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Innovation: The Legacy of Bell Labs

March 30, 2012


Jon Gertner has received some good press for his recently released book entitled The Idea Factory: Bell Labs and the Great Age of American Innovation. Individuals younger than the Baby Boom generation probably don’t understand the luster and prestige that was associated with having a job at Bell Labs. It was home to Nobel laureates and others who possessed some of the world’s best minds. In a review of Gertner’s book, Bob Metcalfe, who teaches innovation at the University of Texas and is a recipient of the Alexander Graham Bell Medal and the National Medal of Technology, agrees that Bell Labs, “AT&T’s well-funded research branch, … had collected many of America’s best scientific minds.” [“Where the Future Came From,” Wall Street Journal, 16 March 2012] One of those great minds was William Bradford Shockley. Metcalfe writes:

“William Bradford Shockley was difficult, but brilliant. For a long time he led solid-state physics research at Bell Telephone Laboratories, and there, in 1947, he invented something very important. Shockley’s colleagues pondered what to call it, voting among six possible names, including ‘semiconductor triode’ and ‘iotatron.’ The winner came from shortening ‘transconductance varistor’ to ‘transistor.'”

Metcalfe notes that “Shockley’s transistor was a tiny, simple, durable and inexpensive solid sandwich. It would turn out to be the most important invention of the 20th century, the essential building block of the Information Age.” He continues:

“All of today’s mobile telephones, desktop computers, laptops and server farms—and all the routers of the world-wide Internet—are chock-full of transistors, sometimes billions of them in a single microchip. They enable many modern wonders, including Google, YouTube, Facebook, Twitter, the iPhone and The Wall Street Journal on your iPad.”

Shockley, however, was not a lone genius. He was surrounded by a brilliant team at Bell Labs. Metcalfe writes, “Jon Gertner’s compelling history of Bell Labs, … suggests that the transistor was invented not once by the brilliant Shockley, but three times by three other people at Bell Labs, with Shockley supervising, annoying, and taking undue credit.” He explains:

“First, John Bardeen and Walter Brattain demonstrated the ‘point-contact’ transistor on Dec. 23, 1947. These two scientists worked in the research group that Shockley led, but they built their transistor with little help from him. Then Shockley broke with Bell Labs’ collaboration norms by separately inventing a second, more reliable, ‘junction’ transistor while he was holed up for several days in a hotel room. Bell Labs would have preferred that he perform his transistor magic in his office, with the door open. Finally, in 1954, Morris Tanenbaum, not Shockley, would invent the third, ‘silicon’ transistor (the previous designs were germanium). The vast majority of today’s transistors are connected in circuits on silicon wafers. Shockley, Bardeen and Brattain would share the 1956 Nobel Prize in physics, but the increasingly estranged Shockley left Bell Labs. Fatefully, he decided to form a start-up near the place where his mother had home-schooled him, Palo Alto, Calif., laying the groundwork for what would become Silicon Valley.”

Metcalfe states that “the tale of Shockley’s invention of the transistor (or not) holds many lessons about the nature of collaboration and innovation. It’s just one of many great stories told in Mr. Gertner’s book, which recounts Bell Labs during its heyday, between the 1920s and 1980s.” He continues:

“The lab’s scientists did pioneering work not only on the transistor but also, amazingly, on the laser; on solar cells; on satellite, cellular and optical communications; and on the modern management of innovation itself. ‘The Idea Factory’ is a eulogy for the ‘most innovative scientific organization in the world,’ now a shadow of its former self, owned by Alcatel-Lucent. The book takes the form of a series of biographies of the men who started, shaped, inhabited and eventually left Bell Labs.”

In a preview of his book, Gertner wrote an article explaining why he selected Bells Labs as his subject. He wrote, “Why study Bell Labs? It offers a number of lessons about how our country’s technology companies — and our country’s longstanding innovative edge — actually came about. Yet Bell Labs also presents a more encompassing and ambitious approach to innovation than what prevails today. Its staff worked on the incremental improvements necessary for a complex national communications network while simultaneously thinking far ahead, toward the most revolutionary inventions imaginable. [“True Innovation,” New York Times, 25 February 2012] Gertner introduced his article this way:

“‘Innovation is what America has always been about,’ President Obama remarked in his recent State of the Union address. It’s hard to disagree, isn’t it? We live in a world dominated by innovative American companies like Apple, Microsoft, Google and Facebook. And even in the face of a recession, Silicon Valley’s relentless entrepreneurs have continued to churn out start-up companies with outsize, world-changing ambitions. But we idealize America’s present culture of innovation too much. In fact, our trailblazing digital firms may not be the hothouse environments for creativity we might think. I find myself arriving at these doubts after spending five years looking at the innovative process at Bell Labs, the onetime research and development organization of the country’s formerly monopolistic telephone company, AT&T.”

