The new face of R&D at IBM, HP and Microsoft

Explains Banerjee, "We had taken the approach of letting 1,000 flowers bloom and hoping a few would pan out. [But] we were working on a large number of projects without enough resources on each one. We'd have two or three people on a project, but now we'll have 20 to 30 large projects, each with 10 to 20 researchers working in teams." As a consequence of this change, he says, product divisions at HP will get research prototypes from HP Labs that are more fully developed, enabling products to be brought to market faster and at lower cost.

Some observers of the new strategy at HP Labs -- including competitor IBM -- suggested it was yet another retreat from long-term basic research in favour of short-term, product-oriented work.

But Banerjee insists the opposite is true. In the past, he says, less than 10% of HP Labs' budget went to exploratory, or "blue sky," research. Under the new plan, he says, one third of spending will be on "exploratory research," one-third on "applied research," and one-third on "advanced product development." (See below for details on one HP "blue sky" research project.)

When asked for evidence that HP has not abandoned blue sky research, HP Labs Director Prith Banerjee cites the company's recent experiments proving the existence of the switching "memristor" (short for "memory resistor"), a tiny electronic circuit element that can signal and remember information by changing its resistance.

No one yet knows where this might lead, but HP says the memristor may find application in very energy-efficient circuits and in non-volatile memories that retain data after the system is turned off, which would enable computers that boot up instantly.

Stanley Williams, who was part of the team that proved the memristor's existence, said at the time: "To find something new and yet so fundamental in the mature field of electrical engineering is a big surprise, and one that has significant implications for the future of computer science."

A major thrust of HP's new strategy is increased collaboration with other companies, universities and venture capitalists. Toward that end, the company recently set up the HP IdeaLab Web site, which offers would-be partners sneak previews of research prototypes.

And in May, HP released a global request for proposals to universities seeking collaboration in each of the five major research areas. Banerjee says he's seeking real partnerships in these areas, not ad hoc, one-off joint projects such as HP might have done in the past. "Never in the past have we gone to the outside world with so much detail about what we are working on," he says.

To be sure, behind all the love of open innovation is bottom-line business sense. Such a strategy not only allows HP to cull ideas from a wider pool, it also allows the company to mitigate risk and share research costs.

Clearly, Banerjee has revenue in mind when he says, "Our approach gives us a sharper focus in the areas that we believe will help our customers addresses the challenges they will face in the next decade. It also ... speeds the time it takes to quickly turn breakthrough research into real products and services."

Either way, the change at the top of HP Labs says a lot about where the company is headed, Chesbrough says. "It's interesting that a company the size of HP would bring in, not a career engineer or scientist from the company, but an academic," he notes. "Instead of the go-it-alone attitude, I see this as evidence of a much more collaborative, distributed process. And that's a very good thing."