[Paleopsych] Business Week: Scouring The Planet For Brainiacs

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Scouring The Planet For Brainiacs

[Some stuff from a Ziff-Davis publication, called Microsoft Watch is 

Worldwide innovation networks are the new keys to R&D vitality -- and

Step inside the labs of Microsoft's advanced technology center
outside Beijing for a lesson in 21st century innovation. In one lab,
engineers have developed a program that simulates the movement of
water around a tropical island, adjusting the lighting of the waves
as they ripple over the reflection of a school of carp swimming at
different depths. Technicians load a photo of a face into another
program and the expression changes from a grin to a pout, down to the
wrinkles on the cheeks and forehead. The lab also is doing cool
things with speech -- computer-generated voices that speak English in
natural-sounding sentences, or a "visual audio notebook" that rapidly
searches tape recordings for specific words.

This $80 million center, with nearly 500 engineers, PhD students, and
visiting professors, is one of Microsoft's most important facilities
for developing graphics, handwriting-recognition, and
voice-synthesization technologies. "One of the reasons we opened the
Beijing lab was to tap into a great pool of talent," says Microsoft
Research Senior Vice-President Richard F. Rashid. Among the 72
innovations that have already ended up in Microsoft products is the
"digital ink" used in software for tablet PCs. Others will eventually
reach the market years down the road in everything from
electronic-game players to industrial-design software.


The Microsoft lab is much more than a showcase for how far China has
come in computer technology. It also illustrates how innovation is an
increasingly global game. It can involve a worldwide research and
development operation like that of Microsoft, or IBM, which has major
labs in China, Israel, Switzerland, Japan, and India. Or innovation
can be the product of a much more amorphous structure, something that
consultants call global innovation networks. These often consist of
in-house engineers, contract designers and manufacturers, university
scientists, and dozens of technology suppliers big and small -- all
pulled together ad-hoc for a particular product.

To many Americans, who assume that every engineer hired abroad by
Microsoft, General Electric (GE ), Intel (INTC ), or Boeing (BA )
means one less high-paying job at home, this is a threatening trend.
There's also growing angst that the rapid advance of Chinese, Indian,
and Russian science is imperiling U.S. global economic leadership.

But such fears often are based on an outdated view of global
competitiveness. Because technology now crosses borders faster than
ever -- thanks to the Internet, cheap telecom links, and advances in
interactive-design software -- the location of R&D facilities matters
less and less. What matters is who controls these networks -- and
where the benefits accrue in terms of products, jobs, new companies,
corporate profits, and higher economic productivity. "The real
challenge is to commercialize technology," says Boston Consulting
Group Executive Vice-President James P. Andrew. "Increasingly, that
means integrating outside technologies and orchestrating global value


The 2000 tech bust and subsequent recession also have spurred
companies to look at ways to get products to market faster. "There is
tremendous pressure on industry to innovate more -- and do it more
quickly," says Krishna Nathan, director of IBM's 200-engineer Zurich
Research Laboratory. The problem is, many companies also are finding
their R&D efforts aren't producing enough bang for the buck. In a
Boston Consulting survey of 250 senior executives, nearly seven out
of ten cited innovation as a top priority and said they plan to hike
R&D spending. Yet 57% also said they aren't satisfied with the return
on their innovation investments. A Forrester Research Inc. (FORR )
study found similar frustration. "CEOs feel they are throwing money
into a hole, but little comes out," says Forrester Vice-President
Navi Radjou.

Thanks to the burst of global R&D, innovative companies can now shop
the world for intellectual property needed for new products. Cities
such as Bangalore, Tel Aviv, and Seoul are starting to have
flourishing Silicon Valley-like tech clusters nurtured by venture
capital, tie-ups between science universities and industry, and a
critical mass of inventors and entrepreneurs adept at selling their
intellectual property worldwide.

South Korea, for example, is a trailblazer in next-generation digital
displays, memory devices, wireless telecom, and electronic gaming. In
Taiwan, long known for churning out me-too electronics products, R&D
spending has leapt fourfold, to $7.5 billion, since 1990. The island
now boasts some of the world's most profitable chip and hardware
designers. "Taiwanese companies used to be able to focus on low-end
products and survive," says spokesman David Chen of Novatek
Microelectronics Corp., a leader in chips for liquid-crystal displays
used in high-end TVs, notebook PCs, and digital cameras that earned
$98 million on $333 million in sales in 2003. "Now intellectual
property is a serious matter."


