Counterattack

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A U.S. high-tech combine

Admiral Bobby Inman, who stepped down as deputy director of the CIA last June, is no stranger to high-stakes research in the face of a tough challenge from abroad. Last week he was named point man for the U.S. response to a formidable new Japanese industrial threat. As chief executive officer of a unique firm called Microelectronics and Computer Technology Corp. (MCC), Inman will head a research operation jointly funded by ten top American computer companies. At stake: the 42% U.S. share of the $92 billion world computer market.

The idea for MCC was born when 15 big U.S. computer manufacturers met at a Florida country club a year ago at the invitation of Control Data's chairman, William Norris. Several months earlier, Japan's government and its computer industry had announced that they were joining forces in the Fifth-Generation Project. Its aim: to develop a new supercomputer by 1990 that works ten times faster than the best models on U.S. drawing boards and breaks new ground in simulating human intelligence. Reminding his competitors of Japan's rapid inroads into the semiconductor market, Norris convinced them that unless they began to work together, American computers could go the way of compact cars and television sets. The first shareholders in the new cooperative, founded in August, include such industry heavyweights as Control Data, Digital Equipment, Honeywell, National Semiconductor and Sperry Corp. One notable nonparticipant: giant IBM, whose research facilities the new company may eventually rival. The U.S. Department of Justice has not challenged the joint venture, but plans to review every MCC research undertaking to ensure that antitrust laws are not violated.

With start-up funding of $50 million, MCC will concentrate on four areas: advanced computer architecture, software technology, integrated-circuit packaging, and computer-aided design and manufacturing systems. MCC will not market products; that will be up to its individual member companies. One of Inman's toughest tasks, therefore, will be to maintain the delicate balance between cooperative research and the competing market aims of MCC's shareholders. Says he: "The ability of the partners to believe they are going to share equally and fairly is critical." But not quite as critical to this venture as their shared belief that working together is the way to beat Japan Inc.