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Suggested Citation:"12 Panel Discussion." National Research Council. 2003. Reducing the Time from Basic Research to Innovation in the Chemical Sciences: A Workshop Report to the Chemical Sciences Roundtable. Washington, DC: The National Academies Press. doi: 10.17226/10676.
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Suggested Citation:"12 Panel Discussion." National Research Council. 2003. Reducing the Time from Basic Research to Innovation in the Chemical Sciences: A Workshop Report to the Chemical Sciences Roundtable. Washington, DC: The National Academies Press. doi: 10.17226/10676.
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Suggested Citation:"12 Panel Discussion." National Research Council. 2003. Reducing the Time from Basic Research to Innovation in the Chemical Sciences: A Workshop Report to the Chemical Sciences Roundtable. Washington, DC: The National Academies Press. doi: 10.17226/10676.
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Suggested Citation:"12 Panel Discussion." National Research Council. 2003. Reducing the Time from Basic Research to Innovation in the Chemical Sciences: A Workshop Report to the Chemical Sciences Roundtable. Washington, DC: The National Academies Press. doi: 10.17226/10676.
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Suggested Citation:"12 Panel Discussion." National Research Council. 2003. Reducing the Time from Basic Research to Innovation in the Chemical Sciences: A Workshop Report to the Chemical Sciences Roundtable. Washington, DC: The National Academies Press. doi: 10.17226/10676.
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Suggested Citation:"12 Panel Discussion." National Research Council. 2003. Reducing the Time from Basic Research to Innovation in the Chemical Sciences: A Workshop Report to the Chemical Sciences Roundtable. Washington, DC: The National Academies Press. doi: 10.17226/10676.
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Suggested Citation:"12 Panel Discussion." National Research Council. 2003. Reducing the Time from Basic Research to Innovation in the Chemical Sciences: A Workshop Report to the Chemical Sciences Roundtable. Washington, DC: The National Academies Press. doi: 10.17226/10676.
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Suggested Citation:"12 Panel Discussion." National Research Council. 2003. Reducing the Time from Basic Research to Innovation in the Chemical Sciences: A Workshop Report to the Chemical Sciences Roundtable. Washington, DC: The National Academies Press. doi: 10.17226/10676.
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Suggested Citation:"12 Panel Discussion." National Research Council. 2003. Reducing the Time from Basic Research to Innovation in the Chemical Sciences: A Workshop Report to the Chemical Sciences Roundtable. Washington, DC: The National Academies Press. doi: 10.17226/10676.
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Suggested Citation:"12 Panel Discussion." National Research Council. 2003. Reducing the Time from Basic Research to Innovation in the Chemical Sciences: A Workshop Report to the Chemical Sciences Roundtable. Washington, DC: The National Academies Press. doi: 10.17226/10676.
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Suggested Citation:"12 Panel Discussion." National Research Council. 2003. Reducing the Time from Basic Research to Innovation in the Chemical Sciences: A Workshop Report to the Chemical Sciences Roundtable. Washington, DC: The National Academies Press. doi: 10.17226/10676.
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Suggested Citation:"12 Panel Discussion." National Research Council. 2003. Reducing the Time from Basic Research to Innovation in the Chemical Sciences: A Workshop Report to the Chemical Sciences Roundtable. Washington, DC: The National Academies Press. doi: 10.17226/10676.
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Suggested Citation:"12 Panel Discussion." National Research Council. 2003. Reducing the Time from Basic Research to Innovation in the Chemical Sciences: A Workshop Report to the Chemical Sciences Roundtable. Washington, DC: The National Academies Press. doi: 10.17226/10676.
