The easy life; R&D is the key

Posted: 04.17.12

Of the great companies I've been fortunate enough to come into contact with, there is one common denominator: R&D investment.

Nvidia’s CEO made a comment in a meeting recently that no super computer company could (or ever did) match the R&D investment his firm makes. Former Cray manger and now Tesla CTO at Nvidia Steve Scott echoed those words. Meg Whitman who recently took over HP gets it—R&D is important and she’s raised the bar and the spending. HP used to one of the leaders in R&D and it looks like Whitman is going to try and restore that glory. (Though she has also said that she wants to be sure the R&D is directed to projects that will pay off. AMD, which has had its troubles, has never taken its foot off the R&D pedal and that has helped to keep the company going during its painful reorganizations. Intel certainly gets it, and has benefited from its R&D for decades, I think it’s safe to say they got where they are today because of their unrelenting investment in the future—the unknown, and unknowable future. Giants like IBM, Microsoft, GE and 3M are legendary about R&D investment, which is why they are giants. Qualcomm is another heavy hitter in R&D and look at their results. Qualcomm is an IP company that also makes parts. Other IP companies like ARM and Imagination Technologies are the leaders in R&D spending 34% and 44% respectfully. Google on the other hand spends a modest 13.6% on R&D; however, its R&D spending was $2.8 billion, $3.8 billion, and $5.2 billion in 2009, 2010, and 2011. At December 31, 2011, Google had 32,467 full-time employees, consisting of 11,665 in research and development—35%!

Life will get easier—is that a good thing?

As computing power approaches the singularity we use that power to examine ever larger fields of data, what is being called big data. Big data is three dimensional: it grows in item count (think of that as the Y axis), with time (X) and in accuracy or resolution (Z). As such it is a cubic data and processing load, but within that load riches lie.

Big data is in weather and oil deposit forecasting, medical statistical analysis and consumer tracking. In all these examinations we learn about behaviors, cause and effect, and get a peek at how to predict things; drug interaction, popularity of a color or style, thermal effects on weather, etc. It’s all good, right?

Maybe. Google recently announced it is consolidating the privacy policies for its products; it has 60 or so such products. That is a lot of data, the epitome of big data—lotsa big data. And through its relentless efforts and consolidation Google has (or will have) created the most significant database ever. The combined aggregation of all that data will give Google the ability to correlate and analyze behaviors and activities, our physical locations, the timelines for the processes of conducting our lives, our actions, our aspirations, and Google can even make a very sophisticated guess about our thoughts; assuming of course it has the compute horsepower to do it. Google is just the first; governments have been trying to do this for decades.

At once, upon reading this a lot of you will yell Big Brother, and in fact it is. Google has accomplished what governments and dictators could only dream about. Google however, unlike a government, won’t pass laws or send in troops based on the analysis of the data. Rather it will use the data to guide the purveyors of goods and services. The result will be those purveyors will fine-tune their offerings so they perfectly match our desires—not necessarily our needs—our desires because we spend most freely on a desire, before a need.

The brave new world illustrated in the Minority Report, when Tom Cruise walks into a store and is recognized and directed to the things the store’s computer thinks he’ll want will soon be here. How we are ID’ed by the store may be through eye recognition like the immigration kiosks now do, but more likely it will be via NFC which we will all have in a year or so.

The question is, will this be a bad thing? It sure will cut down on bad product investments. But overall the wisdom of the crowd may not be what we want, and I’m pretty sure it's not what we need.

If the suppliers of goods and services only offer us what the masses want, then will Baskin-Robbins cut down to three flavors? Will clothes come in black, white, and pink? Will all cars look the same (most do now I’ll admit), and will we all eat the same food, or have to pay 3 to 5x to get something different?

That’s the down side of the singularity. Not that we will be oppressed by a mindless and selfish government, but that we will oppress ourselves by homogenizing our tastes and desires. The second phase of that dank world is the Lord of the Flies where we ostracize those who don’t fit in to our homogenized world. Who wants to see someone wearing green when everyone knows yellow is the in color? Get rid of that fool, he’s hurting my eyes.

Google may, in this gigantic database consolidation, unintentionally violate their first rule: do no harm. They could in fact do great harm—inadvertently, but then, who would know? It’s all good right? You like vanilla ice cream and pink shirts, right?.