Magazine

The Slippery Slope Of Moving R&D Overseas


The most frightening statement in "Outsourcing innovation" (Special Report, Mar. 21) was from Quanta's Barry Lam: "It's now difficult to get good ideas from our customers." This shows what the real threat is. You can't develop new product ideas if you can't integrate intimate knowledge of the market with knowledge of emerging technologies. Companies that pretend these interlocking streams can be separated won't be around for long. The last thing they will outsource is the chief executive and the board.

Daniel E. Whitney

MIT Engineering Systems Div.

Cambridge, Mass.

It is frightening to think that the bean counters' new "target of the day" is the amount Corporate America should spend on R&D. In one tidy, neat statement, Allen J. Delattre of Accenture (ACN) has relegated research and development to line-item status -- as nothing more than the last great "controllable expense" on the ledger. Delattre's comments are those of a tactician, the same mind-set that stated at the turn of the 20th century that all new important inventions had already been invented or that Einstein was a lazy student who would amount to little.

The continuing success of America's ability to innovate needs to be articulated with a sense of strategic vision by someone who will not ask: How much does "X" save us in making our new widget? Rather he will ask, how will our widget revolutionize the world? Focus on the correct question, and the appropriate savings and profit will follow.

Louis Janicek

Ramsey, N.J.

There is a business term for companies that leave manufacturing and design to others -- they're called retailers. Once the Asian companies get their own brand name and distribution network, they won't be working for us anymore, they'll be working for themselves.

Paul Wetor

Wauwatosa, Wis.

I surely cannot be the only one who has noticed the disconnect between what corporate CEOs are saying and what they are doing. On the one hand, they complain that the U.S. education system does not focus enough on math and science and does not produce enough graduates to fill high-tech engineering jobs. On the other hand, they fire the talented and experienced engineers that helped build their companies so they can outsource those jobs.

Dan Tischendorf

New Cumberland, Pa.

I think you missed a critical distinction: When the dominant design, technology, and features have been established in a category, the important work of gaining sales and share by getting those features and costs right are not the province of the high-value R&D experts or scientists. Rather, this type of work requires good intuitive and interactive work among feature engineers, usability teams, and cost-down teams.

The high-value work of inventing breakthrough science and capabilities still seems to rest with the R&D geniuses who are worth their weight in gold.

Fred Heller

Stamford, Conn.

It is naive to assume that Silicon Valley and the U.S. have a monopoly on creativity and innovation. The argument, cited often in this article, that intimacy with the customer is an edge in this global competition is also naive: It presumes that there are no markets other than the U.S. to which Chinese, Taiwanese, and Indian manufacturers can direct their advanced products.

Outsourcing technology development is a slippery slope. In a number of software companies I am closely familiar with, it began with sending quality-assurance work overseas, then bug-fixing (which requires intimacy with code), and finally the entire product development (since bug-fixers eventually became coders).

Jon Handaru

Palo Alto, Calif.

I have worked at major software companies, including such icons as Sybase Inc. (SY) and J.D. Edwards, for the past 20-plus years as a software engineer in various capacities. As far as I know, both Sybase and Oracle Corp. (ORCL) outsourced entire maintenance engineering to India many years ago to compete with each other. Now almost all development has moved to India. I can guarantee that next generations of database engines will start from India, not from the U.S.

No engineer starts developing high-end products from zero. Such people learn their trade from a master -- as with music, carpentry, etc. -- by maintaining their codes for years and in time take it to next level. We are so shortsighted on giving away our crown jewels. Maybe it is the problem with capitalism.

Nick Shener

Alameda, Calif.

I enjoyed "The new radio revolution" (News: Analysis & Commentary, Mar. 14). The 1996 rewrite of the Telecommunications Act was a near death blow to radio. Radio was already getting pretty boring, but letting four companies own most of the radio stations and automate boredom was criminal. Tuning across the dial, it sounds as if there are only four or five stations, cloned and repeated, playing the same tiny group of songs over and over.

The National Association of Broadcasters thinks that going digital and having CD-quality sound will save them. I think not. Digital boredom will be just as boring as analog boredom.

Stephen Hawkins

Boone, Iowa

You overlooked the one device that will grab share and revenue from current and new broadcasting technologies such as pod-casting and satellite. Although still in its infancy, the streaming of radio programming through a cell phone, known as mobile streaming, combines the best features of all other broadcasting technologies. Users can receive preprogrammed or personalized programming, purchase music they hear, and easily send recommended programming or songs to friends. Most importantly, mobile streaming provides operators with strong, recurring revenue streams. There certainly is a radio revolution taking place, but the battlefield will move to the cell phone.

Gilles Babinet

Chairman and Co-Founder

Musiwave

Paris

Commercial radio is becoming its own worst enemy -- because it is putting profits first and customer satisfaction second. Stupid commentary from deejays, endless commercials, and the like have driven me away. It was only a matter of time until this business model came crashing down. I believe that Internet radio is in a position to become a primary medium. I like my Internet radio station so much that sometimes I have to turn it off in order to focus on my work -- it's that good!

Tom Caine

Mountain Lakes, N.J.


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