To get an idea of how diffuse the innovation process has become, try
dissecting your new PDA, digital cameraphone, notebook PC, or cable
set-top box. You will probably find a virtual U.N. of
intellectual-property suppliers. The central processor may have come
from Texas Instruments (TXN ) or Intel, and the operating system from
BlackBerry (RIMM ), Symbian, or Microsoft. The circuit board may have
been designed by Chinese engineers. The dozens of specialty chips and
blocks of embedded software responsible for the dazzling video or
crystal-clear audio may have come from chip designers in Taiwan,
Austria, Ireland, or India.

The color display likely came from South Korea, the high-grade lens
from Japan or Germany. The cellular links may be of Nordic or French
origin. If the device has Bluetooth technology, which lets digital
appliances talk to each other, it may have been licensed from IXI
Mobile Inc., one of dozens of Israeli wireless-telecom companies spun
off from the defense industry. IXI has developed a package of
software allowing users to wirelessly zap images, audio, and data
from digital cameras to e-mail accounts to PCs. Among the products
using IXI's package is ATT Wireless' new Ogo device for instant

This spreading out of R&D is a boon to innovation. By mobilizing
global R&D teams around the clock, nimble companies can accelerate
development cycles, bringing new technologies to consumers and
industry faster, cheaper, and in more varieties. Multinationals can
reach deep into once-cloistered university labs in Shanghai or Moscow
for help in advancing everything from genetics and molecular research
to alternative energy. Besides employing several thousand in India,
France, Germany, and the U.S. to develop chip sets and software,
Texas Instruments taps brains at 100 info-tech companies from Berlin
to Bangalore. This has been vital to maintaining TI's dominance in
the $5 billion global market for digital-signal processors for cell
phones and consumer electronics. "The more we can leverage outside
talent and companies with great ideas, the more product we can get
out," says Doug Raser, who oversees TI's global strategic marketing.

Just as important, the global innovation supermarket lowers entry
barriers for dynamic new players. A good example of the new breed of
technology networker is Austin (Tex.)-based Motion Computing Inc.
With just 110 employees, Motion is the No. 3 seller of slate style
tablet PCs, a market that research firm IDC predicts will near $7
billion in three years. Motion shipped 25,000 of the $2,000 machines
last year, mainly to health-care and financial-service companies in
the U.S. and 14 other nations. Motion's latest M1400 PC, which allows
users to write directly on the screen, display articles as they
appear in a magazine, and transmit documents wirelessly, is loaded
with cutting-edge applications sourced from outside suppliers. The
digital pen comes from Japan's Wacom Co. and the software for digital
sketches from Toronto's Alias Systems Corp. The 12-inch pen-based
screen, which can be viewed in bright sunlight and while tilted at a
160-degree angle, was developed by Korea's Boe Hydis, the world's
leading supplier of tablet PC displays. The machines are made in
China by Taiwanese contract manufacturer Compal Electronics Inc.
"This business model lets us bring core technologies from around the
world to market faster than our competitors," says CEO Scott Eckert.

The digital convergence has sped the global tech scramble, because it
means that many of today's gadgets now need to incorporate video,
telecom, imaging, computing, and audio. "Very few companies can
afford to invest the time and effort to stay at the forefront of so
many technologies," says Srini Rajam, chairman and CEO of
Bangalore-based ITTIAM Systems. "By licensing our design innovations,
they can cut the time it takes to launch a product by nine to 12

Founded in 2001 by seven veteran Texas Instruments executives, the
125-engineer company has found growing demand for its embedded
software and systems designs for decoding highly compressed audio and
video content on the MPEG4 format. ITTIAM's 50 clients in the U.S.,
Europe, and Asia have used its designs in everything from a hand-size
$199 camcorder to a "digital-media album" that can store up to 130
hours of video and thousands of songs.

One customer is e.Digital Corp. The San Diego outfit develops
multimedia appliances such as the digEplayer, a portable in-flight
entertainment system used by 11 carriers, including Ryanair, Alaska
Air Group Inc., (ALK ) and Hawaiian Airlines Inc (HA ). The machine,
sold by Tacoma (Wash.)-based APS Inc., stores up to 30 highly
compressed movies. Economy passengers rent the player for around $10
to watch what and when they please. "We're constantly scouring the
world for high-performance technologies that are already out there,"
says e.Digital Senior Vice-President Robert Putman.


Indeed, the challenge is to keep up with the ever-quickening pace of
innovation. Design houses such as San Francisco-based IDEO are
specialists at just that. The firm collects data on thousands of
chip, software, and manufacturing outfits in more than 100 nations
via trade shows, Web sites, and word of mouth -- all information that
can speed product development. "You have to be tireless about
updating these databases because the half-life of most of the
information is about four weeks," says Dave Blakely, leader of IDEO's
smart-products unit.

