I recently had the privilege to participate in an International Trade Commission field hearing at the Ames Research Center. This hearing focused on the importance of Digital Trade on the US and world economies and how we as an industry can help further innovation and Digital Trade growth. This is an important topic and we were pleased to have been able to contribute to the discussion which is helping lay the groundwork for how digital trade will be integrated into the future of all businesses. Below is the statement I presented at the hearing.
ITC Hearing Statement
September 25, 2013
Dr. Martin Scott
Good Morning, I’m Dr. Martin Scott. It is a pleasure to be with you this morning as you listen to different perspectives on the importance and impact of Digital Trade on the US and world economies.
I am currently the chief technology officer at Rambus and have spent over 30 years living and working in Silicon Valley. I started my career at HP Labs developing semiconductor technologies that ultimately helped power the Internet, and subsequently managed a variety of businesses at HP, Agilent Technologies, and PMC-Sierra.
Over the course of my career, I innovated and helped deploy emerging technologies which help people and businesses connect ― providing the foundation for new products and services. Looking for ways to help consumers, as individuals or organizations, access, store, process, and ultimately utilize information to improve the quality of life continues to drive innovation in the Valley.
We, at Rambus, are focused on this innovation and there is compelling progress being made in power-efficient data transport, storage, and security which push the limits of technology. Digital Trade critically depends on these resilient, yet flexible, and cost-effective technology infrastructures to grow. This is what we do.
Rambus, as you may know, is a company headquartered right here in Silicon Valley – in fact, we’re right across the street from Ames Research Center – that was founded in the early 1990s when the computer industry was evolving rapidly and stretching the ability of computer chipset architectures to scale. Our founders foresaw a key limitation in the memory subsystems of computer platforms which would not be able to keep pace with the ever-increasing performance of microprocessors. In other words, they knew that computer performance would hit a wall. This “memory bottleneck” problem was what our founders set out to solve and, in doing so, developed revolutionary innovations that are widely used around the world in today’s semiconductors which drive PCs, servers, networking hardware, and mobile handsets, among others.
So what does this mean to Digital Trade? Rambus engineers have helped create semiconductor technologies that allow users to nearly instantaneously access the data they need, such as downloading and viewing media-rich content, as well as the technology to help extend the battery life of mobile devices. To help ensure a trusted and secure relationship with these exploding digital data streams, Rambus is also developing security solutions which should help the always-connected world scale in a productive manner ― a necessary foundation to commercial growth which increasingly depends on this data.
It takes continuous commitment, highly-trained and collaborative technologists, and significant R&D investment over time to develop innovative solutions. Rambus’s approximately 250 engineers and scientists thrive in solving these challenges in partnership with customers, often thinking big, and at the system level, before focusing more narrowly on key innovations which provide technology breakthroughs. Whether it’s high-speed circuits that make devices actually run, or high-speed signaling that makes the processing power of devices relevant, or low-power techniques that seamlessly integrate with existing infrastructure, Rambus engineers take a systems approach to designing the most cost-effective and efficiently-run architectures possible. We have developed technologies through extensive R&D efforts over the past 23 years. In 2012, we spent about $140M on R&D alone, which was roughly 60% of our overall revenues. We clearly believe in innovation and creating technologies that are beneficial to the market and beneficial to consumers. It takes this level of commitment in order for organizations to meet the growing demands and requirements needed in today’s fast-evolving technology infrastructure.
Innovation is the lifeblood of the U.S. economy, and is at the core of enabling growth in Digital Trade. It helps keep us, particularly here in Silicon Valley, relevant across the globe and creates new opportunities for job growth. Through our extensive summer internship programs, we have enabled young engineers and scientists from universities across the country, and, of course, from the Silicon Valley, to work alongside our R&D staff and contribute to the innovation process. This partnership with the academic community is critical to facing the daunting challenges of a world of people and things always connected to the Internet. Through our extensive R&D efforts, we are not only working on revolutionary technologies, but we are helping our customers bring these inventions to market.