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106 REDUCING THE TIME FROM BASIC RESEARCH TO INNOVATION IN THE CHEMICAL SCIENCES 12 Panel Discussion Andrew Kaldor, ExxonMobil: This last session is an experiment to turn the meeting over to the audience and let you provide the appropriate ending. We wanted to see whether there was an interest in some impromptu presentations stimulated by the discussion, and Parry Norling has volunteered to give us a brief discussion on innovation in the public sector. When Parry is finished, the speakers who are here can join us at the front of the room. I have some questions that have been given to me by the audience through notes and discussion. I suggest that we walk our way through those questions. I will moderate the discussion, and I remind the speakers to address these questions as their interest dictates. Also, I encourage the speakers to ask questions of each other, since I am sure there were some issues of interest raised. Parry M. Norling, RAND: What can we say about innovation in the public sector? A government agency recently asked RAND how it might be more innovative in all the work it does, not only in research and development (R&D), and requested some case studies of a number of public- and private- sector organizations known to be quite innovative. We are trying to answer the following questions: Can a government agency be more innovative? Are the best practices and lessons such as we have been discussing today useful? Are lessons learned from innovative organizations in the private sector transferable to the public sector and vice versa? The barriers to innovation in government have been recognized for centuries. Many years ago, Machiavelli wrote: “There is nothing more difficult . . . , more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. Because the innovator has for enemies all those who have done well under the old conditions, and luke warm defenders in those who may do well under the new. This coolness arises partly from fear of opponents who have the laws on their side and partly from the incredulity of men, who do not readily believe in new things until they have had a long experience of them.”1 1Machiavelli. 1515. The Prince. Chapter VI. 106

PANEL DISCUSSION 107 Today’s perils have been pointed out by Paul C. Light in his study of 26 innovative organizations in Minnesota: “Imagine the worst possible circumstances for sustaining innovation in the public sector. The external environment would have unrelenting turbulence and unending shocks. The non-profit and government organizations would be constantly guessing about the next crisis, thereby increasing the risks associated with investing whatever scarce resources they might have in innovation. There would be public cynicism. Collaboration among organizations would be discouraged by pitting one against another through categorical funding programs and by reducing the discretionary dollars for true experimentation. The worst possible scenario for innovation in the public sector would also have implementable internal structures and countless other barriers to innovation.”2 At RAND we have been trying to describe and analyze systems and models for innovation in the select group of public and private organizations. We chose to study the U.S. Customs Service, the Food and Drug Administration, the Veterans Health Administration, Procter & Gamble, DuPont, and Marriott (and also had discussions with the National Institute of Standards and Technology and Rohm and Haas). We are still in the middle of this study and analysis and have given one briefing to the sponsoring agency with our findings. A number of interventions similar to those in the six organizations appear to be practical and may be adopted by the agency. Our report will be published in November and should be available on the RAND website.3 Andrew Kaldor: Will the panel members please join us up front? I will read the question from here. One questions was: Are there ways to overcome the distance effect on collaboration? Elsa Reichmanis, Lucent Technologies: I have had some direct experience with long-distance collaborations. In one collaboration we had a joint R&D program with a company located in Switzerland, and in another we collaborated with a company located on the East Coast, only a few hours away from our location. In both cases the initial few meetings were face to face, which helped with the social aspects of the project. Because we had the chance to get to know each other, it was much easier to pick up the phone and talk to the relevant researchers in either organization to get information and understand what was going on. Daily e-mail communication helped us stay informed of progress. Michael Schrage, Massachusetts Institute of Technology: One of the seductive dangers of technology is to believe that you can substitute bandwidth for presence. I think it is demonstrably clear that this is not true, and I find it ironic that we waste so much time on teleconferencing and video