18 ms·

The Death of Corporate Research Labs

355 points by banjo_milkman 6y ago

mensetmanusman 6y ago
“ Large corporate labs, however, are unlikely to regain the importance they once enjoyed. Research in corporations is difficult to manage profitably. “ The easy fix is to classify the work as a net positive for a community, and provide tax incentives such that it becomes by definition profitable, since society can cost-in the scenario where the lab doesn’t exist.
- lotsofpulp 6y ago
  Sounds like an easy way to introduce a million loopholes and legalese trying to define research that is a “net positive” for a community.
  - mensetmanusman 6y ago
    If the government/law isn’t up to the challenge, I could see that they would rather do nothing. The downside is R&D moves to other countries.
- IfOnlyYouKnew 6y ago
  Research can obviously be deducted from profits for tax purposes already, just like most other business expenses. Beyond that, it it's quite hard to set up a system where the incentives still motivate good research. It may also just make more sense for governments to spent the money on university research or institutions like the Max Planck Society, rather than giving it to companies where the public gets less of a say in its use, and any profits are privatized.
  - mensetmanusman 6y ago
    Govt. tried that during WW2, it found that nothing got commercialized because you need a business structure surrounding the research.
- khuey 6y ago
  R&D tax credits are pretty common.
  - mensetmanusman 6y ago
    Yes, this is true. Maybe another tax needs to be invented to disincentivize wall st. from trying to kill research (as the article claims)...
    - eru 6y ago
      How about simplifying tax systems instead of adding more loopholes?
mobilefriendly 6y ago
It is pretty strange to blame the "more relaxed antitrust environment in the 1980s" when it was the 1982 anti-trust breakup of Ma Bell that destroyed Bell Labs and ended the monopoly profit flows that subsidized the telecom labs.
- lumost 6y ago
  A monopoly can only grow revenue by increasing prices, or by creating new use cases and growing the market. The latter tends to pay off better in the long-run. Research tends to take a long-time to hit the market, in a dynamic market there is no reason to expect that a company funding open research would get a strong first mover advantage. A monopoly doesn't have this concern, Intel could fund semi-conductor research with decade+ time horizons and still be the first to put it to use.
  - bleepblorp 6y ago
    Modern business management doesn't care about the long-term. Research pays off future managers and owners in years, or decades, but increasing prices now pays off now in bonuses and dividends for current managers and owners. Behavior follows incentives.
    - scarface74 6y ago
      I agree with you in general, but I don’t think any of the 5 big tech companies are only concerned about short term profits. Two are run by founders (Facebook, Amazon), two are run by hand picked successors of founders (Apple, Microsoft) and I can never tell what Google is doing. It has been rudderless for over a decade.
    - eru 6y ago
      What makes you think that business management doesn't care about the long term? Business management is rumoured to care about share prices. And as we can see in the current stock market, shareholders are long term enough to eg see past the current pandemic. They also managed to see past Tesla's losses or Amazon's slim profitability.
IfOnlyYouKnew 6y ago
Corporations still do invest large sums of money into long-term projects: most acquisitions as well as buildings are amortised over a decade or so, which is about the time-frame I would expect research to have, on average. Airplane and car development also comes to mind. So I believe the complaint about "short-termism" has become a bit too popular. It's great to prop up your bona-fides as a cynic. It's less good at explaining actual behaviour. Instead, I believe research has simply become less profitable over time. The decades from about 1920 into the 1980 were a time of extraordinary rapid successes in the hard sciences: the scientific method had been established, and industry, finance, law, transport, and communications all made sudden jumps into modernity, allowing scientific institutions as we know them today to exist. If you read about the history of physics, for example, you'll see photos of the entire class of 192x at some German university, and every single person on the photo later won a Nobel or had at least some minor unit named after them. We have continued to improve institutions, infrastructure, and our ability to broaden the chance to get into the sciences. But, unfortunately, it's almost a rule of nature that progress slows over time. That's sort-of soothing, actually, because it means we aren't entirely incapable of prioritising easier thing. Government-sponsored research can continue at higher prices. But private, for-profit endeavours have a very specific point where expected returns turn negative.
- foobarian 6y ago
  This 1000%. In the 40s, you invested a bunch of money into a research lab and you got the transistor. If only that kind of payoff could still happen today.
