Chief science officer Mike Carr: unless
something is available globally the economies of the technology
With this issue, Global Telecoms Business is beginning a
series looking at the business of innovation in the industry.
Which operators invest in innovation, and how do they manage
that process? And how do you measure the return on investment
Some operators outsource the process of innovation to
independent organisations, or rely on the industry's
traditional vendors — and later in the series we'll be
talking to those in charge of innovation at some of the key
suppliers in the business.
Later in the year GTB will be awarding its second annual
Innovation Awards at a ceremony in London — see this link for details.
The first feature in this series looks at BT's innovation
strategy. In the May/June issue we'll be talking to executives
Orange Labs in Paris, and later issues will feature companies
such as AT&T, Deutsche Telekom, NTT, Telefónica and
Verizon, as well as selected vendors.
Mike Carr is the executive in charge of research and innovation
at BT, as the company's chief science officer. He is
responsible of an annual budget of £1.1 billion, most of
which is spent at BT's own research labs, Adastral Park at
Martlesham in eastern England.
And he's clear about the need for a company such as BT to
have its own labs. "You need to tap into the world's innovation
and you need a research lab to do it," says Carr, who has
worked at the group since 1972, almost all of it in the UK
— apart from a couple of years around the turn of the
millennium which he spent in its offices in Silicon Valley,
One company cannot hope to innovate everything, he indicates,
because "98% of innovation is somewhere else". That governs his
policy on how to run Martlesham: "You have to make labs open,
so that they can work with start-ups, scientific institutions
and production companies and take their innovations. Our
ability to get an edge comes from an ability to recognise
One of the indicators of effectiveness in innovation is the
number of patents, an independent arbitrator of novelty. BT
manages 120-130 a year, says Carr. "It's one good way of
measuring that we're at the forefront of technology."
In the last five years Carr has seen a tripling in the research
and development budget: broadband and BT's 21st Century Network
project, as well as the company's growing ambitions to be a
corporate IT provider are clearly behind the growth.
"We don't split the budget officially," says Carr, but he's
happy to indicate that about a third of that £1.1 billion
is spent on 21CN, a third on broadband and a third on ICT
— information and computer technology.
But the idea is not, he emphasises, to develop solutions
that are unique to BT. "Having a technology solely for us won't
work," says Carr. "Unless something is available globally the
economies of the technology won't work."
So why does BT need to develop, and patent, technology? It's a
three-stage process, suggests Carr: "We invent it, get it used,
and use it best."
A clue to what he means can be seen elsewhere in Adastral,
where Russell Davey is leading a team working on the
practicalities of fibre to the home.
Current GPON — gigabit passive optical network
— technology uses a single wavelength of light to
deliver a maximum of about 2.5 gigabits to maybe 32 homes, and
about 1.2 gigabits back into the network. The fibre will carry
one wavelength down and one wavelength upstream.
Sounds good today, but an inevitable law of telecoms is that
people will need more and more bandwidth. BT and others can
predict with confidence that in a few years it will be possible
to deliver 10 gigabits or more down a fibre on a second set of
wavelengths — and, inevitably, the demand will be
But the last thing you want to do — a few years after
undertaking such a huge capital investment programme as fibre
to the home will be — is reequip everything to expand
"You could put multiple wavelengths on the fibre," says Davey.
But his team recognised that the GPON equipment that
manufacturers were proposing today were suitable only for one
wavelength in each direction. More precisely, the receivers
would pick up all wavelengths, so any attempt to add new ones
would just cause mutual interference.
"So we thought ahead, and realised we could specify a filter
in the current design which would just pass the wavelength used
today," says Davey.
That will satisfy the demand for most users over the next few
years. As soon as the technology and the demand is there, new
customers can be equipped with filters for the wavelength used
for 10 gigabits. "We could just give these units to new
customers. But it was our ability to think ahead that made us
plan how to upgrade. It's much cheaper to replace a few boxes
than to replace the fibre."
As a result of the BT team's work, says Davey, the filter has
been specified as an essential part of the design.
That's a good example of the detailed innovation that an
operator can be responsible for — building in scope
for future expansion in capability and avoiding unnecessary
extra costs. Longer term, BT has a team of futurologists.
Lesley Gavin is a former architect who has become an enthusiast
for virtual worlds, such as Second Life, and is learning how
they can help BT understand issues such as remote
In such cases BT can have a better understanding of the
possibilities that potential customers, she says. "You can push
the client into having something they never knew they could
have, that will last well into the future. Most people don't
think in that way, so just asking the customer what they want
doesn't get you there."
Before joining BT she had a company making systems for
equity trading: "We wanted to carry the ambient information
from a trading floor into electronic trading. It's an iterative
process, and a very personalised service. We rented space on a
trading floor and had 'crits' [an architect's term for critical
discussions] every Tuesday."
Her BT colleague Jonathan Mitchener specialises in devices and
their evolution. "We are increasingly a software service
company, so we need to know what's coming in the devices
space," he says. "We want customers to get the optimum
It means keeping close to the vendors, such as Sony with the
PSP and Microsoft with its Xbox, and "looking beyond what we
expect to happen", says Mitchener. "It's what device evolution
is all about."
Apart from vendors, BT keeps in close contact with 34
universities around the world, says Carr. "MIT is a core
collaborator of ours. It helps us see where the world is going
— not deep research in science but in its
Among the other universities that BT is close to are Cambridge
— a short drive from the research labs — and,
a lot further away, Berkeley and Stanford in California. And
both University College London and the University of Essex have
researchers on the Adastral site, he adds.
"We want to open up academic opportunities. The good thing
about academics is that they share everything with people.
Mainly we pay them for their work rather than pay for a chair
[sponsoring a professorship] and hope something happens. It
means we can give it some direction."
Another change is that BT — like some other operators
— is starting to set up labs in other parts of the
world, including one with 20 people in Shanghai and another
with 50 in Kuala Lumpur. There's also a "lablet" in India, not
directly managed by BT.
Why in those places? "We need to get our early stage research
close to our customers," says Carr. "Part of our strategy of
open innovation is identifying problems and then finding
techniques to solve them, so we need to be close to the end
Each region is "massively different", he notes. It's not a
challenge of "just having the technology", he says, but of
building "the business case around it".
It's all a long-term process, Carr admits. "Concept to
production is about 10 years. We stop loads of things before
they're finished," he says. "Half of the things we work on get
adopted," but even when they don't the work can be
"Having the best technology in the industry doesn't mean you're
successful," he warns. "We could just specify a switch that was
for us and was built for us in the UK."
Indeed, that's how it used to happen. One of Martlesham's first
projects was System X, the digital switch launched by the
ancestor of BT and its selected vendors in 1979. The world of
telecoms has changed: operators no longer require their own
"But having a research lab means we've got an opinion," says
Carr. "It's a complete change." GTB