Preston Gralla: Can Amazon drones save the economy?

It's a tenet of Business 101: Concentrate on your core business with laser-like focus, and cut out everything else. If you stray too far from that, the thinking goes, you're wasting time and money and you will inevitably be eaten by your competitors.

If that's the case, then Google and (to a lesser extent) Amazon are angling to become someone's lunch. Amazon has at times strayed from its primary business, with things like Amazon Web Services. Google is another matter, spending a substantial amount of money on research that is as far away as can be from its core business of powering Internet searches.

But I don't see either as being in danger of failing. Spending money on projects that may at times seem quixotic could very well fatten their bottom lines in the long run. More remarkably, it may ultimately help save the U.S. economy.

The reason? As the federal government abandons funding primary and applied research, the U.S. is in danger of falling behind the rest of the world in innovation. But when companies like Amazon and Google fund research for their own purposes, they help pick up the slack and spur gains throughout the economy.

Take Google's most recent venture, Calico, a healthcare-focused company that aims to, among other things, dramatically increase human longevity. Could anything be further from Google's core mission? No. And yet, Google is investing. Google co-founder and CEO Larry Page explained the decision this way to Time magazine: "In some industries, it takes 10 or 20 years to go from an idea to something being real. Healthcare is certainly one of those areas. Maybe we should shoot for the things that are really, really important so that 10 or 20 years from now we have those things done."

Even though Google is a private business, its research will redound throughout the economy. Calico will use big-data technology as part of its research, and its findings and techniques will likely spur other startups and associated businesses we can only imagine.

Then there's Google's research on self-driving cars. If successful, other companies will likely jump into the market, either to compete or to become part of a thriving, related ecosystem.

Amazon doesn't go quite as far afield as Google, but its big ambitions and research can similarly help not just the company, but the entire economy. Take Amazon's recent announcement that it was developing a fleet of drones to deliver packages. That will help jump-start a drone market now in its nascence. And that market will be substantial. The Association for Unmanned Vehicle Systems International estimates that drone-related companies will create more than 100,000 jobs in the U.S. by 2025, for a total economic benefit of $82 billion.

There was a time when the federal government embraced research as a central part of its role, and in doing so propelled innovation and the country's economic might. Al Gore may not have invented the Internet, but federal funding did, leading to explosive growth and innovation that will be felt for decades to come. But this is an era that disdains government and sees research as bureaucratic rot that needs to be cut.

Enter Google. And Amazon. And other tech companies. Their research needs to take up the slack as meat cleavers come down on federal research programs. Not only will it ultimately fatten their bottom lines, but it can help revive the U.S. economy as well.

Preston Gralla is a contributing editor and the author of more than 35 books, including How the Internet Works (Que, 2006).

Copyright © 2013 IDG Communications, Inc.

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