{"id":1047,"date":"2006-07-25T06:47:44","date_gmt":"2006-07-25T11:47:44","guid":{"rendered":"http:\/\/chimeraobscura.com\/vm\/todays-post-is-brought-to-you-by-the-letters-r-and-d\/"},"modified":"2006-07-25T06:47:44","modified_gmt":"2006-07-25T11:47:44","slug":"todays-post-is-brought-to-you-by-the-letters-r-and-d","status":"publish","type":"post","link":"https:\/\/chimeraobscura.com\/vm\/todays-post-is-brought-to-you-by-the-letters-r-and-d","title":{"rendered":"Today’s post is brought to you by the letters R and D"},"content":{"rendered":"

BusinessWeek has an essay about the lack of innovation at the major telephone companies<\/a> (yet another installment in the “I care about this stuff; no reason for you to” series). Mind-blowing quote:<\/p>\n

One way in which these companies are very different from the old phone monopoly is that while the original AT&T had a world-class research operation, its successors don’t. One of the signal facts of the communications revolution is that virtually all the new technologies that made it possible were developed outside the phone world. Last year, Verizon’s revenue came in at nearly $80 billion. AT&T (without BellSouth or Cingular) had revenue of $44 billion. And yet while Intel Corp. spent $5.1 billion last year on research and development, AT&T spent just $130 million. The word “research” doesn’t even appear in Verizon’s annual report.<\/p><\/blockquote>\n

Now, in the pharma industry, there’s a lot of talk about “rethinking R&D,” as major companies learned that simply pumping more dollars into the process doesn’t necessarily yield results. When I compiled this year’s Top Pharma Companies report<\/a>, I noticed that plenty of big guns have reduced their R&D budgets — not drastically, but it was certainly a change from past double-digit increases. And these annual R&D figures were at least $1 billion for the top 17 companies on the list.<\/p>\n

Obviously, the drug industry is keyed by development of new products; patent terms dictate that every product has a brief lifespan. When the R&D pipeline falls short, companies turn to in-licensing new drugs. In my many Yankees = Pfizer comments, this equates to buying free agents when the farm system isn’t producing good players.<\/p>\n

Turns out that this is the main model for the telcos.<\/p>\n

There is something to be said for “buying it elsewhere.” If the big telcos built everything themselves, there would be no Cisco and no Motorola. But years of buying it elsewhere has yielded a culture distrustful of technology — and of progress: It’s impossible to imagine Microsoft developing a big new product and having the lead engineer shift from foot to foot in the corner pretending to be just another customer. It has meant, as with AT&T’s Lightspeed, that telcos are likely to offer services that only match, but not surpass, those available from others. And increasingly their approach has put the telcos on the wrong side of technological innovation, leaving them in the position of protecting their investments in their networks from the encroachments of new ideas.<\/p><\/blockquote>\n

Anyway, I’m fascinated by the ways major industries function, and this essay provides some neat insights into what it’s like to be an $80 billion player with razr-thin (ha-ha) profit margins. So give it a read<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

BusinessWeek has an essay about the lack of innovation at the major telephone companies (yet another installment in the “I care about this stuff; no reason for you to” series). Mind-blowing quote: One way in which these companies are very different from the old phone monopoly is that while the original AT&T had a world-class … <\/p>\n

