PowderMed set to test needle-free bird flu vaccine?|?Reuters.com

LONDON, July 10 (Reuters) - British biotech firm PowderMed
Ltd has filed for permission to start the first human clinical
tests of a needle-free vaccine against the avian flu virus, it
said on Monday. The experimental vaccine will target the deadly H5N1 strain
of bird flu, which has spread rapidly through poultry flocks and
has killed 131 people around the world since 2003. Unlike conventional flu vaccines, PowderMed's product uses
fragments of virus DNA to stimulate immunity and tiny particles
are blasted into the skin instead of using a needle. A finished
product is still several years away, however. The first-time-in-man clinical trial will be conducted at a
clinical research unit in London and will examine the ability of
a vaccine based upon the Vietnam H5N1 avian influenza strain to
protect against a potential pandemic form of flu.




Previous studies have shown the vaccine technology produces
100 percent immune responses against normal seasonal flu and
PowderMed hopes for a similar response with H5N1. Its vaccine is produced by copying a gene from the virus and
enclosing it in tiny gold particles. It is delivered using an
injector powered by concentrated helium gas, which pushes the
particles into the skin. The privately-held firm believes vaccines delivered in this
way may produce better immunity than conventional ones. Current
flu vaccines are based on 50-year-old technology that requires
live chicken eggs and six months of brewing time. Several companies that make traditional flu vaccines are
also working on H5N1 vaccines, including Sanofi Aventis SA
(SASY.PA: Quote, Profile, Research), GlaxoSmithKline Plc (GSK.L: Quote, Profile, Research) and Novartis AG (NOVN.VX: Quote, Profile, Research)
unit Chiron. Governments want to encourage companies that can produce
better vaccines in less time. They hope an influenza pandemic
does not come in the meantime, but fear the H5N1 virus could
evolve into a pandemic strain of flu at any time."

Connecting the Dots: Collaborative Technologies Conference

Connecting the Dots: Collaborative Technologies Conference: "This morning's first speaker was John Seely Brown. His central theme was the macro nature of computer mediated networks and their effects but he, like many speakers today, clearly emphasized the fact that humans are the collaborators and it's not just about technology.

What was amazing was his story of Li & Fung. This firm has a loosely coupled network of 7,500 suppliers. It's a collaborative, relationship-based, feedback-looped network that's provided them with one helluva competitive advantage (even thinking about managing such a network and its interconnections made my eyes glaze over).

Interesting points:

* The world may becoming flat...but it's actually 'spiky'. The competitive future is to those that can identify unique differentiators by partners and embrace them.
* Tools: must be simple! People need simple. Can't be any extra work.
* THE most important element in videoconferencing is *eye contact*. People need to see that others are engaged with them and it's eye contact that does it.
* It is possible now to have virtual connections be better than being there in person
* Meetings are just part of collaboration.
* Web 2.0 is a participatory medium (damn...that's one of my slides for Thursday!)
* Discussed Second Life. You talkin' collaboration? What's more collaborative than being in an immersive environment?
* An Accelerating Confluence. Brown said we're on the cusp of a 100 fold change in 'punctuated evolution' disrupting Moore's Law! Mainly due to commodization of hardware and software."

Magnetic field research could make computers 500 times more powerful

Press Release - 22 June 2006 University of Bath: "Magnetic field research could make computers 500 times more powerful

Magnetic fields created using nanotechnology could make computers up to 500 times more powerful, if new research is successful.

The University of Bath is to lead an international £555,000 three-year project to develop a system which could cut out the need for wiring to carry electric currents in silicon chips.

Computers double in power every 18 months or so as scientists and engineers develop ways to make silicon chips smaller. But in the next few years they will hit a limit imposed by the need to use electric wiring, which weakens signals sent between computer components at high speed.

The new research project could produce a way of carrying electric signal without the need for wiring. Wi fi internet systems and mobile phones use wireless technology now, but the electronics that create and use wireless signals are too large to be used within individual microchips successfully.

The research project, which involves four universities in the UK and a university and research centre in Belgium and France, will look at ways of producing microwave energy on a small scale by firing electrons into magnetic fields produced in semi-conductors that are only a few atoms wide and are layered with magnets.

The process, called inverse electron spin resonance, uses the magnetic field to deflect electrons and to modify their magnetic direction. This creates oscillations of the electrons which makes them produce microwave energy. This can then be used to broadcast electric signals in free space without the weakening caused by wires.

The possibility of using the special semi-conductors in this way was first pointed out by Dr Alain Nogaret, of the University of Bath’s Department of Physics, in an important scientific paper in 2005 (Electrically Induced Raman Emission from Planar Spin Oscillator, in Physical Review Letters). The latest resea"

The Future of Media - Mike Walsh Speech (Transcript and Video)

Mike Walsh delivers a great speech on the future of media. Great job Mike!

"I recently gave the keynote speech to the graduating students of the Australian Film, Radio & Television School. It was a great honour to be able to both address the topic - the future of media - and also the audience which included Kim Williams (CEO, Foxtel), Chris Chapman (Head of ACMA), Brian Rosen (CEO, FFC) and Kim Anderson (CEO, Southern Star Entertainment). Somewhat nervewracking as well. Read on for the transcript and the videocast."

Thumbstacks.com - Live presentations on the web!: "Thumbstacks.com!

Welcome to Thumbstacks.com, a new site for making and sharing presentations on the web. This site is just getting started, so if something's missing, or you can't find what you need, please let us know! We'll help out as best we can.
What is it?

With Thumbstacks.com, you can make presentations - like slideshows, or outlines - right in your web browser. When you're done, you can share your presentations with anyone, anywhere, just by sending them a link. Want to see an example? Here's a presentation about us.
[Edit presentations in your web browser]
How does it work?

It all runs right here, in your web browser. You can create your presentation, save it, modify it, update it, whatever - then click 'publish' and you'll get a link you can use to share it with everyone. The best way to understand is to try it out!
How do I get started?

You'll need a user account (it's free!) so click 'sign up' above. Once you have an account, click 'presentation builder', above, to start. If you have any questions, check out the forum or ask us!"

Some facts and predictions to make you think

Total world cross-border trade as a percentage of global GDP
1990: 18%
2015 (estimated): 30%

Number of regional trade agreements
1990: 50
2005: 250

Change in Germany's population over the age of 75 from 2005 to 2015: 33%
Increase in tax burden needed to maintain current benefit levels for Germany's future generation: 90%
Change in Japan's population over the age of 75 from 2005 to 2015: 36%
Change in Japan's population under the age of 5 from 2005 to 2015: -13%
Increase in tax burden needed to maintain current benefit levels for Japan's future generation: 175%

Computational capability of an Intel processor, as measured in instructions per second
1971: 60,000
2005: 10,800,000,000

Multiple by which e-mail traffic has grown from 1997 to 2005: 215
Number of US tax returns prepared in India
2003: 25,000
2005: 400,000

Combined market cap of top 150 mega-institutions
1994: $4 trillion
2004: $11 trillion

Total capital under management by private equity firms in 2003 in the United States and Europe: $1 trillion
Market cap of the NYSE in 2003: $11 trillion
Growth rate of the total wealth controlled by millionaires in China from 1986 to 2001: 600%
Estimated number of Chinese households to achieve European income levels by 2020 (assuming real income grows at 8 percent annually): 100 million
Total number of workers in China: 750 million
Number employed in China's state-owned companies: 375 million

Year when the income gap in the United States between the wealthiest 5% and the bottom 10% was the widest ever recorded: 2004
Part of national GDP spent on the public sector in the United Kingdom in 2004: 20%
UK public-sector spending as a ratio of GDP when transfer payments (for example, pensions) are included: 40%
Proportion of Latin Americans who would prefer a dictator to democracy if he improved their living conditions: 50%

Muslims as a percentage of the global population
2000: 19%
2025 (estimated): 30%

Number of major violent conflicts
1991: 58
2005: 22

Number of coal-fired power plants China plans to build by 2012: 562
Estimated year China will overtake the United States as the number-one carbon emitter: 2025
Estimated year CO2 levels will hit 500 parts per million: 2050
Years since CO2 levels last hit 500 parts per million: 50 million
Average years it takes a CO2 molecule, once produced, to degrade: 100

Global CEOs who think overregulation is a threat to growth: 61%
Probability that a company in an industry's top revenue quartile will not be there in five years: 30 percent

Ten trends to watch in 2006

Macroeconomic factors, environmental and social issues, and business and industry developments will all profoundly shape the corporate landscape in the coming years.

Ian Davis and Elizabeth Stephenson
Web exclusive, January 2006


Those who say that business success is all about execution are wrong. The right product markets, technology, and geography are critical components of long-term economic performance. Bad industries usually trump good management, however: in sectors such as banking, telecommunications, and technology, almost two-thirds of the organic growth of listed Western companies can be attributed to being in the right markets and geographies. Companies that ride the currents succeed; those that swim against them usually struggle. Identifying these currents and developing strategies to navigate them are vital to corporate success.

What are the currents that will make the world of 2015 a very different place to do business from the world of today? Predicting short-term changes or shocks is often a fool's errand. But forecasting long-term directional change is possible by identifying trends through an analysis of deep history rather than of the shallow past. Even the Internet took more than 30 years to become an overnight phenomenon.

