What Made Bell Labs So Successful? (msn.com) 86
Bell Labs "created many of the foundational innovations of the modern age," writes Jon Gertner, author of The Idea Factory: Bell Labs and the Great Age of American Innovation — from transistors and telecommunications satellites to Unix and the C programming language.
But what was the secret to its success? he asks in a new article for the Wall Street Journal. Start with its lucky arrival in a "problem-rich" environment, suggests Arno Penzias, winner of one of Bell Labs' 11 Nobel Prizes: It was Bell Labs' responsibility, in other words, to create technologies for designing, expanding and improving an unruly communications network of cables and microwave links and glass fibers. The Labs also had to figure out ways to create underwater conduits, as well as switching centers that could manage the growing number of customers and escalating amounts of data.... Money mattered, too. Being connected to AT&T, the largest company in the world, was an advantage. The Labs' budget was enormous, and accounting conventions allowed its parent company to make huge and continuing investments in R & D. The generous funding, moreover, allowed scientists and engineers to buy and build expensive equipment — for instance, anechoic chambers to create the world's quietest rooms...
The most fortunate part of Bell Labs' situation, however, was that in being attached to a monopoly it could partake in long-term thinking... Without competition nipping at its heels, Bell Labs engineers had the luxury of working out difficult ideas over decades. The first conceptualization of a cellular phone network, for instance, came out of the Labs in the late 1940s; it wasn't until the late 1970s that technicians began testing one in Chicago to gauge its potential. The challenge of deploying these technologies was immense. (The regulatory hurdles were formidable, too....)
The article also credits the visionary management of Mervin Kelly — who fortunately also "had access to funding in a decade when most executives and universities didn't" to hire the brightest people. (By the early 1980s Bell Labs employed about 25,000 researchers, technicians and support staff, with an annual budget of $2 billion — roughly $7 billion in today's dollars.) "The Labs' involvement in World War II suggested to Kelly that an exciting postwar era of electronics was approaching, but that the technical problems would be so complex that they required a mix of expertise — not just physicists, but material scientists, chemists, electrical engineers, circuitry experts and the like." At Bell Labs, Kelly would sometimes handpick teams and create such a mix, as was the case for the transistor invention in the late 1940s. He came to see innovation arising not from like-minded or similarly trained people conversing with each other, but from a friction of ideas and approaches. It meant hiring researchers who had different personalities and favored a range of experimental angles. It also meant personally designing a campus in Murray Hill where departments were spread apart, so that scientists and engineers would be forced to walk, mingle and engage in serendipitous conversations and debate ideas. Meanwhile, under Kelly, the Labs focused on hiring people who were deeply curious, not just smart. Kelly saw it as his professional duty to do far more than what was expected, with his laboratory and vast resources, to create new technologies...
The breakup of AT&T's monopoly, which led to a steady shrinking of Bell Labs' staff, budget and remit, shows us that no matter how forward looking your employees and managers may be, they will not necessarily see the future coming. It likewise suggests that technological progress is too unpredictable for one organization, no matter how powerful or smart, to control. Famously, Bell Labs managers didn't see value in the Arpanet, which eventually led to today's internet.
And yet, for at least five decades, Bell Labs created a blueprint for the global development of communications and electronics. In understanding why it did so, I tend to think its ultimate secret may be hiding in plain sight. The secret has to do with Bell Labs' structure — not only being connected to a fabulously profitable monopoly, but being connected to a company that could move theoretical and applied research into a huge manufacturing division that made telecom equipment (at Western Electric) and ultimately into a dynamic operating system (the AT&T network)... Scientists and engineers at the Labs understood their ideas would be implemented, if they passed muster, into the huge system its parent company was running.
Bell Labs racked up about 30,000 patents, according to the article, and celebrated its 100th anniversary last April.
It is now part of Finland-based Nokia.
But what was the secret to its success? he asks in a new article for the Wall Street Journal. Start with its lucky arrival in a "problem-rich" environment, suggests Arno Penzias, winner of one of Bell Labs' 11 Nobel Prizes: It was Bell Labs' responsibility, in other words, to create technologies for designing, expanding and improving an unruly communications network of cables and microwave links and glass fibers. The Labs also had to figure out ways to create underwater conduits, as well as switching centers that could manage the growing number of customers and escalating amounts of data.... Money mattered, too. Being connected to AT&T, the largest company in the world, was an advantage. The Labs' budget was enormous, and accounting conventions allowed its parent company to make huge and continuing investments in R & D. The generous funding, moreover, allowed scientists and engineers to buy and build expensive equipment — for instance, anechoic chambers to create the world's quietest rooms...
