4 - R&D goes global

Summary

Innovation is an historic and irreversible change in the way of doing things … This covers not only techniques, but also the introduction of new commodities, new forms of organization, and the opening of new markets … Major innovations entail the construction of a new plant and equipment, but not every new plant embodies an innovation.

We must distinguish, says Schumpeter, between innovation possibilities and the practical realization of these possibilities. Prosperity does not arise merely as a result of inventions or discoveries. It waits upon the actual development of innovations which is the driving power of the period of prosperity.

Technology, like life, evolves in stages. The genesis of digital electronics was a handful of simple yet profound innovations, the silicon counterparts of single-celled organisms in primordial seas. Soon successive generations of the technology, each more complex than the last, appeared at unheard-of speed and spread across the face of the earth.

Unlike the progenitor of life, the creative spirit behind the digital electronics revolution is easy to identify. It is the genius of innovation, embodied in the visionary researchers who developed solid-state electronics, ICs, sensors, and software.

Fifty years ago these innovators were concentrated within the pioneering R&D organizations of a few American corporations. They invented the transistor, fiber optics, the microprocessor, and the semiconductor laser. They created new software structures and languages.

In Schumpeter's sense of the term, these were revolutionary innovations, with far-reaching (and largely unforeseen) consequences.