Macroeconomic trends

We would highlight ten trends that will change the business landscape. First, we have identified three macroeconomic trends that will deeply transform the underlying global economy.

1. Centers of economic activity will shift profoundly, not just globally, but also regionally. As a consequence of economic liberalization, technological advances, capital market developments, and demographic shifts, the world has embarked on a massive realignment of economic activity. Although there will undoubtedly be shocks and setbacks, this realignment will persist. Today, Asia (excluding Japan) accounts for 13 percent of world GDP, while Western Europe accounts for more than 30 percent. Within the next 20 years the two will nearly converge. Some industries and functions—manufacturing and IT services, for example—will shift even more dramatically. The story is not simply the march to Asia. Shifts within regions are as significant as those occurring across regions. The United States will still account for the largest share of absolute economic growth in the next two decades.
Further reading:
China and India: The race to growth
Mapping the global capital markets

2. Public-sector activities will balloon, making productivity gains essential. The unprecedented aging of populations across the developed world will call for new levels of efficiency and creativity from the public sector. Without clear productivity gains, the pension and health care burden will drive taxes to stifling proportions.

Nor is the problem confined to the developed economies. Many emerging-market governments will have to decide what level of social services to provide to citizens who increasingly demand state-provided protections such as health care and retirement security. The adoption of proven private-sector approaches will likely become pervasive in the provision of social services in both the developed and the developing worlds.
Further reading:
The demographic deficit: How aging will reduce global wealth
Boosting government productivity

3. The consumer landscape will change and expand significantly. Almost a billion new consumers will enter the global marketplace in the next decade as economic growth in emerging markets pushes them beyond the threshold level of $5,000 in annual household income—a point when people generally begin to spend on discretionary goods. From now to 2015, the consumer's spending power in emerging economies will increase from $4 trillion to more than $9 trillion—nearly the current spending power of Western Europe.

Shifts within consumer segments in developed economies will also be profound. Populations are not only aging, of course, but changing in other ways too: for example, by 2015 the Hispanic population in the United States will have spending power equivalent to that of 60 percent of all Chinese consumers. And consumers, wherever they live, will increasingly have information about and access to the same products and brands.
Further reading:
Premium marketing to the masses: An interview with LG Electronics India's managing director
New strategies for consumer goods

Social and environmental trends

Next, we have identified four social and environmental trends. Although they are less predictable and their impact on the business world is less certain, they will fundamentally change how we live and work.

4. Technological connectivity will transform the way people live and interact. The technology revolution has been just that. Yet we are at the early, not mature, stage of this revolution. Individuals, public sectors, and businesses are learning how to make the best use of IT in designing processes and in developing and accessing knowledge. New developments in fields such as biotechnology, laser technology, and nanotechnology are moving well beyond the realm of products and services.

More transformational than technology itself is the shift in behavior that it enables. We work not just globally but also instantaneously. We are forming communities and relationships in new ways (indeed, 12 percent of US newlyweds last year met online). More than two billion people now use cell phones. We send nine trillion e-mails a year. We do a billion Google searches a day, more than half in languages other than English. For perhaps the first time in history, geography is not the primary constraint on the limits of social and economic organization.
Further reading:
The next revolution in interactions
The McKinsey Global Survey of Business Executives, July 2005

5. The battlefield for talent will shift. Ongoing shifts in labor and talent will be far more profound than the widely observed migration of jobs to low-wage countries. The shift to knowledge-intensive industries highlights the importance and scarcity of well-trained talent. The increasing integration of global labor markets, however, is opening up vast new talent sources. The 33 million university-educated young professionals in developing countries is more than double the number in developed ones. For many companies and governments, global labor and talent strategies will become as important as global sourcing and manufacturing strategies.
Further reading:
China's looming talent shortage
Sizing the emerging global labor market

6. The role and behavior of big business will come under increasingly sharp scrutiny. As businesses expand their global reach, and as the economic demands on the environment intensify, the level of societal suspicion about big business is likely to increase. The tenets of current global business ideology—for example, shareholder value, free trade, intellectual-property rights, and profit repatriation—are not understood, let alone accepted, in many parts of the world. Scandals and environmental mishaps seem as inevitable as the likelihood that these incidents will be subsequently blown out of proportion, thereby fueling resentment and creating a political and regulatory backlash. This trend is not just of the past 5 years but of the past 250 years. The increasing pace and extent of global business, and the emergence of truly giant global corporations, will exacerbate the pressures over the next 10 years.

Business, particularly big business, will never be loved. It can, however, be more appreciated. Business leaders need to argue and demonstrate more forcefully the intellectual, social, and economic case for business in society and the massive contributions business makes to social welfare.
Further reading:
What is the business of business?
The role of regulation in strategy

7. Demand for natural resources will grow, as will the strain on the environment. As economic growth accelerates—particularly in emerging markets—we are using natural resources at unprecedented rates. Oil demand is projected to grow by 50 percent in the next two decades, and without large new discoveries or radical innovations supply is unlikely to keep up. We are seeing similar surges in demand across a broad range of commodities. In China, for example, demand for copper, steel, and aluminum has nearly tripled in the past decade.

The world's resources are increasingly constrained. Water shortages will be the key constraint to growth in many countries. And one of our scarcest natural resources—the atmosphere—will require dramatic shifts in human behavior to keep it from being depleted further. Innovation in technology, regulation, and the use of resources will be central to creating a world that can both drive robust economic growth and sustain environmental demands.
Further reading:
Preparing for a low-carbon future
What's next for Big Oil?

Business and industry trends

Finally, we have identified a third set of trends: business and industry trends, which are driving change at the company level.

8. New global industry structures are emerging. In response to changing market regulation and the advent of new technologies, nontraditional business models are flourishing, often coexisting in the same market and sector space.

In many industries, a barbell-like structure is appearing, with a few giants on top, a narrow middle, and then a flourish of smaller, fast-moving players on the bottom. Similarly, corporate borders are becoming blurrier as interlinked "ecosystems" of suppliers, producers, and customers emerge. Even basic structural assumptions are being upended: for example, the emergence of robust private equity financing is changing corporate ownership, life cycles, and performance expectations. Winning companies, using efficiencies gained by new structural possibilities, will capitalize on these transformations.
Further reading:
Strategy in an era of global giants
Loosening up: How process networks unlock the power of specialization

9. Management will go from art to science. Bigger, more complex companies demand new tools to run and manage them. Indeed, improved technology and statistical-control tools have given rise to new management approaches that make even mega-institutions viable.

Long gone is the day of the "gut instinct" management style. Today's business leaders are adopting algorithmic decision-making techniques and using highly sophisticated software to run their organizations. Scientific management is moving from a skill that creates competitive advantage to an ante that gives companies the right to play the game.
Further reading:
Do you know who your experts are?
Matching people and jobs

10. Ubiquitous access to information is changing the economics of knowledge. Knowledge is increasingly available and, at the same time, increasingly specialized. The most obvious manifestation of this trend is the rise of search engines (such as Google), which make an almost infinite amount of information available instantaneously. Access to knowledge has become almost universal. Yet the transformation is much more profound than simply broad access.

New models of knowledge production, access, distribution, and ownership are emerging. We are seeing the rise of open-source approaches to knowledge development as communities, not individuals, become responsible for innovations. Knowledge production itself is growing: worldwide patent applications, for example, rose from 1990 to 2004 at a rate of 20 percent annually. Companies will need to learn how to leverage this new knowledge universe—or risk drowning in a flood of too much information.
Further reading:
The 21st-century organization
Making a market in knowledge

Companies need to understand the implications of these trends alongside customer needs and competitive developments. Executives who align their company's strategy with these factors will be the best placed to succeed. Reflecting on these trends will be time well spent.

MARKETERS LOSE CONFIDENCE IN TV ADVERTISING
78% Say Effectiveness Is Diminishing; Clutter, DVRs to Blame
March 22, 2006
QwikFIND ID: AAR53O
By Abbey Klaassen
NEW YORK (AdAge.com) -- Major brand advertisers responsible for $20 billion in ad spending are losing confidence in the effectiveness of TV advertising. More than three out of four advertisers -- 78% to be exact -- said they have less confidence today in the effectiveness of TV advertising than they did two years ago, according to a survey released at today’s Association of National Advertisers TV Ad Forum.

More than three out of four advertisers -- 78% to be exact -- said they have less confidence today in the effectiveness of TV advertising than they did two years ago.

The study asked 133 national advertisers representing more than $20 billion in ad dollars about their attitudes toward TV advertising and how new technologies such as digital video recorders and video on demand will have on their TV ad budgets.
Almost 70% of advertisers believe DVRs and VOD will reduce or destroy the effectiveness of traditional 30-second commercials. Instead, they are looking at alternatives such as branded entertainment within TV programs (61%), TV program sponsorships (55%), interactive advertising during TV programs (48%), online video ads (45%) and product placement (44%).
Web, search marketing
Additionally, 80% will spend more of their advertising budgets on Web advertising and 68% are looking into search engine marketing.