The most fortunate part of Bell Labs' situation, however, was that in being attached to a monopoly it could partake in long-term thinking... Without competition nipping at its heels, Bell Labs engineers had the luxury of working out difficult ideas over decades. The first conceptualization of a cellular phone network, for instance, came out of the Labs in the late 1940s; it wasn't until the late 1970s that technicians began testing one in Chicago to gauge its potential. The challenge of deploying these technologies was immense. (The regulatory hurdles were formidable, too....)
The article also credits the visionary management of Mervin Kelly — who fortunately also "had access to funding in a decade when most executives and universities didn't" to hire the brightest people. (By the early 1980s Bell Labs employed about 25,000 researchers, technicians and support staff, with an annual budget of $2 billion — roughly $7 billion in today's dollars.) "The Labs' involvement in World War II suggested to Kelly that an exciting postwar era of electronics was approaching, but that the technical problems would be so complex that they required a mix of expertise — not just physicists, but material scientists, chemists, electrical engineers, circuitry experts and the like." At Bell Labs, Kelly would sometimes handpick teams and create such a mix, as was the case for the transistor invention in the late 1940s. He came to see innovation arising not from like-minded or similarly trained people conversing with each other, but from a friction of ideas and approaches. It meant hiring researchers who had different personalities and favored a range of experimental angles. It also meant personally designing a campus in Murray Hill where departments were spread apart, so that scientists and engineers would be forced to walk, mingle and engage in serendipitous conversations and debate ideas. Meanwhile, under Kelly, the Labs focused on hiring people who were deeply curious, not just smart. Kelly saw it as his professional duty to do far more than what was expected, with his laboratory and vast resources, to create new technologies...
The breakup of AT&T's monopoly, which led to a steady shrinking of Bell Labs' staff, budget and remit, shows us that no matter how forward looking your employees and managers may be, they will not necessarily see the future coming. It likewise suggests that technological progress is too unpredictable for one organization, no matter how powerful or smart, to control. Famously, Bell Labs managers didn't see value in the Arpanet, which eventually led to today's internet.
And yet, for at least five decades, Bell Labs created a blueprint for the global development of communications and electronics. In understanding why it did so, I tend to think its ultimate secret may be hiding in plain sight. The secret has to do with Bell Labs' structure — not only being connected to a fabulously profitable monopoly, but being connected to a company that could move theoretical and applied research into a huge manufacturing division that made telecom equipment (at Western Electric) and ultimately into a dynamic operating system (the AT&T network)... Scientists and engineers at the Labs understood their ideas would be implemented, if they passed muster, into the huge system its parent company was running.
Bell Labs racked up about 30,000 patents, according to the article, and celebrated its 100th anniversary last April.
It is now part of Finland-based Nokia.
Is that because of the monopoly? (Score:5, Interesting)
The most fortunate part of Bell Labs' situation, however, was that in being attached to a monopoly it could partake in long-term thinking... Without competition nipping at its heels, Bell Labs engineers had the luxury of working out difficult ideas over decades.
Was it the monopoly that made the difference? Or was it simply management smart enough to not only not kill the goose, but also to feed it? They had wins, they got more funding, they had more wins, repeat until they no longer got more funding and stopped getting wins. What's probably more important than why they succeeded is what happened at the end.
Re:Is that because of the monopoly? (Score:5, Interesting)
He made it work. 2008 economic crisis hit. Contracts halved. We ran mostly on royalties for that year. Little to do, so he encouraged us to do research. Anything. A lot of BS came out of it, but also a small gem here and there that would later be useful and one thing became a product.
Moved to a company that did not have royalty income. Most projects were fixed cost, meaning sales people had to hunt for contracts to keep the pipeline filled. Once heard the boss say: "We never have exactly the right amount of projects. I prefer too much projects instead of one too few." My god, what did they drag in when things went slow. Overpromissing our capabilities, impossible projects, unrealistic deadlines,
Anyway, no time to optimize work flows, no time to research and criticize obviously flawed procedures, just get the job done in the specified amount of days or else... The fun part? We were pretty good compared to our competitors. Only mediocre compared to the best though.
The bad part? I noticed that companies that did their due diligence, usually were unable to finish or sell their product. It usually got cancelled. The sloppy ones? They sold their junk successfully. I observed too few projects to make it significant, but the pattern was there.
Successful business? It is not a straight line, I can tell you that.
