Stephen B. Adams, Salisbury University

A sea change has occurred in American research and development since the 1980s. America’s major industrial laboratories have torn down much of the barrier between research and development; the model of “smart people on the hill” and the idea of intra-firm technology transfer have given way to a fusion of R&D. Several factors contribute to this phenomenon:

• A more competitive environment for the organizations housing the researchers
• A reduction in the extent of vertical integration on the part of technology firms
• The difficulty for the host firm of capturing the benefits of such research (as exemplified by the benefits accruing to outsiders of so many breakthroughs at AT&T and Xerox)

The result is that research (and researchers) now operates more closely to markets and to the corporate marketing function, and focuses on more immediate needs than before.

Isn’t this what Clayton Christensen warned against? In The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail, Christensen noted several examples of firms who appeared to do everything right and still failed. Most notably, by staying close to their customers, they focused on incremental improvements rather than making fundamental breakthroughs that their customers could not even imagine, until disruptive technology developed by other firms did them in.

This paper explores the extent to which America’s technology companies have made themselves vulnerable to disruptive technology by moving away from research toward market-driven development. The basis of the study is a set of interviews with leading researchers as part of an ambitious project by the American Institute for Physics. Interviews with 100 managers and scientists at 15 of America’s most noted research laboratories suggest that the new approach is likely to produce the sort of result that Christensen warned about.