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Universities, Industry, and Government:
A Complex Partnership Yielding
Innovation and Leadership
One measure of the impact of investment in information technology research and development
is its contribution to the creation of numerous U.S. firms with annual revenues exceeding $1 billion
and of entire new sectors that contribute billions of dollars to the U.S. economy. 8 Many of these
firms are household names, and their products and services underpin the digital economy—and
indeed the economy more broadly. The combined estimated annual revenue of only the companies
listed on Figure 1 is nearly $500 billion (Table 1).
Figure 1, an update of the 1995 “tire tracks” figure9 and the intermediate 2003 version,10 illus-
trates, through examples, how fundamental research in IT, conducted in industry and universities,
has led to the introduction of entirely new product categories that ultimately became billion-dollar
industries. It reflects a complex research environment in which concurrent advances in multiple
subfields—in particular within computer science and engineering but extending into other fields,
too, from electrical engineering to psychology—have been mutually reinforcing, stimulating and
enabling one another and leading to vibrant, innovative industries exemplified by top-performing
U.S. firms.11 Figure 1 is of necessity incomplete and symbolic in nature; it would be impossible to
chart all of the important cumulative contributions of research and their links to today’s products,
firms, and industries. For example, Google could be thought of as having benefited from at least
three research areas—networking, parallel and distributed systems, and databases.
Listed in the bottom row of Figure 1 are areas where major investments in basic research in
subfields of computing and communications have had the impacts shown in the upper portions
of the figure. Not depicted but equally important is research on the theoretical and algorithmic
foundations of computing more broadly (Box 1). The vertical red tracks represent university-based
(and largely federally funded) research, and the blue tracks represent industry R&D (some of which
is also government funded). The dashed black lines indicate periods following the introduction
of significant commercial products resulting from this research, the green lines represent billion-
dollar-plus industries (by annual revenue) stemming from this research, and the thick green lines
represent achievement of multibillion-dollar markets by some of the industries. The top rows list
the present-day IT market segments and representative U.S. firms and products whose creation
was stimulated by the decades-long research represented by the red and blue vertical tracks.
2
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I T Sectors With Large Economic Impact
Motorola AMD Intel eBay Akamai Yahoo! IBM Electronic Arts
Qualcomm HP Symantec Juniper Facebook Twitter VMware HP Adobe Autodesk Nuance
Texas Instruments Microsoft XBox
nVidia Apple Cisco Amazon Oracle nVidia Pixar iRobot
iPhone Dell Google iPod Intuitive Surgical
Broadband Personal Internet Cloud Enterprise Entertainment Robotics & Assistive
& Mobile Microprocessors Computing & Web Computing Systems & Design Technologies
2010 2010
2005 2005
2000 2000
1995 1995
1990 1990
1985 1985
1980 1980
1975 1975
1970 1970
1965 1965
Digital Computer Software Networking Parallel & Databases Computer Graphics AI & Robotics
Communications Architecture Technologies Distributed Systems
Areas of Fundamental Research in IT
University Industry R&D Products $1 Billion Market $10 Billion Market
FIGURE 1 Examples of the contributions of federally supported fundamental research to the creation of IT sectors, firms, and products with large
3
economic impact. Tracks added since the 2003 update of the figure are described in Appendix B. See also Box 1 and Appendix C.
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4 CONTINUING INNOVATION IN INFORMATION TECHNOLOGY
TABLE 1 Annual Revenue Associated with the IT Industry Sector for Key U.S. IT Firms Listed in
Figure 1
Company and Estimated Revenue ($ Billion)a
Industry
Broadband and Mobile Qualcomm* 11
Motorola 8.2
Microprocessors nVidia 3.5
Intel 54
AMD 5.0
Texas Instruments 2.1
Personal Computing Dell 34
HP 41
Apple 89
Symantec 6.2
Internet and Web Juniper 4.4
Cisco 43
Akamai 1.2
Twitter (estimated) 0.1
Facebook 3.7
eBay 12
Amazon 25
Google* 22
Yahoo! 5.0
Cloud Computing Google (non-advertising)* 1.1
VMware* 2.9
Amazon (non-e-commerce) 1.4
Enterprise Systems Oracle* 31
IBM 44
Microsoft 39
Entertainment and Design Electronic Arts* 3.6
Pixar 0.5-1.0
Adobe 4.2
Robotics and Assistive Technologies iRobot* 0.4
Nuance 1.3
Intuitive Surgical* 1.8
NOTE: Revenues are for FY 2011 except as indicated by an asterisk for firms whose listed revenues are 2010-based.
aSources for estimated revenue listed are given in the section “Notes” following the main text of this report.