Continue reading “Today’s post is brought to you by the letters R and D”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[12],"tags":[],"class_list":["post-1047","post","type-post","status-publish","format-standard","hentry","category-pharmaceuticals"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p4C7K-gT","jetpack_likes_enabled":true,"jetpack-related-posts":[{"id":964,"url":"https:\/\/chimeraobscura.com\/vm\/anti-midas","url_meta":{"origin":1047,"position":0},"title":"Anti-Midas","author":"Gil","date":"May 24, 2006","format":false,"excerpt":"Great (lengthy) article about the messed-up-edness of Paul Allen's Charter Communications. I think Paul Allen's greatest skill was his ability to be friends with Bill Gates back in the day. From a financial perspective, Charter has turned into one of the ugliest U.S. companies still in solvency. Its $19.5 billion\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":3689,"url":"https:\/\/chimeraobscura.com\/vm\/too-big-to-fail","url_meta":{"origin":1047,"position":1},"title":"Too Big To Fail?","author":"Gil","date":"March 27, 2009","format":false,"excerpt":"Here's my From the Editor column from the March issue of my magazine. Enjoy: Too Big To Fail? The pharmaceutical industry is experiencing a deepening productivity crisis. The industry\u00e2\u20ac\u2122s preferred escape mechanism from this predicament has been to increase investment in current business activities \u00e2\u20ac\u201d primarily R&D and sales \u00e2\u20ac\u201d\u2026","rel":"","context":"In "Big Business"","block_context":{"text":"Big Business","link":"https:\/\/chimeraobscura.com\/vm\/category\/big-business"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1019,"url":"https:\/\/chimeraobscura.com\/vm\/pfed","url_meta":{"origin":1047,"position":2},"title":"Pf***ed","author":"Gil","date":"July 7, 2006","format":false,"excerpt":"Sorry for the lack of posts, readers! I'm really busy on the home-stretch of that Top Companies special issue. Gotta finish the final profile today, so's I can head to the shore tomorrow without worrying about it. I decided to save the biggest one for last: Pfizer. As you may\u2026","rel":"","context":"In "Pharmaceuticals"","block_context":{"text":"Pharmaceuticals","link":"https:\/\/chimeraobscura.com\/vm\/category\/big-business\/pharmaceuticals"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":544,"url":"https:\/\/chimeraobscura.com\/vm\/hell-is-people","url_meta":{"origin":1047,"position":3},"title":"Hell is People","author":"Gil","date":"May 29, 2005","format":false,"excerpt":"P.J. O'Rourke on the need to tax celebrity:\"America's media and entertainment industry has a gross (as it were) revenue of $316.8 billion a year. If we subtract the income derived from worthy journalism and the publishing of serious books, that leaves $316.8 billion.\"","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1539,"url":"https:\/\/chimeraobscura.com\/vm\/utilitarianism","url_meta":{"origin":1047,"position":4},"title":"Utilitarianism","author":"Gil","date":"June 6, 2007","format":false,"excerpt":"Every summer, when we get rolling on the annual Top 20 Pharma \/ Top 10 Biopharma report, my trusty associate editor compiles pipeline information for the past year. While I suss out sales figures and try to parse the arcana of accounting, she puts together lists of new drugs that\u2026","rel":"","context":"In "Big Business"","block_context":{"text":"Big Business","link":"https:\/\/chimeraobscura.com\/vm\/category\/big-business"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":586,"url":"https:\/\/chimeraobscura.com\/vm\/american-job-destruction-act","url_meta":{"origin":1047,"position":5},"title":"American Job Destruction Act","author":"Gil","date":"July 25, 2005","format":false,"excerpt":"When I write my annual Top 20 Pharma Companies & Top 10 Biopharma Companies report (this year's edition is soon to post at the website of my day job), I read a lot of annual reports, along with industry analysis, news coverage, and other neat sources. The annual reports have\u2026","rel":"","context":"In "Pharmaceuticals"","block_context":{"text":"Pharmaceuticals","link":"https:\/\/chimeraobscura.com\/vm\/category\/big-business\/pharmaceuticals"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/chimeraobscura.com\/vm\/wp-json\/wp\/v2\/posts\/1047","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/chimeraobscura.com\/vm\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/chimeraobscura.com\/vm\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/chimeraobscura.com\/vm\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/chimeraobscura.com\/vm\/wp-json\/wp\/v2\/comments?post=1047"}],"version-history":[{"count":0,"href":"https:\/\/chimeraobscura.com\/vm\/wp-json\/wp\/v2\/posts\/1047\/revisions"}],"wp:attachment":[{"href":"https:\/\/chimeraobscura.com\/vm\/wp-json\/wp\/v2\/media?parent=1047"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/chimeraobscura.com\/vm\/wp-json\/wp\/v2\/categories?post=1047"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/chimeraobscura.com\/vm\/wp-json\/wp\/v2\/tags?post=1047"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}