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Where Have You Gone, Bell Labs?
theodp writes "Name an industry that can produce 1 million new, high-paying jobs over the next three years, challenges BusinessWeek. You can't, because there isn't one. And that's the problem. So what's the answer? Basic research can repair the broken US business model, argues BW, saying it's the key to new, high-quality job creation. Scientific research legends like Bell Labs, Sarnoff Corp, and Xerox PARC are essentially gone, or shadows of their former selves. And while IBM, Microsoft, and HP collectively spend $17B a year on R&D, only 3%-5% of that is for basic science. In a post-9/11 world, DARPA's mission has shifted from science to tactical projects with short-term military applications. Cutting back on investment in basic science research may make great sense in the short term, but as corporations and government make the same decision to free-ride off the investments of others, society suffers the 'tragedy of the commons,' wherein multiple actors operating in their self-interest do harm to the overall public good. We've reached that point, says BW, and we're just beginning to see the consequences. The cycle needs to be reversed, and it needs to be done quickly."
They're looking for talented engineers and scientists with LOTS of imagination to take important projects from concept to reality!
Check out their website and apply if you want to turn this trend around!
There is a really simple idea on how to get more basic research... PAY MORE!!!
Seriously, in a world where artists, movie actors, athletes get completely outrageous salaries (let alone wall street and executives) the answer can be easily found.
It used to be in the old days that you should learn a profession before becoming a professional athlete, actor, etc. Now the payoff of these fields far outweigh learning a "real" field. Look at MTV and this weird chick who thinks that she has talent. In fact want to see what the youth has become look at MTV reality in general...
What do I do? I work in a hedge fund, even though I am a professional mechanical engineer who used to "build real things". I can actually build robots, and industrial production machinery. Because of my upbringing (German) it was ingrained to me to build "real things". I moved to finance because I am of the motto, "if you can't beat them, join them... Your life is too short..."
Researchers have been sounding this alarm for years, if not decades. But what makes this significant is hearing it from the likes of BusinessWeek. If the Wall Street Journal ever catches on, we might be close to some real change. On the other hand, they are sure to think the solution to tragedy of commons is stronger IP laws rather than more investment in commons.
The capitalist system IS the business model. There's no money to be made in basic research when you can sell shitty packaged "solutions" consisting mostly of off-the-shelf hardware.
An example: The Army uses mobile PCs with touchscreens that are given out to soldiers in the field. They're made by Toshiba, I believe. What do they run? Windows with some shitty full-screen GUI. Yes, they do crash. The defense budget takes the biggest chunk of the USA's budget. Even with all that money, they still get utter crap peddled to them by "system integrators". How can this be?
Business plan:
1. determine how to maximize profit no matter what
2. repeat indefinitely
We've invested in basic research here in Ireland, and the government is being criticised for it (link to Irish Times opinion piece).
Certainly there is a problem here in Ireland that there are a lack of opportunities for those who've acheived a PhD qualification through basic research. Already a lot of even ordinary degree graduates in science and technology have emigrated from Ireland, and the number of entrants into such undergraduate courses is dropping year by year.
However, possibly there's nothing inherently wrong with investing so much in basic research and the issues arise merely from the ineptitude of those running this country and the blind voting that such a section of the populance do for the current ruling party - who've throughout Ireland's history acheived lots of public support but attempted to ruin the country at various stages (starting with the Civil War, continuing with the economic war with the UK in the 1930s, going crazy in the 1970s even abolishing car tax to win votes as the country went bankrupt, deliberately facilitating a property bubble after the dot-com crash, attempting to have the taxpayers continue to pay into the Ponzi scheme with a unique Irish version of the bad bank - i.e. pay speculative amounts to banks for bad loans and attempt to keep prices up until a new bubble is created).
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Government spending on R&D? That's socialism! I thought everyone knew that taxes are bullshit. It's not like government funded basic research ever gave us anything useful like the transistor.
One of these days I'm going to cut you into little pieces. - PF
The defense budget takes the biggest chunk of the USA's budget. Even with all that money, they still get utter crap peddled to them by "system integrators".
