LAS VEGAS--Innovation within the telecommunications industry is at risk because of lower R&D spending, particularly at the component level, said Jagdeep Singh, president and CEO of Infinera, Thursday to the NXTcomm08 keynote audience.

The “virtuous cycle” that produces more bandwidth at lower costs and stimulates innovative applications to use that bandwidth could be disrupted if the telecom industry doesn’t take note of the slowdown in innovation on optical network technology, Singh said.

Singh used a Telephony magazine article to illustrate his point that the industry has been talking about 40 Gb/s optical networking technology for eight years — but is only now deploying it. “40 gig optics haven’t made economic sense,” Singh said. “As a result, the core optical network has been stuck in neutral.”

If the next step — 100 Gb/s — moves into the network at a similar pace, service providers will be forced to grow their operations staff by 30% and use the power generated by two Hoover Dams to keep up with bandwidth demand, Singh said. Technological innovation is required “so the network can add bandwidth at the core at the same rate as bandwidth demand is growing.”

R&D spending has gone down since the telecom bubble burst in 2000; venture capital is also being drawn away from telecom by the biotech and energy industries; and fewer college graduates are emerging with electrical engineering or computer science degrees, Singh added. All of that exacerbates the industry’s innovation problem.

Singh’s suggested solution is threefold: Hardware and software companies need to stop making “me, too” products and start solving new problems; hardware companies should once again focus on innovation at the component level; and service providers need to reward innovation with their dollars.

“All the big vendors used to have their own component labs,” Singh said, “but they sold their component divisions” and now outsource that function. Getting a third party to innovate at the component level is hard because “a third-party supplier isn’t going to invest millions to sell something to just one company,” he said.