Re:Is that because of the monopoly? (Score:4, Insightful)
I put an awful lot of the blame on the introduction of the 'Business Ethics' courses in the '70s, and the flood of MBAs with no real-world employment experience in the '80s. When you have guys that have never worked a day in their lives (and six figures of debt) coming in to manage businesses about which they know little to nothing, having been erroneously taught that their one and only duty is to enrich shareholders, it's a recipe for disaster. Then combine that with executive pay plans hyper-focused on quarterly returns, and the resulting meltdown was utterly predictable and unfortunately unavoidable.
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Ignoring the two acs below - they're both assholes who have no clue, and if they're not trolls from Russia or elsewhere, are posting from their basements.
No, cusco, it's not "business ethics". It *was* the MBAs, Friedmanites all, who decided that ROI was, to paraphrase Lombardi, "ROI isn't everything, it's the only thing." Products and services? No, ROI. And ROI must be this quarter. Destroy unions, ship jobs overseas to semi-slave labor? ROI!
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Those are both the same stalker troll, I've seen it post over a dozen replies to a single post of mine, pretty much all pro-US propaganda. A lot of its post are just bot-like, and may be a poorly programmed bot, but the rest indicate a truly pitiful life. It may be the same one who stalks rsilvergun, although not quite as fanatically.
The 'Business Ethics' classes are what taught the up and coming execs that ROI, share price, and quarterly results are the only thing that matters.
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Yep. There's a parallel between the busy-work culture so popular these days - there's little time to pause for reflection so the deep work doesn't get done and that's where the true insights lie.
Re:Is that because of the monopoly? (Score:4, Interesting)
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I take your point about this being before the dawn of ubiquitous tech companies, but what kind of chilling effect did the Bell monopoly have?
Taxes (Score:5, Interesting)
Also stock BuyBacks used to be illegal. Stock BuyBacks mean that companies don't invest anymore they hold on to their cash so that they can do BuyBacks and pump the stock during downturn. This is exactly why stock BuyBacks were illegal for so long.
I don't think folks realize how much of a role public policy plays in their daily lives or the myriad of knock-on effects from those kind of policies. There's an idea of a chesterton's fence, which is a fence that you don't pull down unless you know damn well why it was put up. High taxes and Wall Street regulation were a classic chesterton's fence.
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Tax our way to prosperity!
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"We used to have super high taxes for the wealthy and corporations."
Did we?
Because what I see is a high marginal tax rate really only in the postwar years. ... And anyone who begins their economic model in the late 40s is a moron or a liar.
Remember anything important that happened, say, midcentury?
Something that may have left the US fabulously wealthy, particularly relative to all the other industrialized countries who were shattered & left in ruins by the same event?
Anyone who points to that time and s
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Yes we did. There was a top marginal tax rate of 93% into the 60s, 70% through the 70s, and 50% into the 80s.
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Did you think the benefit of being the 'only surviving industrial infrastructure' faded what, a week after ww2? /huh?
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Did you think we were the 'only surviving industrial infrastructure' until the 80s? /huh?
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Did you think we were the 'only surviving industrial infrastructure' until the 80s? /huh?
I'm going to go ahead and assume bad faith on your part, because otherwise you're very stupid. But nobody in your potential audience is stupid enough to believe there aren't lasting effects to being bombed to shit.
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The 'lasting effects' of being bombed included growing at 2-5x the US rate for two decades straight. Japan went from literal ashes to the world's second-largest economy in 23 years. West Germany became Europe's biggest economy within a decade. By the 1970s these 'bombed to shit' countries were outcompeting American manufacturers in their own domestic market. The data doesn't show lasting damage — it shows that being bombed was, perversely, an economic advantage in the long run because they rebuilt wit
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in the long run
Thanks for making my point for me there bro
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"By the 1970s these 'bombed to shit' countries were outcompeting American manufacturers in their own domestic market."
LOL
"I'll just prove his exact point for him!"
Thanks man!
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Certainly the funding from the monopoly allowed the Labs to hire the best and turn them loose on problems that didn't have immediate potential. This translates to "get a bunch of PhDs in a room and turn them loose, pretty soon you have a world-beating operating system that will last for decades"
There are books by Labs people which give a pretty good picture of the atmosphere. Jon Gertner's "The Idea Factory" is one, Michael Noll's "Memories: A personal History of Bell Telephone Laboratories" is another.
Hire
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Re:Is that because of the monopoly? (Score:4, Interesting)
Philips and Bell had executives who had come up through the ranks, knew their industry, and intended to stay with the company long term. Today's executives are uniformly MBAs and lawyers who have spent their entire careers hopping from one job to another in a game of 'Executive Musical Chairs', bumping up quarterly profits with short term fixes to ensure their bonuses, hoping to not be in the corner office when the music stops and the results of their bad decisions tanks the company. What interest do they have in long term investment when by the time it bears fruit someone else will be reaping the benefits?
