Dear Miki, 

R&D is an operational cost, not a question of profit. If Canon stopped R&D for one year, its profit might increase dramatically, but it would likely suffer the following year as sales declined due to the lack of innovation. That’s why all companies, regardless of size, have R&D as part of their operations. R&D can mean many things, but mostly it’s about people. 

The major companies are often the ones that also have long-term, foundational R&D where new technologies are invented rather than “just” iterated on. I think this is important to understand, and I can’t think of any OEM that determines its R&D budgets solely based on the previous year’s profit. They must — as most also report — allocate a relatively fixed sum or a sum based on revenue. 

R&D becomes as essential as accounting, basically. 

Regarding Benny Landa and Landa Digital Printing: the company has surrounded itself with so much secrecy and so many NDAs that it’s only natural to speculate about their entire operation. The paper transport system is delivered by Komori, the printheads by Fujifilm, the dryers by … and so forth — and therefore one has to think back on one of Landa’s statements from 2016: Landa employed about 600 people, of which 500 were engineers. 

These individuals (possibly not the same people over the years) have been working essentially since 2008, when the Landa project began. You can argue that indirect printing is incredibly difficult, and you can argue that if it’s solved, the world will see technology that could potentially bridge the gap Benny Landa spoke about at drupa 2012 and drupa 2016. 

You can even argue that if the pockets are deep enough, you can “afford” to burn money for many, many years — like Amazon did before it became a success.

I buy all these arguments — and yet, I don’t.

Responsible management must carefully monitor how money is spent, how development progresses, and — most importantly — understand whether investors can ever get a return.

In the extreme, it’s not a question of whether it’s possible, but whether it’s possible to recoup the investment within a reasonable time. I think this is what has happened with Kodak as well — they developed amazing technology, but the price was so high that no business model could justify the investment.

Landa Digital Printing is amazing — I have visited them in Israel. I got the impression that many of the challenges, including speed, were solved (at least from a drying perspective) — and again, that was by changing dryers from IR to NIR. Why wasn’t that done years earlier? And then there are the customers. Some can afford the loss, some can’t — and that’s the reason why the story about Landa becomes so crazy.

Not only could Benny Landa lose his $220 million investment, but his partners could lose even more. And then the printing companies that trusted Landa — they could not only lose the machines, the capacity, and their investment; their balance sheets could also be affected, making it more challenging to finance a replacement. In the worst case, people are laid off, and businesses close.

This is the worst-case scenario. Landa is putting both customers and investors at risk — and why do you think some have asked the court to add a clause preventing legal actions against leadership? I can only guess, but to me it sounds like a likely situation — especially as the last Landa S10 press was installed in May, and during my visit in the United Kingdom this week, some printers said they had even been pushed hard by Landa to buy machines.

The $6 billion you refer to is part of ongoing operations. A startup like Landa Digital Printing is using other people’s money, and that requires a certain responsibility. Did Landa manage accordingly?

I don’t know. But I’m not 100% convinced that Landa shouldn’t have been restructured a long time ago — at least before drupa, where another huge batch of money was burned on something that apparently wouldn’t be ready before 2030.

Or?