It’s with this backdrop that we are pleased to have been invited here today to help the Commission explore ways to ensure technology access is not hindered by barriers that could halt innovation. We see Digital Trade as the cornerstone for innovating the way we capture, secure, and move valuable information around the world. In fact, our ideas are often a critical first step in creating the infrastructure that enables Digital Trade to occur.
We appreciate and concur that one of the critical aspects of this important investigation is to ensure that information is accessible while data remains secure. Improved technologies for keeping information secure are critical for underpinning the continued growth of the Digital Trade economy. Theft of trade secrets, identity information, payment credentials, digital movies, and other forms of intrusion present a constant and growing issue as valuable information is increasingly stored and accessed through cloud-based applications connected to mobile devices. Rambus’ security division, Cryptography Research Inc. (CRI), is providing hardware-based security solutions to mitigate some of these threats, to businesses and consumers alike. One of the technologies being developed provides a layer of protection that is embedded on the semiconductor chip. This hardware “root of trust” can be an important component to securing high-value data streams, whether it is protecting financial transactions that take place across networks, authenticating devices and users, or providing countermeasures to attack or counterfeiting. One example that highlights such a solution is securely delivering premium entertainment and/or Internet-based content to network subscribers. In fact, piracy has been a large challenge for companies in the Pay-TV space where, despite rigorous enforcement efforts, subscription theft continues and ultimately undermines Digital Trade based on compensating content rights owners and distributors. In partnership with our customers, CRI’s technology is set to be deployed across approximately 75% of new set-top boxes rolled into the market by the end of this year, helping the industry to stop the estimated $18B global piracy market.
Another area where our security technology is playing an increasingly important role in Digital Trade is providing anti-counterfeiting protection. In fact, counterfeiting is a current or emerging problem for virtually every industry and not only impacts business results for those companies whose products are cloned, but potentially impacts consumer safety due to deficiencies in cloned product quality or functionality. As more and more commercial transactions are executed digitally through the Internet, verifying the authenticity of goods physically received is a growing concern. Counterfeit products hurt the economy. They displace legitimate sales, de-value brands, undermine consumer confidence, and create significant issues both here and abroad. In some instances, counterfeits can contribute to serious health and safety risks. Commonly-counterfeited products not only include luxury goods, but automotive and aircraft parts, batteries, consumer electronics consumables and peripherals, medical devices, and infrastructure components. Some reports in the last few years indicate counterfeit goods totaled close to $650B in lost sales. With tamper-resistant semiconductors under development, counterfeiting can be significantly reduced while helping eliminate cost, time, and complexity of tracing counterfeit products around the world. The tamper-resistant silicon cores provide cryptographically-secure confirmation of a product’s authenticity and can be used to detect whether or not a product has been tampered with and/or is being reused in an inappropriate manner.
Building a sustainable and secure infrastructure for the Digital Trade economy is imperative as more and more things are connected to the cloud to facilitate efficient transactions between buyers and sellers. Many of the micro-ingredients under development in Silicon Valley, and at Rambus, are critical to this growth.
In order to support growth, we must keep innovation and deployment of advanced architectures for the movement of data and security at the forefront of the economy. It is imperative that oversight committees and commissions enable innovative companies, like Rambus, to maintain relevance in this new economy. Supporting legislation that enables small, inventive companies to continue investing significantly in R&D and take large financial risks in pursuit of finding new technology solutions is critical. The Silicon Valley is filled with smart, passionate, and entrepreneurial people who, like our founders, have big ideas that may provide key ingredients to future success in Digital Trade. Bringing invention to market is what drives Rambus, drives the local economy, and supports Digital Trade growth around the world. This spirit needs support and nurturing to remain intact. As we enter into the next phase of invention, particularly in the era of the “Internet of Things” where connectivity to the cloud is ubiquitous and value is created by data, innovation opens up exciting opportunities for new products and services.
Rambus, as a group of innovative thinkers and doers working on some of the world’s most challenging technology problems, looks forward to continuing this dialogue. Further engagement with the Digital Trade industry and policy makers will help keep innovation thriving.