  - nopeNopeNooope 6y ago
    I don't get this complaint? The leverage for R&D is vastly higher now than ever before: You leave Zuckerberg in his dorm room and you get Facebook. You leave Larry and Sergey in a garage and you get Google. You leave Steve Jobs and Jony Ives together and you get dozens of products in Apple. The money in vs money out in research has never been more absurdly positive in human history. This is why companies aren't investing in R&D, because they don't need to do as much as they used to, because a little goes a lot farther.
dnautics 6y ago
Maybe it's more fruitful to not just consider the Death of Corporate Research Labs, but also ask ourselves "why did they even exist in the first place?" This day in age, the expectation, for better or worse, is that the State sponsors research; this was very much not the case from, say 1850-1950. Luminaries did tons of basic science research under the auspices of corporate (like Irving Langmuir) and private (like Peter Mitchell) labs. Without assigning causality (I happen to think that the primary cause is "low hanging fruit" phenomenon), the transition to state sponsored research has coincided with a general loss of scientific productivity in many fields, and even in some fields with explosive growth, like genomics, there has been major corporate involvement (half the human genome was sequenced by a not just private, but a wall-street traded, entity). Yet the narrative of late has been "if the state doesn't sponsor it, nobody will". I don't feel like I have a solid understanding of why corporate research labs were a thing, or even, how science got done in the pre-manhattan-project/Vannevar Bush era.
- UncleOxidant 6y ago
  > This day in age, the expectation, for better or worse, is that the State sponsors research But the state (at least the US state) has been cutting spending on research over the last several years - and those cuts have accelerated under the current administration which does not seem to understand the value of basic scientific research.
  - scarmig 6y ago
    Cutting research is an overstatement: US federal R&D funding has been increasing, just at a significantly lower rate than GDP. Since it's ideas being created and not widgets, you'd expect the same number of researchers to create at least as much positive impact for society through idea generation. It seems obvious that they haven't. I don't think it's anything nefarious about government funding (or lack thereof) that did it; it's just we've already picked all the low hanging fruit. Plucking all the undiscovered ideas at the frontier of knowledge will be increasingly expensive, because if they were cheap to discover, we already would have. Though I always wonder if there's some trove of cheap ideas hanging out somewhere...
aborsy 6y ago
Research is very hard and has low financial rewards. If it’s funded by state, it’s poorly paid (think of grad students, postdocs, APs). If it’s funded by corporate, it’s basically tedious product design and it’s not interesting science or even proper research anymore. In industry, it’s typically done by second class citizens. Long term research is worse. We have the classical problem of creating value vs capturing the value. I believe that’s a major factor. I often meet students and the vast majority want good paying 9-5 jobs and don’t want to bother with research or academic papers.
the-dude 6y ago
Previously : https://news.ycombinator.com/item?id=23246672 https://news.ycombinator.com/item?id=23246672
Sniffnoy 6y ago
Non-mobile link: https://blog.dshr.org/2020/05/the-death-of-corporate-research-labs.html https://blog.dshr.org/2020/05/the-death-of-corporate-researc...
akbirkhan 6y ago
I'm really confused. When looking at artificial intelligence it seems that actually we have dominating corporate labs which through integrated services (such as compute and data), totally dominate academia. It's coming to the point where researchers that want to make a difference are actively choosing corporate research labs over academic ones.
- chrisseaton 6y ago
  > I'm really confused. When looking at artificial intelligence it seems that actually we have dominating corporate labs which through integrated services (such as compute and data), totally dominate academia. But this is just one unique case - where access to a lot of data and a lot of compute makes a huge difference. I'm not sure that it translates to many other fields in CS.
  - jlangemeier 6y ago
    Corporate research is still going to somewhat be at the whimsy of what's bleeding edge AND has some applicable value; the idea of it just is a little different with things like the 10% or 20% "constructive free-time" model. Each engineer in FAANG-like companies just get a 10-20% salary allotment instead of the equivalent expense of researcher headcount. The idea of "constructive free time" for work is just the "agile" iteration of the research lab.
    - uxp100 6y ago
      Except “constructive free time” mostly isn’t a thing anymore, right?
      - eru 6y ago
        You can still get 20% time at Google. But you have to take it. They don't shove it in your face.
- breck 6y ago
  This headline doesn't jive with my experience having worked with lots of folks in corporate R&D at big tech. After looking at the data in the paper I think it's far too soon to talk about the "death of corporate research labs". > These examples are backed by systematic evidence...The figure also shows that the absolute amount of research in industry, after increasing over the 1980s, barely grew over the 20 year period between 1990 to 2010. Other data show the same decline That seems like a cherry-pick. In that very same figure, you can see that 2015 is about 300% of 1990. So from 1990 to 2015 corporate research spending grew 5% on average annually. I'm not sure how you could refer to that as "dying". Of course, the paper doesn't use that term, just the parent blog post. I have no sense of non-tech research labs, and maybe if you exclude those corporate research labs are indeed dying, but the headline is click baity.
