General Motors and IBM on the Role of a Silicon Valley R&D Outpost

By Kaitlin Milliken |  February 24, 2020

Home to high-flying technology unicorns and a wealth of talent, Silicon Valley has become a prime address for corporate innovation outposts. However, the Bay Area’s legendary startup attitude can be at odds with the culture and pace of big companies. Innovation and R&D labs in the Valley need to figure out how to bridge the gap between those two worlds. 

“A big corporation with 300,000 people trying to work with a startup that’s got five [employees] and about three months of runway is a very different model,” said Frankie James, the managing director of General Motors’ Advanced Technology Office in Silicon Valley. “So we’re trying to figure out how can we be helpful. And how can we nurture a company of that size, so that they can grow into something that can be a partner for us, or a supplier.”

James discussed her team’s mission on the main stage at InnoLead’s 2019 Impact event. Jeffrey Welser, a Vice President in IBM Research, joined James on the panel. In his role, Welser directs labs based in the Bay Area, Australia, China, and Japan. (The 2020 Impact conference takes place in Boston, October 19-21, 2020.)

During the conversation, both leaders discussed the purpose of their groups, the importance of participating in the innovation ecosystem, and being part of a “first mover culture.” 

Defining Objectives

Jeff Welser: IBM has chosen to continue to maintain a separate research division. So it is separate from our development labs, and they do it because we try to let it have a little bit more leeway. There is discussion about funding getting cut on a regular basis, which happens in our development groups all the time. But in research, they’ve maintained a fairly steady stream of investment… We want about a third of our stuff to be going into products in the next year or two. We want about a third to be going in in three years. And we have about a third which…we don’t expect to go in for five years or more. 

Frankie James: My team…[has] always reported to the head of GM R&D. The woman who is the head of R&D is now also the head of global innovation, which is actually a separate team at GM. But it’s really nice to have her being in charge of both, because it gives us a way to connect with the innovation team. … The global innovation team is really focused on new business models…new lines of business for the company that are beyond just selling cars to individuals. …R&D at GM has a long history. And it is very focused on the technology…going into vehicles…but also going into new things like autonomous vehicles…

Be an Active Participant in Your Ecosystem

Jeff Welser: One of the things that we find to be really important is that, in our research labs, we require our researchers to be out at conferences actually participating. … About a third of our research we actually do with clients, where we have a project we’re doing with them. Even though it’s far out research…that kind of market validation and that kind of input coming from the outside-in constantly, it’s amazing how many times after that you change direction. … [You often]  end up going faster in a direction you didn’t think you were supposed to [be] heading.

Keep an Eye on First Movers

Frankie James: We have different groups at GM that are constantly doing different kinds of focus groups, and talking with customers, and trying to understand what their future behaviors are going to be. … [But] what people say they’re going to do and what they’re actually going to do, when it comes down to voting with real dollars, can be quite different. One of the things that you have to look at is what parts of the world are moving first in an area, and decide if you think the rest of the world is going to come along. 

That’s another reason to be here in Silicon Valley. We had people hopping onto [electric rental] scooters before a lot of other cities and states got them. … Everything catches on first in San Francisco and Silicon Valley. Is it really going to take off in other parts of the country? We had to think about [it]…then watch it go. Being in a first mover culture out here in Silicon Valley gives you some insight into what might happen.