Last year, IDEO was hired to develop a device to show patients what
their smile would look like after a tooth-whitening process by Walnut
Creek (Calif.)-based BriteSmile Inc. It found the digital
image-compression algorithm from a Vancouver, B.C., company and an
outfit in Amedabad, India, that specializes in making such algorithms
work on TI's DSP chips.

Such blending of technologies will become even more common as
innovation networks extend their reach. Many corporations have been
obsessed with improving quality in the 1980s, boosting productivity
in the 1990s, and slashing costs in the wake of the 2000 tech bust.
Now, companies are zeroing in on how to innovate more efficiently.
"The fallacy of innovation was that it was all about spending on R&D
or information technology," says Diana Farrell, director of the
McKinsey Global Institute. "Instead, it has more to do with execution
and getting products out better and faster." The answers are out
there, waiting for the quickest and smartest to find them.

By Pete Engardio

With Dexter Roberts in Beijing, Neal Sandler in Tel Aviv, and Matt
Kovac in Taipei
>from Mary Jo Foley
>mailto:mfoley at ziffdavis.com
>October 7, 2004
>In This Issue
>Three Microsoft Research Projects to Watch: We bring you an
>update on three of the more newsy MSR projects in the works.
>Mesh Connectivity Layer Code Posted for Download: MSR takes
>a step toward making the Holy Grail of mesh computing a
>Making Passwords More Secure Through Mnemonic Clues: Could
>randomly generated ink blots be used to help users create
>more memorable and secure passwords?
>MSR Shields: A First Line of Worm Defense: There are two
>different "Shields" efforts happening at Microsoft. The MSR
>one is all about unearthing worms before they burrow into
>users' PCs.
>Three Microsoft Research Projects to Watch
>In every recent Bill Gates or Steve Ballmer speech, there
>are inevitable references to the $7 billion that Microsoft
>is sinking into R&D in fiscal 2005 in the name of
>innovation. So what's Redmond doing with all this research
>If you haven't checked out the Microsoft Research (MSR) Web
>site lately, you might want to take a gander. There is
>growing amount of information on an increasing variety of
>projects in which Microsoft's Redmond, San Francisco,
>Silicon Valley, Cambridge (UK) and Beijing labs are engaged.
>See the Main MSR Site Here
>And Subscribe to the MSR RSS Feeds and E-mail Newsletter
>In today's newsletter, we're calling out three of the more
>newsworthy projects that have come across our RSS reader in
>recent months.
>Mesh Connectivity Layer Code Posted for Download
>Microsoft Chairman Bill Gates has made several references
>over the last couple of years to his interest in mesh
>networking as a way to connect consumers more affordably.
>Earlier this year, in fact, Gates dedicated part of his
>regular "Think Weeks" to the topic of mesh networking.
>A quick refresher: Mesh networking is a way of routing data,
>voice and instructions between nodes (thanks to Wikipedia
>for the definition).
>See the Full 'Mesh Network' Definition Here
>In March, Gates told eWEEK why he thinks mesh networking
>matters: "There's a thing called mesh networking, which is
>software making all this stuff work together in a way that
>lets you do video and audio in a pretty neat way. And this
>idea that we're going to unify on the network voice, video
>and data, . . . . That's another one of those Holy Grails
>that you can probably find in an article back when eWEEK
>first came out talking about unified networks. But that's
>really coming to the fore."
>What Is Bill Gates Thinking About? Mesh Networks, For One
>And back in 2003, Gates said during the company's annual
>Research Faculty Summit that mesh networking might have even
>more potential in the developing world than in the developed
>"If some advances in wireless and mesh computing can bring
>the cost of connectivity down, that idea of being serious
>about the digital divide, that is what would be the huge
>breakthrough," Gates told faculty researchers. "It's not the
>$400 PC, it's not the software, because Microsoft in all
>those Digital Divide cases is willing to come in and provide
>software donations for those things; what holds it back is
>that just having a standalone machine, as nice as that is,
>really isn't the vision of all the information that you want
>to get at."
>Read Gates' MSR Summit Remarks From 2003
>Well, MSR's Redmond, Cambridge and Silicon Valley teams are
>all working on mesh networking. According to the MSR Mesh
>Networking Center Web site, the researchers have deployed
>testbed mesh networks in their offices and in a local
>apartment complex.
>In fact, in late September, MSR posted for download a piece
>of its mesh-network code - its mesh connectivity layer (MCL)
>driver. MSR describes MCL as a driver that implements a
>virtual network adapter in a way that makes the rest of the
>network appear as an "additional (virtual) network link."
>Check Out the MSR Mesh Networking Center Page
>And the MCL Driver
>Still, Microsoft has a long way to go to fill in more
>elements of the mesh fabric. We'll keep you posted as the