Milton Friedman explained this very well when he pointed out that your incentive to get your money's worth is lowest when you're spending someone else's money for someone else.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
All of you Genetisists with your fancy degrees start discovering stuff, but remember if you start playing god again we are going to complain to the governement...
All of you Nuclear Physists start making your reactors and glowey things, but not in my back yard! I don't want that nuclear waste making my McDonalds Double Cheesburger unhealthy!
The same for all of you green energy people with your wind turbines you need to start building this renewable energy! but not in my neighborhood you're destroying the value on my now worthless house!
Clearly this is everyone's fault except for mine, now if you'll excuse me I'm late for second job delivering pizza's I'm glad I never went to college otherwise I might be expected to do something about this! - The American Public
"Name an industry that can produce 1 million new, high-paying jobs over the next three years", challenges BusinessWeek. The obvious answer is Greentech. We need to scale wind and solar power production rapidly, for a whole host of reasons. Currently installed base took decades, and is still only 1% of the electric grid, so clearly there is lots of room to expand... and that's not even counting such opportunities as electric cars.
augment your senses: http://sensebridge.net/
I think a lot of the lack of R&D goes back to decisions made many years ago by the government. At one point all employee salaries regardless of how outrageous they were were a deductible expense. Congress decided they wanted to tax high salaried people. Therefore companies found ways around those laws. In comes stock bonuses and stock options. The problem with that is that a highly paid employee (most likely a decision maker) will do what is best for them, which is kick up the stock price so that they get higher effective pay. Easy way to do that, kill long term R&D. In addition with companies hiring people with business BS degrees who then get an MBA to manage, instead of the engineers, everything is looked at on the current P&L statement, not the 10+ year roadmap.
The combination of the higher ups wanting short term profits due to changes in tax law, along with many fewer R&D companies (HP for example) having engineers and technical people making decisions has decimated R&D.
I remember when HP meant test equipment and awesome calculators, not lousy consumer based computers (Thanks Carly). Another example, don't laugh too hard, is Radio Shack. I used to work for Radio Shack in the late 80's and the early 90's. When I started, they actually had R&D (they had a dye based CD-R technology they were working on, but had RIAA type problems with), manufacturing, a lot of electronic components, etc. When the founder of Tandy died, the MBA style management came in. They started off selling manufacturing, as that was not part of the "Core Business", sold off the credit card division, which made a nice one time profit, that then really made customers made because of lack of customer service, and lowered sales because of tighter credit requirements. They stopped carrying a lot of small parts, because of the low dollar value, regardless if they were high profit. In short, Charles Tandy, the leather salesman, ran it better and more profitably than the "business school" people that were bought in because he understood the business. We need to find a way to encourage the people who know the business they are in to get higher up and make decisions, rather than feeding the orgy of MBA's and people with business degrees that now rule most companies. As to how, I have very little in the way of ideas, but I think some tax law encouraging long term and pure science R&D would be helpful, if it could not be bastardized for other purposes (yeah, I know, a pipe dream).
NASA used to have research labs, too-- Ames and Lewis and Langley-- but years of cuts to the research budget and redirection has pretty much eliminated most of the work that doesn't have a near-term engineering payoff for a funded project. There's just no real constituancy to funding research.
http://www.geoffreylandis.com
Sometime in the late 60's/early 70's, economists and politicians began to see honest growth based on adding value and fair trade as something that would slow the growth of the US economy, and leave the country unable to pay for the massive military and social programs that we are committed to. How many trillions of dollars were invested in ICBM silos? Strategic Air Command bombers and tankers that are still flying today by the grandchildren of the original pilots because they were never needed in the first place?
We made the switch from scientific and industrial powerhouse to empire. Instead of building factories, we build relationships with dictators. Instead of employing citizens in manufacturing, we exploit peasants in East Asia. I live in Albany, NY. Thanks to government, this area is pretty prosperous. But as you drive west through once-thriving cities like Amsterdam, Utica, Syracuse, Rochester and Buffalo, you are a witness to economic devastation as the region declines to a shadow of its former self.
We live in an age of false prosperity, where our chief export is the wealth of the nation.
