The road to long-term economic recovery lies in the nation’s ability to create innovative technologies that will result in tomorrow’s jobs.
That was the philosophy behind President Obama’s call to make permanent for U.S. corporations a research and development tax credit that has been extended yearly since 1981.
“I … believe that government should do for the people what they cannot do better for themselves,” Obama said in a September speech. “And that means making the long-term investments in this country’s future that individuals and corporations can’t make on their own: investments in education and clean energy, in basic research and technology and infrastructure.”
The private sector needs incentives because companies don’t do “long-term” very well, said one industry technologist. Short-term pressures to make profits often force companies to be more risk averse.
“It’s something corporations struggle with because nobody wants to invest in the long term anymore,” said Ed Campbell, executive vice president of Raytheon BBN Technologies.
“Certainly in the country there is a lack of patience for letting technology develop,” he added.
“You look around for some of the corporate labs that used to exist. Many of them don’t exist anymore.”
Three companies that work in the defense sector and have a reputation for coming up with innovative technologies — BBN, Rockwell Collins and FLIR — were asked how they invest in long-term projects that may or may not lead to new products.
Company representatives all said they did not rely solely on government contracts from service laboratories or other agencies to lead their research and development efforts. And all said they plowed portions of their profits back into long-term R&D projects. However, none were willing to go into blind alleys. At the end of the day, there has to be something they can sell.
John Miller, director of the Army Research Laboratory, explained how the synergies between industry and the military work, and how they have benefited both sectors, and society at large.
Many ubiquitous technologies widely used today were originally funded by Defense Department investments in basic research that came out of Defense Advanced Research Projects Agency or the service laboratories. Specialized materials found in personal electronics such as cell phones are examples. The private sector — after seeing that the developmental risk had been reduced — adapted the technology for everyday use and sold it in the commercial
market.
“Many of these [materials] early on in their development were initially pushed by investments from the DoD,” he told an industry conference.
Today, these handheld devices are less expensive for the military services to buy because they are produced in mass quantities and their prices are lower.
Company representatives said they have to know there is a gap that needs to be filled and a customer waiting for a product before they roll the dice on undeveloped technologies.
David Strong, vice president of marketing at FLIR Systems Inc., said, “Everything we do is 100 percent focused on getting real products in production volumes and into the hands of customers.”
FLIR began as a company that sold its sensor systems and cameras to foreign markets. Overseas customers generally do not have the big research and development programs that are found in the U.S. defense and intelligence sectors. Early on, the company had to rely on its own labs to do its research.
“We gladly accept government funding, but the vast majority of our R&D funding comes from our own revenues,” Strong said. Roughly 10 percent of its profits are put back in its research and development centers, he added.
About half of the 18 percent of revenues Rockwell Collins spends on developing new technologies comes from its own profits. The rest comes from government contracts, said Barry Alexia, director of strategic technology concepts at the company.
Its researchers look three to five years out for promising new technologies that they think the company could support.
“We look at our internal technology roadmaps and identify gaps. We also sit down with customers, and we identify their technology gaps … We develop a push-and-pull scenario,” Alexia said.
BBN Technologies, a company started by four Massachusetts Institute of Technology professors in 1948, is best known for its work with DARPA, and its early involvement in ARPANET, which over the years became the Internet.
Before that revolutionary technology could spring forth from Defense Department projects, there had to be some basic research. The Defense Department defines this as investigations that may not have any specific application in mind and that look into the general understanding of the fundamental aspects of the universe.
The Jasons, a group of top defense thinkers who advise the military on science, technology and other issues, wrote a report that criticized the Defense Department for drifting away from basic research and sinking money allocated for it into projects that come under the “applied research” category (See story
here).
Basic research is the foundation of all the technologies that eventually emerge from laboratories and the private sector, the group asserted.
Campbell said: “Basic research is nice but if it ends up in a journal article somewhere, it is not as valuable unless you find out what the practical application for that breakthrough is.” Companies need to ask: What is the benefit to the human race?