conferencing. I think we need to define the word “collaboration.” It is not a catchall. Do we mean an informal chat? Do we mean three people brainstorming around a particular model or representation? I am especially looking forward to seeing how different groups and different organizations develop a more refined and sophisticated definition of the word “collaboration.” Francis A. Via, Fairfield Resources, Inc.: The last few years at GE we focused on enhancing and improving long-distance collaboration involving global R&D teams working on specific technical goals. A system was being established to electronically monitor experiments that were being conducted at remote sites—for example, test trials in Bangalore, India, could be “observed” from laboratories conducting related work in Schenectady, New York. One concern rose rather quickly, that of the 2Paul C. Light. 1998. Sustaining Innovation: Creating Nonprofit and Government Organizations that Innovate Naturally. San Francisco: Jossey Bass. 3<http://www.rand.org/>

108 REDUCING THE TIME FROM BASIC RESEARCH TO INNOVATION IN THE CHEMICAL SCIENCES scientists needing “space” to review experimental results before a wideband broadcast occurs; others were personal concerns over the potential for displaying test failures on a daily and hourly basis. As we are witnessing, technology is increasing our ability to exchange information and to enhance collaboration. Nonetheless, there remain personal issues related to the methods for reviewing or controlling information. There are many challenges associated with long-distance collaboration. As Allen Clamen pointed out, there is a growing variety of techniques becoming available, but few things are as useful as face-to- face contact on a periodic basis to build trust over time. Another important issue impacting collaboration is the economic environment: during an expanding economic environment collaborations are more readily fostered, while despite policies, strategies, or technologies, a contracting economic environment represents barriers and challenges to collaboration. Venkat Venkatasubramanian, Purdue University: I want to follow up on Elsa’s comments. All three projects I have worked on in the design area involved very strong collaborative work with our industrial counterparts with periodic exchanges of people. One of the advantages of being at a university is that the students can act as photons, mediating exchange. So we would send our photons out to spend 2 weeks to 2 months learning the details of technology transfer. Having the students as a medium to go back and forth made a big difference in learning the complexities of the problem and aided in transferring knowledge from our side into industrial practice on the shop floor. Allen Clamen, ExxonMobil (retired): I agree with Michael that collaboration has many different forms. I am intrigued by the way needs and solutions find each other. I think the challenge we have at the very early stages in the idea management process is to find information within or even outside the organization that could make immature ideas more robust and attractive, which will persuade others that the ideas are worth pursuing. I have heard that companies have done this by having a profile for each and every organizational member with their interests and their experience base on the company’s Intranet. An idea that enters the database might be read by an individual and stimulate him or her to add to or enrich the idea and make it much more likely to have a successful evaluation and more significance. Participant: I could give both good examples and bad examples. The best example I recall was when GE had a telecom product that was being installed in Japan at the same time we had a collaboration with Ericsson in Stockholm. A problem that would appear at the end of the day in Tokyo was sent to Lynchburg, Virginia, to be solved. The solution was then validated in Stockholm, and when the engineer returned in the morning in Tokyo, the answer was on his desk. It was very exciting. And no one told them to do that. The engineers just devised this technique themselves. Most of the great innovations don’t come from great professors thinking about great thoughts, but rather from those for whom practicality is important. One example of poor collaboration is the global failure of telecom to improve teleconferencing technology. Let me ask Michael about research at the Massachusetts Institute of Technology (MIT) Media Lab. Could you postulate a time when technology really will make a difference in long-distance collaboration? For example, what would happen if I had a screen right beside my desk that would show my buddy all the time, just as I would see a colleague in another cubicle. Of course, there is always the time zone problem. Regardless, it is currently unthinkable that at some point you should be able to have the kind of relationship with someone in Chicago, down the street, or more than 90 feet away that you would have with someone who is next door.