Conformity is the jailer of freedom and enemy of growth. -JFK
Actually, Social Security is the biggest chunk of the national budget at 21.05%. The Department of Defense is 16.85%. Actually if you add SS, Medicare, Medicaid, Unemployment and Welfare, Housing and Urban Development, and Health and Human Services you get 49.72% for social programs. Also, interest on the National Debt is budgeted at 8.5%. That leaves 25% left for things like Education, NASA, DOE, DHS, DOJ, EPA, NSF, Federal LE, etc.
mmmmm pie
If you want the literal answer to this question, they're part of Alcatel-Lucent now, after being part of Lucent Technologies since AT&T spun them off in the 90s.
GLaDOS for President 2016! "Well here we are again. It's always such a pleasure." -- GLaDOS, 2011
Bell Labs was a subsidiary of the Bell Telephone company. Since the telephone company was a regulated utility, and a monopoly, the US government did not allow it to commercialize many of its discoveries and inventions. UNIX for instance was "given away" with a license to universities (e.g. UC Berekely), companies, and the government.
I believe the conclusion you drew is incorrect because it was based on the faulty assumption that Bell Labs tried to commercialize and profit off its products, when in fact it could not.
Name an industry that can produce 1 million new, high-paying jobs over the next three years
Government!
Catalin Braescu
Ofaly.com
It's interesting to note that most of the top-tier research facilities of the past were backed by monopoly or near-monopoly corporations. Bell Telephone speaks for itself, IBM Labs was supported by revenue of a dominating computer manufacturer, Sarnoff is the old lab facility of RCA, which for a time had sufficient clout to pretty much set the price of vacuum tubes. Xerox was the dominant photocopier supplier in an era of large growth. In today's world, Microsoft is one of the biggest spenders on research, and they have their own cash cow from a software monopoly.
One wonders if the ability to fund basic research depends on having a nearly monopolistic revenue stream. And if that's the case, are we prepared to suffer monopolies to get the research that comes with them?
It kind of is.
Ok, fine. There are many collective action problems, and the Tragedy of the Commons is just one of them. If we're being picky, I suppose you should only use "Tragedy of the Commons" to refer to scenarios in which individual incentives cause a shared resource to be used unsustainably. I think the argument is that, metaphorically, there is a shared resource here (and indeed there is) -- scientific knowledge. Now, perhaps you can actually "use up" this resource by exploiting all the economic opportunities it affords. But I will agree that the metaphor of the commons breaks down here, because the problem is NOT that knowledge is being "overused" but that it is being "underproduced."
So the phrase "Tragedy of the Commons" is used, maybe, a tiny bit out of place, when simple "Freeriding" would have been a better choice. But I'm ok with that. We can call it synecdoche: The writers are using one element (the Tragedy of the Commons) of the set of collective action problems to refer to the entire set. I can live with that.
A real question is whether basic research mines a depleting resource. The issue is not whether more can be discovered. The question is whether basic research is still cost-effective.
The problem is that we've found most of the easy hits in science and technology. Edison's lab, circa 1880, had a goal of one minor invention every three days and one major invention every two months. This was with a rather modest staff, about 40 people. In no area of science is that level of output possible today. Everything that easy has already been done.
One guy built the first IC in two months at Texas Instruments, without much help. Several early microprocessors were designed by teams of about 5 people. It took 3,000 people, in grey cubicles in Santa Clara, to design the Pentium Pro/II/III architecture, the first superscalar IC. (Getting a working design out of 3000 people for something as tightly integrated as a fast superscalar CPU for a complex architecture was an incredible management achievement.)
Xerox PARC, in its heyday, had a nearly open field in which to work. PARC was funded on the concept that if they did things which cost too much now, they'd be affordable later and Xerox would own the technology. So they built things like the Dover (a $100,000 laser printer) and the Alto (a $30,000 single-user computer), and they built enough of them to be useful experimentally. So they were able to make major progress with about 40 people in the computer science section. (PARC seemed bigger, but a big part of PARC was copier technology development. Everybody forgets those people, but they filled much of the building.) Now it takes resources like that to develop a midrange cell phone.
There's a curve here, it gets steeper, and not in a good way. The easy stuff is discovered/invented first, then the harder stuff. Each new bit of progress comes at a higher price. It's like mining lower and lower grade ore as the good stuff runs out.