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5
UNIVERSITIES, INDUSTRY, AND GOVERNMENT
BOX 1
Research in the Theoretical and Algorithmic Foundations of Computing
Are there problems that simply cannot be solved by a computer algorithm? If so, what are they, and why
is this so? For the problems that can be solved, how efficiently (in terms of time, memory, or communications
requirements) can this be done? And for those that can’t be solved, can we make practical use of this fact,
for example, to help ensure better privacy on our computer systems?
These are some of the most basic questions in computing. Research to address such questions is often
motivated by the desire to understand the basic nature of computation rather than to find practical applica-
tions. However, time and again discoveries are made that provide new ways to solve difficult algorithmic
problems. For example, research in coding theory, which investigates the fundamental limits in the encoding
and decoding of messages, has led to methods for transmitting messages in ways that are highly tolerant of
faulty communications channels, and ultimately to methods that achieve very close to the maximum pos-
sible efficiency and provide a foundation for nearly all of today’s wireless technologies, ranging from mobile
phones, to WiFi, to deep-space communications.
The impact of theoretical and algorithmic research is wide-ranging. Algorithms for network congestion
provide the key building block for today’s content-distribution networks. Modern logistics systems, such as
those used by the airline industry or package delivery systems, depend on a deep understanding of the limits
of computation and algorithms for optimal allocation of resources and for scheduling. All modern search en-
gines make use of fundamental knowledge of how mathematical concepts such as eigenvalues can be used
to rank Web pages. All electronic commerce today is built on foundational concepts of so-called one-way
functions, developed in some of the most theoretical computing research endeavors. And today’s speech and
natural language understanding systems apply large-scale statistical analysis algorithms in sophisticated ways.
Additional examples of the impacts from algorithms research are provided in Appendix C.
Although the tracks in Figure 1 were chosen to illustrate through prominent examples how
each selected research area is connected with a closely linked industry area, in reality each research
area is linked in many ways to one or more industry areas. Research outcomes in one area have
continued to affect and enable research in other areas. Furthermore, synergies among research areas
often lead to surprising results and have impacts on industry that were not originally intended or
envisioned (Table 2). This characteristic of technological innovation is most evident in the broad-
based impact of research on basic questions in computing. Such research often starts as a search for
fundamental knowledge but time and again produces practical technologies that enable significant
economic impact, in areas as diverse as optimal resource allocation and scheduling, compact encod-
ings of signals, efficient search algorithms, fair auction and voting mechanisms, and ultralarge-scale
statistical analyses. (Box 1 provides further discussion.)
The arrows between the vertical tracks represent some salient examples of the rich interplay
between academic research, industry research, and products and indicate the cross-fertilization
resulting from multi-directional flows of ideas, technologies, and people (examples are given in
Appendix B). Also illustrated in Figure 1 is how products arising from industry can shape academic
research. (For example, Microsoft’s Kinect sensor is now being used in many research applications,
and Google’s practical application of MapReduce introduced new ideas about web-scale distributed
computing to the research community.) Arrows spanning research areas provide a few indications
of the interdependence of research advances in various areas.
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6 CONTINUING INNOVATION IN INFORMATION TECHNOLOGY
TABLE 2 Original Goals, Unanticipated Results, Current Results, and Possible Future Directions for
Research Topics in Figure 1
Research Topic Original Goal Unanticipated Results
Digital Communications Untethered communication Wireless local area networking for
computers, cell phones
Computer Architecture Tools to manage increasing complexity of Powerful computation in things such
microprocessor designs; new architectures to as cars, televisions, kitchen appliances,
dramatically increase processing power and mobile devices
Software Technologies More effective use of computing power for Open-source movement that inspired
specific tasks, and the creation of common many to gain powerful technical
systems on which to run them skills and become entrepreneurs; the
ability to create software systems of
extraordinary scale and complexity
Networking Sharing computational resources and data Network e-mail; widespread sharing of
among computers software and data; the interconnection
of billions of computers and other
devices
Parallel and Distributed Using multiple computers and/or processors Emergence of businesses such as Google
Systems to solve a complex problem and Amazon that use multiple very
large data centers to deliver services at
large scale
Databases Tools for managing, discovering, and Search engines, digital libraries, and
locating information data mining and analytics on massive
data sets; advances in databases
that have led to the development of
enormous data repositories—improving
knowledge and supporting new forms
of scientific discovery
Computer Graphics Display of real-time graphics and text on an Graphical user interfaces; techniques
external screen for realistic modeling and simulation
applied for near-realistic video
games and movies; support by these
technologies for applications in training
and scientific exploration
Artificial Intelligence Simulation of human-level intelligence, Robotic-enabled prosthetics and
and Robotics including language understanding, vision, artificial organs; fly-by-wire avionics
learning, and planning and antilock brakes; cars capable of
parallel parking themselves;
intelligent ranking of Web search results
aSources for details listed are given in the section “Notes” following the main text of this report.