Forrester VP Josh Bernoff addressed the advertisers at the forum, explaining that Forrester is very confident in pegging current DVR penetration at 10%. The biggest news, however, is that it is poised for a rapid growth spurt, thanks to cable and satellite operators’ pushing the set top boxes and reducing the prices. By 2010, 43 million households -- 40% of the U.S. -- will have DVRs.
He described agencies and advertisers as “hard-nosed” and “focused on data” and said that while the advance of DVRs doesn’t spell the end of TV’s 30-second spots, it will incite a change.

Little real change

Yet for all of advertisers’ blustering talk about DVRs and the decreased efficacy of TV, there has been little real change. Even today, when Mr. Bernoff asked advertisers via an instant electronic polling system what they believed would be the most promising video advertising vehicle of the future, 22% thought it was regular TV, making it the second most popular choice. Interactive TV was the leader, with 31%, and in third place with 21% was Internet video. Cable VOD was fourth with 16%.
When instantly polled as to the biggest threat to TV, 48% of advertisers resoundingly called commercial clutter the top threat, followed by 17% who feared DVR ad skipping.

Prove viewers watch DVR ads

Other speakers at the forum echoed Mr. Bernoff’s thoughts about the impact of DVRs. Kia Motors Chief Marketing Officer Ian Beavis, who famously struck network TV from Mitsubishi’s media mix when he was leading marketing at the struggling auto brand, said he’s yet to see proof that viewers watch time-shifted ads.
“Prove to us they really are watching them and we’ll pay for it,” he charged the TV network executives in attendance.
Mr. Beavis also defended his decision to pull Mistubishi's TV advertising spending and blamed the automaker's subsequent sales problems on the product. He held up the Mazda 5 as an example of an auto marketer that achieved sales success without using TV in the media mix.

He urged advertisers to not just talk the talk, but walk the walk. “Don’t get up and bitch and moan and then do the same thing you’ve always done,” he said. “Do the right thing to do for that brand at that particular time.”

Craig Rispin, Futurist is interviewed about trends influencing the workplace.


MP3 File

New centre to deliver innovation to the real world
AUTHOR: Deborah Tarrant DATE: 08.12.05 ISSUE 3, 2005

An initiative to establish a pioneering Centre for Innovation, Commercialisation and Entrepreneurship is set to bridge the gap that currently exists between Australia’s great scientific inventions and commercial success.
With the promise of delivering a new generation of entrepreneurs, a new centre – a joint venture between the Australian Graduate School of Management (AGSM) and the faculties of Engineering and Science at the University of New South Wales (UNSW) – will promote the development of market-driven innovation from research.


Innovation and entrepreneurship are vital for wealth creation, and wealth creation is a fundamental part of every growing society.
Illustration: Gregory Baldwin

Announcing the initiative, AGSM Dean Rob McLean said fast-tracking capabilities in innovation and commercialisation is vital as it relates directly to future economic prosperity. Despite Australia’s great strengths in science and abiding interest in entrepreneurship, he observed: “we have struggled to get to the end point of commercialisation of technology.”

The centre will forge a close connection between the worlds of business and technological research. Its principal aim will be to accelerate the development of technology-based global companies from outstanding university research by providing a range of innovation enablers, market strategies and funding support.

“We will address how to bring market-driven commercialisation to bear in a university setting,” Mr McLean said. “This will involve linking some of the world’s best entrepreneurs with AGSM and UNSW, inviting them to visit, to share their experiences and perspectives.”

Collaboration between a world leading business school and internationally recognised engineering and science schools with the focus of developing successful entrepreneurs is a first for Australia.

Fast-tracking capabilities in innovation and commercialisation is vital as it relates directly to future economic prosperity.
Rob McLean
Photo: David Smyth

UNSW’s Dean of Faculty of Engineering Professor Brendon Parker welcomed the initiative as particularly timely. With many big companies closing down research and development activities, the need for engineering graduates to have entrepreneurial skills and to be ready to move into start-ups and small companies is pressing, he said.
The course will be unique in Australia for delivering the experience of learning through practical application by students working step-by-step through the processes of innovation and commercialisation.

Acknowledging the importance of this initiative, the business community has moved to provide financial backing. With a goal of raising $2.5 million to establish the centre and for the appointment of a Chair of Innovation, Commercialisation and Entrepreneurship, funding commitments of more than $750,000 already have been received towards the project, including substantial seed funding of $500,000 over five years from Dr Peter Farrell, chairman and chief executive of Resmed, the Australian-founded medical technology company. Dr Farrell’s achievements in innovation and commercialisation were lauded at the launch of the initiative by UNSW Vice-Chancellor, Professor Mark Wainwright, as one of Australia’s outstanding success stories.

Dr Farrell, a Visiting Professor at UNSW and member of AGSM’s Advisory Council, says Australia needs “a cultural wake-up call”. “We need to build a strong, viable entrepreneurial culture where innovation thrives. Innovation and entrepreneurship are crucial for wealth creation – and wealth creation is fundamentally part of a growing society,” Dr Farrell says.

When people think of innovation in an Australian context they look to globally successful companies like ResMed and Cochlear, but the right education and environment will deliver opportunities for many more entrepreneurial success stories, Dr Farrell believes.

Dr Farrell who served in the UNSW Engineering faculty through the 1970s and 1980s is eager to ensure universities are “connected to the real world” and “outcomes focused”. Typically Australia has been poor at commercialisation because it has concentrated on input and processes, he says. As a major supporter of the Innovation, Commercialisation and Entrepreneurship initiative, Dr Farrell says he hopes the new centre will deliver a whole new way of looking at the world, a fresh mindset where the considerations of the market come first, and innovation and infrastructure is built to meet those needs.

"Encouraging a new mindset by providing practical learning opportunities is essential."
Dr Peter Farrell AM

In 1989, Dr Farrell, with several others, founded ResMed, a born-global business, to develop devices for sleep disordered breathing. ResMed is now one of the world leaders in its field with distribution to more than 60 countries. The company has had 41 consecutive record income quarters since it listed on the NYSE in 1995. Despite a substantially academic background, Dr Farrell honed his own entrepreneurial skills after a wide exposure to industry in his early career.

Gary Zamel, founder of Mine Site Technologies, who is playing a key role in establishing and fundraising for the initiative, says for too long we’ve been saying Australia is good at R&D but poor at commercialization. “If Australia is serious about taking its technologies into global markets then we need to teach young graduates the whole process of commercialization and to develop a culture where people learn from real live businesses that it’s possible to go offshore at an early stage.” Mr Zamel, a UNSW alumnus and long-term member of UNSW’s School of Mining Engineering Advisory Board, believes entrepreneurial skills can be learned through the exposure to companies such as ResMed, Cochlear and Mine Site Technologies.

The enthusiasm and energy of the business community for the initiative is providing an entrepreneurial zest to the formative stages of the centre, promoting its establishment sooner rather than later.

With a target launch date of mid-2006, the new cross-disciplinary centre will deliver award and short courses to AGSM MBA students and advanced under-graduate and post-graduate students of UNSW.

Key to the centre will be nurturing a real understanding of the relationship between technology and market needs, confirms Rob McLean. Flowing from this will be the dual benefits of clearly identifying the market’s requirements and the ability of business to support research.

One of the aims will be to offer students real world experience with industry from the creation of a business plan through the innovation phase of developing and protecting technology and other products, and finally commercialization, Mr McLean says. The impact of market forces will be experienced firsthand on product and process development, the management of new ventures, intellectual property and capital-raising.

The course will be unique in Australia for delivering the experience of learning through practical application by students working step-by-step through the processes of innovation and commercialisation, Rob McLean believes.

Encouraging a new mindset by providing practical learning opportunities is essential, according to Dr Farrell. “You can read about entrepreneurship and innovation in a book, but to succeed at it you really have to smell it and feel it,” he says.

Mr McLean observes the global trend for the best business schools to link closely with other schools to tackle innovation and entrepreneurship. US-based Massachusetts Institute of Technology (MIT), recently listed by The Economist among the world’s top five universities, has created an exemplary model by establishing links between its engineering and business schools. MIT’s Deshpande Centre nurtures emerging technologies by connecting MIT innovators with venture capitalists and entrepreneurial companies.
One of the aims will be to offer students real world experience with industry from the creation of a business plan through the innovation phase of developing and protecting technology and other products, and finally commercialization.

While the AGSM-UNSW initiative is in the planning stages, a two-semester course is envisaged with the first focusing on how to approach commercialisation and innovation, including elements of design, marketing, technology, management and funding. In the second semester, students would learn what it takes to be an entrepreneur and be actively involved in the development and pitching of a business plan, Mr McLean says.

Students may approach the centre with a formed business plan, or develop their skills by being assigned to an industry project as part of the course. Exposure to successful entrepreneurs and innovators during the course or as part of a CEO speaker series would also form part of the students’ learning.

While the science and engineering disciplines are responsible for substantial technological inventions, the centre’s entrepreneurial focus will encompass wider enterprise opportunities, Rob McLean says.

From left: Professor Mark Wainwright AM, Dr Chris Roberts, Gary Zamel, Dr Peter Farrell AM and Rob McLean.

A structure for Australia’s first Innovation, Commercialisation and Entrepreneurship Centre and its programs will be determined pending the formation of an interdisciplinary committee and advisory board. However, a significant portion of its future program has a relevance to current learning delivered by AGSM where courses are conducted in entrepreneurship and strategy, new product development, private equity finance and the management of intellectual property. “While these courses are currently on offer to graduates, they require an integrative focus on innovation,” explains Mr McLean. The school finds clear evidence of entrepreneurial potential annually in its popular annual Connector business plan competition with further plans to develop this program with UNSW.

