Online Extra: Irwin Jacobs: Don't Skimp on Tech
Irwin Jacobs is the founder and CEO of Qualcomm (QCOM ), the San Diego company that invented the CDMA cell-phone technology used by Verizon (VZ ), Sprint (FON ), and other wireless carriers. In a recent phone interview with Los Angeles Correspondent Arlene Weintraub, Jacobs discussed the opportunities and challenges facing the technology industry. Following are edited excerpts from that conversation:
Q: Do you agree with the opinion that technology has become so pervasive it no longer provides a competitive advantage?
A: We would have to be a little bit more selective than just saying "technology." For example, take the case of mobile data. Most companies have not really begun to make use of some very powerful devices that could make their people [more productive] when they're out of the office. Those companies that do exploit this new technology, and do so quickly, can gain a competitive advantage.
Q: How will mobile technology help companies make productivity gains?
A: If salespeople, for example, do not have to continually come back into the office, they can save that commuting time. It's this idea of the mobile warrior, the road warrior. Back when we started Qualcomm, we provided a [mobile-communications] product to the trucking industry. At the time there were a lot of naysayers who said providing mobile communications and position location really wouldn't add much to productivity. They thought the cost was too high, they said drivers wouldn't be able to use it. That [product] has already has proven itself.
Looking forward, salespeople are an obvious audience. And we're looking at applications in the medical area, where doctors may be able to provide diagnoses remotely and be able to help patients much more rapidly. It isn't going to be one type of application, but rather a broad variety of fairly narrow vertical applications that I think will provide these high payoffs. Each company is going to have to look at how they do business, how they might be able to do business with these mobile devices, and then tailor the applications.
Q: Have corporate tech buyers become more cautious in their spending now because they feel they were "taken" during the boom?
A: They had to pull back because of the slowdown in the economy. But if they play it too conservatively, then they will not be positioned well when the economy improves.
Q: What will the role of Silicon Valley be in the future?
A: One reason Silicon Valley was a technology center in the past is because of the excellent educational institutions nearby that were a good source of bright new workers coming into the field. That hasn't changed. Silicon Valley will clearly continue to be a significant leader.
However, I think many other areas of the country have learned from that example and have put more effort into supporting research universities, incubators, and various levels of infrastructure, so they can also build high-tech businesses quickly.
Q: How big a threat to the tech industry is security? Are hackers getting the upper hand?
A: Clearly there's a lot more focus on the danger, given the problems that have been occurring and increasing. It's always going to be a measure/countermeasure situation. We'll improve security, then the offense will get a little stronger.
I think with [advanced Internet protocols] coming along, there will be some improvements in security. There will be more focus on syndication -- on having to prove you are who you say you are. And there will be improvements in our ability to safeguard information as it travels through the Internet. I think we're making good headway. It's an ongoing problem. But we can and will grow in spite of it.
Q: How will the coming tech recovery differ from those in the past?
A: In the late 1990s, we saw an amazing boom. Just before it began, people were saying there will be no improvement in productivity from technology. There were a lot of naysayers at that time. Then, of course, the tide completely turned. The pendulum swung back in the other direction, and people were overhyping some of the advantages of technology.
Now we're back to the naysaying period again. But I think that pendulum will be swinging. I believe there will be a lot to be gained in productivity. And that will, in fact, help pull us back out of this recession.