Honda’s first complete humanoid robot, P1, had the build of an NFL lineman—six foot, two inches tall and 386 pounds, much of the weight due to a built-in backpack that held wiring and a large battery. Subsequent models became increasingly svelte and graceful. ASIMO himself—the robot boy king—is a petite four foot three and 119 pounds, which allows him to walk at a speedy 3.7 miles per hour. There are around a hundred ASIMO robots in the world today, demonstrating their capabilities in research settings and serving as ambassadors for Honda.
Basic research has deep roots in the culture of Honda. Company founder Soichiro Honda once observed that “the true value of research and development lies in the exploration of uncharted waters,” and historically each of Honda’s CEOs has come from the company’s R&D division. Honda’s current president and CEO, Takanobu Ito, for example, who serves simultaneously as director of R&D, was initially attracted to Honda because of its ambitious research in aviation and robotics.
Today the Honda Research Institute focuses on open-ended exploration of diverse technological challenges, with the explicit goal of “contributing to society.” Top researchers are recruited and given the resources to pursue their own projects, even if they have no direct value to the corporation’s current product line—or bottom line. At HRI, it’s the future that counts.
And HRI’s open-ended research has led to a number of new businesses for Honda, through such diverse innovations as high-yield rice genes, powerful fuel cells, and the design for a business jet whose fuselage is made of composite plastics lighter than aluminum. Honda was even once named the top organic soybean producer in Ohio, a business it entered partly to fill containers rather than ship empties back to Japan after delivering cars to the United States. That led them into a business selling fermented soybeans that help dissolve blood clots.
As these examples illustrate, basic research is not a straight-line process. Scientists look for A, but find B—and in the process they make breakthrough C, which pays off in both societal benefits and corporate profits. It’s the same zigzag model we’ve seen since Louis Pasteur’s search for a way to stop milk-borne diseases led to theories about the immune system and the technology of vaccination.
In similar fashion, ASIMO’s systems for monitoring and controlling robotic movements have yielded technologies now being used in developing Honda’s Walk Assist devices to improve the mobility of people who are elderly, frail, or disabled, such as hip/leg pads that respond to signals from the walker to provide support as needed. Just count the number of people over the age of seventy-five, and you can begin to sense the magnitude of the potential.
ASIMO also spawned DiGORO, a robot that learns how to clean and keep house by imitating human movements glimpsed through a camera on its head. And back in the auto industry, ASIMO technology has also led to Honda’s Lane Keeping Assist System, which uses cameras and steering controls to help keep cars from drifting.
Thus ASIMO and the other projects under way at HRI have the potential to solve consumer hassles and human problems on a global scale—and to unlock a series of huge streams of twenty-first-century demand for Honda.
A MULTINATIONAL CORPORATION that invests in basic science is an echo of the glory days of Bell Labs and RCA Labs—but it’s not the only effective discovery-producing model for the twenty-first century. A second is the “demo or die” research model exemplified by the famed MIT Media Lab.
The Media Lab is a scene of marginally controlled chaos, with hundreds of research projects visible from multiple vantage points in a glimmering new glass building. As you take in the scene, someone whizzes by on a GreenWheel, an electric bike with an integrated electric motor and battery in the wheel hub designed to overcome hills and travel longer distances, making cycling accessible to those who normally would not ride a bike. A couple of students nearby are tinkering with a foldable electric motor scooter called the Robo Scooter, below a huge photo of a prototype CityCar, a stackable, foldable two-passenger vehicle designed for shared use in dense urban areas. These vehicles are designed for a new use model called Mobility on Demand, which places electric vehicles at charging stations throughout the city. Users simply walk up to the closest charging station, swipe an access card, and drive to any other station.
Ryan Chin, a PhD student, explains: “We design all kinds of urban mobility devices to respond to the extreme density in today’s cities. The main problem is a last-mile, first-mile problem. To get to the train from your house, or from the train to your destination, is a problem. That’s why people drive: access to public transit is just too inconvenient and inflexible. But Mobility on Demand systems will begin to solve that.”