PANEL DISCUSSION 109 Michael Schrage: The transmission of presence research was funded by the Advanced Research Projects Agency (ARPA) at the Media Lab more than 20 years ago. We do have ubiquitous technology that allows a person to be with you all the time. They are called cell phones. There is no longer such a thing as an uninterrupted conversation. I have found that even though we love face-to-face meetings, the most important thing in terms of productivity and collaboration is the transmission of the work as opposed to the transmission of the people. It is very rare that you need to see the individual. However, you do need pointing capabilities, highlighting capabilities, and annotation capabilities. The notion of collaboration around work versus collaboration between individuals strikes me as one of the ways that we will see different tool sets evolve to support those kinds of interactions. Thus, while I accept your premise, I really believe that enterprises are going to focus on things like instrumenting experiments and design representations, as opposed to substituting for this kind of face-to-face interaction. Participant: I am astonished that you believe the person can be separated from the work. I have many counterexamples. When I was at GE working on magnetic resonance imaging, we had Japanese collaborators who were part of a subsidiary of GE. They were not strangers, but they came to the United States, worked in our laboratory, and were seen at night making phone calls to Tokyo. All the wrong conclusions were drawn. We thought that somehow they were stealing our stuff and the situation was horrible. It was just paranoia on our part. You can imagine the lack of sharing of data that then ensued because people just didn’t trust each other. Elsa Reichmanis: I think that raises a point of needing to have trust and respect, in addition to communication among the group of people who are working together on a body of work. Andrew Kaldor: I agree. I think face-to-face contact is needed to build up a trust. Then you can try to share information. Lawrence H. Dubois, SRI International: There are three broad recommendations that I came up with to stimulate some discussion. One falls into the class of focusing on important problems and not just interesting problems. The focus should be on something that is big, important, and will make a difference. In the university setting, working on an important problem makes the research much more relevant to students because they are working on something that has some value. You have much more relevance to the government funding agencies, potential industrial investments in research infrastructure, and an increased potential for economic return, which is the key to getting the technology out of the laboratory and into the marketplace. Whether it is in the chemical industry, pharmaceutical industry, or others, this starts a positive feedback loop. Michael Schrage: I am concerned about the word “important.” The biggest arguments tend to be about “important” things because by definition what I do is important. Unfortunately, you may disagree with my definition. Is there anything you feel that you have learned at the Defense Advanced Research Projects Agency (DARPA) that is very good at quickly reaching consensus as to what important means? Lawrence H. Dubois: Using DARPA as an example, what are some of the critical issues facing the safety of the nation today? I think a lot of people would say biological warfare defense is an issue we may have to deal with. You will get some consensus with that issue.

110 REDUCING THE TIME FROM BASIC RESEARCH TO INNOVATION IN THE CHEMICAL SCIENCES Michael Schrage: You picked the perfect example. I am going to postulate that the single most important thing that must be done for biological warfare is prevention and immunization because prophylactic cures would be administered too late to save patients. I want to overemphasize vaccination and underemphasize therapeutics. I can see a very serious debate about which approach is best. We agree that biological warfare is a big problem, but what is the tradeoff between prevention, prophylactic, and cure? Lawrence H. Dubois: I think that is a very good question, and it certainly is open to a wider debate. Putting all your eggs in one basket is probably the wrong thing to do, however. You can look at the possibilities of success in different areas to determine where to put your money or effort, but because the probability and timing of an attack are uncertain, it is necessary to act in the shorter term. Andrew Kaldor: But, Larry, do you have a thought on how you accomplish portfolio management in the public sector? Lawrence H. Dubois: I think it is necessary to look at a portfolio across all of government. Again, let’s use this example of biological warfare defense. There clearly has to be something in the upper right- hand corner that is of the high-reward nature. Let’s forget about risk for a moment. Risk is the price paid for the high reward. The focus has to be on the reward, not on taking risk. There is also a need to go out there and buy gas masks for people, stockpile therapeutics, and take other low-risk precautions, which would have a very high payoff if there were an attack in the near future. This doesn’t mean that one agency or one organization has to cover the entire spectrum. In fact, different organizations have expertise in different areas. So it is helpful to involve an organization that knows how to do logistics, that knows how to stockpile and distribute, and that knows how to do higher- risk activities. Francis A. Via: The concept of developing a portfolio for the public sector (government-funded research) has been extensively debated, especially within the National Science Foundation and the academic community. Yesterday it was asked whether there is something equivalent to the Semiconductor Manufacturing Technology group in the chemical industry. A number of us have participated in a technology road map development exercise for the chemical industry titled Technology Vision 2020: The U.S. Chemical Industry. Representatives from the three sectors of the research enterprise with an emphasis on leadership and guidance from industry participated in workshops that included representatives from government funding agencies. The workshops were held to define technical needs and develop outlines for high-risk research programs in critical technologies, including catalysts, processes, separations, analysis, measurements, engineering, and modeling. The current focus of this activity is on the effective definition and implementation of the Vision 2020 challenges. The Department of Energy and in particular the Office of Industrial Technology is leading this experiment for funding-focused R&D with emphasis on knowledge integration for energy savings and economic impact. Lawrence H. Dubois: My second recommendation for portfolio management in the public sector is to focus on your goal and work backwards. Probably the most controversial is the third recommendation that entails empowering funding sources. This means giving funding sources not only the responsibility to accomplish something but also the authority to do it. For those of you who have spent time in Washington, you realize that those two things don’t necessarily come together. One of the advantages of spending time at DARPA was having both the responsibility and the authority.