When my wife started working at Target the CEO had started on the sales floor three decades earlier, by 2010 there wasn't a single person in the executive offices who had ever worked at a low level retail job. The entire company was being run by people who had no idea what the employees who kept it functioning day to day actually did, and the decisions coming from Minneapolis showed it.
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Yes, it was the monopoly that made it possible. This has been repeated enough times that it should be obvious: IBM, Xerox, Google, for example. It's only the monopolies who are willing to let smart people pursue research whose practical usefulness is unclear. Oh yeah, I forgot to mention another monopoly: the US Government.
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Yes, it was the monopoly that made it possible. .
It's not as simple as just that. It's a monopoly that is fearful that it might lose the monopoly if it isn't seen to be doing a good job. If you just have a monopoly, as Microsoft did in operating systems, the tendency is to exploit your customers for gain. If you have a monopoly but you think someone with the power to do so is out looking for an excuse to take it away from you then you want to avoid giving them an excuse.
Re: Is that because of the monopoly? (Score:4, Informative)
Re: Is that because of the monopoly? (Score:2)
You are correct. Meta (parent company of Facebook, Instagram, and WhatsApp) has an annual R&D spend exceeding US$40 billion. Five times more than the $7 billion (in today's money) quoted as the Bell Labs R&D budget.
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My personal take after reading The Idea Factory (really good book btw) was that it was actually a combo of a monopoly with close government accountability that produced some remarkable results.
Basically, Bell had a monopoly, and in anti-trust hearings ~early 1900's it was argued that it was necessarily a monopoly from a technical perspective in order to have standardization of communication across the country. Congress reluctantly agreed, and granted Bell the ability to maintain the monopoly under the const
Re: Is that because of the monopoly? (Score:1)
Bell Labs was part of AT&T, AT&T was a monopoly, a legal monopoly with one limitation (that it not enter the computer business) and in return it was guaranteed a fixed profit margin.
The more money AT&T spent, the greater profit they made. AT&T was happy to fund expensive 'blue-sky' projects because the expense drove revenues up, which increased profit.
It is FAR from the only, or even majority influence/factor of Bell Labs success, but it was a very, very unique arrangement.
Cash from a regulated monopoly (Score:5, Interesting)
Because of the regime it operated under, the ATT/Bell labs had an internal "R&D tax", which allocated at least 1% of the gross revenues of ATT & related companies to Bell labs R&D. This was the minimum, but often typically ATT invested in R&D more.
With a guaranteed 8% "fair return", which was what shareholders were entitled to, and without the pressure to report "growth potential" to "investors" every few weeks, they were able to put resources into developing actual growth potential. Besides, it was free money, as it was fully tax deductible.
In exchange, they made their patents public for everyone else.
That is, because of the regulatory regime it was operating like a government-funded research institute.
Bell vs. Academic R&D (Score:5, Interesting)
One thing Bell Labs did do correctly was by being part of a company, they had the needs and desires of a market and consumers to act as a pull, a "Why" so to speak. Even with some of the more speculative research they did, there was always an eye towards how would this get deployed to a market as a product and thus become a technology available to the broader world. Academia does not have this; most academia lives in a bubble. WHen you read academic papers, they all follow the same outline: 1) there's a problem in the world, 2) a new technology is hypothesized to solve it, 3) here is an experiment and data to show it cna solve it, and 4) that problem might be solved by this new technology.
While generally most papers I read have mid- to good- experimental design and data and decent conclusions, it's the first part about a problem that is almost entirely made up from nothing. In my field at least, when I read an academic paper that is supposed to relate to my field, the problem they are identifying isn't even a problem at all; it has no relevance to the field or what people want. As such the technology is funded, experiments are done, a paper is published, and it dies on the vine because it turns out no one wants it because it was never a problem in the first place.
It's noticeable that when it comes to silicon and chip-based technologies, academia does very little; the silicon industry basically took it all over through the formation of SRC. SRC unfortunately just got gutted by the Trump administration, but for a long time SRC and the industry ran all of the new technology development; there wasn't anything like chip architectures or new interconnects or anything coming out of academia at all; it was all industry led and academia only did niche stuff like graphene and organics and the like.
Industry at least provides a pull for a new technology academia has to push it and it rarely results in anything useful. It's different for different fields, but in my field at least I haven't found a single university program that's even remotely relevant; the Bell Labs model is sorely missed.
