The first day of MIT Technology Review's Emerging Technology Conference - and already the morning panel is feeling it. On stage is Uma Chowdry, Paul Horn, and Bob Tepper - and they are delivering gems. Paul Horn opens...

Paul Horn
How does IBM view R&D in the current climate of super-agile markets?
IBM spends 5.5bil per year on R&D. If information technology has become a mass commodity then why is that? We invest because the returns are promising for investors, for IBM, and for our customers. We invest because that is the single-most successful approach to innovation. Lou Gerster once said, "Innovate - or you are in commodity hell."

You must learn to dintinguish between innovation and invention. Both are important, but in the end only successful inventions are innovations. Bell Labs was superb at invention; they sucked at providing their parent company marketable inventions. Xerox PARC - same thing - had no channels into marketplace.

Channels are the life blood of innovation. Do research, not just development. They are misundertood as conjoined. Go out and ask the industry how to solve real-world problems.

What happens to basic research?
IBM still does basic research (nanotech, quantum mechanics, biotech); why? That fosters many elements of innovation: identifies channel-voids, builds university relationships...we do it in an environment where IBM can benefit quickly. Take an example: Blue Gene is now world-fastest computer. That started 5 yrs ago. We explored a comp sci project w/ a university to fundamentally change how you compute. Through that basic research Blue Gene was able to get into the real-world. And the value: Blue Gene takes fraction of power as compared with Earth Simulator.

Exploratory work is compatible w/ real-world marketplace. You must learn to focus on your most promising research. Coming from top down and bottom up - you have to put researchers in front of market, customers.

Uma Chowdry
Dupont has had a quiete transformation as they enter into bio-based materials. 1900s lesson: innovate technology into marketplace - not into a lab folder. Our bio-based economy vision: transform from fossil fuel to renewable energy (crops, biomass, etc.) - and our answer is bio catalysis.

How do we incorporate R&D? Top management must have unwaivering commitment to vision and strategy. You must have clarity of market defition. You must have real-world options framework.

The panel continued with many important facts - but the major take-away is that success is still based on content. You cannot (for long) fake innovation. And innovation is the only way to make a market.