Insights and knowledge already delivered as a basis of some AGSM courses would combine with the scientific expertise at UNSW with further links anticipated with the medical faculty, and potentially including design capability coming from the University’s Department of the Built Environment and College of Fine Arts, says Rob McLean. Increasingly, international trends show business schools exploring new perspectives in association with design schools.

Why biotech won't happen overnight
AUTHOR: Deborah Tarrant DATE: 08.12.05 ISSUE 3, 2005

The biotechnology sector, with its voracious capital requirements, extensive timeframes for scientific development and growing ethical sensitivities, offers unique and compelling challenges.
Opportunities for managers, scientists, regulators and venture capitalists are emerging as the biotech revolution is poised to rival the recent information technology explosion in its impact.


One of the major concerns for the biotech sector globally is developing competent individuals who have the capacity to combine science and business.
Illustration: Gregory Baldwin

The need to understand not only where potential opportunities may lie in fields ranging from human health to agriculture, food, and material science but the driving forces and issues of the biotechnology sector is giving impetus to a course that combines the management expertise of AGSM with the scientific knowledge of UNSW, and offers an important international perspective.

The 10-week Managing Biotechnology course designed by AGSM’s Professor Michael Vitale and UNSW’s Emeritus Professor Peter Rogers, who have been joined this year by Professor Nicholas Mottis of the French business school, ESSEC, focuses on the processes and skills for managing both the development of biotechnology-based products and the organisations responsible for bringing those products to market.

One of the major concerns for the biotech sector globally, according to Professor Mottis, is developing competent individuals who have the capacity to combine science and business. “In Europe, there are still too few project managers who really understand how to make the links between scientific innovation and the market. There are many more such managers in the United States, where the biotech sector is more mature.”

Much attention has been focused on star scientific research and breakthroughs in biotech, in particular the human genome project and its implications for genetic disease, stem-cell research, genetically modified crops, new pharmaceuticals and biomedical devices where some Australian companies have already made great inroads. However, leveraging scientific discoveries demands specific management skills to go through the phases of capital raising and dealing with the business community and, eventually, bringing products to market. Increasingly, science graduates are considering biotech management or consulting as a career option, observes Professor Rogers.

There are clear similarities between the Australian and the European biotech sectors – and the pressing question still surrounds the survival and development of many small companies in a high-risk environment, Professor Mottis observes.

"Companies are being formed when there is just a research project, before there's a product or even a product concept."
Professor Michael Vitale

“It’s a very innovative domain with social and political issues that have to be addressed. In the development of new drugs and medical devices, there are always very sensitive questions about the end product.”

While developing awareness of the skills required to manage biotech companies is one of the clear aims of the course, it is also highly relevant for the financial and investment community, and for regulators.

Creating the alliance between business, government and science is key, according to Professor Vitale, whose recent research has shown many Australian biotech companies were forming too early, but commercialising too late. “Companies are being formed when there is just a research project, before there’s a product or even a product concept,” he says. Raising money for an organization at this stage is risky. “Either no one will invest or they will do it under such stringent terms and conditions that it becomes difficult for the company to develop.”

These ventures are often seen as high risk, and Australians can act as if they are very risk averse, Professor Vitale notes. (He points out the irony that more than three times the amount of venture capital invested in Australian biotech last year was wagered on the last Melbourne Cup.) It has been widely reported that Australia’s investment in scientific research falls well below the OECD average.
One objective of the course is to bridge the gap between scientific and business communities.

Professor Vitale suggests the currently limited investment in biotech is too thinly spread. The solution may lie in focusing Australia’s biotech endeavours in a particular area as New Zealand has done with agricultural biotech. The Managing Biotechnology course shows the breadth of the sector covering the domains of white biotechnology (industrial), green (agricultural) and red (health and medical).

One of the critical areas for the viability of this sector is promoting a broader understanding of its specific features, in particular the extensive timeframes involved in developing and testing products, which historically have deterred venture capitalists from investing in biotech, say the course organisers.

The urgent need for capital remains crucial and the immediacy of that need presents a sharp contrast to the long-term product development periods. “When a new drug is developed, it still takes somewhere between 10-15 years to test it and to bring it to market, and it may cost $700-800 million across that timeframe,” explains Professor Rogers.

One objective of the course is to bridge the gap between scientific and business communities by exploring the background reasons for biotech companies requiring “patient capital”. The protracted timing means companies must find ways to add value along the track, to enable venture capital companies to get their money back on the way.

In Australia, the comparatively small size of the biotech sector prompts frequent discussions about alliances and mergers as companies grapple for the funds to move to the next development phase, but very few such combinations have in fact taken place.

A wide range of ethical issues also are raised by biotechnology, among them is the debate over large pharmaceutical companies holding the patents on high cost drugs which are most urgently required in Third World countries to treat malaria, HIV and influenza.

Competing pressures and ambiguities emerge between the development of potentially life-saving drugs juxtaposed with the importance for treatments to be closely monitored for longer-term problems.

The course offers MBA students the opportunity to explore broad scenarios of where new opportunities lie and provides background in science as well. Insights are delivered through case studies and guest speakers from industry. “Our aim is deliver sufficient scientific insight, so the students have some language, but they don’t need to be molecular biologists to understand what’s going on”, explains Professor Rogers, whose fields of research encompass the environment and agriculture. His most recent research has focused on biotechnology-based strategies for conversion of renewable agricultural and forestry resources to fuel ethanol and fermentation chemicals.

While the course has been designed for MBA students with a view to broadening their awareness of global career possibilities, its scope covers wider interests. “It asks students to consider the issues from all perspectives: How would you feel if you were a producer, a consumer, a citizen, a regulator – and what would you do?” asks Professor Vitale.

Essentially, the most compelling aspect of biotechnology is that it’s about modifying, enhancing and preserving life. What makes it so engaging is also what makes it highly challenging. The three lecturers concur that biotech is a sector that has featured great highs in scientific discovery and business community interest immediately following significant breakthroughs, and great lows. Reasons for these are also examined.

Biotechnology is a field that generates passion in people, Professor Vitale reports. “There’s a dedication to promotion of the sector, even when there is no conceivable personal gain. People are passionate about it because it’s not just about cold science. It’s about real effects on real people,” he says. “It can change people’s lives.”

New EDSF Study Identifies Current And Future Trends In Print-For-Pay Services Market

Source: Press release issued by the company, unless otherwise noted.

ROLLING HILLS, Calif., U.S.A. (Jan. 18, 2006) --- The Electronic Document Systems Foundation (EDSF), the non-profit organization dedicated to the document management and communications industry, announced the publication of an insightful co-branded research paper on industry trends in the print-for-pay services market. The study was designed to gain an understanding of the current state of business, evaluate future trends, establish perceptions of customer expectations, and to identify and understand any gaps in perception between print providers and the vendors who supply them. “Supplier and Service Provider Priorities: 2005 Survey Results” is a collaboration between InfoTrends/CAP Ventures ( Web Site Executives Related Articles Google) (www.capv.com), the leading worldwide market research and strategic consulting firm for the digital imaging and document solutions industry based in Weymouth, Mass., and the Graphic Communication Program at Clemson University in Clemson, S.C.

"This important study examines the requirements of print-for-pay service providers and the vendors who work with them,” explained Charlie Corr, group director, InfoTrends/CAP Ventures. “It provides critical information on both the current state and future direction of our industry. We are pleased to have worked on this critical study with EDSF and our research partner, Clemson University."

According to the study, print providers and vendors share a common market. Factors that benefit print providers indirectly benefit vendors, as printers will buy more. Print providers also benefit from the technical knowledge and expertise vendors can provide to them. In some cases, providers and vendors have common perceptions of the market; in other cases they do not. In many areas, significant gaps in beliefs are evident between print providers and vendors. To benefit the industry as a whole, vendors should work more closely with print providers to understand the trends and beliefs of print providers in order to provide the advice and counsel expected of them, as well as make more accurate sales forecasts.

Looking to the future, the study suggests that print providers focus on aligning investment plans with strategic intent. Achieving “super efficiency” requires investments in software and services that many print providers are not planning to make. If this gap persists, it will lead to many print providers exiting a competitive landscape, predict the authors.

Highlights of “Supplier and Service Provider Priorities: 2005 Survey Results” include:

---Both groups were optimistic about print revenue moving forward with the strongest growth over the next two years expected to come from variable data printing and digital full color printing.

---Print providers and suppliers have different views of the future. Print providers forecast growth for offset printing, fulfillment and kitting, and facilities management. Suppliers, on the other hand, forecast a decline in offset print revenue and are less optimistic about growth in fulfillment and kitting and facilities.

---Among the print providers surveyed, Adobe (Stock Price Web Site Executives Related Articles Google) has an enviable position. Providers identified PostScript as the most common print language, PDF as the most popular file format, and had a high level of use and interest in a PDF-enabled workflow.

---Vendors and print providers have very different views on technology adoption. Forty-four percent of the print providers described themselves as early adopters of new technology, 40% as mainstream adopters, and 16% as laggards. Vendors had a much different view, believing that 25% of print providers were early adopters of new technology, 45% were mainstream, and 30% were laggards.

