NEC's 'Big Brother' Lab

To boost innovation and discover how good ideas are generated, NEC has set up a lab where researchers will work under high-tech surveillance

by Kenji Hall

Everybody knows that the boss could be reading employees' e-mails and monitoring their mouse clicks at any given moment. But what if the snooping extended beyond the PC screen to every corner of the office?

It sounds ominously Orwellian, but NEC (NIPNY) thinks that eavesdropping on some of its best brains' water-cooler chats and brainstorming sessions, and knowing what books they're reading, could improve its chances of becoming a leader in high-tech innovations. To test the theory, the Japanese company created the Computers & Communications (C&C) Innovation Research Lab on a campus near the western city of Nara.

The idea is simple: Wire a lab with the latest networking tech; add security cameras, microphones, and sensors; and invite researchers from all over the world to work there. The experiment is sure to raise privacy concerns, but NEC officials say they have safeguards in place to allay fears that they're creating a "Big Brother" work environment.

"Open Innovation"

Keiji Yamada, who proposed the original concept and now heads the lab, says the company hopes to stitch together the video, voice, and other data files to get a better grasp of how hot new ideas are hatched.

NEC officials won't say how much they're spending or how many researchers will be assigned to the lab, and no projects have been formally announced. But they say the lab's mission is to spend the next three decades developing future generations of network-linked computers and other gizmos.

Yamada says "open innovation" will play a huge role in making it happen. In the past, NEC had relied almost entirely on its own army of scientists to continuously feed a product pipeline that runs the gamut from cell phones and laptop computers to wireless towers and undersea telecom cables.

Seeking Innovation Insight

But researchers at the lab will be encouraged to openly compare notes with outsiders in a more interdisciplinary approach. Officials have been negotiating with 20 companies, universities, and research organizations to lure top talent to the C&C lab. "We want to understand how technology can improve collaboration over time and distances," says Yamada. "We realize that we can't accomplish this alone."

NEC's experiment reflects the lengths to which some will go to remove the guesswork from innovation. In an era of rapid technological change, companies are launching new products faster than ever, setting off a race to replicate success. In NEC's case, a run of mixed earnings is forcing the Tokyo company to consider a radical rewiring of what many analysts characterize as a stodgy corporate culture. (After a 3.5% decline in operating profit, to $598 million, and a 5.6% fall in sales last fiscal year through March, the company forecasts this year's profits to rise 85%, to $1.1 billion, on a 1% rise in sales.)

Nothing like a high-tech playpen that goes against the company's traditional notions about research to help change the mindset. The key, says San Jose State University professor Joel West, will be for NEC to seek out new partnerships, not simply turn to the familiar chain of smaller Japanese suppliers and universities. "Open innovation is about finding new combinations and new sources of knowledge," says West, an open innovation expert.