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100% agree on academic research. The amount of slop which is basically “20% better XYZ, but we ignored all linearity and reliability requirements” is infuriating. Wading through ISSCC rooms for cool stuff was frustrating. It seemed to be largely be industry advertising wrapped up as a paper without enough details to do anything with or student papers with such a bad premise that you wanted nothing to do with the details. My biggest usage was to use papers to back up what we were wanting to d
No (Score:2)
It was absolutely not the case that "there was always an eye towards how would this get deployed to a market as a product". Look at how much energy went into building Belle, the first chess machine to achieve master-level play. And it wasn't a simple computer program, it had a full-on chess board with pieces. When dignitaries toured the labs the tour guide would have to invent some bullshit reason as to how this chess machine benefited a telephone company.
Or just read the biographies and interviews of the p
Typo in summary (Score:5, Informative)
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WW2 can do attitude? (Score:2)
The people working in the labs at the time would have grown up post WW2 when there was still very much a can-do attitude in the west, now , not so much. I'm not saying that was the only reason but its certainly one of them.
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They grew up *during* WWII.
Re: WW2 can do attitude? (Score:2)
Yeah, and? They had their parents and grandparents as examples.
Can I edit articles? (Score:2)
An amazing place (Score:3)
My science teacher and I were the guests of Bell Labs in, I think, 1965, before I graduated high school. Still remember the computer memory with a gas laser burning spots on a chilled slab of material. Might have been a great place to work if my life had let me go down that path. Still have the pictures someplace their publicist took. Memories...
Did the author miss the biggest issue? (Score:5, Insightful)
For most of the 1900s, research was tax deductible for companies. Companies could run research labs for the benefit of both themselves and larger society, and Uncle Sam would give them a tax break. The result was a huge ecosystem of top tier corporate labs that bridged the gap between ivory tower research and application. Bell labs was just one of many. There was also GE labs, PARC, IBM labs, Xerox, Kodak. Im probably forgetting a few of the big ones as well. Then, the voters decided that they didnâ(TM)t like giving companies a tax break for that. I dont remember if it was liberals or conservatives who changed their minds. Maybe both. As soon as that tax break was gone, the managers at each company started requiring each of their lab divisions to actually turn a profit. Every single one of them was closed within a few years, or hung on as a tiny ghost of what it used to be.
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Re:Did the author miss the biggest issue? (Score:4, Interesting)
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This goes back (somewhat) to the 1960s. [occamsadvisory.com]
Research and Experimentation [wikipedia.org] starts at 1981.
Technology hills and valleys (Score:5, Interesting)
I don't believe it's because of the tax-breaks, for they still exist, but that the low-hanging-fruit of solid state electronics R&D have dried up. Software has replaced hardware for many functions of machines, and software needs less "big lab" R&D since it can be done in pajamas. Corporate hardware labs just stopped being able to pay their way.
If say quantum computing started spewing innovations, a similar "gold rush" of R&D may appear again. This is not saying "everything has been invented already", but rather that technology doesn't progress at a steady pace. The AI boom (bubble?) has produced AI labs, but I doubt its lab boom will last as long as the solid state boom.
(Correction) Re:Technology hills and valleys (Score:1)
Minor grammar fix: "the low-hanging-fruit of solid state electronics R&D has dried up."
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While true, the pace of the Next Big Thing is not necessarily constant.
diversity of thought and approach (Score:5, Insightful)
He came to see innovation arising not from like-minded or similarly trained people conversing with each other, but from a friction of ideas and approaches. It meant hiring researchers who had different personalities and favored a range of experimental angles.
Intellectual diversity makes for better teams.
\o/ (Score:1)
Micromanagement?
'Agile' ?
Slides and table football?
Did I win?
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uh, no. You didn't win.
Places like Bell Labs were more like university research centers than corporate dressing on mandatory-overtime grind. They were not expected to directly turn a profit as business units of the company, because what they did was to lay the groundwork for technology that the other business units could then adapt into products. The return on the investment paid into running them took years or even decades to realize. Without the pressures of needing to turn quarterly or even annual pr
Publicly funded research is broken (Score:2)
The material science people were only marginally better.
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s'okay. Biology is the only scientific discipline where division and multiplication are the same thing.
No funny yet? (Score:2)
Maybe the story is a bad target, but I'm not going to start with the rude jokes about what happened to IBM Research. Too close to the my own heart?
I did spot a few mentions of Xerox PARC and I think the managers deserve some sort of special funny booby prize for missed opportunities.
No finance bros (Score:4, Interesting)
Research does not generate immediate profits. Simple as that.
Great follow-up book (Score:1)
R&D budget (Score:1)
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Bzzt, thank yuo for playing. You have just shamed your family for generations to come. You do not win a year's supply of Rice-a-roni....
Inhumanity was always the plan (Score:4, Insightful)