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7
UNIVERSITIES, INDUSTRY, AND GOVERNMENT
Advances Expected with Continued Commitment to IT
Todaya Researcha
Wireless and broadband industry. Nearly 6 billion Pervasive/ubiquitous communications and access to data
cell phone subscribers worldwide, including more and computing resources; mobile sensors for monitoring
than 320 million subscribers in the United States; environment and health in real time
54% of the U.S. population as active mobile-
broadband subscribers, and more than 87 million
fixed broadband subscriptions
Microprocessor industry. 8.3 billion microprocessors Increased interplay between hardware and software to achieve
produced annually and used pervasively; $40 billion performance while managing power and providing easy
in annual revenue programmability
Personal computing industry. 1.4 billion PCs in Parallel software to better use parallel hardware; improved
use worldwide as of 2010; U.S. smartphone sales tools for processing very large data sets
expected to be nearly 100 million in 2011
Internet and Web industries. One-third of the ”Internet of things” (virtually every device/object
world’s population is online, and 45% of those are networked); sensors embedded everywhere, enabling dramatic
under the age of 25; more than 18 billion searches improvements in automation, efficiency, and safety
were conducted in October 2011 in the United
States (across five major search sites); U.S. retail
e-commerce sales for the third quarter of 2011 were
$48.2 billion and accounted for 4.6% of total sales;
worldwide, annual e-commerce sales were almost
$8 trillion; banking, trading, and other financial
transactions done by means of the Internet
Cloud computing industry, an emerging and rapidly Renewal of efforts in parallelism to sustain growth in
growing industry sector. Health IT alone expected computing performance; improvements in scalability with
to spend more than $1 billion on cloud services by reductions in operating costs for very large data centers
2013; enterprise spending on public cloud computing
services expected to expand 139% from 2010 to 2011
Enterprise systems industry. Widespread use of Natural language searches, data management to promote
enterprise resource planning software; world’s energy-efficient computing, cloud-based data analyses in
largest civilian database, Walmart’s data warehouse, heterogeneous environments, and other large-scale data
stores more than 583 terabytes of sales and inventory management systems
data built on a massively parallel system
Entertainment industry. CGI movie “Toy Story 3” Tying visualization of large data sets to the simulation code,
the highest-grossing film of 2010; 12 feature-length increased use of augmented reality, search based on images;
computer-generated-imagery animated films released photography becoming computational
in 2011; modeling and simulation commonplace in
manufacturing and engineering; video games using
advanced computer simulation techniques
Robotics and sensing industries. Automation Artificial intelligence agents capable of abstraction and
commonplace in manufacturing and in specialties generalization beyond their initial programming; “household”
such as robot-assisted surgery; use of aerial drones robots for more than vacuuming
for surveillance becoming commonplace; some
household robots
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8 CONTINUING INNOVATION IN INFORMATION TECHNOLOGY
Consider how research in the leftmost area in Figure 1—digital communications—has propelled
the communications revolution that continues to unfold today:
• ode division multiple access, which had origins in World War II anti-jamming technology
C
and later was used in military communications satellites, was developed and commercialized
as a new standard for cellular telephony in the 1990s by Qualcomm, a company founded
by DARPA-funded university researchers. It uses unique mathematical codes to modulate
transmissions, thus allowing multiple users to efficiently share a radio channel and provid-
ing relative immunity to interference.
• esearch in the 1990s on multiple-input and multiple-output techniques, beginning with
R
closely related university research and followed by research at Bell Laboratories, has been a
fundamental enabler of today’s wireless communications technologies.
• esearch and serious engineering efforts in universities through the 1990s led to the ability
R
to use complementary metal oxide semiconductor technology for radio-frequency signals, a
development that made it possible to include WiFi, GPS, and Bluetooth at low cost in small,
mobile devices.
• arly academic research into packet switched networks provided an underpinning for the
E
local area networks that connect computers within homes and businesses as well as for the
Internet that links the globe.
• university spin-off company developed and commercialized a practical approach to digital
A
subscriber line (DSL) technology, which made it possible to provide high-speed data net-
working over public telephone network lines.
A similar list could be constructed for each of the research areas represented in Figure 1. As
Figure 1 and Table 2 illustrate, investments started more than four decades ago have been criti-
cal enablers of the products and services in use today. They also illustrate how research can yield
important results not originally contemplated when a first investment was made. Finally, they
describe some of the open questions that researchers pursue today and suggest some of the potential
applications that lie ahead provided there is a continued commitment to IT research.
