Nortel CEO John Roth remembers the good old days when he was president of Bell Northern Research, the Canadian equivalent of Bell Labs. Telephone companies were monopolies and having a central lab devoted to pure research was par for the course.
"Now we're in a very different world,'' Roth says. "There's competition everywhere, deregulation everywhere and Moore's Law has been unleashed in the industry of telecommunications.''
Roth says that means product cycles have to be "one Moore's Law cycle,'' or 18 months. Advanced research that may one have looked 10 to 15 years out now has to focus on producing returns in three to four years.
That's why Nortel recently closed its central lab and moved advanced researchers into one of the three business units - wireless, carriers and corporate.
Nortel still spends $200 million of its $2.6 billion research and development budget on advanced research. But Roth says the reorganization means, "Advanced thinking is now tied to the direction where customers are pulling us.''
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