Those are places I know about and visited at one time or another, all in semiconductors and electronics. I can't speak for biotech, which seems not to be as far up the curve yet. On the other hand, consider aviation and rocketry, where the easy part ended in the 1960s. Look at progress in aviation between 1903 and 1956 (Wright Flyer to Boeing 707), then 1956 to 2009 (Boeing 707 to Boeing 787). Or rocketry between 1929 and 1969 (Goddard rocket to Apollo) and 1969 to 2009 (Apollo to Shuttle).
This is not exactly true. The fact is that the drug industry is making handsome profit at the prices they sell in Canada, Mexico or Europe. They easily recoup their R&D costs. Besides, R&D expenditures in the pharma industry are relatively small part of their budget. For example marketing costs are about 3 times as much (can you turn on TV and not see an add for a prescription drug?) . Even manufacturing costs are higher. The reason for this is that all the basic research as well as some of the drug development is done by universities and payed by grants from the government (NIH, DoE, DoD, NSF) and non-for-profits. Creators and inventors see a hostile environment for profiting off their works, so they stop investing in creating and inventing.
Creators and inventors do what they do because they enjoy it. Making money is a second or third motivator. If it was the primary goal they would be in marketing selling you stuff from China that you don't need.
I believe the conclusion you drew is incorrect because it was based on the faulty assumption that Bell Labs tried to commercialize and profit off its products, when in fact it could not.
Indeed. And the same point should probably be made about Xerox PARC; a lot of really good basic research went on there, but the management of the company had little clue what to actually do with it. The graphical user interface, the WYSIWYG word processor, object-oriented programming -- all of these were PARC innovations, and Xerox did almost nothing to commercialise them. In the end, Xerox was simply content with being a photocopier manufacturer. Laser printers were close enough to that core business to fit in; graphical networked workstations, operating systems and programming langauges weren't.
A regulated market that prohibits companies from buying each other out when there are only a few players left, protection from lawyer attack and price undercutting for new players entering an established market and anti-monopoly/anti-cartel legislation to round it off.
deny the organization who discovered it the fruits of their labor
Call it anecdote, but I find that the people most likely to use the phrase "fruits of ... labor" tend to be the people least likely to have ever performed an hour of true hard labor in their lives.
Like the Rugged Individualist(TM) who goes on and on about how he shouldn't pay taxes and should be able to keep the "fruits of his labor" when it turns out he resets people's passwords and reboots servers for a living.
In reading some of the comments, people don't seem to understand the purpose of patents.
The true purpose of patents are not so much to act as incentives to innovate, that will happen anyway as long as innovation can produce a profit though the innovation becomes a trade secret.
The purpose of patents is information sharing. The patent holder is given a monopoly for a limited time but must reveal the workings of the innovation. By revealing the information others can study it, improve it and use it to advance the state of the art.
I hope this BW article doesn't lead to the same lunacy to extend patents that happened with copy rights to "incetivize" innovation since that would defeat the purpose.
Also, the short term view that the business school developed in business "leaders" is nothing more than self cannibalization. Tech companies have been devouring themselves, riding on technology they developed years ago and not laying ground work for future profitability through solid basic research.
In addition, by outsourcing and offshoring they have been choking off their own sources of future leadership in personnel. The skilled workers they need are developing their skills working for other companies.
Here's my observations. Many of the IT people of my generation began as help desk (some times part-time while in school or summer jobs), the jr. sys-admins or consulting finally working their way up to senior positions or creating their own companies'. They sometimes were hired internally to a company since they knew the company and the company knew them. That path allowed for slow gradual developed of skill sets, maturation and exploration of interests. With offshoring and outsourcing that path is becoming rarer. And so now companies when they do look for IT/programmers bemoan the lack of skilled workers.
This also creates a chilling effect when people look for careers in the Sciences, esp. when it is easier to get an MBA than a Phd.
I tried to make these points to a Phd in Chemistry who had worked his way up into mgt. in a pharmaceutical company which was offshoring research, but he didn't get it. A bright guy, but he didn't get it.
putting the 'B' in LGBTQ+
I submit that both are broken and for the same reason: They want to have their cakes and eat them too.
