a-year market for sources of white light, now the sole property of makers of incandescent light bulbs and fluorescent tubes. The semiconductor responsible: gallium nitride. In "Let There Be Light," Glenn Zorpette reports on this emerging market. The founder and leader, Nichia Corp. of Japan, is taking on Lumileds Lighting LLC, a joint venture of Philips Lighting and Agilent Technologies (58); GELcore, a joint venture of General Electric (43) and Emcore Corp.; Tokyo's Toshiba Corp. (31) partnered with Toyoda Gosei Co.; as well as Osram Sylvania, which is is working with Osram Opto Semiconductors in the United States.
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