As described by William Mitchell, the late dean of the MIT School of Architecture and Planning, and head of the Media Lab’s Smart Cities research group, the approach to innovation is holistic, with the CityCar representing the confluence of four big ideas: the transformation of vehicles from internal combustion to electric-drive; the use of the Internet to enable vehicles to process enormous amounts of data; the integration of vehicles with smart electric grids that use renewable energy; and the creation of real-time systems with dynamically priced markets for electricity, road space, parking space, and shared-use vehicles. The nurturing of such high-quality, big-picture ideas in which demand creators can play is a hallmark of the Media Lab.
Every great lab has a distinctive culture. In the Media Lab’s new glass building, researchers working on a range of projects, including cars, robots, biomechatronic limbs, hyperinstruments, and early education projects can all watch and interact with one another—a “fish-scale model” of overlapping disciplines that reinforces the multidisciplinary nature of the lab.
Considering its relatively small size—an approximately $35 million operating budget supporting some 40 faculty members, senior researchers, and visiting scholars, and close to 140 graduate students—the lab’s output is prodigious and broad. In twenty-five years, more than eighty start-up companies have been spun out of it. The lab’s E Ink spin-off (1997), for example, is the key to legible, low-power-consumption e-readers. One Laptop per Child, a Media Lab spin-off, was the spark that inspired ASUSTeK’s Eee netbook. Another spin-off, Sense Networks, uses cell phone data to map the real world, much as Google indexes the Internet. Harmonix (the music technology behind Rock Band video games) and TagSense (RFID and wireless sensing) also came from the lab. Other products and projects have been codeveloped with industry, including WebFountain, an architecture for text analysis of billions of pages for IBM, and wireless mesh networks for Nortel.
Will any of these innovations become the basis for a major new industry creating millions of jobs? It’s too soon to tell, but the Media Lab is focused on questions that lead them in that direction.
“The Media Lab is looking at the forces that will transform society over the next ten years,” says Frank Moss, director of the lab from 2005 to 2011. “Whether the research is called science or engineering, applied or pure, it does not matter to us. The question is: Can it lead to something important that will affect people and society? The business model for innovation in the U.S. is broken. What we have here is the bones of a new way of thinking. Research at the Media Lab is highly creative but finds its way into the world via industry.”
The next frontier for the lab is creating stronger connections and synchronization among humans, digital machines, and the real world. The more than 350 projects currently in progress include cars that sense their environment and one another to provide real-time data about traffic patterns, smart prosthetics that can read social-emotional cues, and interactive wallpaper that allows you to control your environment—light a lamp, play a tune, control your toaster. Then there’s SixthSense, a wearable, gestural interface device that turns any physical object into a kind of touch-screen computer: to take a picture, frame a camera with your fingers; to check the time, draw a circle on your wrist; outline an “@” symbol, and you are shown your e-mail.
The Media Lab is, in
many ways, the antithesis of a corporate R&D lab. It focuses on human needs, but has no blinders—no time constraints or deadlines, no shareholders to please. It celebrates openness and collaboration between different disciplines and entities. But it winnows ideas quickly because of the emphasis on testing concepts through prototype building. The discoveries that work find their way into the world, with E Ink as exhibit A.
A would-be demand creator looking for a wealth of ideas from which to glean a handful of possibilities for building our next big industry could do a lot worse than spend a few months hanging around the Media Lab, soaking up insights and absorbing a culture in which freewheeling innovation is celebrated.
A RESEARCH LAB is a great place for generating breakthrough ideas. But labs don’t always do a good job of turning their ideas into products. Most labs, that is. SRI International is different.
Founded in 1946 in Menlo Park, California, as the Stanford Research Institute, SRI is now the largest nongovernmental lab in the United States, with roughly $500 million in government- and corporate-funded projects. Like the Media Lab, SRI stretches the R&D horizon far beyond the typical corporate three-to-five-year view. But SRI shows that a research lab armed with a system for commercialization of ideas can successfully cross the so-called valley of death that separates the lab from the marketplace—a route littered with unread papers and long-forgotten patents describing products that never connected with customers.