PANEL DISCUSSION 111 You need to have clear priorities, well-defined goals, and a mixed portfolio of strategic, tactical, directed, and global R&D. What is the right relationship between individual investigators and big groups? What is the right distribution between spending money on equipment and spending money on salaries? What about small science versus big science? There are a lot of questions that will require people to think and really work the issues, as opposed to somebody in Congress making a decision based on constituent input. Ultimately, I think we have to end some programs. DARPA does it. I think other organizations need to do it as well. That is the only way we are going to start new projects because the budgets are not going to keep growing forever. Participant: I am used to the corporate environment where I knew the rules. I had to show how I provide long-term value for my research. The thing that strikes me about funding in the public sector is that there is overspecification of what the terms and conditions are for me to do my research. It is not the money that is customized to help me do my job. I have to maneuver my job to fit some smart person’s ideas of what I should be doing and how I should be doing it. This is true not only of applying for government money but also of applying for foundation funding. Everyone has his or her own idea. This is not an optimum way of doing research. I wouldn’t empower the funders. I would empower the fundees, the people receiving the money. Lawrence H. Dubois: In part, the issue depends on whether you are working in a mission-oriented agency that has a responsibility to accomplish something. Then you have got to decide what it is you want to accomplish. Participant: No one would object to that. My objection is to how you do it. Lawrence H. Dubois: Clearly, you have to tailor what it is you are trying to do technically with the ultimate goals of the organization. This takes somebody who is a proactive decision maker, not a passive bureaucrat. Participant: Proactive can mean talking to the funder and helping the funder accomplish its major technical goal without saying how to do it. Robert A. Beyerlein, National Institute of Standards and Technology: Although Larry has some very good ideas and insights on the overarching issue of empowering funding sources, I have a great skepticism about the desirability of giving those of us in Washington the responsibility to decide and implement what is important in the technical, academic, and industrial communities. I wonder if it isn’t better for those in such positions to keep our ears close to the ground, to go to meetings, to rub shoulders with the technical and industrial communities, and to distill as best we can what they are telling us is important. Lawrence H. Dubois: As a DARPA program manager, that is exactly what you are supposed to do: go out and discover what is important, find the new ideas. But there is also a need for some healthy skepticism. If you are funded today, you want your funding to continue. Of course, you are going to tell your program manager, program director, or agency that the research you are doing is by far the best and ought to be continued. There needs to be a healthy skepticism. Some people may have been doing the same thing for the past 27 years. They might have been making progress in the past, but things might have changed.