linguae 6y ago
As a (non-PhD) researcher who works for one of the last traditional industrial research labs in Silicon Valley, I've noticed this trend for years. I've seen industrial research labs either close or become increasingly focused on short-term engineering goals. I also have noticed that newer Silicon Valley companies have adopted what Google calls a "hybrid approach" (https://research.google/pubs/pub38149/ https://research.google/pubs/pub38149/) where there are no divisions between research groups and product groups, and where researchers are expected to write production-quality code. I've noticed many of my PhD-holding peers taking software engineering positions when they finish their PhD programs, and I also noticed more people who were formerly employed as researchers at places like IBM Almaden and HP Labs switch to software engineering positions at FAANG or unicorn companies. Unfortunately, as someone who is also working toward finishing a PhD, I've seen very little guides for CS PhD students that reflect this reality. To be honest, I love research and I'd love to stay a researcher throughout my career, but I don't have the same love for software engineering, though I am comfortable coding. Unfortunately with these trends, traditional research is now largely confined to academia, which is very competitive to enter and where COVID-19's effects on its future are uncertain at this time, and federal laboratories such as Los Alamos and Lawrence Livermore. I fear losing my job (nothing lasts forever) and having to grind LeetCode since there are few other industrial research labs, though given the reality maybe I should start grinding LeetCode anyway.
- wrnr 6y ago
  I have but a highschool degree and coding is the way I make money, try as I might not to feel any schadenfreude for every researcher failing to secure funding or find gainful employment in their special interest area, I am only human. The BS that people with the title Philosophiae Doctor get away with is a bane on society. Don't get me wrong, I love bio, math and physics, but too often it feels like what is called research is a job program for thick skulled idiots. Maybe you can be saved from this faith, and learn what the real world can teach you on the nature of reality.
  - MattGaiser 6y ago
    > learn what the real world can teach you on the nature of reality. People focused on the "real world" tend to only see the world as it is now. That is the exact opposite of what research is generally about.
kratom_sandwich 6y ago
Previous discussion: https://news.ycombinator.com/item?id=23246672 https://news.ycombinator.com/item?id=23246672
timkam 6y ago
What worsens the problem is that publicly funded research often solves toy application problems (at least in CS); academics know that they need to "apply" their research to get funding/citations/publications with relatively little effort, but from an industry/real-world perspective, many application scenarios hardly make sense and are hand-wavy-ly evaluated (for example, in applications of CS, too often the code is not shared so that the results are practically not reproducible). The current system simply rewards researchers who manage to get into the top venues with the least effort possible, and for many who aren't brilliant the pseudo-application approach is the way to go. IMHO, this broadens the gap between academia and industry, because it's hard for a practitioner to pick out the few relevant nuggets in a stream of half-baked applied research.
f00zz 6y ago
This sounds a bit hyperbolic when you have Microsoft doing pie-in-the-sky research on topological quantum computing, Google and IBM research teams arguing over quantum supremacy, etc.
TabTwo 6y ago
Looking out of my office window in Stuttgart I can see the big sign „Nokia Bell Labs“. You can almost smell all the history this sign carries
jrochkind1 6y ago
Interesting, after the Bell Labs example, I was going to guess that anti-trust enforcement meant that companies weren't big enough to afford an internal lab anymore. But the OP, quoting/citing Arora et al, actually suggests the REVERSE causative correlation: > Historically, many large labs were set up partly because antitrust pressures constrained large firms’ ability to grow through mergers and acquisitions. In the 1930s, if a leading firm wanted to grow, it needed to develop new markets. With growth through mergers and acquisitions constrained by anti-trust pressures, and with little on offer from universities and independent inventors, it often had no choice but to invest in internal R&D. And that in fact later "lack of anti-trust enforcement... killed the labs". Makes sense to me. Goes to show that our "intuition" (of course informed by cultural assumptions) for how capitalism works and it's effects isn't necessarily accurate.
CharlesMerriam2 6y ago
This type of article comes up from time to time, and is generally wrong on many points. * Corporate Labs are not for primary research, at least in the United States. In the U.S., any primary research is done at universities, developed from research to prototype and patent at NASA, and then licensed to a U.S. company to go to product. For non-primary research, prototypes are developed by corporations via grants from government agencies. * Bell Labs, before AT&T monopoloy breakup, was a special business case. Its funding existed in a game of legislation maneuvering. It is not an exemplar. * Think of labs as "tier 5 tech support, when the engineers are stumped". Most labs are holding areas for smart people to solve sudden business problems. For those who read the famous analysis of criticality accidents in non-military settings, you need some smart folk hanging around to prevent disasters. For example, Sun Labs had people working (forever) on some hopeful breakthrough. Howard Davidson, a failure engineer, was pulled off task when server boxes started breaking (paper washers being glued in manufacturing) or card connections started failing (silver substituted for gold). These were high impact problems not solvable by line engineers. Similarly Ricoh Labs had a day when everyone was pulled off to disassemble a large machine and figure out a feeding problem that had a hard solution. Intel keeps materials PhDs in the fab areas just in case something comes up that would slow throughput. * Many labs have reputations no longer deserved. I worked at PARC and found some teams made magic and others made bloat. Look at the short term results, meaning the past decade, to rate a lab.
