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  • the convergence of wired and wireless networks throughout an enterprise and throughout the home

  • the expansion of intelligence and massive bandwidths to the edge of the Internet and into the home or enterprise

  • the development of multimedia data transfer for multiple providers (cable, telephone, wireless converging, competing, and offering content)

  • the development of low-cost devices and low-cost infrastructure for emerging economies that have different price points and applications than in the mature U.S. market

  • the ongoing development of software and middleware and increasing reusability

The absence of these research themes in U.S. academic R&D shows the complete disconnect between what companies see in their future (e.g., the corporate vision or road map) and what professors and graduate students in the United States are working on. I fear that professors are becoming increasingly isolated from “customers.”

R&D Initiatives by Major Companies

The discussion that follows briefly covers some of the major R&D initiatives of the corporations listed in Figure 1.1 In 2002, Alcatel made R&D investments in Canada, Australia, and China; in 2003, the company invested in R&D initiatives in Australia, France, and China. In fact, China appears on every company’s R&D investment list. Alcatel did not invest in the United States until 2007, when it purchased Lucent.

Only a small number of R&D projects by Cisco have been publicly announced. Cisco uses an open IETF model in developing much of its technology, but the company has opened centers in Japan, India, and Vietnam. Instead of funding basic R&D, Cisco typically buys 10 to 15 small companies per year. Ericsson, like most telecom companies, struggled for survival during the dot-com bust. Since then, it has managed to open an R&D facility in China.

Huawei has made investments in China (its home country), India, and Malaysia. The Malaysian government offers huge incentives to companies to locate jobs there, especially in telecom and manufacturing. For example, the government often pays the salaries of the first 100 or so engineers to help a company establish a beachhead.

Intel has not publicly announced any investments in R&D centers in the United States. The company has invested in China, Spain, and England. LG, a leading Korean company, established a U.S. facility in 2005, but its primary focus is in China, Korea (its home country), Italy, and France. Microsoft has announced one major U.S. investment, R&D initiatives in England, and a major investment in India. Motorola has been active in China, Brazil, and Denmark and, in 2005, made a major R&D investment in the United States.

NEC and Nokia both opened R&D centers in China. Nortel is investing in China, France, and India. Samsung made major R&D investments in China and Korea. Siemens made an R&D investment in Korea and is partnering with Nokia. UTStarcom, a Chinese company, is investing heavily in India for wireless infrastructure and for IPv6. ZTE, another Chinese company, is investing in its home country.

In summary, major telecommunications companies announced 57 major R&D initiatives in the past few years. Of these, only five were in the United States. Thirty-five, the overwhelming majority, were in Asian countries, where public policy and regulations are much more welcoming and where markets are experiencing higher growth rates. Twelve major R&D investments were made in Europe, more than twice as many as in the United States.

OBSERVATIONS

What can we learn from these data? First, R&D investments are going to high-growth countries. Second, multinational companies are investing in countries that have made telecom a priority, either through tax incentives, research-expenditure incentives, or other government policies. Businesses are going where there is less friction, because it makes good business sense.

We now see many foreign students who come to the United States to get educated in telecom return to their home countries. For example, of the Ph.D.s who graduate from our wireless center at the University of Texas, about half take jobs back in China, Korea, Pakistan, and India—something I haven’t seen in my career before.

That trend is not a bad thing in itself, but it points to the fact that the United States has lost its national focus on telecom, which is clearly not on the research agenda of the U.S. government or U.S. industry. When I look 10 to 15 years ahead, I am deeply concerned about what might happen in the United States. As the data clearly show, U.S. companies, rather than investing in the United States, are investing overseas and hiring overseas, for R&D positions.

Under these conditions, I wonder if, today, we could invent the Internet or cell phone technology. DARPA funded the Internet. NSF took over the build-out of the Internet to campuses across the country. This required a very long investment period, 10 years of funding, before there was even a hope of creating an Internet. Yet that stay-the-course, long-term research was a national policy by a government determined to develop a failsafe communications network that could survive and operate in a national emergency.

In the aftermath of the dot-com crash, we must rethink how U.S. corporations should engage with the U.S. government and with academia. We must ask ourselves how long the United States can continue to produce talent at home to build secure networks, defense networks, without the old



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