112 REDUCING THE TIME FROM BASIC RESEARCH TO INNOVATION IN THE CHEMICAL SCIENCES Francis A. Via: The efficiency of the funding process is a challenge that is impacting the continued progress of science. The resources consumed to secure funding have been increasing and exceed most commonly accepted estimates of 25 to 45 percent of a principal investigator’s time at some of our national labs. That does not mean everybody should be funded or that we should have more money for funding, although the latter topic should be receiving greater attention. Rather, it would represent a beneficial contribution to the national research infrastructure if these workshops could more actively contribute, in some fashion, to increasing the efficiency of the funding process so that science is the winner in these processes. Lawrence H. Dubois: In the defense sciences office at DARPA, we tried to minimize the pain and time associated with writing proposals. We put out a solicitation asking for a 4- to 6-page abstract with a basic budget describing what was planned for year 1, year 2, and year 3. Then we flagged the better abstracts and asked the authors for full proposals. This is the time-consuming part of the fund-seeking process. With this system the success rate at the full proposal level was 40 to 50 percent. This really minimized the time and effort it took people looking for funds and is now starting to be used more often. J. Stewart Witzeman, Eastman Chemical Company: Projects that are often presented as market- driven research can, if done incorrectly, be incremental or force a silo because companies that are built on platforms of technology are no longer worrying about platforms. Instead, they are worrying about specific niches or applications and are not building the breakthrough technologies that might help them continue to be great. While market-driven research often sounds good in practice, it can be misused or it leads companies, once they become established, to lack innovation. The question to put in front of the panel is whether there are any ways that companies can address that possibility so that they don’t fall into this incrementalism. Elsa Reichmanis: We have a broad range of activities, from very focused technology research activities that are very near to product implementation in the marketplace to very long-term fundamental research activities. Across the entire continuum of activity, we are also trying to build relationships and understanding along all aspects of the business. We aim to have a shared understanding of where the needs are and an understanding of the value of the fundamental activity between the business and research communities. I think it boils down to having good communication systems in place for person-to-person interactions and to having communications (not the technology of it) so that there is trust and respect among all parts of the organization. This enables a silo to be avoided. Michael Schrage: I take slight issue with that. Portfolio management is a vehicle to manage risk. How many of you have money in index funds? It should be the bulk of your investments because index funds are the safest kind. If the market goes up, you are protected. If the market goes down, you are not going to do significantly better or worse. Innovators are inherently betting on the unbalanced portfolios. If they bet on the index, they will perform at the median within a standard deviation of how the industry group is doing. Why are so many organizations seemingly disproportionately investing in one incremental innovation? Breakthrough innovation has become even riskier because you can call something a breakthrough, but you don’t get to determine what a breakthrough is. You get to determine what a technical breakthrough is. It is your customers that determine whether it is a business breakthrough. This problem will never be solved because we can’t predict the future. That is why we have a diversified portfolio.

PANEL DISCUSSION 113 Participant: Businesses should avoid being lock-stepped with their customers. Often they don’t have very many customers, and their fortunes are tied very closely to their customers. If you do have a new idea that is not in the line of your present market, take it out of your company. Set it up separately so the project is not infected by the local culture, which doesn’t allow anything beyond the norm. Move the idea to one side, set up a warehouse somewhere, and do it. Universities are another area where new ideas can be found that are worth funding. As an acquisition strategy, look for small companies for which you provide value, such as distribution. You may provide some good marketing information to them, but your new project should be a whole new technology. Get on the board of some small company and pay attention to that. Our economy is so diverse. There are so many interesting ideas buzzing around that recognizing the good ones requires paying attention. Do not be blinded by what you have today and assume it is going to be there tomorrow. Ned D. Heindel, Lehigh University: I wanted to make a comment about innovation with respect to the attendees at this meeting. I think if you walked around at the social hours and read our badges, you would find that the academic institutions represented among the attendees are Stevens, Youngstown, Alabama, Arkansas, Lehigh, and Maine. Are those schools Ivys? Are those places Big Tens? Are those America’s leading schools? The answer is “no.” Now, we do have the MIT and California Institute of Technology folks on the panel. I would argue that in innovation and in the drive to move academic technologies to industry, the second- and third-tier universities are inherently more aggressive or at least would like to be more aggressive than the first-tier universities in this. Frankly, all of our administrators hope that there is a Gatorade or a cis-platinum in