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IBM Chief: All CEOs Reluctant To Invest In R&D
theodp writes "In his Centennial Conversation at the Computer History Museum, IBM CEO Sam Palmisano emphasized the importance of investing in R&D, even in a down economy. 'Shareholder expectations for higher returns don't diminish when the economy stutters,' said Sam. 'And yet, Tom Watson Sr. actually increased research investment during the Great Depression.' Palmisano added, 'I will tell you that my own instinctive reflex isn't to continue investing $6 billion a year during the worst economic downturn since the Great Depression. In that regard, I'm like all CEOs.'"
You steal them from others, silly! And when the inventor tries to sue for patent infringement, you bury them in legal fees. And then your PR department writes an "article" about how this poor poor mega-corporation is being wrongfully sued by a patent troll, Slashdot then puts it on their front page, and you get hundreds of comments saying the whole patent system needs to be abolished.
No, you don't understand at all. The old system had all kinds of abominations such as database-access code mingled inside of JSPs and inline styles. So, I rewrote their apps with clean separation into tiers with proper style sheets and security and proper service/Dao layers. I actually got them to use a source control system rather than storing code in developer's unix home directories. I insisted on primary keys for DB tables and all kinds of no brainers like that. I resisted the urge to use Hibernate because I knew the existing staff could not support that. So, you underestimated the scope of what I fixed. What I left behind will be much easier to maintain. Separating the view code from the DB access code alone made it infinitely easier to support. Using PreparedStatements instead of Statements made their lives so much easier and removed a whole class of defects from occurring.
The difference between dumb and smart is not measured in percentages--but in orders of magnitude.
Actually, American corporations are awash with cash. They could very well afford more R&D, and don't need the shareholders.
There is no risk of failure in many cases. Simply, the habit is to hire psychopath as CEOs, who are really good at squeezing the lemon. This works in times of boom, but when a crisis comes along, and some real insight is necessary, as well as long-term thinking, there is no one.
The culture of the deification of the CEO-psychopath is what is killing America.
Sorry, but no. You can manufacture in China, but doing R&D there will lead to a disaster.
In China, working to spec is the be-all-end-all way to do something. I had my share of work with Chinese companies, and they will do everything to your specification. Exactly. This. Way. Which is good if you have a finished product and just need it assembled a billion times. It gets completely out of hand the moment you try to let them decide anything. Because they will invariably choose the way that's cheapest to do. Don't be surprised if the task is "add another button" to find the button inside the device, unreachable, because it was simply easiest and cheapest to put it there.
In a nutshell, never ever let a Chinese company design anything. Invariably, you'll end up with a product you can't use.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
What puzzles me to no end is that they didn't even lose their divine status when they had to grovel for MY (and your, don't feel left out) money to keep their company from failing because they themselves are utter failures as managers. I wouldn't trust the management of my spending money to those duds, let alone a company where thousands of people are working hard.
These people proved they cannot manage, they cannot run a company and they cannot handle money, yet they not only keep their job, no, we (as taxpayers) get to pick up the tab for them and those friggin' morons continue moving from one blunder to the next without remorse or regret.
Care to explain to anyone why these people are supposedly worth the money they rake in? I refuse to call it "earning", they most certainly didn't earn it. But I guess if I post what I think they'd earn instead, in this day and age this might be grounds for a lawsuit.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
It's so amusing to me when people trump up the "outsourcing" solution. I have had to deal with many many overseas outsourcing companies, some with shoddy talent, but some with some extremely bright and talented individuals as well. Unfortunately, none of the endevours bore fruit. Why? Because no matter how hard you try, you face the tyranny of distance. Not just geographical location, differing timezones etc., but cultural distance. This is why numerous banks are bringing their overseas talent onshore, rather than outsourcing cheaper overseas. Oh yes, and before everyone gets all huffity and up in arms about bringing workers in to work cheaper etc, note that these guys aren't cheaper. In fact, they are more expensive than their local equivalents for the business due to visa's, relocation costs and finally in some cases, their negotiated wages. Remember those bright sparks I was mentioning before? Well, they're these guys, and hence why at the end of the day the outsourcing companies don't have many of the bright sparks left, because you get what you pay for, and some companies are willing to pay more than others.
It will be a simple matter of a few years until a substantial portion of work comes back onshore as more companies understand the distance issue (and of course, talent becoming more expensive overseas), but there will be fewer seniors available to train the juniors.
At the end of the day financially for the effort and risk expended, the intelligent manager knows it is better to land R&D talent onshore rather than funding a research lab overseas; Unless of course, it's simply a bottom line fudge to get the shareholders to agree that you've met your 2 year KPI, and burying a nice little landmine for the next sucker CTO to find and rebury when he steps on.
Science advances one funeral at a time- Max Planck
A very important fight/evolution in society is the evolution of democracy in the corporations. Not just worker representation (it is a good idea to have worker representative on the board, if only to provide dissenting voices when decisions are taken) but real shareholder representation. If I own stock in a company, the CEO is basically my employee. If he is incompetent, I should be able to fire him. The shareholder assembly should work like a parliament, responsible for setting the objectives and the regulations internal to the corporation, and the board is really the executive power.
Notably, the salary scale should be voted on. The CEO would then stop stealing shareholder money (because their outrageous salaries are stealing -- they sure did not add that much value), and long-term strategy would be encouraged. Most shareholders are in for the long haul, and they expect dividends more than stock-price upticks. If they don't it's their own damn fault.
And as this structure would never arise while the CEOs are in charge, it should be mandated by the government: the government allows the corporation to exist, and grants it certain rights. Thus it is reasonable that it decides how it should be run. Not the decisions, but who has the power. And the power should go to the owners.
I think that those numbers are all the playthings of accountants, and are likely not reflective of anything.
1) Since neither Microsoft nor Google have large hardware divisions (at least not in those numbers), they are not compareable to Apple. Once hardware goes to manufacturing nothing in that line can be counted as R&D. Cisco does have a large hardware division, so I don't know about that number. None of the costs of hardware production for sale can be counted as R&D.
2) None of those companies have the large retail presence that Apple does. None of that can ever be called R&D.
3) Apple tends to make a product then iterate on its products. Only new product development counts twords R&D expenditures. So it may well be that none of the MacOS X development costs since 10.0.0 have counted as R&D expenditures. Note that it might be that Apple accounts for things this way, and other companies account for new product models (something Apple glosses over most of the time) as new products, and thus count the development costs as R&D.