Siri, a virtual personal assistant for the iPhone, is one of SRI’s latest spin-offs. When users speak to their phones, Siri understands the question or command, performs research, and responds. Over time, Siri adapts to users’ individual preferences, making a tailored, concierge-like experience possible. Siri can find you the nearest ATM, discover who’s playing at a local jazz club, check the status of a flight or the weather at your destination, or buy tickets to an upcoming basketball game. Even multistep tasks, like making a dinner reservation—including searching nearby restaurants, browsing reviews, booking a table, alerting companions, and setting up a reminder—are handled seamlessly.
The development of this supersophisticated virtual assistant would not have been possible without almost $200 million in DARPA funding for artificial intelligence research spread over twenty-five universities. Then the disparate research findings were pulled together under the auspices of SRI’s CALO (Cognitive Assistant that Learns and Organizes) project. One application born from the research project was shaped for the market by Dag Kittlaus. A former research engineer at Motorola who was frustrated by the slow pace of commercialization in a large corporate environment, Kittlaus found SRI a fast and effective launchpad for vanguard products. After roughly half a year at SRI, Kittlaus spun off Siri in 2009 with $24 million in venture capital backing; a year later, the company was bought by Apple for an undisclosed amount thought to be in the $200 million range.
SRI held a stake in Siri and enjoyed one of its best investment returns ever. It’s an unusual financial model for a research lab, but one that SRI has perfected. In the last fifteen years, SRI has spun off more than forty companies, creating new industries and billions of dollars in market value. Three of the spin-offs—Nuance, Intuitive Surgical, and Orchid Cellmark—have been taken public, with a combined market cap of nearly $20 billion and more than six thousand employees.
How do they do it? CEO Curtis Carlson, himself a brilliant technological innovator, helps to set the tone. Before joining SRI in 1999, he worked as a physicist in the imaging division of RCA Labs, where he led the team that developed the high-definition television system that became the U.S. standard, for which they received an Emmy Award. Now he drives the managerial, intellectual, and social system by which SRI winnows promising scientific concepts, seeking out those with the greatest demand-creating potential for fast-tracking. “You can invent by yourself,” Carlson likes to say, “but you can’t innovate that way.” To bring great ideas to fruition takes the guidance and support that a great institution like SRI can provide.
Each quarter, an SRI Commercialization Board meets to pore through dozens of the best market-ready ideas, looking for disruptive market opportunities and a “golden nugget” solution that meets SRI’s criteria for value creation—and has a champion who has assembled a team. Once an idea is selected, SRI recruits an entrepreneur in residence—someone like Siri’s Kittlaus—who works on-site for three to eight months to prepare the venture for funding and spin-off. Throughout this period, SRI’s nVention advisory board provides close ties with Silicon Valley venture capital funds, a set of connections whose value is difficult to overstate. Out of many candidates, the Commercialization Board moves about ten opportunities a year through its pipeline—winnow, winnow, winnow—and actually launches two to four ventures.
One of the biggest successes to emerge from the SRI commercialization system is Intuitive Surgical, which sells the da Vinci Surgical System for robotic-assisted minimally invasive surgery.
In 1995, Intuitive Surgical was spun off from SRI with venture funding from Morgan Stanley Dean Witter, Mayfield, and Sierra Ventures. In 1999, the first da Vinci Surgical System was declared market-ready, and in July 2000, the FDA cleared da Vinci for use in laparoscopic surgery. Da Vinci’s first beachhead market was with urologists, who found robotic surgery effective in prostate surgery and allowed for much shorter patient recovery times. But da Vinci Systems have been used for a variety of chest and abdominal surgeries, including heart surgery. Today there are more than 1,600 da Vinci Systems in place worldwide, and Intuitive Surgical has a market value topping $13 billion.