their future. Among the distribution sites I would hope we would consider for the ultimate output of this conference are the second- and third-tier academia. I don’t think MIT and Harvard University need to know what we have said here. If they did know it, they wouldn’t change their policies anyway. I can tell you that when industry approaches academia with a request to create things, it is the less famous universities that are willing to give away much of the intellectual property. At Lehigh, in return for 10 fully supported graduate students working on a project on printability, adhesion, and tacticity, we’re assigning the rights to a Fortune 500 chemical company. Additionally, an employee has come from that company to become a Lehigh professor, paid for by the company. I could cite other instances of industry-friendly activities like that at the Illinois Institute of Technology and Washington State University. There are much more aggressive attempts to innovate to the mutual benefit of the company and the university in second- and third-tier schools. I hear all this grousing about the difficulty corporate representatives have had negotiating contracts with MIT. Well, come to Bethlehem, Pennsylvania, and we will make it easier for you. Mary L. Mandich, Lucent Technologies: I have a question directed toward Michael, about the comparison of innovation and research with stocks. Maybe I am overly influenced by a book called Stocks for the Long Run, by Jeremy J. Siegel and Peter L. Bernstein, but the basic point of that book was that you would make the most money in the long run not if you tried to find one stock that would do superbly well, but if you backed really good horses. There is a dichotomy of market-driven research that will make a lot of money versus the fundamental belief that innovation is the way to go. I see a conflict there, and maybe you can resolve it better than I can. Michael Schrage: The most important thing is that I am making an analogy between innovation and the stock market. They both involve investments. They are not isomorphic, but you have hit on something

114 REDUCING THE TIME FROM BASIC RESEARCH TO INNOVATION IN THE CHEMICAL SCIENCES that was a startling revelation for me. It probably is less of a startling revelation for the people who began on the business side. I grew up in a household believing that innovative ideas will do better in the marketplace, that innovation gets rewarded, and that people will pay a premium for innovation. They don’t. People pay a premium for some innovations, but they expect other innovations to be given for free. I thought that attitude was the exception, but in the chemical industry it turns out to be the rule. I think that one of the most painful things for people who are technically excellent to adjust to is the fact that the peer review market will pay a premium for innovation in recognition, rewards, and medals. But the marketplace where people actually pay dollars and euros will not. I believe that because so many organizations are well positioned to be fast followers, as opposed to innovators. Customers in certain market segments are counting the value of innovation. They know that if they wait a year or two, another company is going to be in the market with 80 percent of the functionality at 50 percent of the cost. Then the question is not whether we wait but how long we should wait. This isn’t true in the electronics business. I wonder whether the expectations of faster, better, and cheaper products from followers in 6 to 18 months have led to the fact that innovation becomes less valuable. Look at market signals. It is not an accident that pharmaceutical companies are now spending more on marketing and advertising than on R&D; they want consumers to pay attention to them so they will pay a premium for these expensive drugs that have been developed. I want to make absolutely clear that just because somebody tells you what their needs are doesn’t mean they are going to pay you for satisfying them. I think that a lot of needs analysis is fundamentally misdirected. The problem with innovation is that it is not that you pay for solving the needs, but you get a premium because the risk for this is the price you pay. There has to be a premium to the risk born by the inventor. Allen Clamen: Yes, but the market-driven research determines whether people will pay a premium for this improvement. It isn’t just determining what you need and getting it to you regardless of the fact that you won’t pay for it. What do you need and how valuable is it? What will it allow you to do and how much money will it save you or provide to your customer? What is the value proposition? That is part of market research. David E. Nikles, University of Alabama: I would like to change the subject to roadblocks, but first I have a disclaimer. I fully believe in health and safety and in educating my students to be professionals, but one thing that I have worried about for the past 15 years is the intrusion of regulatory health and safety into the laboratory. I spent a month in 1990 bar code labeling all my chemicals, and then my managers wanted to get the chemicals out of my laboratory. Recently at the university, somebody said I couldn’t take a chemical from my laboratory out of the chemistry building because it could be used as a terrorist weapon. Do we want our scientists bogged down with all of this intrusion of regulation into the innovation process? I think everyone would react by thinking, “Of course, we have to do it,” but such regulation does not exist worldwide. When I raise these issues, it is heresy to our health and safety establishment at the university. Are we going to have American scientists tied up, dealing with the audit trails that show that they are safe and limiting their ability to innovate? Sooner or later there will be a rule that prohibits chemicals in the laboratory.

