"The result was product markets got more competitive, and those big companies couldn't sustain the long-term investments in research that they could in the earlier period," he says -- their money went instead to competing in their markets in the short term.

Into this research breach stepped smaller, newer technology companies, universities, companies in Europe and Asia, and in some cases, even customers. To Chesbrough, that's all good news. "Today, no one has locked up the really good ideas, and the R&D processes of large companies have to connect to these parties and make use of them," he says.

In fact, HP, IBM and Microsoft are all currently showing a strong move toward a favorite research concept of Chesbrough, "open innovation." As Chesbrough spells out in his book of the same title, open innovation calls for good ideas to come from both inside and outside the company. In turn, companies take the fruits of those ideas to market through internal as well as external paths.

What follows is an overview of how three of the biggest names in research are putting open innovation and other concepts into practice in a changing R&D landscape.

HP Labs: Five big bets

Hewlett-Packard last year hired Prith Banerjee, the engineering dean at the University of Illinois at Chicago, as the new director of HP Labs, overseeing 600 researchers in seven labs around the world. The company followed up with an announcement the following March that HP Labs would shift focus from a large number of smaller projects to a few "big bet" projects in five major research areas -- information explosion, dynamic cloud services, content transformation, intelligent infrastructure and sustainability.

"These are the big research challenges that we think are most important to our customers in the next decade," Banerjee says. Individual projects include exascale computing, social computing, quantum computing and so-called green computing.

Explains Banerjee, "We had taken the approach of letting 1,000 flowers bloom and hoping a few would pan out. [But] we were working on a large number of projects without enough resources on each one. We'd have two or three people on a project, but now we'll have 20 to 30 large projects, each with 10 to 20 researchers working in teams." As a consequence of this change, he says, product divisions at HP will get research prototypes from HP Labs that are more fully developed, enabling products to be brought to market faster and at lower cost.

Some observers of the new strategy at HP Labs -- including competitor IBM -- suggested it was yet another retreat from long-term basic research in favor of short-term, product-oriented work.