Editor’s Note: Welcome to our weekly feature, Analyst Angle. We’ve collected a group of the industry’s leading analysts to give their outlook on the hot topics in the wireless industry.
The pace of innovation is accelerating as convergence has joined technology with telecom, media, entertainment and consumer electronics. As innovation races forward, relying solely on homegrown inventions and vertical innovations is proving suicidal. In her book, “Regional Advantage”, AnaLee Saxenian explains how the vertical integration of Boston’s Route 128 was outpaced by the distributed innovation of Silicon Valley. Today, innovation must be best-of-breed and sourced from wherever it can be found. Companies that don’t look for, identify, filter and integrate the best technology are at a disadvantage in their markets.
Because of that driving reality, many very successful, although slow-moving, in-house research and development programs have been de-funded, shrunk or repurposed. CFOs are reticent to fund huge R&D cost centers when they are repeatedly beaten out by fast-moving small firms. Though it’s been hard to notice, labs facilities of large and incumbent telcos around the world, those who had been responsible for most telecom inventions during the first 100 years since Alexander Graham Bell got his patent for the telephone in 1876, have been quietly closing over the past 15 years as wireless telephony made its way to the mass market and carriers were forced to rethink innovation.
So with global network operators doing less and less of their own R&D, yet technology moving faster and faster, from where are these new ideas and inventions coming? The answer might be brewing in your neighbor’s garage. The independent entrepreneurs, startups, inventors and idea people have a tremendous role to play. The bottom line is: Entrepreneurs can create better, build faster, be more flexible, adapt to changing markets, and most importantly, dedicate themselves to solving a single market need in ways that large companies cannot.
Yes, telcos and major vendors are still inventing, but they are also investing in, acquiring and partnering with unprecedented numbers of small and young companies. Over the past 10 years, these companies have funded and put in place hundreds of programs to partner with innovators and leverage their creativity inside the telecom industry, like those discussed at the annual TC3 conference. The state of affairs is still not perfect, but the doors have opened and many successes have occurred.
Meanwhile, the tools available to the entrepreneur are better than ever before. Home broadband speeds allow elaborate connected offices to be set up in homes, garages, workshops, etc. And SaaS, PaaS, and other cloud computing resources like Amazon.com’s EC2 mean that investments in expensive computer equipment has become non-essential while access to massive compute power has never been equaled.
So, the costs are down, the opportunities are up, and there are established partnering programs in place. The industry and the world needs entrepreneurs. And it’s never been a better time to be one.
Liz Kerton, analyst for The Kerton Group and president of the Telecom Council of Silicon Valley, follows innovation across all telecom sectors.
