Countless research institutions contributed to the digital, wireless, and mobile technologies that underpin our modern world. But none contributed more than Bell Telephone Laboratories, which logged an astonishing share of the key advances of the 20th century, including the transistor, the cellphone, the digital signal processor, the laser, the Unix operating system, and motion-picture sound. We no longer have Bell Labs to fund research with long-term payback. That has prompted many to wonder: Who will pay for such research now, and where will it be done?
We say: Governments and corporations must share the burden, and they must do it in structured collaborations among universities, companies, and government agencies in which intellectual property is freely available to all participants.
We also say, the sooner we can get started, the better. The recession has left R&D spending in free fall. This year, the global semiconductor industry is expected to spend just US $200 billion on research—$50 billion less than in 2008. And times are really tough in the semiconductor-equipment industry, whose R&D operations will shrivel like a salted leech from $34 billion in 2007 down to a pitiful $10 billion in 2009.
In the United States, a few basic sciences are getting a reprieve, thanks to the federal stimulus package. Of the $787 billion designated, $10 billion went to the National Institutes of Health for life-sciences research; on the other hand, there has been a steady federal funding decline for physical sciences in the United States.
In the long run, however, even the life sciences are unlikely to benefit in any meaningful way from that load of cash. A one-time infusion helps, but it also creates a classic feast-or-famine problem: The money needs to be spent by September of next year. And because there's no follow-up money to keep these programs going beyond that time, officials can't start major long-term initiatives.
But the recession isn't what's causing this problem; it's only revealing an intensifying trend in the semiconductor industry. Revolutionary innovation has been missing in action for about 40 years as the industry instead focused on incremental advances. The industry could get away with short-term research because those incremental advances got the companies where they needed to be, financially speaking.
Limiting that funding to incremental research is why there hasn't been a "transistor moment" in 50 years. So, painful as it is, this economic gloom might actually turn out to be a good thing. It offers the industry, for the first time in decades, an opportunity to rethink its most basic strategies, down to the engine that keeps it all going—innovation.
Innovation has often been a catalyst for economic recovery. It happened in the 1930s, when DuPont invented one of the major materials of the 20th century: neoprene. Two years after its introduction, neoprene, a synthetic rubber, was in every car and plane built in the United States, and 50 years after that it was in knee braces and wet suits. And again in the 1980s, small steel mills like Geneva and Nucor rose from the ashes of Big Steel. Today many developed countries have stupendous R&D resources and infrastructures and are eager to use them to pursue very high potential payoffs, especially in semiconductors. So the basic factors are in place to use this recession to establish a new model of semiconductor R&D that could usher in the next generation of innovation.
But there's a problem. The innovation strategies that semiconductor companies large and small have developed over the past half century are grounded in the business practices and research conventions of a bygone era. Unless their strategies evolve to meet these changes, many of those companies will die a slow and avoidable death.
There is a way out. It just doesn't look anything like the old way out, and it will make some of those companies uncomfortable, at least initially. At the Semiconductor Industry Association (SIA), in San Jose, Calif., we have developed a new model for innovation. Our model is counterintuitive—it asks companies to share intellectual property and invest in research that also benefits competitors, something that's anathema in today's standard industry practices. But our approach has been successfully tested by corporations like IBM, Intel, Micron, and Xilinx, among many others. When companies have embraced it, they've seen encouraging results. For example, there has already been a significant breakthrough that can be largely attributed to this model: the graphene-based BiSFET logic device, which operates at a fraction of the power of today's typical devices. The concept is being developed by researchers at the University of Texas at Austin, and if it works as well as the simulations imply, it could change the world.