Two very different business creation myths have long coexisted in Silicon Valley’s business culture. The better-known narrative is that of the venture-funded entrepreneur in a garage whose invention leads to an IPO. The older, now largely forgotten, story is one of the government-funded initiative, like the DARPA projects that led to personal computers, networking, and the Internet. SRI has helped build companies following both pathways, and is arguably the first institution to meld them into one coherent and potentially more powerful narrative of innovation for the twenty-first century.
Carlson sometimes worries about the long-term future of the SRI model. One reason for his concern is America’s flagging production of new scientific talent. “If it were not for our foreign-born researchers,” he observes, “America’s growth would stop.” And he points out that China today has more honor students than the United States has students. Partly as a result, America’s strategy for innovation is “inadequate.” “Solar cells were invented here,” he says, “but most of the value is going to China. Compared to America, China is buying forty-one times more manufacturing equipment for solar cells.”
Part of Carlson’s response would be a shift in national immigration policy: “I would let in all the smart, educated folks I could find,” he recommends—and he adds with a smile, “… and all the chefs.”
Despite the dwindling number of young scientists being groomed in American schools, Carlson and SRI are continuing to drive the commercialization of science. SRI’s business model offers a powerful set of tools for reducing the time it takes to traverse the valley from discovery to funding to market, the ultimate goal, in Carlson’s words, to “make the world a better place by augmenting and extending human intellect.”
A lab with a business model? Shades of David Sarnoff’s RCA! It’s as unusual as a car company that creates new varieties of rice. And it’s unexpected sources like these that are likely to spawn the new ideas from which tomorrow’s demand will grow.
ACCORDING TO HOARY legend, Charles Duell, commissioner of the U.S. Patent Office, is supposed to have said, in 1899, that “everything that can be invented has been invented.” Researchers have failed to unearth evidence that Duell said any such thing, and in fact he appears to have been quite bullish about the prospects for twentieth-century technological innovation—and rightly so.
But there’s this much truth in the Duell myth: Despite the brilliant work
of today’s great demand creators, we are living largely off inherited riches. Many of the breakthroughs on which today’s demand is based came from four sources: RCA Labs, Bell Labs, DARPA, and PARC. The transistor, on which so much of today’s demand depends, was invented way back in 1947.
We’ve seen how frustratingly unpredictable industry-creating discoveries can be. But when we had Bell, RCA, and PARC, we invested, as a society, a modest share of our resources in a set of powerful discovery tools that made the odds tremendously better.
Do we need to build new discovery engines of equal or even greater potency? Can we dare to imagine a dozen Honda Research Institutes? A score of Media Labs? Several SRIs? How might a proliferation of institutions like these affect the frequency of new industry-creating discoveries?
There’s no shortage of challenges that have large-scale human, social, and economic implications and—equally important for the true scientist—offer fascinating lifelong work for those who choose to tackle them. The list of Grand Challenges for the twenty-first century created by the National Academy of Engineering testifies to that. But exactly when and where will tomorrow’s big breakthroughs finally appear? The answer is still unknown—and it depends, in part, on our readiness to do two things: rebuild the engines of industry-creating discovery, and make science prestigious again, in a way that encourages the best minds to take up the challenge that only they can meet—to make the basic discoveries that lead to tomorrow’s new industries and tomorrow’s new forms of demand.
Coda: The Demand Creators
DRIVEN BY CURIOSITY and by the nagging suspicion that the origin of demand is both seriously misunderstood and deeply important, we began our research hoping to discover a formula for demand creation. It turned into a multiyear quest that made us realize that there is no formula for demand any more than there is a formula for human creativity itself. Yes, there are common elements and unmistakable patterns shared by most stories of demand creation, as we’ve explained and illustrated in these pages. But just as the hassles that complicate life are endlessly varied, so is the artistry of hassle-fixing that underlies demand creation, making our topic not only vitally important to economic and social progress but also uniquely fascinating.
Demand_Creating What People Love Before They Know They Want It Page 33