Today’s AT&T is a shadow of the old AT&T. Metcalfe provides some historical perspective:

“The American Telephone & Telegraph Co. evolved from various predecessor companies at the end of the 19th century. In its first few decades, AT&T was, as Mr. Gertner puts it, ‘close to a public menace—a ruthless, rapacious, grasping “Bell Octopus.”‘ Attitudes toward the company changed after AT&T was converted in 1921 to a government-mandated ‘natural monopoly,’ exempted by Congress from antitrust laws. Thanks to ‘one of the great public relations campaigns in corporate history,’ AT&T came to be known ‘Ma Bell.’ Ma Bell presented herself as the benevolent source of universal telephone service. She organized herself into three main branches. The AT&T operating companies delivered local and long-distance telephone service. Western Electric was AT&T’s sole provider of equipment and thus one of America’s largest manufacturing companies. And, after 1925, Bell Telephone Laboratories was the exclusive home of research and development for AT&T’s other branches.”

Gertner focuses on Bell Labs because his book is primarily about innovation. Metcalfe continues:

“Bell Labs’ founding president, Frank Jewett, made it the center of American technology. In the years following World War II, other presidents—including Mervin Kelly, Jim Fisk and William Baker—not only steered AT&T’s research but were constantly consulted by presidents from Roosevelt to Reagan, becoming key advisers in the Cold War and space race. Telstar, the first satellite to transmit television and telephone, was developed by AT&T in the early 1960s. Mr. Gertner, besides celebrating forgotten figures and seminal discoveries, wants us to re-evaluate our contemporary assumption that innovation can only be brought about by ‘small groups of nimble, profit-seeking entrepreneurs.’ Think big, the author urges. ‘To consider what occurred at Bell Labs, to glimpse the inner workings of its invisible and now vanished “production lines,” is to consider the possibilities of what large human organizations might accomplish.'”

Metcalfe asserts that “Gertner grew up in the glow of Bell Labs headquarters in Murray Hill, N.J.” and as a result he “romanticizes the place.” Gertner certainly was enamored with Bell Labs’ accomplishments. He writes:

“Consider what Bell Labs achieved. For a long stretch of the 20th century, it was the most innovative scientific organization in the world. On any list of its inventions, the most notable is probably the transistor, invented in 1947, which is now the building block of all digital products and contemporary life. … Bell Labs produced a startling array of other innovations, too. The silicon solar cell, the precursor of all solar-powered devices, was invented there. Two of its researchers were awarded the first patent for a laser, and colleagues built a host of early prototypes. (Every DVD player has a laser, about the size of a grain of rice, akin to the kind invented at Bell Labs.) Bell Labs created and developed the first communications satellites; the theory and development of digital communications; and the first cellular telephone systems. What’s known as the charge-coupled device, or CCD, was created there and now forms the basis for digital photography. Bell Labs also built the first fiber optic cable systems and subsequently created inventions to enable gigabytes of data to zip around the globe. It was no slouch in programming, either. Its computer scientists developed Unix and C, which form the basis for today’s most essential operating systems and computer languages.”

It’s not too difficult to see why Gertner thinks so highly of Bell Labs; regardless of where he grew up. Metcalfe, however, believes that Gertner’s assessment of how effective the Labs were is exaggerated. While its accomplishments were myriad, compared to the number of employees working on those accomplishments, Metcalfe concludes that Bell Labs is not a good model for innovation. He writes:

“[Gertner] makes the common mistake of confusing invention with innovation. Mr. Gertner credits Bell Labs with inventing the silicon solar cell in the 1950s. If only they had finished the job. Solar energy remains uneconomic today, more than half a century later—invented but not innovated. Likewise, Bell Labs in the 1960s poured its money and reputation into an early form of videoconferencing, PicturePhone, which flopped when deployed. Mr. Gertner suggests that society would do well to re-create more Bell Labs. But trusting research to corporate monopolies is problematic in two ways. First, their money comes from overcharging customers by using monopoly power. … Second, a corporate monopoly has little motivation to disrupt a market that it already dominates. AT&T had to be forced, starting in 1968, to let the nascent Internet connect to its telephone network; ‘Ma Bell’ resisted every step of the way.”

Those are points well made. Metcalfe nevertheless concludes that “Gertner’s book offers fascinating evidence for those seeking to understand how a society should best invest its research resources.” Metcalfe says that rather than invest in corporate R&D the U.S. should consider investing more “in research universities (of which the United States has at least 100).” Before continuing with Metcalfe’s arguments, let’s finish what Gertner had to say. He wrote:

“So how can we explain how one relatively small group of scientists and engineers, working at Bell Labs in New Jersey over a relatively short span of time, came out with such an astonishing cluster of new technologies and ideas? They invented the future, which is what we now happen to call the present. And it was not by chance or serendipity. They knew something. But what? At Bell Labs, the man most responsible for the culture of creativity was Mervin Kelly. … Between 1925 and 1959, Mr. Kelly was employed at Bell Labs, rising from researcher to chairman of the board. … His fundamental belief was that an ‘institute of creative technology’ like his own needed a ‘critical mass’ of talented people to foster a busy exchange of ideas. But innovation required much more than that. Mr. Kelly was convinced that physical proximity was everything; phone calls alone wouldn’t do. Quite intentionally, Bell Labs housed thinkers and doers under one roof. Purposefully mixed together on the transistor project were physicists, metallurgists and electrical engineers; side by side were specialists in theory, experimentation and manufacturing. Like an able concert hall conductor, he sought a harmony, and sometimes a tension, between scientific disciplines; between researchers and developers; and between soloists and groups.”