“Sponsoring research that has significant value in today’s workplace is very important to EDSF,” said EDSF Vice Chair of Research Kenneth M. Morris, Ph.D., CEO of Lightbulb Press. ”We’re proud to provide on-target information such as this study through the hard work and expertise of InfoTrends/CAP Ventures and Clemson University.”

“Supplier and Service Provider Priorities: 2005 Survey Results” is available as a free download at www.edsf.org.

Web skeptics, take note: The sky hasn't fallen
Internet doesn't destroy relationships, a new study finds, it strengthens them
By JILL MAHONEY
Thursday, January 26, 2006 Page A8
SOCIAL TRENDS REPORTER

The initial warnings about the Internet's creep into modern lives were dire: Communities would crumble because people would be chained to their computers.

But a new study by Canadian researchers suggests the Web actually expands and strengthens relationships.

"The Internet is adding on to community rather than destroying it," said Barry Wellman, a sociology professor at the University of Toronto who co-wrote the report. "There were a huge number of people running around saying the sky was falling a few years ago. What we found is the sky isn't falling, that life is going on and quite happily."

The study, which was released yesterday, examined Americans' Internet habits and found that computer users have larger social networks than non-users. And, perhaps surprisingly, people who use e-mail actually have more phone and face-to-face contact with their friends, families and associates.
"The current generation of e-mail users is communicating much more often than recent generations and possibly more often than any previous generation since people huddled in caves with only conversation to pass the nights away," says the study, which was funded by the Pew Internet & American Life Project.

Heavy e-mail users have more than twice as much land-line phone contact within their social networks and three times as much cellular phone contact than people who do not use e-mail, according to the report.

"E-mail supplements, rather than replaces, the communication people have with people who are very close to them -- as well as . . . with those not so close," the report says in noting e-mail's key role in maintaining ties between acquaintances.

Prof. Wellman, who was asked by the Pew organization to get involved with the research, said the conclusions are "highly similar to what we'd find with Canadians."

The reason e-mail breeds increased communication, the report suggests, could be because, as the old maxim goes, one thing simply leads to another.

For example, an e-mail exchange between colleagues about a complex issue might spark a phone call to continue the discussion. Or friends could use e-mail to arrange a night at the movies.

"There's an ecology of media and they all fit together," Prof. Wellman said.

E-mail -- which is the Internet's most popular application -- has long been extolled for helping far-flung friends and relatives stay in touch because it is convenient, inexpensive, unobtrusive and fits seamlessly into busy modern lives.

While social networks were once geographically based -- people's lives revolved around local friends, neighbours and co-workers -- they are now much more dispersed. (The report looked at other Internet applications, including instant messaging, weblogs and webcams.)

Take Jeffrey Boase, a University of Toronto doctoral student in sociology who also co-wrote the report. Most mornings, Mr. Boase talks to his girlfriend in Japan by webcam.

The pair, who met three years ago in Kyoto, were initially friends but their romance heated up over e-mail. Their relationship became serious during a fall visit and is now sustained by long webcam conversations.

"It's interesting -- we started with e-mail when we didn't know each other as well and then the more we got to know each other, we moved to the more rich form of communication," he said.

However, the report, which is primarily based on the findings of a telephone survey of 2,200 American adults done in February and March of 2004, also found the "great bulk of ties" nurtured by the Internet were among people living in the same city, Prof. Wellman said.

"That's where our lives are. We still are physical beings, we're not just computer bits. We're still atoms, we still have physical needs," he said.

But despite the Internet's deep reach, the survey found that the most common mode of communication remains the land-line telephone and personal interaction.

The study also found that Internet users are more likely than non-users to get help from their contacts.

As well, nearly one-third of adult Americans said the Internet had played a key role in dealing with at least one recent major life decision.

Outsourcing Innovation
First came manufacturing. Now companies are farming out R&D to cut costs and get new products to market faster. Are they going too far?

As the Mediterranean sun bathed the festive cafés and shops of the Côte d'Azur town of Cannes, banners with the logos of Motorola (MOT ), Royal Philips Electronics (PHG ), palmOne (PLMO ), and Samsung fluttered from the masts of plush yachts moored in the harbor. On board, top execs hosted nonstop sales meetings during the day and champagne dinners at night to push their latest wireless gadgets. Outside the city's convention hall, carnival barkers, clowns on stilts, and vivacious models with bright red wigs lured passersby into flashy exhibits. For anyone in the telecom industry wanting to shout their achievements to the world, there was no more glamorous spot than the sprawling 3GSM World Congress in Southern France in February.

Yet many of the most intriguing product launches in Cannes took place far from the limelight. HTC Corp., a red-hot developer of multimedia handsets, didn't even have its own booth. Instead, the Taiwanese company showed off its latest wireless devices alongside partners that sell HTC's models under their own brand names. Flextronics Corp. demonstrated several concept phones exclusively behind closed doors. And Cellon International rented a discrete three-room apartment across from the convention center to unveil its new devices to a steady stream of telecom executives. The new offerings included the C8000, featuring eye-popping software. Cradle the device to your ear and it goes into telephone mode. Peer through the viewfinder and it automatically shifts into camera mode. Hold the end of the device to your eye and it morphs into a videocam.

HTC? Flextronics? Cellon? There's a good reason these are hardly household names. The multimedia devices produced from their prototypes will end up on retail shelves under the brands of companies that don't want you to know who designs their products. Yet these and other little-known companies, with names such as Quanta Computer, Premier Imaging, Wipro Technologies (WIT ), and Compal Electronics, are fast emerging as hidden powers of the technology industry.

They are the vanguard of the next step in outsourcing -- of innovation itself. When Western corporations began selling their factories and farming out manufacturing in the '80s and '90s to boost efficiency and focus their energies, most insisted all the important research and development would remain in-house.

But that pledge is now passé. Today, the likes of Dell (DELL ), Motorola, (MOT ) and Philips are buying complete designs of some digital devices from Asian developers, tweaking them to their own specifications, and slapping on their own brand names. It's not just cell phones. Asian contract manufacturers and independent design houses have become forces in nearly every tech device, from laptops and high-definition TVs to MP3 music players and digital cameras. "Customers used to participate in design two or three years back," says Jack Hsieh, vice-president for finance at Taiwan's Premier Imaging Technology Corp., a major supplier of digital cameras to leading U.S. and Japanese brands. "But starting last year, many just take our product. Because of price competition, they have to."

While the electronics sector is furthest down this road, the search for offshore help with innovation is spreading to nearly every corner of the economy. On Feb. 8, Boeing Co. (BA ) said it is working with India's HCL Technologies to co-develop software for everything from the navigation systems and landing gear to the cockpit controls for its upcoming 7E7 Dreamliner jet. Pharmaceutical giants such as GlaxoSmithKline (GSK ) and Eli Lilly (LLY )are teaming up with Asian biotech research companies in a bid to cut the average $500 million cost of bringing a new drug to market. And Procter & Gamble Co. (PG ) says it wants half of its new product ideas to be generated from outside by 2010, compared with 20% now.

Competitive Dangers
Underlying this trend is a growing consensus that more innovation is vital -- but that current R&D spending isn't yielding enough bang for the buck. After spending years squeezing costs out of the factory floor, back office, and warehouse, CEOs are asking tough questions about their once-cloistered R&D operations: Why are so few hit products making it out of the labs into the market? How many of those pricey engineers are really creating game-changing products or technology breakthroughs? "R&D is the biggest single remaining controllable expense to work on," says Allen J. Delattre, head of Accenture Ltd.'s (ACN ) high-tech consulting practice. "Companies either will have to cut costs or increase R&D productivity."

The result is a rethinking of the structure of the modern corporation. What, specifically, has to be done in-house anymore? At a minimum, most leading Western companies are turning toward a new model of innovation, one that employs global networks of partners. These can include U.S. chipmakers, Taiwanese engineers, Indian software developers, and Chinese factories. IBM (IBM ) is even offering the smarts of its famed research labs and a new global team of 1,200 engineers to help customers develop future products using next-generation technologies. When the whole chain works in sync, there can be a dramatic leap in the speed and efficiency of product development.

The downside of getting the balance wrong, however, can be steep. Start with the danger of fostering new competitors. Motorola hired Taiwan's BenQ Corp. to design and manufacture millions of mobile phones. But then BenQ began selling phones last year in the prized China market under its own brand. That prompted Motorola to pull its contract. Another risk is that brand-name companies will lose the incentive to keep investing in new technology. "It is a slippery slope," says Boston Consulting Group Senior Vice-President Jim Andrew. "If the innovation starts residing in the suppliers, you could incrementalize yourself to the point where there isn't much left."

Such perceptions are a big reason even companies that outsource heavily refuse to discuss what hardware designs they buy from whom and impose strict confidentiality on suppliers. "It is still taboo to talk openly about outsourced design," says Forrester Research Inc. (FORR ) consultant Navi Radjou, an expert on corporate innovation.