PANEL DISCUSSION 115 Allen Clamen: In the corporate environment we have been living with that all along. You are talking about the university catching up to the corporate environment. That is not such a bad thing because many of those students will end up in industry. David E. Nikles: I agree with that, but at some point do the regulations become so onerous that I am losing productivity and the benefit of the research? Elsa Reichmanis: I don’t really find that the regulations are so very onerous from my perspective in a research lab in industry. Now, we do have an organization in place that works with those issues and helps us meet the regulations. However, I think it is very important to work in a safe environment both for the individual and for the entire community. I would hate to be in a situation where the pollution level is through the roof compared to the United States, and hence the quality of life is lower. We are not going to have a safe environment without regulations. Venkat Venkatasubramanian: Half of my work involves in-process safety and monitoring of chemical plants to prevent Union Carbide kinds of incidents. Other countries are also catching up. Certainly, in India, for example, the number of regulations greatly increased after the Bopal incident, and people are much more concerned and aware of health, safety, and environmental issues. As society evolves, life is of increasingly higher value, and that is reflected in regulations. Participant: If you really want to get ahead of the game, invite DuPont in. DuPont is number 1 in safety, and its costs are lower because of the serious attention the company pays to safety. David J. Soderberg, BP Chemicals: I would like to give an industrial perspective on that. First, I will not do any work with any university that I consider to be unsafe for a very practical reason. If there is a liability inherent in the work being done, I do not want to be responsible financially or otherwise for the impact. In fact, when university professors and students come in, we give them training in our safety procedures. When we send people out to collaborators’ laboratories, our employees will actually perform a safety audit in that lab. That is very important. Second, I think it is a misconception to say that developing countries lack standards. That might be from some local industry and historical perspective, but certainly if you are putting a new plant on the ground in Taiwan, the authorities will expect you to comply with TA-Luft, the strict German Technical Directive for Air Pollution Abatement, which is among the toughest air quality legislation that industry has to comply with. It is actually tougher in some ways to establish foreign plants than some domestic plants. Participant: I want to make a comment on this particular issue because I worked in a national laboratory that changed from virtually unregulated to very tightly regulated between the mid-1980s and the late 1990s. Then I left the national laboratory and worked for DuPont for a little over a year, where safety was an important consideration. I observed that moving from an unregulated environment where this is not a consideration to a regulated environment where health and safety are important, there is a period of time during which this is disruptive, because you don’t have the mechanisms and the support structures in place to help you deal with it. People are very averse to change. This is human nature. When they are told to do something differently, their immediate response is to find all of the problems with the new method. Once people become used to the new methodology, once some of the legacy problems are dealt with, and once a support structure is in place, it becomes much less burdensome. I saw that occur. Initially, anything

116 REDUCING THE TIME FROM BASIC RESEARCH TO INNOVATION IN THE CHEMICAL SCIENCES could be poured down the sink. Then a paper towel with a small amount of acetone on it couldn’t be thrown in the trash after the acetone evaporated. Finally, regulations came back to a rational point and could be dealt with. The reality was that my work procedures in the national laboratory were not very different than the procedures at DuPont. DuPont did have a better infrastructure to help employees deal with regulated procedures. Therefore, I do not believe that health and safety issues are a burden on research. I think most industrial people who have worked in manufacturing find that in the end they actually help because of all the different ways they make processes more efficient and liability lower. Venkat Venkatasubramanian: I would like to comment on structured invention and innovation linked to reduced cycle time. I want to draw a distinction between the two kinds of inventions or discoveries, what I call structural and parametric changes. For example, you can go from A to B by car or by plane. These are two completely different modes of transportation. I would call them structural changes. The invention of the plane would be a structural change. Once the Wright Brothers created their plane, coming up with the Boeing 747 in my view is a parametric change. That is, you have the basic structure, but you try to optimize it for speed, efficiency, and so on. Development of road maps or structured innovation plans would probably work for parametric improvements around the structure, but the basic structure itself is unpredictable and cannot be regulated because the future cannot be predicted. Road maps can plan the incremental improvements, which lead to important changes, but they cannot plan breakthrough or leap frog types of discoveries.

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Innovation, the process by which fundamental research becomes a commercial product, is increasingly important in the chemical sciences and is changing the nature of research and development efforts in the United States. The workshop was held in response to requests to speed the R&D process and to rapidly evolve the patterns of interaction among industry, academe, and national laboratories. The report contains the authors' written version of the workshop presentations along with audience reaction.

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