Forbes | by Sramana Mitra | Dec. 11, 2009
America is in dire need of some breakthrough innovation that can crack open significant new horizons. Yet, every year, numerous corporate and academic labs spend millions working on projects that have no commercial future, no application, no real justification for their existence. At best, they represent the tinkering of a technologist with some cool ideas.
Against that backdrop, I recently spoke with Prith Banerjee, head of HP Labs, on Hewlett-Packard’s strategy to streamline innovation and make it relevant to real world problems. Banerjee, to set the stage, also has experience founding two electronics start-ups, and brings a good understanding of the entrepreneurship and venture capital worlds.
Banerjee says that in the good old days of Bell Labs, researchers could concentrate on basic research and they did not have to think about the business elements. In a corporate research lab today, if you only do 100% basic, long-term research, the stakeholders of the company must challenge the function of the lab.
“On the other hand, if you look at most companies such as HP, which as a whole has a very large R&D budget ($3.5 billion in fiscal year 2008), there are 30,000 very smart engineers who are working on the next-generation laptop,” Banerjee says. “At HP Labs we only have 500 people. If those 500 people also start working on the short term, then the question becomes, ‘Why are they doing this at HP Labs? We have a much larger R&D enterprise.’ ”
HP Labs has taken an approach where one-third of the research is focused 10 to 15 years into the future. Another third of the work is what they call product development research, which is relevant to today’s products. That research will show up in six to 18 months. The final third of the work is applied research, which is tied to an application, not a product. “If we are researching some imaging, it might end up in a printer or laptop display sometime in the next two to four years,” Banerjee says. “I think that is very important. At HP Labs we have a very formal process to fund these projects, some with short-term goals and some with long-term goals.”
So how does HP choose what projects to focus on? “My vision and decision was to focus on 20 to 30 big-bet projects that would really make a difference to HP. The common thread is that the research must satisfy twin goals,” Banerjee says. “I have told researchers that as they put together their big-bet–large research collaborations, each of them involving 20 to 30 researchers–they have to crisply identify the problem they are solving. They must also advance the state of the art by at least an order of magnitude in whatever they do. The second aspect is that it must present a significant commercial impact for HP. Since HP is a $100 billion company then the impact must be at least $1 billion.”
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