The concerns also explain why different companies are adopting widely varying approaches to this new paradigm. Dell, for example, does little of its own design for notebook PCs, digital TVs, or other products. Hewlett-Packard Co. (HPQ ) says it contributes key technology and at least some design input to all its products but relies on outside partners to co-develop everything from servers to printers. Motorola buys complete designs for its cheapest phones but controls all of the development of high-end handsets like its hot-selling Razr. The key, execs say, is to guard some sustainable competitive advantage, whether it's control over the latest technologies, the look and feel of new products, or the customer relationship. "You have to draw a line," says Motorola CEO Edward J. Zander. At Motorola, "core intellectual property is above it, and commodity technology is below."

Wherever companies draw the line, there's no question that the demarcation between mission-critical R&D and commodity work is sliding year by year. The implications for the global economy are immense. Countries such as India and China, where wages remain low and new engineering graduates are abundant, likely will continue to be the biggest gainers in tech employment and become increasingly important suppliers of intellectual property. Some analysts even see a new global division of labor emerging: The rich West will focus on the highest levels of product creation, and all the jobs of turning concepts into actual products or services can be shipped out. Consultant Daniel H. Pink, author of the new book A Whole New Mind, argues that the "left brain" intellectual tasks that "are routine, computer-like, and can be boiled down to a spec sheet are migrating to where it is cheaper, thanks to Asia's rising economies and the miracle of cyberspace." The U.S. will remain strong in "right brain" work that entails "artistry, creativity, and empathy with the customer that requires being physically close to the market."

You can see this great divide already taking shape in global electronics. The process started in the 1990s when Taiwan emerged as the capital of PC design, largely because the critical technology was standardized, on Microsoft Corp.'s (MSFT ) operating system software and Intel Corp.'s (INTC ) microprocessor. Today, Taiwanese "original-design manufacturers" (ODMS), so named because they both design and assemble products for others, supply some 65% of the world's notebook PCs. Quanta Computer Inc. alone expects to churn out 16 million notebook PCs this year in 50 different models for buyers that include Dell, Apple Computer (AAPL ), and Sony (SNE ).

Now, Taiwanese ODMs and other outside designers are forces in nearly every digital device on the market. Of the 700 million mobile phones expected to be sold worldwide this year, up to 20% will be the work of ODMs, estimates senior analyst Adam Pick of the El Segundo (Calif.) market research firm iSuppli Corp. About 30% of digital cameras are produced by ODMs, 65% of MP3 players, and roughly 70% of personal digital assistants (PDAs). Building on their experience with PCs, they're increasingly creating recipes for their own gizmos, blending the latest advances in custom chips, specialized software, and state-of-the-art digital components. "There is a lot of great capability that has grown in Asia to develop complete products," says Doug Rasor, worldwide strategic marketing manager at chipmaker Texas Instruments Inc. TI often supplies core chips, along with rudimentary designs, and the ODMs take it from there. "They can do the system integration, the plastics, the industrial design, and the low-cost manufacturing, and they are happy to put Dell's name on it. That is a megatrend in the industry," says Rasor.

Taiwan's ODMs clearly don't regard themselves as mere job shops. Just ask the top brass at HTC, which creates and manufactures smart phones for such wireless service providers as Vodafone and Cingular as well as equipment makers it doesn't identify. "We know this kind of product category a lot better than our customers do," says HTC President Peter Chou. "We have the capability to integrate all the latest technologies. We do everything except the Microsoft operating system."

Or stop in to Quanta's headquarters in the Huaya Technology Park outside Taipei. Workers are finishing a dazzling structure the size of several football fields, with a series of wide steps leading past white columns supporting a towering Teflon-and-glass canopy. It will serve as Quanta's R&D headquarters, with thousands of engineers working on next-generation displays, digital home networking appliances, and multimedia players. This year, Quanta is doubling its engineering staff, to 7,000, and its R&D spending, to $200 million.

Why? To improve its shrinking profit margins -- and because foreign clients are demanding it. "What has changed is that more customers need us to design the whole product," says Chairman Barry Lam. For future products, in fact, "it's now difficult to get good ideas from our customers. We have to innovate ourselves."

Sweeping Overhaul
India is emerging as a heavyweight in design, too. The top players in making the country world-class in software development, including HCL and Wipro, are expected to help India boost its contract R&D revenues from $1 billion a year now to $8 billion in three years. One of Wipro's many labs is in a modest office off dusty, congested Hosur Road in Bangalore. There, 1,000 young engineers partitioned into brightly lit pods jammed with circuit boards, chips, and steel housings hunch over 26 development projects. Among them is a hands-free telephone system that attaches to the visor of a European sports car. At another pod, designers tinker with a full dashboard embedded with a satellite navigation system. Inside other Wipro labs in Bangalore, engineers are designing prototypes for everything from high-definition TVs to satellite set-top boxes.

Perhaps the most ambitious new entrant in design is Flextronics. The manufacturing behemoth already builds networking gear, printers, game consoles, and other hardware for the likes of Nortel Networks (NT ), Xerox (XRX ), HP, Motorola, and Casio Computer. But three years ago, it started losing big cell-phone and PDA orders to Taiwanese ODMs. Since then, CEO Michael E. Marks has shelled out more than $800 million on acquisitions to build a 7,000-engineer force of software, chip, telecom, and mechanical designers scattered from India and Singapore to France and Ukraine. Marks's splashiest move was to pay an estimated $30 million for frog design Inc., the pioneering Sunnyvale (Calif.) firm that helped design such Information Age icons as Apple Computer Inc.'s original Mac in 1984. So far, Flextronics has developed its own basic platforms for cell phones, routers, digital cameras, and imaging devices. His goal is to make Flextronics a low-cost, soup-to-nuts developer of consumer-electronics and tech gear.

Marks has an especially radical take on where all this is headed: He believes Western tech conglomerates are on the cusp of a sweeping overhaul of R&D that will rival the offshore shift of manufacturing. In the 1990s, companies like Flextronics "completely restructured the world's electronics manufacturing," says Marks. "Now we will completely restructure design." When you get down to it, he argues, some 80% of engineers in product development do tasks that can easily be outsourced -- like translating prototypes into workable designs, upgrading mature products, testing quality, writing user manuals, and qualifying parts vendors. What's more, most of the core technologies in today's digital gadgets are available to anyone. And circuit boards for everything from cameras to network switches are becoming simpler because more functions are embedded on semiconductors. The "really hard technology work" is migrating to chipmakers such as Texas Instruments, Qualcomm (QCOM ), Philips, Intel, and Broadcom (BRCM ), Marks says. "All electronics are on the same trajectory of becoming silicon surrounded by plastic."

Why then, Marks asks, should Nokia (NOK ), Motorola, Sony-Ericsson, Alcatel (ALA ), Siemens (SI ), Samsung, and other brand-name companies all largely duplicate one another's efforts? Why should each spend $30 million to develop a new smartphone or $200 million on a cellular base station when they can just buy the hardware designs? The ultimate result, he says: Some electronics giants will shrink their R&D forces from several thousand to a few hundred, concentrating on proprietary architecture, setting key specifications, and managing global R&D teams. "There is no doubt the product companies are going to have fewer people design stuff," Marks predicts. "It's going to get ugly."

Granted, Marks's vision is more than a tad extreme. True, despite the tech recovery, many corporate R&D budgets have been tightening. HP's R&D spending long hovered around 6% of sales, but it's down to 4.4% now. Cisco Systems' (CSCO ) R&D budget has dropped from its old average of 17% to 14.5%. The numbers also are falling at Motorola, Lucent Technologies (LU ), and Ericsson. In November, Nokia Corp. said it aims to trim R&D spending from 12.8% of sales in 2004 to under 10% by the end of 2006.

Close to the Heart
Still, most companies insist they will continue to do most of the critical design work -- and have no plans to take a meat ax to R&D. A Motorola spokesman says it plans to keep R&D spending at around 10% for the long term. Lucent says its R&D staff should remain at about 9,000, after several years of deep cuts. And while many Western companies are downsizing at home, they are boosting hiring at their own labs in India, China, and Eastern Europe. "Companies realize if they want a sustainable competitive advantage, they will not get it from outsourcing," says President Frank M. Armbrecht of the Industrial Research Institute, which tracks corporate R&D spending.

Companies also worry about the message they send investors. Outsourcing manufacturing, tech support, and back-office work makes clear financial sense. But ownership of design strikes close to the heart of a corporation's intrinsic value. If a company depends on outsiders for design, investors might ask, how much intellectual property does it really own, and how much of the profit from a hit product flows back into its own coffers, rather than being paid out in licensing fees? That's one reason Apple Computer lets the world know it develops its hit products in-house, to the point of etching "Designed by Apple in California" on the back of each iPod.

Yet some outsourcing holdouts are changing their tune. Nokia long prided itself on developing almost everything itself -- to the point of designing its own chips. No longer. Given the complexities of today's technologies and supply chains, "nobody can master it all," says Chief Technology Officer Pertti Korhonen. "You have to figure out what is core and what is context." Lucent says outsourcing some development makes sense so that its engineers can concentrate on next-generation technologies. "This frees up talent to work on new product lines," says Dave Ayers, vice-president for platforms and engineering. "Outsourcing isn't about moving jobs. It's about the flexibility to put resources in the right places at the right time."

