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Home > Nanotechnology Columns > ONAMI > Why Nanotechnology Research Investment and Commercialization Must Come First

Skip Rung
President and Executive Director

The history of the corporate objectives developed by the founders of the Hewlett-Packard Company teaches a wise and logical lesson about priorities and investment that the United States should internalize before it's too late.

June 4th, 2007

Why Nanotechnology Research Investment and Commercialization Must Come First

Sonoma, CA. January, 1957.

The senior management - 20 out of 1200 employees - of fast-growing Hewlett-Packard Co. is meeting to discuss how to manage now that it is no longer possible for top management to know in intimate detail what each employee is working on. The answers are a divisional structure and the first written statement of a set of corporate objectives (one of the few things that hasn't changed very much at HP in the last 50 years). This is the company that pioneered flex-time for employees, eschewed rapid ramp-up government contracts that would result in layoffs following project completion, provided free coffee and donuts at breaks, distributed cash profit sharing checks to all employees and in every way acted on its stated beliefs that people and communities were indispensable and that employees inherently wanted to do a good job (i.e. without threats or coercion). Radical stuff. I doubt HP's founders spent much time reading business best-sellers like Theory Z (1981) - they just implemented enlightened policies 20+ years before the b-school profs wrote about the Japanese companies that quickly adopted them.

Back to that 1957 Sonoma offsite - what was Objective Number One? Profit. The same thing all the other unenlightened companies managing by theory X would put first.

I knew all about the donuts and the too-good-to-be-true-except-it-really-is working environment when I joined HP Labs in 1977, but when I first heard the presentation of the Corporate Objectives, I wondered if there wasn't some degree of moral inconsistency in all of this. There wasn't. In David Packard's words (The HP Way, 1995):

"It is impossible to operate a business for long unless it generates a profit, and so if a company is to meet any of its other objectives, it must make a profit. Our ability to properly serve our customers, to finance research and development, to offer rewarding employment opportunities, and to make contributions to the communities in which we operate depended directly on our ability to generate an adequate profit. The profit we generate from our operations is the ultimate source of the funds we need to prosper and grow. It's the foundation of future opportunity and employment security."

The same is true in U.S. nanoscale science and technology, and for research and innovation in general. It's certainly correct to care about and invest in social impacts (n.b., not a nano-specific issue) and EHS concerns, but I don't have the sense that David Packard's timeless wisdom and logic are as well understood today as they ought to be. A visit to the capital city of an underdeveloped (say, Uganda) or developing (say, Mexico) country should convince anyone that less modern development and zeal for business do not result in better social, environmental and human health outcomes. And which countries but the ones already successful at leading in innovation (the US, Canada, Western Europe, Japan) have the quality of life everyone else desperately wants?

The research and commercialization agenda and action items are by now obvious enough and do not need repeating here. They were well-expressed in the invaluable "Rising Above the Gathering Storm" report by the National Academies - yesterday's news bullet, but still very current. They are to a good extent embodied in the America Competes legislation (S.761, H.R. 2272) and the immigration reform, though the output of political compromise amid all the pet causes of the day is inevitably a faint reflection of the sense of almost-urgency with which an effort begins. I don't want to sound ungrateful for welcome attention and progress, but the long-overdue doubling of NSF investment taking 10 years (here's hoping for the Senate version which does it in 5), flat/declining NIH investment (just as the excellent NCI work is hitting stride), capital and stock registration flight from the increasingly hostile legal and regulatory climate in the US and the fact that we don't yet staple a green card to every science PhD earned by a foreign student all tell me that we aren't yet serious about the fact that we are losing ground in the global competition.

So, sadly, the realist in me expects to see decline in the U.S. competitive position (especially relative to Asian countries which don't seem to be the least bit conflicted on these issues), increasingly difficult climates for both public and private investment, and (ironically) poorer environmental and human health outcomes than could otherwise be the case. These must be the most probable predictions for the next decade, and where I'd bet my own money if that were all that mattered. But it's so unnecessary given what we already know has worked in the past when leaders prioritized what was most important.

And today, what is most important in nanoscale science and technology is research investment growth that leads the world and making sure that commercialization and the high-wage jobs it creates happen here.

Maybe the top 20 people in the U.S. government should book the Sonoma Mission Inn next January?

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