I am a proponent of cross-disciplinary innovation. The more perspectives from which you examine a challenge the better the eventual solution. Although you might need a critical mass of such people, Metcalfe seems to be arguing that Bell Labs’ mass of scientists and engineers was so far beyond critical that it was inefficient. There was probably a 20/80 rule at work at Bell Labs where 20 percent of the scientists were coming up with 80 percent of the good ideas. But that’s just a guess. Gertner pointed out that Kelly had some pretty concrete ideas about how to spur innovation. Gertner wrote:

“One element of his approach was architectural. He personally helped design a building in Murray Hill, N.J., opened in 1941, where everyone would interact with one another. Some of the hallways in the building were designed to be so long that to look down their length was to see the end disappear at a vanishing point. Traveling the hall’s length without encountering a number of acquaintances, problems, diversions and ideas was almost impossible. A physicist on his way to lunch in the cafeteria was like a magnet rolling past iron filings. Another element of the approach was aspirational. Bell Labs was sometimes caricatured as an ivory tower. But it is more aptly described as an ivory tower with a factory downstairs. It was clear to the researchers and engineers there that the ultimate aim of their organization was to transform new knowledge into new things. Steven Chu, secretary of the Department of Energy, won a Nobel Prize in 1997 for his work at Bell Labs in the early 1980s. He once said that working in an environment of applied science like Bell Labs ‘doesn’t destroy a kernel of genius, it focuses the mind.’ At Bell Labs, even for researchers in pursuit of pure scientific understanding, it was obvious that their work could be used. Still another method Mr. Kelly used to push ahead was organizational. He set up Bell Labs’ satellite facilities in the phone company’s manufacturing plants, so as to help transfer all these new ideas into things. But the exchange was supposed to go both ways, with the engineers learning from the plant workers, too. As manufacturing has increasingly moved out of the United States in the past half century, it has likewise taken with it a whole ecosystem of industrial knowledge. But in the past, this knowledge tended to push Bell Labs toward new innovations.”

I don’t believe that Metcalfe has a problem with applied science, but I doubt he wants research universities to give up on basic scientific research. I suspect that Metcalfe would also agree with Kelly’s open organizational scheme for sharing ideas. After all, Metcalfe trumpets the fact that Shockley was associated with a number of institutions of higher learning including UCLA, Caltech, MIT, Columbia, and Princeton. One thing that Gertner and Metcalfe probably agree on is that some ideas take years to develop. Finding a venue that permits idea incubation is no longer an easy thing to do. Gertner wrote that Bell Labs gave its scientists “lots of time — years to pursue what they felt was essential.” He continued:

“One might see this as impossible in today’s faster, more competitive world. Or one might contend it is irrelevant because Bell Labs (unlike today’s technology companies) had the luxury of serving a parent organization that had a large and dependable income ensured by its monopoly status. Nobody had to meet benchmarks to help with quarterly earnings; nobody had to rush a product to market before the competition did.”

Metcalfe, it would appear, believes that research universities meet many of the criteria that Gertner believes are necessary for creative institutions to possess. Metcalfe asserts that many universities are not well managed; but, he writes, “The saving grace of research universities is that it is their business to graduate students, who have repeatedly proved to be effective vehicles for innovation, especially in their own start-ups.” He continues:

“Bell Labs’ greatest contribution may have been driving Shockley out. Shockley Semiconductor, his start-up, was a fiasco, but the man was good at recruiting talent, especially Gordon Moore from Caltech and Robert Noyce from MIT. Those two men would later found Fairchild Semiconductor, which over the years spun off Intel, National Semiconductor and Advanced Micro Devices. Those companies, in turn, spun off more start-ups, which grew to become Silicon Valley, the world’s pre-eminent innovation machine, clustered around Stanford and the University of California at Berkeley.”

Gertner argued, however, that not all innovations (or start-ups) are the same. He concluded:

“One type of innovation creates a handful of jobs and modest revenues; another, the type Mr. Kelly and his colleagues at Bell Labs repeatedly sought, creates millions of jobs and a long-lasting platform for society’s wealth and well-being. … The teams at Bell Labs that invented the laser, transistor and solar cell were not seeking profits. They were seeking understanding. Yet in the process they created not only new products but entirely new — and lucrative — industries. … Revolutions happen fast but dawn slowly. To a large extent, we’re still benefiting from risks that were taken, and research that was financed, more than a half century ago.”

Gertner and Metcalfe fundamentally agree that innovation, spawned by well-funded research and development, is critical for human and economic progress. They might differ about the size and shape of the organizations that can generate ideas, inventions, and innovations; but they agree that research must continue if the U.S. is going to remain a world leader.

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