>MSR and/or product teams deliver more pieces.
>Making Passwords More Secure Through Mnemonic Clues
>Another hot button for Chairman Gates is security, as the
>whole Trustworthy Computing Initiative makes evident. But
>lately, Gates has been playing up the necessity of securing
>passwords in order to insure the integrity of home and
>corporate PCs.
>While Gates has gone on the record saying that smart
>cards/biometric recognition may be the ultimate solution, he
>said it would likely be five or six years before such
>systems become commonplace.
>Gates Talks Password Security, Spyware and More
>But a solution for helping to secure passwords may be nearer
>than that, especially if some MSR work pans out that
>involves using mnemonic clues to create better passwords.
>MSR recently published a synopsis of some of the password
>security work being done by Dan Simon, a cryptographer in
>MSR's systems and networking group, and his intern Adam
>Simon and Stubblefield are looking to inkblots as hints that
>users could rely on to create unique and more easily
>memorable passwords.
>Read a Report on MSR's Ink-Blot Research
>"To make the system work, they developed a program that can
>generate an infinite amount of random inkblots," according
>to an MSR article on Simon and Stubblefield's work.
>"'We show you a bunch of computer generated inkblots,' said
>Simon. 'We ask you to look at the inkblot, see whatever you
>see in the inkblot, and type a short abbreviation of what
>you see. The first and last letter works well. We do that
>for a sequence of inkblots. At the end of all that we take
>you through it a few more times, but we scramble it in a
>random order first to make sure you haven't just typed in
>whatever you wanted to and ignored the inkblots altogether.
>We run it a few more times to make sure you have it in your
>memory, and thereafter whenever you try and log in we'll
>give you that second order of your inkblots. Eventually
>you'll just commit it to muscle memory and you'll learn it.
>And the inkblots will trigger the same memory.'"
>There's no word on when or how this project might make its
>way into any of the Microsoft product groups. But stay
>MSR Shields: First Line of Worm Defense
>Microsoft's security technology and business unit (SBTU)
>officials have talked of Microsoft's plans to help
>enterprises "secure the perimeter" via firewalls and
>shields, This plan is part of the Active Protection
>Technology initiatives upon which Microsoft's
>security-product teams are working (and which we're going to
>be hearing a lot about in the coming months).
>Get Your Active Protection Technology Refresher Here
>But there's another Microsoft "Shields" strategy in the
>works. And this one, which is purely research at this point,
>is happening in MSR.
>A note on the MSR Shields Web site explains the distinction:
>"The name of our research project coincides with our
>company's "shield" security strategy. In fact, our research
>project started before the Microsoft 'shield' initiative.
>Our project is purely a research project at this stage."
>Check Out the MSR Shields Site
>The MSR Shields team is developing "vulnerability-specific,
>exploit-generic network filters" that can examine filter
>traffic before a patch is applied. The ultimate goal of
>MSR's Shields is to stop worms before they can burrow into
>users' machines.
>"Shields are less disruptive to install and uninstall,
>easier to test for bad side effects, and hence more reliable
>than traditional software patches. Further, shields are
>resilient to polymorphic or metamorphic variations of
>exploits," claim the Shields team on their Web site.
>In August, members of the MSR Shields team published a new
>white paper on their work, which they presented at an
>Association of Computing Machinery (ACM) conference. (Dan
>Simon, one of the researchers involved in the password
>ink-blot research mentioned above, is a key member of the
>Shields team.)
>Read the MSR Shields White Paper in Full
>We'll be watching for more news on both kinds of Microsoft
>shields as Microsoft's fiscal 2005 rolls on.
>A couple of quick housekeeping notes: For those who wondered
>if Microsoft Watch had the inside track on Rodney
>Dangerfield's demise on Tuesday, the answer is no. Despite
>one colleague's pronouncement that "the Microsoft Watcher
>knows ALL," we can tell you it was a pure coincidence that
>we likened Windows XP Starter Edition to Dangerfield in
>Monday's newsletter. RIP, Rodney.
>Monday is Columbus Day here in the U.S. So we'll be sending
>you your Microsoft Watch issues on Tuesday and Thursday next
>week (instead of Monday/Thursday).
>Don't forget: We live on tips. Got a Microsoft product,
>strategy or personality you're just dying to read more
>about? Send your ideas, rants, raves, quibbles and other
>tidbits to mfoley at ziffdavis.com. (Don't worry, though:
>Confidentiality is guaranteed!)
>Microsoft Watch Information
>If you experience any difficulties with receiving your
>issues of Microsoft Watch, please click here:
>Subscribe to Microsoft Watch:

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