The Future of Tech August 27, 2009, 5:00PM EST

Big Blue's Global Lab

(page 4 of 4)

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Saudi Arabia's KAUST is "a magnet for smart people," says CIO Al-Ghaslan Ben Baker/Redux Pictures

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Niu Gang is looking to IBM to transform China Telecom technology David Hogsholt/Getty Images

A mutual friend of Matthias Kaiserswerth, head of IBM's Zurich lab, and Peter Chen, chief of research at ETH, had learned they were both interested in building new facilities. He introduced them at a gathering at the tony Grand Hotel Quellenhof in Bad Ragaz, Switzerland, in 2007. The two hit it off immediately. "I had never done anything like this before," says Kaiserswerth. "It comes down to whether you trust people and have congruent interests."

Researchers at IBM and professors at the university conducted a series of meetings where they hashed out priorities. They found a 70% overlap—plenty to make an alliance worthwhile. For instance, they targeted an area of physics called spintronics that could lead to the new generation of chips.

Often, IBM gets projects started by dispatching a single scientist with a big idea. Henry Chang, a 22-year veteran of IBM's labs, returned to his native Taiwan last year and helped a professor at National Taiwan University write a proposal for how the country could shift from an electronics manufacturing economy to one with more high-value tech services. The model he used: IBM's own transformation from a computer company to a services and software giant. "The government liked the idea. They wanted to have a conversation about making the transition," says Chang. On Aug. 12, IBM signed a deal with Taiwan's government to improve the national health-care system.

Such projects could fuel concerns about American competitiveness, but two-thirds of IBM's scientists work in the U.S. and there will be collaboratories here, too. IBM is working with Virginia Tech and Arlington County, Va., to develop a lab focused on advanced systems for crisis management.

IBM still faces plenty of challenges in getting its collaboratory strategy to work. But Palmisano put Kelly on notice in a one-on-one meeting in July that he wants him to think even bigger. Kelly isn't exactly sure what that will mean, but he's mulling it over. "The biggest challenge is to not overextend ourselves," he says. "I want to be very aggressive, but I don't want to trip up."

Hamm is a senior writer for BusinessWeek in New York and author of the Globespotting blog.

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