Bell Labs adjusts to the profit motive
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HONG KONG: The four newest projects from Bell Labs, the birthplace of fundamental technology breakthroughs like the transistor, the solar cell and the LED, represent a 180-degree change in mind-set for the 81-year-old research center - they are designed from the outset to make a profit.
The new products are the result of a deliberate plan by Jeong Kim, president of Bell Laboratories for the past year and a half, to turn the hallowed halls of basic communications research into a direct contributor to the bottom line of its parent, Alcatel-Lucent, based in Paris.
"I have changed the vision, the strategy and the structure," Kim said during an interview at ITU Telecom World, which is meeting in Hong Kong this week.
Where once the best and brightest minds at the Bell Labs headquarters in Murray Hill, New Jersey, were turned loose to innovate without concern for practical use or sales potential - thus giving birth to decades of inventions and patents, many of which went nowhere - Kim now wants to "make innovation count" on the bottom line.
Others have been doing this for years. Shane Robison, chief technology officer at Hewlett-Packard, for example, knows a lot about managing a product-oriented research staff.
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"Our philosophy is to leverage the university research community for the broad- based, long-term basic research," Robison said during an interview at the telecommunications conference. "What you'll see in ours is more applied research that is aligned with company strategy."
Kim is putting Bell Labs through that adjustment. In the past, he said, "Bell Labs was recognized by outside bodies for doing world-class research.
"What I wanted to do," Kim added, "was instead focus on leveraging our research assets for the financial benefit of the company."
The four commercial products are now being demonstrated to customers and will be introduced starting in March. Kim would not discuss details, other than to say that they were in the fields of security, Internet protocol networking, location-based mobile Internet services and "the enterprise space."
"We have kept all four in stealth mode because we don't want distractions," said Kim, who sold his Washington, D.C., area start-up, Yurie Systems, to Lucent Technologies in 1998 for $1 billion.
Likewise, Robison would not talk about the more basic research HP is doing at its Palo Alto labs in nanotechnology, describing it only as "fundamental enabling technology in the next generation of computer architectures."
For Kim, 46, a native of Seoul, the profit motive also goes into deciding where to place international outposts of Bell Labs, he said, like the one set up in Ireland in 2004.
Bell Labs Korea, which is awaiting final approvals, will be based on a financing model similar to the center in Ireland, where the government, in collaboration with eight universities, pays half of the cost of academics there.
The Irish partnership focuses on supply logistics. "Ireland wanted to avoid becoming only a low-cost manufacturer and wanted to move to the next stage of evolution in supply chain management," Kim said.
He said the company was exploring the possibility of a joint lab in Scotland as well, adding, "We are being asked to open centers all around the world."
Robison also said that the demand for technology research was growing.
"People are assuming that since there is commoditization in information technology, that leaves no room for R&D," Robison said. "Just the opposite is true. Because we have the ability to build on industry standard components, we have economies of scale that are just unbelievable. There are more targets for research rather than less today."
Kim said Patricia Russo, chief executive of Alcatel-Lucent, is counting on Bell Labs "to make a big impact" on the company.
He intends to do that by improving the transfer of technology into "current markets, products and solutions."
At the same time, Kim said, he would welcome "breakthrough products that would allow the company to enter into new markets," perhaps along the lines of the transistor, the solar cell and the LED.
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