It's also about brutal economics and the relentless demands of consumers. To get shelf space at a Best Buy (BBY ) or Circuit City often means brand-name companies need a full range of models, from a $100 point-and-shoot digital camera with 2 megapixels, say, to a $700 8-megapixel model that doubles as a videocam and is equipped with a powerful zoom lens. On top of this, superheated competition can reduce hit products to cheap commodities within months. So they must get out the door fast to earn a decent margin. "Consumer electronics have become almost like produce," says Michael E. Fawkes, senior vice-president of HP's Imaging Products Div. "They always have to be fresh."

Such pressures explain outsourcing's growing allure. Take cell phones, which are becoming akin to fashion items. Using a predesigned platform can shave 70% of development costs off a new model, estimates William S. Wong, a senior vice-president for marketing at Cellon. That can be a huge savings. As a rule of thumb, it takes around $10 million and up to 150 engineers to develop a new cell phone from scratch. If Motorola or Nokia guess wrong about the market trends a year into the future, they can lose big. So they must develop several versions.

With most of its 800 engineers in China and France, Cellon creates several basic designs each year and spreads the costs among many buyers. It also has the technical expertise to morph that basic phone into a bewildering array of models. Want a 2-megapixel camera module instead of 1-megapixel? Want to include a music player, or change the style from a gray clamshell to a flaming-red candy-bar shape? No problem: Cellon engineers can whip up a prototype, run all the tests, and get it into mass production in a Chinese factory in months.

Moving Up the Food Chain
Companies are still figuring out exactly what to outsource. PalmOne Inc.'s collaboration with Taiwan's HTC on its popular Treo 650 smart phone illustrates one approach. Palm has long hired contractors to assemble hardware from its own industrial designs. But in 2001, it decided to focus on software and shifted hardware production to Taiwanese ODMs. PalmOne designers still determine the look and feel of the product, pick key components like the display and core chips, and specify performance requirements. But HTC does much of the mechanical and electrical design. "Without a doubt, they've become a part of the innovation process," says Angel L. Mendez, senior global operations vice-president at palmOne. "It's less about outsourcing and more about the collaborative way in which design comes together." The result: PalmOne has cut months off of development times, reduced defects by 50%, and boosted gross margins by around 20%.

Hewlett-Packard, a company with such a proud history of innovation that its advertising tag line is simply "invent," also works with design partners on all the hardware it outsources. "Our strategy is now to work with global networks to leverage the best technologies on the planet," says Dick Conrad, HP's senior vice-president for global operations. According to iSuppli, HP is getting design help from Taiwan's Quanta and Hon Hai Precision for PCs, Lite-On for printers, Inventec for servers and MP3 players, and Altek for digital cameras. HP won't identify specific suppliers, but it says the strategy has brought benefits. Conrad says it now takes 60% less time to get a new concept to market. Plus, the company can "redeploy our assets and resources to higher value-added products" such as advanced printer inks and sophisticated corporate software, he says.

How far can outsourced design go? When does it get to the point where ODMs start driving truly breakthrough concepts and core technologies? It's not here yet. Distance is one barrier. "To be a successful product company requires intimacy with the customer," says Azim H. Premji, chairman of India's Wipro. "That is very hard to offshore in fast-changing markets." Another hurdle is that R&D spending by ODMs remains relatively low. Even though Premier develops most of its own cameras and video projectors, "the really core technology," such as the digital signal processors, is invented in the U.S., says vice-president Hsieh. Premier's latest wallet-size video projector, for example, was based on a rough design by Texas Instruments, developer of the core chip. With margins shrinking fast in the ODM business, however, Premier and other Taiwanese companies know they need to move up the innovation food chain to reap higher profits.

That's where Flextronics and its design acquisitions could get interesting. Inside frog's hip Sunnyvale office, designers are working to create a radically new multimedia device, for an unnamed corporate client, that won't hit the market until 2007. The plan, says Patricia Roller, frog's co-CEO, is to use Flextronics software engineers in Ukraine or India to develop innovative applications, and for Flextronics engineers to design the working prototype. Flextronics then would mass-produce the gadgets, probably in China.

Who will ultimately profit most from the outsourcing of innovation isn't clear. The early evidence suggests that today's Western titans can remain leaders by orchestrating global innovation networks. Yet if they lose their technology edge and their touch with customers, they could be tomorrow's great shrinking conglomerates. Contractors like Quanta and Flextronics that are moving up the innovation ladder, meanwhile, have a shot at joining the world's leading industrial players. What is clear is that an army of in-house engineers no longer means a company can control its fate. Instead, the winners will be those most adept at marshaling the creativity and skills of workers around the world.


By Pete Engardio and Bruce Einhorn
With Manjeet Kripalani in Bangalore, Andy Reinhardt in Cannes, Bruce Nussbaum in Somers, N.Y., and Peter Burrows in San Mateo, Calif.

Lexmark Study Reveals Internet's Impact on Paper Use and Future Printing Environments

Despite the immense popularity of "paperless" media such as e-mail and the Internet, a new study by Lexmark International, Inc. reveals that the need for printing remains strong and is growing. Results of the study also offer details on home and office printing and the future of printing technologies and applications, including public preferences for wireless printing, while dispelling a number of popular misconceptions about printing trends.

The survey helped further dispel the myth of the "paperless office." On the contrary, the Internet and its seemingly boundless information sites have led to an increase in pages printed at home as well as in the office, with ever higher numbers of pages being printed closer to the end user. This is a phenomenon known as "distributed printing." According to Lexmark's study, over 90% of respondents with a printer at home print Internet content, and three out of four respondents print from the Internet while at the office. Moreover, while nearly all respondents were printing Internet content, one in ten respondents report printing from the Internet at home every day. Nearly twice that percentage prints out Internet content at the office on a daily basis. Additionally, more than 40% of respondents print from the Internet at home at least on a weekly basis.

According to the Lexmark survey, the most commonly printed Internet content is e-mail, followed by research, news, children's activities, and entertainment.

The Lexmark survey also revealed age differences in the content printed from the Internet:

• Respondents over 55 are printing e-mail at twice the rate of those aged 18-44.
• 18-34 year-olds are three times as likely to print entertainment-related content compared to those over 45.

Futurists have speculated that computer users will eventually print less and rely more heavily on the computer screen to view content. When Lexmark asked why people print from the Internet, however, answers suggested that dependence on hardcopy output will continue despite the evolution of screen technologies:

• Almost one out of three cited a need for hard copy to archive information.
• The need to share information with friends, family, and co-workers compels a significant number to print.
• Others said they print from the Internet simply because they "prefer reading hard copies."

The Lexmark survey also found that younger respondents tended to report less of a need to archive hard copies of material. 56% of 45-54 year-olds reported that they print pages off of the Internet due to the need for hard copies for their archives, as compared to 42% of those 35-44 and only 33% of those 18-34 who print off of the Internet for the same purpose.

When it comes to the business environment, enterprise printing is taking on a new "hue" with the rise of multifunction products and the popularity of color output. Lexmark asked which single feature users would most like to see from their office printer. Dazzling color, increased speed, and document scanning were the features users coveted most. The preference for color output mirrors global trends that indicate increasing use of color in the workplace as color printers become faster and more affordable

Printing is not limited to the home or office. The Lexmark survey hints that markets exist for public access to standalone wireless printers, which would allow users to print from PDAs, laptop computers, and other portable devices. Preferred sites for such printers are libraries, airports, shopping malls, and grocery stores.

In the home, more than one third of respondents would be interested in a standalone printer that would allow constant, PC-free access to the Internet. Almost 70% of respondents would place such a device in the study or den, followed by the family room and the master bedroom.

The survey included 500 respondents who use computer printers at home and in the workplace on a regular basis. The survey's margin of error was plus or minus 4.4 percentage points at the 95% confidence level.

