Most financial institutions, and many well-known companies, have not yet fully appreciated profound nature of technology-driven in management strategy now required for industrial competitiveness--even survival. Several basic premises are involved: * Wealth no longer will be measured primarily in terms of ownership of fured physical assets, many of which can be obsolete in a few years. * Alternatively, wealth increasingly will be measured in terms of ownership of (or timely access, through strategic alliances, to) knowledge-intensive, high-value-added, technology-driven systems that are primarily designed to increase productivity. * Current accounting methodologies, consequently, do not adequately reflect true value of either existing business operations or of new business opportunities. The profound nature of this paradigm shift mandates a process of continuous corporate renewal structured specifically to manage continuous change, and to simultaneously involve all elements of management (marketing, production, technology, legal, and financial). This is often called concurrent engineering, task force, or modified matrix management. The need for continuous corporate renewal is driven primarily by rapid emergence of advanced which have collapsed product and process half-lives often to less than five years, making equipment and facilities obsolete long before their useful lives can be reached. Other irreversible forces also are involved: * The communications revolution now allows capital and information to flow with speed of light anywhere in world, with technology rapidly following. * Any in world now can be transformed in less than a year into a state-of-the-art facility operated by $2-an-hour labor, leading to excess capacity worldwide in many industries. * Foreign nation assemble vertically integrated consortia, which, with heavy government subsidies, are designed to capture market share in existing businesses through predatory pricing. The targeting and rice paddy syndromes are zero-sum strategies that carve same pie into smaller pieces, overbuilding world capacity in businesses involved (steel, aluminum, automobiles, semiconductors, etc.) and destroying profitability for everyone. The constructive alternative is one that develops next-generation critical technologies, which will dominate 21st century and which can expand pie and raise quality of life for all nations. CTITICAL TECHNOLOGIES AND CORPORATE RENEWAL Adam Smith pointed out in 1776 that investment creates new wealth, and progress does not have to be a zero-sum game that beggats thy neighbor (1). In 21st century, profitable operation will require not only annual incremental improvements (10 percent to 20 percent per year) in existing businesses (just to maintain cash flows), but also simuEtaneozls investments in next-generation systems deliberately designed to make obsolete current operations before a competitor does, and often before their useful lives can be realized. Fortunately, an historically unprecedented opportunity now exists to implement both of these strategies. This unique situation has resulted from a trillion.dollar investment over last 40 years in U.S. academic infrastructure of universities and government laboratories. Following World War II, Vannevar Bush in his report to President Truman defined research as the endless frontier (2). Creation of National Science Foundation followed, with subsequent buildups in medical research, aerospace and high energy physics, electronics, communications, and material sciences. Today, U.S. spends over $25 billion for basic research, 10 times more than any other nation has in-place capability to match. This unique level of investment has resulted in most of Nobel Prizes, and most of seminal technical discoveries, which are basis of 20-plus critical technologies recently defined by various government agencies (3). …
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