In response to your ideas about the customer being in charge, I am reminded of a book by Clayton Christensen, called The Innovator's Dilemma. From the review:

"Simply put, when the best firms succeeded, they did so because they listened responsively to their customers and invested aggressively in the technology, products, and manufacturing capabilities that satisfied their customers' next-generation needs. But, paradoxically, when the best firms subsequently failed, it was for the same reasons--they listened responsively to their customers and invested aggressively in the technology, products, and manufacturing capabilities that satisfied their customers' next-generation needs. This is one of the innovator's dilemmas: Blindly following the maxim that good managers should keep close to their customers can sometimes be a fatal mistake."

As a recently-minted PhD and now industrial researcher, I am struggling to understand this dilemma. In particular, I think industry has undergone a huge shift in the past 16 years, since I started BYU in 1990 as a college freshman in computer science. Previously, with institutions such as Bell Labs and PARC and IBM Almaden/Watson/etc you had a lot of research going on with only marginal benefits to the customer. In fact, you might even argue that researchers were -not- listening to the customer, but instead inventing things that the customer might (or might not) want in five or ten years time. Not everything would succeed, but when things did succeed, they seemed to spark revolutionary changes in the entire computer industry.

Nowadays, however, you have this radically different model, advocated by folks such as Google, in which even your R&D is customer driven. You're not shooting for any radical five or ten year breakthroughs. You're releasing incremental developments, early and often, and seeing what sticks.

While this might satisfy the customer in the short term, and make us all happy when we can play with nifty AJAX interfaces, it makes me wonder if we're not eating our seed corn, by applying our best and brightest minds to things like Google Suggest, rather than to basic research. A recent article at ArsTechnica makes the case much better:

"With today's short-term corporate focus on maximizing shareholder value by inflating the stock price at all costs, the pressure to innovate comes from the boardroom and the marketing department. Hence all the men and women in R&D have to be able to make a case for the eventual marketability of what they're working on or risk being downsized...[snip]...There's no doubt that the information economy continues to create a lot of wealth, but I think it's fair to ask if it's also creating enough science to replenish the stock of scientific capital that it's still burning through. I think it's clear that chaotic, market-driven change is a good way to bring ideas quickly and efficiently from concept to profitable product. However, such a rapid churning of the institutional and cultural landscape ultimately may not be conducive to the kind of steady, expensive, long-term investment in fundamental research that produces the really big ideas that somewhere, at some completely unforeseeable point in the future, change the world."

So I'm just wondering if you have any thoughts about this "customer is in charge" attitude, when it comes to R&D. What do you do when the customer is short-sighted, as the customer often is? Is there room in this brave new Web 2.0 world for longer-term vision?

[Aside: When previewing my comment, my html tags did not appear..the whole comment is one huge block of text. If this also happens in the final post, I apologize.]