Global Economics

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

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.

Walls Are Watching

Walking into the C&C lab can feel like entering a bugged room. More than 100 sensors along the ceiling communicate with radio frequency identification chips in researchers' ID badges, relaying to the lab's servers where everyone is. Those computers also receive data from 30 high-powered microphones and two dozen cameras, which capture researchers as they move around the room, write on whiteboards, and run through presentations.

All the action plays out on a bank of screens at the back of the room, and nothing escapes their notice. As a researcher enters a camera's sights, he shows up on one of four live video feeds and as a green line on a two-dimensional map of the room. If he takes a book off a shelf or makes a phone call, the servers pick up his virtual fingerprints. "We'll keep about 10GB of compressed video, audio, and other data per day," says Kazuo Kunieda, a senior researcher and manager at the lab. Only senior lab officials will have access to the secure files, adds Kunieda.

That's enough assurance for Sebastien Cevey, a 23-year-old Swiss graduate student from the École Polytechnique Fédérale de Lausanne. Cevey says he doesn't equate what the company is doing to spying. "I will ultimately have the last word on whether the data is used or not," he says.

To encourage collaboration and interdisciplinary projects, the lab has laptops on tables and near couches, and no cubicles so researchers are free to work anywhere. The main room's only partitions are functional: Sliding whiteboards hide bookshelves filled with reference materials, and glass walls allow anyone to peer into conference rooms at the back of the room.

Industry Skepticism

In the hallway, video panels on the walls act as two-way communication devices (and evoke the two-way telescreens of George Orwell's dystopian classic 1984), recording and playing video clips on command, and a separate screen acts as a video link to labs in other parts of the world. In another room, there's a proprietary mapping system that helps researchers with their search for scientific papers and potential collaborators by creating a diagram of authors' names with lines connecting those who have worked together.

It's an impressive showcase of technology but some observers are skeptical about the payback. With its expertise in networking equipment, NEC researchers might be better off tackling concrete problems, such as finding a single elegant solution for the confusing mess of phone, cable, and Internet services, says Jeneanne Rae, co-founder and president of Alexandria (Va.)-based research and consulting firm Peer Insight. "I'm all for creativity…but if there is no focus, this will soon be a waste of time and money," Rae adds.

And to reap the benefits of an open innovation system, NEC would have to be as aggressive as Cisco (CSCO), IBM (IBM), and others have been at creating an ecosystem of partnerships, something many Japanese companies haven't often shown a willingness to do. As for how NEC's surveillance of researchers would sit with Silicon Valley's techies? San Jose State's West says, "It would be a real hard sell in the Valley."


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