"At Bell, the financial motive was not grants but contributing to the company’s product lines. This seems reasonable to me, both because telephone service is a

"At Bell, the financial motive was not grants but contributing to the company’s product lines. This seems reasonable to me, both because telephone service is a public good and because, as Gertner notes, the challenges of improving phone service motivated technical advances that benefited other areas as well." The thing is AT&T was the monopoly of telecommunication service in the US back then. When Paul Baran went to present his "packet switching" (which is also independently studied and proposed by UK's Donlad Davies, and both combined with Leonard Kleinrock's theoretical analysis became packet switching in the development of the "Internet") to AT&T, AT&T laughed it off and said no, mainly because AT&T did not want to adopt the digital communication and wanted to maintain its monopoly. The engineers at AT&T (not Bell Labs) pretty much said to Baran he lacked the fundamental understanding of how communication system works. Just to be fair, at work, in the beginning RAND Corp engineers were also not convinced, but nonetheless Baran was able to get enough support and appreciation from his fellow coworkers and the company's management that he demoed to AT&T. This is a story of a classic corporate engineer who has the "know-it-all" mindset vs the classic researcher/engineer who appreciate challenges and differences. I recommend reading "When Wizards Stay Up Late". I think companies which allow some degree of hacker/research culture really do benefit from the openness and innovation. Google's 20% (although I read most engineers don't get any free time at all and 20% was not a formal policy, and 20% was just a spontaneous thing in the early stage of Google), FB's internal Hackathon crated some of the most-used features/products at the respective company. I think another modern example is Stripe, I consistently heard something great about its culture.