Innovation: Where Invention and the Market Place Meet
4/7/2006 --

IBM's director of research says technological innovation can be managed to produce business success.

ANN ARBOR, Mich.―To manage technological innovation and translate it into business success, companies have to embrace risk, ask questions, create a culture of open thinking and foster an atmosphere of collaboration.

Paul Horn, senior vice president and director of research at IBM, defines innovation as the "connection of invention and the market place." In his presentation titled "The Changing Nature of Innovation (in a Services Economy)" at a recent event sponsored by the Tauber Manufacturing Institute (TMI) and the School of Information, Horn said "We think of ourselves as a technology company. Our challenge is creating value out of it."

IBM is the world's largest IT research organization and has led patent leadership for the past 13 years. IBM's strategy is guided by two tools developed to predict emerging technology trends―the Global Technology Outlook and the Global Innovation Outlook (GIO). The GIO is generated by IBM's worldwide offices and laboratories and influences IBM's technical strategy.

Technological innovation is disruptive to existing businesses and simultaneously creates potential for new businesses. As a result, companies like IBM need to reinvent themselves to stay competitive. They must "think disruptive technologies out carefully and understand customer challenges," Horn said.

Horn described how rapidly the computing business has evolved, demanding change from information technology companies. Grid computing or using distributed computer resources as a virtual computer is next on IBM's horizon, Horn predicted. "The layering of hardware, operating systems and middleware suggests a framework to define virtual computer components."

Another example of industry adjusting to innovation is the current state of the automakers. When the Ford Motor Co. was founded, it was vertically integrated and Ford handled every aspect of manufacturing from parts to assembly. In today's economy, "the value chain is increasingly relying on external suppliers," Horn said.

Similarly, IBM began by building all the hardware components for its PCs. Now, IBM serves more as a distributor of computing services, especially on-demand services.

Horn also spoke about Amazon.com, a company that successfully built its business on a platform of integrated online services now used throughout the retail sector.

Innovation can be managed in today's environment of the commoditization of technology and globalization of markets, Horn said. Key insights from IBM's GIO include the need to develop new business designs based on open collaboration, establish standards across industries and leverage the power of both individuals and networks.

For IBM's Global Innovation Report, please see www.ibm.com/gio.

For more information, contact:
Adrienne Losh
Phone: (734) 615-5068
E-mail: alosh@umich.edu

Original press release:

IBM's Director of Research Paul Horn Will Speak at the Ross School
03/15/2006 --

Turning technological innovation into real-time marketplace opportunities.

ANN ARBOR, MI---Dr. Paul Horn, senior vice president and director of research at IBM Corp., will speak about "The Changing Nature of Innovation in a Services Economy" at 3:30 p.m. March 27 in 0750 Wyly Hall.

The services sector currently represents over 75 percent of the U.S. economy and is growing rapidly as companies seize new business opportunities by building more efficient IT systems, streamlining business processes and embracing the Internet. At IBM alone, services now account for about 50 percent of the company's revenue.

"We clearly need to develop a more systematic approach to services innovation if we are to sustain this vital new sector in the economy," Horn says. "It is critical that we work with universities to create curricula that provide students entering the workforce with skills and training needed for growing our services business."

As director of research, Horn has implemented a management system that promotes technological innovation and quickly translates this research into marketplace opportunities to sustain and grow IBM's business. Current research includes developing services to support IBM's on-demand services and building autonomic computing systems.

Horn received his Ph.D. in physics from the University of Rochester in 1973 and he worked as a professor of physics before joining IBM in 1979. Scientific American magazine named him one of America"s top technical leaders in 2002. He has published more than 85 scientific and technical papers.

This event is sponsored by the Tauber Manufacturing Institute (TMI) and the School of Information.

For more information, please contact Danielle Palincsar at (734) 647-6075 or dpalincs@umich.edu.

Written by Adrienne Losh
734-615-5068, alosh@umich.edu

TMI Media Contact:  Email tauber.info@umich.edu