	Petabyte Prognostications EDS's futurist is preparing for the coming data flood with context-sensitive text-mining tools. Future Watch by Gary H. Anthes
			OCTOBER 25, 2004 (COMPUTERWORLD) - Jeff Wacker's job as Electronic Data Systems Corp.'s futurist is to develop companywide initiatives that will shape the future of EDS. He recently told Computerworld's Gary H. Anthes why mobile workers, unstructured information and communications infrastructures are worthy of special attention in the coming years. Is there an information explosion coming? Yes, and it's based on two major factors. First, there's all this sensor and RFID information that's starting to flow into corporations, and it will only accelerate; Wal-Mart is looking at 5TB to 7TB a day. The other factor is that unstructured information makes up 80% to 90% of the average corporation's information content. It's not in a form computers can readily use, such as e-mail. We are using context-sensitive text mining as a tool for structuring that content. When you do that, all that information becomes a corporate asset. How might that new asset be used? Most of the new information that allows you to predict the future is nontraditional corporate information -- what we call indicator information. You have transactions, which are past; you have events, which are current; and you have indicators, which are not traditionally used in business. You can put that information in a data mine and after the fact try to figure out what you should have done. Or you can feed it into a cause-and-effect model ... and use pattern-recognition technology. [That gives you] the ability to understand patterns of business activity that are going to repeat and say, "What do I want the outcome to be?" Can you give a couple of examples? Weather predictions for a warmer-than-usual winter in New England change the model's probability of selling x fruitcakes to y. That, coupled with a colder-than-normal forecast for the mid-Atlantic states, drives a directive to channel the fruitcake to those states. EDS futurist Jeff Wacker sees toys as an analogy for rapid change, since “kids turn toys at an astonishing rate.” This one is made from old IT components, demonstrating “that we create the future on the bones of the past—but different from the past.” Or an erroneous newspaper article reports that a certain food product has now been linked to heart attacks. In every city where that article has appeared, you can expect the demand to fall off precipitously, and therefore you need to "reverse-logistic" the existing supplies of the product to areas where the article has not run. What are some opportunities for IT in the mobile world? Mobile workers are the orphans of the information revolution, because IT has basically ensconced itself in a stationary environment. Mobile workers work asynchronously with their IT. The office worker works the problem with the computer, but the mobile workers for the most part get their information, go out and do their work, come back and report their information. The IT is not overlaid directly on top of their work. We have built a testbed called process mentor. It's the ability for you to deliver just-in-time information to the mobile worker. Information flows, unprompted in some cases, as you need it. Can you give an example? In the petroleum industry, 70% of workers are in the field. The average age of a field worker is 55, and 50% of them will retire in the next five years. That's a hell of a lot of expertise not easily replaced. So if I'm out at the wellhead and I ask, "How do I take this thing apart?" all of a sudden I have just-in-time training that tells me exactly how to do it. It says, "Here's Step 1 -- now do it. Now here's Step 2 -- do it," and so on. It's the opportunity to put IT into the business process rather than work around the business process. Where will we see sensors deployed? That airplane that's flying has sensors that tell me that a certain part is going to go out, so I can fly the part to the destination before the plane gets there. That's the kind of model that's going to be deployed throughout all of business. All the items coming into my supply chain, all the items going through manufacturing, all items going out to the customer and all the people in my organization are going to be sending me information. All that extra data must have huge implications for storage systems. When we start sending petabytes of information from one company to another, it's cheaper to have a petabyte storage cube put on an airplane and fly it to the other coast. That will be a constraint in the future, because petabytes of information don't work well on our communications infrastructure. What's the solution to that problem? The amount of information that can be stored on a hard drive doubles every year ... and fiber-optic capacity is doubling every nine months. While it will take some time, this will overcome the problem. Also, you can break the file into many pieces, transmit the pieces and put it all together on the other end. The problem here is the infamous last mile. Most companies do not have [networks] to allow them to send the data through multiple pipes from a single source and to a single destination. This is an infrastructure design problem that never contemplated needing many T3s to the same point of origination/delivery. Profile Name: Jeff Wacker Title: EDS fellow and futurist Company: Electronic Data Systems Corp. Background: Wacker is chief technology officer for EDS's Global Industry groups. He earned a bachelor's degree in computer science and an MBA from the University of Nebraska. He is a member of MIT's Society of Learning.

The New BrandScape: Six Future Trends Changing Marketing| MarketingProfs.com:

"The New BrandScape: Six Future Trends Changing Marketing"
by Mary Brown
May 17, 2005

Someday in the not-so-distant future, branding as we know it will be thought of as so 20th century. With societal, cultural and technological changes occurring at increasingly accelerated rates, keeping your eye on the horizon of future trends in branding gives your company the advantage.

Peter Bishop, executive director of the Institute for Futures Research, points out that you can't predict the future but you can arrive there less surprised and more prepared by telling stories, thinking the unthinkable and creating alternate futures through scenarios. Nine out of the 10 scenarios you imagine won't come true. But you'll be ready when that one vision does become reality.

What trends are already reshaping our ideas of branding?

1. Consumers Are the New Creative Directors

Brands that create a process of discovery drive passion and ownership of the brand. Consumers like being the creative director and feeling in control of shaping the products and brand. Born from consumers' desire to differentiate themselves from the mass market, this trend toward customization will continue to grow with the flexibility and efficiencies offered by technology at home and in manufacturing.

Consider Timberland's BOOTSTUDIO, where you can 'build a boot as original as you are,' including adding your own monogram. Nike ID also allows customers to control the look of 27 footwear styles and view their final creation from five different angles.

Lab21 takes customization to new heights by creating individually formulated skin-care products based on your DNA. Customers take an at-home DNA test and answer a questionnaire about the health of their skin. LAB21's Skin Profiler System then creates a custom formula (with your name on the label) to treat specific conditions.

As diamond promoters encourage women to buy their own diamonds (why wait for a marriage proposal?), technology that allows a gal to design her own diamond ring in three easy steps is sure to increase sales. Diamond.com not only builds your custom ring but also clearly educates on the four Cs, grading reports, setting styles and how to find your ring size.

2. Cynicism Raises the Bar for Authenticity

With consumer cynicism about marketing at an all-time high, brands must cultivate authenticity on a level never demanded before. Consumers are smart, resourceful and savvy. If your brand doesn't deliver on all its promises, or fails to speak to a consumer's specific, personal needs, your brand will become irrelevant, or worse: a pariah.

Furthermore, the companies behind a brand will be expected to behave authentically and demonstrate an active alignment with consumers' values. Simply slapping a pink ribbon on your Web site will no longer cut it, especially in building brand relationships with the influential woman consumer.

This demand for authenticity will shift marketers' preference for communicating via advertising and direct mail. The overt sales focus inherent in these channels makes them more suspect in consumers' minds.

Conveying brand messages via third parties, especially if they are a trusted, impartial source, will be better received. We'll see an increase in brands using the more transparent channels of public relations, sponsorships, niche interaction, word-of-mouth/buzz and blogs to deliver seemingly unbiased brand communications.

3. Multitasking and Info Overload: Don't Waste My Time

In a 2004 Redbook magazine poll of 1,000 women, a majority actually preferred time to money. In our info-saturated, multitasking lives, time is the new currency.

Barraged by more information than we can ever hope to absorb, we have what Paco Underhill, author of Why We Buy, refers to as a process crisi —how do we get the wisdom out of all the data with the least amount of time investment?

Consumers look to companies, media and marketers to provide information filters—tools to edit the mass amount of data available. As Robyn Waters, trends guru and former VP of Trend, Design and Product Development for Target, points out, "too much information without editing is toxic."

To effectively filter and communicate relevant data to a specific consumer, brands will need to be well versed in the art and science of interpreting, translating and delivering information. This requires cultural, ethnic, gender and generational expertise as well as sophisticated global knowledge of word associations and linguistics.

Amazon.com's highly developed preferences filtering keeps track of your interests, making recommendations based on your ever-growing profile, providing product reviews, updating daily a customized list of the newest and coolest products customers are buying—essentially creating a personal shopper to save you time. And it does all this in six languages with the appropriate cultural insights for each.

4. Humanization of Technology

The mind-bending advancements of the Web and computer technology have thrown life into warp speed. From an evolutionary standpoint, technology has infiltrated every aspect of our lives faster than we can assimilate the changes. Programming the clock on your old VCR seems effortless compared to the overwhelming, and often intimidating, technological knowledge now required to efficiently get through a day.

Successful brands will "humanize" technology by delivering a brand experience where the technology is transparent to the consumer. Products, services and communications fashioned around innate human behavior, instead of the ideals of a programmer, will win consumers.

Hewlett-Packard leads the pack with its "you + HP" consumer brand campaign focused on taking the hassle out of digital photography. Visually fun, full of creative energy and real life scenarios, HP's ads devote minimal space to showing actual product. Instead, they go to the heart of image-making—documenting, sharing and making memories. HP touts its digital cameras and printers as "radically simple picture-making technology, which lets you be in control of the entire picture-making process." It back ups its claim with easy-to-navigate, thorough product support via hp.com.

5. From Multi-Channel to Uni-Channel

Donald Libey, considered the leading direct marketing and catalog industry futurist, predicts that we will see even more evolved information systems than the World Wide Web. Any aspect of communications in our lives—cell and landline phones, libraries and research, bill paying, satellite TV, GPS navigation, entertainment, travel, financial transactions, shopping, fitness and health monitoring—will be available from anywhere at any time.

Increasingly, consumers will be less aware of separate marketing channels. Instead, all experiences of brand communications will be perceived as one all-encompassing, 360-degree, 3-D channel. Brands can prepare now by investing in creating a consistent and integrated customer experience across today's communications channels.

Catalog and retail giant JC Penney understands how to fully leverage multiple-channel synergy. Its stores, catalog, Web site and advertising interrelate across all channels: enter your zip code on jcpenney.com and browse your local JC Penney store's sales flyer or download coupons; order a printed catalog or flip through one online; items purchased through any channel can be returned or exchanged via any channel. At any touchpoint of the brand, the consumer finds a consistent experience.

6. Trends in Trending

While attending the 9th Annual Future Trends Conference, I was struck that one scenario in particular was not addressed more fully—the phenomenon that the mature market, AKA aging baby boomers, will completely redefine what "old" and "aging" means.

With the average American now living about 30 years longer than 100 years ago, what's considered old? What's considered middle-aged, for that matter? If the brands in these consumers' lives rely on the stereotypical notions of older as an uncool, has-been demographic, they'll perish.

Marketers have historically looked to the 18-to-24 year-old crowd for inspiration and indicators of future trends. I'd challenge the next conference, and brand stewards in general, to explore the dynamic, trendsetting potential of the baby boomer powerhouse.

MarketingProfs.com

Mary Brown is president of Imago Creative. For more information, visit www.imagocreative.com.

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