Business relies heavily on societal infrastructure for end profits, but thinks that contributing to the support and development of the infrastructure is a horrible injustice inflicted upon them: You'll never, ever find a business which factors in the infrastructure items they depend upon because they are assumed to be there to be used, much like mana from heaven. Someone else is expected to put all the various infrastructure elements in place and maintain them so business can reap profits, but what happens when business controls most of the wealth of the society? Who then plans, builds and maintains the infrastructure items necessary for business to function? No one.
America's wealth owners would re-read the children's classic "The Little Red Hen" and throw Ayn Rand in the trash if they're really interested in seeing the U.S. do well in the future.
Everything in the Universe sucks: It's the law!
Yes, so many in business and politics don't see their role as American citizens as more important than their making money for personal gain. The accumulation of wealth has become perceived as valuable than personal sacrifice for the common good. To many, the entire concept of collective government is viewed as the problem not the solution.
Driven by self-serving market forces, its an attitude that has permeated nearly every aspect of our culture. Americans today by and large do not see the government budget as their money, rather they see it as someone else's money. This arises in large part because they continue to elect representatives, who represent corporate interests rather than their own. The decline of our political culture (the decline of our economy and scientific infrastructure are merely byproducts) has reached the point that corporations, most obviously in the area of health care, now actually buy politicians and market their own political agendas to keep the gravy flowing and the current system in place, craftily selling them to the foolish, who then proceed to attack their own self-interest. Corporations and corporate media in our "free" markets tout the evils of socialism and brand any collective action for the common good that may affect their self-interest "socialism". The short-sighted and the ideological rigid (conservative) are more than eager to follow their lead.
Sure, the lip service of cheap patriotism is easily paid, but you can count the number who are ultimately willing to pay either higher prices or more taxes for the "greater good" in single digits. The willingness of many to see any kind of collective activity as a sign of "socialism" only emphasizes that the kind of initiative the writer is talking about will more likely take place elsewhere, China, India, Europe, Japan, Korea, Canada, where they more readily accept and recognize that economic and social realities do not come in easily pigeonholed extremes that can be painted black or white. The transition and acceleration of societies more adept at handling and developing collective action other than our own has been picking up steam over the past few decades, particularly in the biosciences where much of the future lies. However, this is not necessarily a bad thing as the collective effort becomes globally rather than nationally oriented.
It's interesting there where you try to claim that inferior, higher priced forms of energy are more efficient. If they were more efficient, why wouldn't they be less expensive than fossil fuels? Then we'd just switch to them because they're cheaper -- rather than being forced against our will to pay extra for them and to subsidize them.
Or did you mean "more efficient" at delivering subsidies and windfall profits into the hands of the politically-connected ruling class at the expense of the average American?
The US is __not__ overegulated, it is just poorly regulated, and has far too much politically and socially motivated regulation eg Bush, stem cell lines, [security] Id cards.
Much regulation is either WRONG, or INADAQUATELY ENFORCED, particularly in the finance sector, eg:
(a) Naked Shorts
(b) Incorrect MARK TO MARKET
(c) Capital Adaquacy
(d) Insure un-owned asset
(e) Late transaction settlement
you need the above list fixed before the next implosion or down turn.
But the "R&D" Apple is talking about is the Silicon Valley jargon for "Product Development." This is not even close to the Basic Research of the OP.
It would indeed have been difficult for anyone to screw things up as badly as Fiorina; that does take real talent. When Fiorina came on board, she made it clear that she did not like the company of which she had just taken control. So she methodically set about destroying the "old" HP. The first thing she did was a masterful piece of irony: she ordered that the word "Invent" would become part of the HP logo. Evidently, she thought that "branding" is all that matters; hype can be substituted for the real thing, and nobody will notice. I guess she was right.
This is not just about one bad person; it is a pattern. I think that what has happened is that the corporate managerial and financial class (and it is a sort of ruling class, in the old sense of class struggle) have become destructive parasites that suck the wealth out of our common economy, and transfer it to their own wallets. They destroy things that have value—like a creative engineering corporation—and leave behind an empty husk that only pretends to do what the old corporation actually did: invent.
Great men are almost always bad men--Lord Acton's Corollary