Gary Gordon is the kind of person who is naturally curious about how things work -- and how to make them work better. He's that way on or off the job, but when he's at work in his cubicle at Agilent Technologies Inc. in Palo Alto, Calif., Gordon is constantly in the hunt for technological solutions to problems. With some 40 patents in optics, mathematics, and instrumentation, Gordon, 61, a principal department scientist at Agilent Laboratories, the high-tech firm's R&D unit, was named the winner of the company's first Joel S. Birnbaum Prize for innovation in 1999. That year he devised a way to solve the problem of computer "mice" whose roller balls get stuck with dirt and don't work properly. Gordon's solution: an "optical mouse" that "sees" the surface of a table or desk and measures its movement. "People universally loathe their computer mice," Gordon says. "They get dirty and people pound them to get the dirt loose, they have to clean them periodically, and eventually they fail because of the dirt." The optical or trackless mouse -- Agilent calls it the MouseJet -- has no ball and no moving parts. It works by shining a light on the work surface, enabling the mouse to take 1,500 pictures per second to determine its relative location. Its exact location at any one instant compared to the next is acutely important to a computer mouse, because this information determines how far and in which direction the cursor or pointer moves on the screen. "I think in a matter of years all mice will use this technology," Gordon says. Microsoft Corp., for one, has licensed it. Innovation is critical not only to individual companies such as Agilent, but to our economy as well. The reason is that new and better mice allow people to do their jobs more efficiently, creating value. At the same time, the companies that create and manufacture the new product -- whether it's computer software or a new kind of automotive transmission -- are able to charge a premium for the innovation. "Agilent Laboratories' job is to look three to five years out to develop new technologies or to strengthen core technologies, or to get us into new businesses," says Ned Barnholt, Agilent president and CEO. "Agilent Labs also is our secret weapon to keep us on the lookout for disruptive forces that could affect our businesses." Agilent, whose advertisements typically tout the company's innovative ways and heritage, is one of the high-tech industry's biggest spenders on R&D. As a percentage of revenue, Agilent spends more -- about 12% -- on R&D than Apple Computer Inc., Xerox Corp., Dell Computer Corp., and Hewlett-Packard Co., the parent firm from which it was spun off a year ago. Sure, there are a few that spend more, most notably Microsoft and IBM Corp. Technology needs innovation the way a tree needs the sun. A year ago most of that sun's rays seemed to be focused on the Internet. "Innovation spans all areas of the economy, but the reality is that with the new economy, it's the Internet," George Bailey, senior partner at PricewaterhouseCoopers, told IW at that time. Bailey still sees the sun trained on the Internet, but the focus has shifted some. While a year ago it was on business-to-business e-commerce, today he sees more companies investing in business-to-employee systems. What he's talking about are Web-based portals that enable employees to do their jobs faster and easier by providing them with personalized information, tailored to their roles in the company. "This is a new area of innovation," Bailey adds. "These business-to-employee Web sites allow employees to do their jobs and run their personal lives from the same screen right at their desks." Agilent's Gordon believes successful innovation can be traced to curiosity, rather than education. He has a bachelor's degree in electrical engineering from the University of California, Berkeley, and a master's in the same field from Stanford University. "There's not that much correlation with education," he observes. "The people who are constantly hitting and getting on base in this business tend to be curious and nerdy." The kind of people who wonder how to make a clean mouse.