"The fact is that innovation was a little different in the 20th century. It's not easy (now) to come up with greater and different things," Donofrio said.
"If you're looking for the next big thing, stop looking. There's no such thing as the next big thing," he added.
That is not to say that the 21st century does not also require invention, creation and discovery, he said. But these days, people are looking for value that arises from a creation and not just looking at technology for its sake, he explained.
When it comes to innovation, there is a need to think collaboratively and in a multifaceted manner, as this determines who wins and who loses, he said.
Donofrio added that innovation today is more about services, process, business models or cultural innovation than just product innovation.
"People all around the world are telling us the same thing," Donofrio said. "IBM did a survey of 750 (chief information officers), and all of them listed innovation as a top priority. This is what I spend my time on, what I worry about."
Room to think
To foster a culture of innovation in the company, IBM set up ThinkPlace, an online community for its employees, nine months ago. At ThinkPlace, participants are encouraged to put up ideas, which are evaluated and then rewarded or redirected accordingly.
"In the late 1980s, IBM got into trouble and did away with suggestions," Donofrio said, referring to the corporate turmoil that IBM underwent as it headed into the 1990s. The company reported a $4.97 billion loss in 1992 which, at that time, was the largest single-year corporate loss in the history of the United States. After Lou Gerstner was named CEO in 1993, he helped turn IBM around.
According to Donofrio, IBM employees have contributed close to 5,000 ideas to date, and about 100 of those are being evaluated. The ideas cover products, processes and services.
IBM seeks to cultivate the spirit of innovation outside the company too, Donofrio pointed out. There is even a group at the company "looking hard at collaborating with other people" on future technology. A key example is IBM's alliance with Sony and Toshiba on the Cell chip.
In addition, IBM organized the Global Innovation Outlook. The GIO series of discussions, which took place in 2004 and 2005, brought together IBM workers and thought leaders, and participants from academia and industry around the world.
For GIO 2.0 last year, more than 180 IBM ecosystem partners from around the world participated in 15 daylong sessions held in China, India, Brazil, Switzerland and the United States, discussing the future of the enterprise, transportation and the environment.
And in April of last year, IBM launched the Genographic Project together with the National Geographic Society. The project is a five-year research partnership that aims to map how the Earth was populated using sophisticated laboratory and computer analysis of human DNA, contributed by hundreds of thousands of people.
Just this week, IBM announced that it will give qualified partners access to its renowned research organization.
IBM Research is celebrating 60 years of breakthroughs in computer science, physics and semiconductor design on Tuesday, as it steps up its efforts to scientifically study how organizations operate.
Originally housed in a renovated fraternity house at Columbia University, the then-named Watson Scientific Computing Laboratory has become one of the pre-eminent technological research centers in the world--and it has given IBM an edge over competitors in many fields.
Five IBM employees have won Nobel Prizes for, among other achievements, the discovery of electron tunneling and the invention of a microscope that captures images of individual atoms. Add to that seven National Medals of Technology, five National Medals of Science and four A.M. Turing Awards.
IBM inventions and discoveries include the programming language Fortran (1957), magnetic storage (1955), the relational database (1970), DRAM (dynamic random access memory) cells (1962), the RISC (reduced instruction set computer) chip architecture (1980), fractals (1967), superconductivity (1987) and the Data Encryption Standard (1974). In the last 12 years, IBM has received 29,021 patents--more than any other company or individual in the world.
And, unlike like the storied Bell Labs or Xerox PARC, IBM has striven to ensure that its research adds to the bottom line through enhanced products, services and intellectual property licensing.
"While we do exploratory stuff, we count on the research to help grow the parent," Paul Horn, senior vice president of research at IBM, said in an interview. "While Bell Labs spent a lot of money, they never really had a strong model on how research impacted the company."
The practical streak goes back to the beginning, Horn added. Although the group was started in 1945, the company didn't form it as a response to World War II or postwar reconstruction. "Thomas J. Watson Jr. felt there would be really hard problems that computers could solve," Horn said.
The organization, however, is becoming a far different place than it was back in the 1970s when IBM devised a way to use regular TV monitors as computer displays (1968) or unfurled the first speech-recognition application for computers (1971).
For one thing, scientific research is no longer as heavily concentrated in the U.S. as it once was. The number of peer-reviewed papers written outside the United States, as well as the number of citations to these papers, is rising rapidly.
"There are contributions of consequence that are occurring across the world," said Chris Murray, manager of nanoscale materials and devices. "I don't think we (the U.S.) are in a position at our current levels of investment in education to control or even have a strong influence on how innovation develops."
The direction of IBM's lab efforts is also changing. Years ago, the company primarily concentrated on pushing the frontiers of hardware. This resulted in such machines as the 1947 IBM 603 Electronic Multiplier, the first electronic calculator put into production, and the Sabre reservation system in 1962.
While IBM remains a major center for nanotechnology research, the company's push toward services and software has prompted it to dedicate more of its laboratories toward solving business process problems: supply chain management, application integration and transactional inefficiencies.
The ultimate question is, "How do people in an existing network operate?" Horn said. "We estimate that business process transactional services could become a half a trillion dollar market in the next couple of years, and the whole IT industry itself is only $1.2 trillion."
Right now, one of the basic challenges is coming up with a framework for studying these issues. "It touches on social sciences. It touches on business. It touches on economics," he said. Software programming and game theory are also crucial applications.
One of the first steps in developing a larger body of knowledge in this area occurred a few years ago when IBM began to set up supply chain management curriculum at various universities. Now, the company is working with North Carolina State to develop curriculum around what it calls SSME--social science and management engineering.
Although "services science" may sound squishy, Horn asserts that every new discipline does.
"A long time ago, people didn't think there was science in computer science. If you were a member of the IBM Academy, you were in hardware. There was no deep intellectual depth in software," he said. "Now people say the same thing about services."
The 60th anniversary celebration will take place at the T.J. Watson Research Center in Yorktown, N.Y. Speakers include Horn, Nick D'Onofrio, executive vice president of innovation and technology, Bob Dennard, inventor of the DRAM cell, and Fred Brooks from the University of North Carolina.