Word: researchers
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Dates: during 1980-1989
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Small enterprises serve as incubators of U.S. innovation. The National Science Foundation estimates that 98% of "radical" product developments spring from the research labs of small firms. "Why did the large employers allow the entrepreneurs to escape?" asks Frederic Scherer, an economics professor at Swarthmore College. "There is one story after another where superior ideas were rejected by the larger companies and disgruntled staff went out to found their own enterprises...
Once dominant mainly in manufacturing, Japan's giant electronics companies are sharpening their edge in product development as well. Reason: manufacturing profits have bankrolled research and development. Japan now leads the U.S. in twelve of 25 strategic chip technologies, has pulled abreast in eight others, and is catching up in the remaining five...
...Charles Ferguson, a former IBM analyst who is now a research associate at M.I.T.'s Center for Technology, Policy and Industrial Development, argues that the U.S. semiconductor industry is collapsing because start-ups have siphoned off talented engineers from larger firms. Example: in 1981 a group of Intel executives started Seeq Technology (1987 revenues: $44.6 million) to develop sophisticated memory chips. Four years later, three Seeq employees specializing in such chips quit to form their own company, Atmel...
...industries, notably aerospace and chemicals, have been dominated by a few giant companies. (Gilder might cite as a counter-example RCA, which squandered its technological heritage by investing in such diversions as carpetmaking and rental cars.) High-tech corporations, says Ferguson, need a heavy capital base to pay for research, computer networks, manufacturing systems and worldwide organizations for sales and customer support. Upstart U.S. firms, too small to bankroll their own factories, often turn to Japanese companies for manufacturing help or sell their key technologies to raise capital for expansion and product development. A common result: the erosion of overall...
...CHIEF OF RESEARCH: Betty Satterwhite Sutter...