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Google’s next step needs to be beyond innovation

Steve Henn Dec 17, 2010

Google’s next step needs to be beyond innovation

Steve Henn Dec 17, 2010


STEVE CHIOTAKIS: Google is letting the ideas flow from its northern California campus. Engineers there are working on self steering cars, electric power distribution, and — of course — smart phone apps. But while those initiatives may end up benefiting the planet, it’s unclear whether they’ll benefit Google and its shareholders.

From Silicon Valley, Marketplace’s Steve Henn reports.

Steve Henn: When it comes to innovation, Google is probably best known for its 20 percent policy. All engineers get to spend 20 percent of their time working on their own projects.

While the 20 percent plan generates lots of positive press and keeps many Google engineers happy, Chris Tremble at the Tuck School of Business at Dartmouth is a critic. First, he says, it’s incredibly expensive.

Chris Tremble: Second, this is a policy that spreads those resources thinly and broadly and indiscriminately. And third, that just can’t generate projects of any appreciable scale. If it’s anything bigger than what a few people can handle in their spare time, it’s too big.

And in the past year there’s been some evidence Google’s founders and top executives have grown impatient with this approach. Late last year, they launched a lab within Google. Its explicit purpose is to create new technologies that could change the world. Insiders call it GoogleX. It was this lab that created Google’s now-famous self-driving car.

Judy Estrin is a serial entrepreneur and author of “Closing the Innovation Gap.” She thinks it is exactly these kinds of big bets on new research and technology that the country needs. She says Google’s leaders get that.

Judy Estrin: Between Eric Schmidt’s background, Sergy and Larry’s background, they all come from backgrounds where they have a deep understanding of the need for research.

But Estrin says the biggest challenge in corporate research is figuring out how to profit from it.

Estrin: What do you do with it? How do you monetize it? Do I spin out a company?

After all, it was Bell Labs’ research that led to the microchip — but today Intel dominates that business. And while Xerox PARC built the first personal computer, it was Apple and Microsoft that made billions.

So now that Google’s creating wonders like self-driving cars, its executives need to ensure that the shareholders who paid for this research will actually profit from it.

In Silicon Valley, I’m Steve Henn for Marketplace.

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