BBN has contractual agreements with about 65 universities throughout the world that conduct basic research. It looks for ways to translate the work that goes into the scientific journals into real products.
“A lot of people confuse innovation with profitability. That if you’re going to be innovative, it must mean you’re going to make money in the near future,” Campbell said. “That’s not necessarily so.”
Identifying the gaps doesn’t always mean following the lead of the Defense Department, he said. One of the BBN’s more successful products was the Boomerang sniper detection system. At the time of its development prior to 9/11, no one was clamoring for such a device. The company took basic research into shockwave detection and applied it to a system that can detect gunfire and tell soldiers the direction from where it came.
“Too many people in the world today are risk averse,” Campbell said. “You use your best knowledge at hand, you put your faith in the people you have hired and you place your bet down that they are going to get you somewhere — whether it is this year, five years from now or 10 years from now.”
He believes that basic research is best left for universities and organizations such as the National Science Foundation. Government — since it does not have the pressure of creating profits — can be more patient.
Alexia said the pull from the Defense Department labs of late has grown farther away from individual items. Increasingly, they are asking for a holistic approach to research and development.
“I think with the constraints with the budgets that are out there — and the need to get something into the war fighters’ hands yesterday versus tomorrow — they are looking at more of a technology systems approach,” he said.
Whereas in the past, Rockwell Collins might have been asked to design and develop a new radio, DARPA, the service’s labs and the intelligence communities are asking contractors to marry that radio with other technologies.
Rockwell Collins recently participated in a program that integrated several previously developed computer, communication and biometric technologies into a demonstration to see if facial, fingerprint and other data taken from potential “bad guys” could be processed and transmitted quicker from the field to a higher headquarters.
That systems approach, he admits, can be antithetical. These individual technologies that are being integrated must come from somewhere. Nevertheless, this new trend plays into the strengths of the company, he added.
Strong said if there is less money available for “high-risk, mega-programs,” that’s just fine with FLIR. Since the company is more about developing its own products and pushing them to the market, instead of waiting for customers to pull it in their direction, the firm will continue taking risks.
“We’re very practical and focused,” he said. FLIR’s efforts to develop the high-definition Star Safire electro-optical/infrared system came from the company’s own belief that there was a need for HD in the surveillance marketplace. In order to produce the sensors, it had to create some new technologies and “do some things that not only had we never done before, but nobody else had done before.”
There have been some dead ends. About 20 years ago, FLIR spent some of its own money in an effort to produce tank gun sight technologies. That didn’t pay off, yet some of the work decades later was used in a updated M36 tank sighting sensor.
As for the future, Alexia said he sees more investment coming in meta-materials. Rockwell Collins sees promise in devices using this technology that could make communications easier. For example, instead of having many radio-spectrum bands emitting from a tower with several dishes made from different materials, all could be combined into one.
Cybersecurity has received relatively little research and development funding so far, he added. It has come in “fits and starts from the government.”
The technology is still in the developmental stage. “You can’t go to the shelf and find all the answers to all the problems. It’s just not out there yet.”
Campbell said BBN is investing its own dime into highly specialized equipment that will help it develop products that apply quantum physics to problems. This does require more basic R&D, he added. The company has received a few federal contracts to research the highly complex field “that takes everything you learned in physics class and tosses it out the window.”
Quantum mechanics can be a hard concept for many to wrap their heads around, he admits. It is the study of time and space. Imagine, for example, slicing photons of light and using many of its splinters to replace “1s and 0s” in computer programs.
Most of the work on quantum mechanics is being funded outside the United States, Campbell noted. “There is not a whole lot of [U.S.] money going into quantum research.” The company is willing to bet some of its R&D budget on purchasing the equipment needed to pursue this because it expects research to continue for the next two decades.
Too much of the military research and development community is mired in Cold War thinking where projects took decades to come to fruition, Campbell added. The nation must be more nimble.
“The threat changes constantly on you. We’ve got to do a better job of taking the innovation that we do have and finding ways to bring that out into the world so we can validate it and push it forward,” Campbell said.