ChrisLomont 6y ago
As of 2016 corporate R&D was at a record high. https://www.aip.org/fyi/2016/us-rd-spending-all-time-high-federal-share-reaches-record-low https://www.aip.org/fyi/2016/us-rd-spending-all-time-high-fe...
- seanmcdirmid 6y ago
  R&D measures often include a lot more D than R.
  - ChrisLomont 6y ago
    Do you claim this was not the case when R&D spending was demonstrably lower? I see no evidence demonstrating that when I looked for it.
    - seanmcdirmid 6y ago
      I'm claiming that the R part of R&D was always tiny to begin with. That rising spending R&D is not indicative of much more R compared to dedicated research labs.
      - ChrisLomont 6y ago
        >That rising spending R&D is not indicative of much more R compared to dedicated research labs. R&D are not binary options. I know in some fields a massive amount of published papers are coming from corporations, and I suspect if I could find data on it that the percentage of peer-reviewed publications from corporations is much higher than in the past. Certainly in various CS and math disciplines I work with, corporations have made massive inroads. You're trying hard to push at a possible loophole in the rise in spending, but without evidence that more spending was not spent on what you think it should be, it's sensible to assume it was actually spent on increased R AND D. Otherwise, for every conjecture you can make without evidence, I can just as easily make the opposite conjecture, and neither has been demonstrated. Take a few moments and try to source some good evidence - I looked at a few directions and didn't find anything one way or the other, except that spending has increased.
totesraunch 6y ago
This is Capitalism. Let the government and educational institutions spend all of the money, do the real work and research, and then as a private company swoop in and reap all of the benefits. A blatant example would be Gilead Truvada for PrEP. US Tax payer funded research and all profits go straight to Gilead.
- refurb 6y ago
  A blatant example would be Gilead Truvada for PrEP. US Tax payer funded research and all profits go straight to Gilead. That's such a gross oversimplification to the point it's just wrong. If you want to read how one of the two drugs in the combo was developed, I'd suggest this journal article [1] - I warn you, the story evolves over 15 years. The initial discovery of the class of compounds was done at Emory university. Emory then partnered with Burroughs Wellcome. Burroughs Wellcome was then acquired by Glaxo, who halted the research. The rights then went back to Emory, who then spun it out to a start-up called Triangle Pharmaceuticals, who was then acquired by Gilead who brought Truvada to market. Emory did sue a number of manufactures as they had a patent, but it was settled with a fat ($525M) cash payment to Emory and an on-going royalty stream. [1]https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5777139/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5777139/
- kleiba 6y ago
  At least in my understanding, the reason why governments have in interest in this kind of model is that companies in return provide employment and pay taxes (if you're lucky). In the EU, there is a really strong focus these days on exploitation of the results that come out of the research projects they fund (Horizon 2020) that you sometimes almost feel a bit out of place as a researcher. As in: why should a researcher at a university care deeply about how their findings can be turned into products by some companies? I mean, not only are they usually not really qualified for such questions, but also if they were interested in product development, they'd probably work in industry (perhaps even for a higher salary).
ylem 6y ago
I remember an interesting article (I can't find the reference) that made the claim that for a number of pharma labs, the advantage in hiring researchers is not that they are likely to make a great discovery--but rather that they will be up to date with the literature and be able to recognize a potentially great discovery and to productize it. This is not necessarily trivial as a number of things that work in an academic lab setting don't translate into actual usable drugs.
valenciarose 6y ago
Under-taxation of corporations plays a significant role in the decline of research spending. While potential competitive advantage is one reason to pursue research and development, taxes and the interplay between tax and corporate accounting are another reason (even prior to 1981). While taxes paid by corporations benefit the general public, from the corporation’s point of view taxes are money out the door with zero possible return. So what does a prudent corporation do with its profits? It recognizes that they are potential capital and seeks to maximize the risk-adjusted return on capital. It can bank them at the risk-free rate of return, but we should remember taxes will take a healthy chunk out of that return on the front end. It can pay them out to investors as dividends (increasing the return on remaining capital by reducing the denominator). Note that under rational tax schemes the risk adjusted return on capital should be equivalent to investing at the risk free rate of return (modulo management of cash-flow risks). It can buy riskier assets with higher return, such as other companies. And it can make much riskier investments, like research and development. As with most things financial, the best overall risk adjusted return on capital is diverse in both kind and in risk level. It should do all of those things (treating dividends as equivalent to investment at the risk free rate of return), with the proportion going to each tuned to achieve the aggregate optimum(1). Also, can you see how a regulated utility with(like AT&T of old) would find R&D attractive for spicing up its asset mix? Think of R&D as producing a stream of lottery tickets with the drawing in the distant future. Those lottery tickets (for a tech company) can pay off in two ways. One is that they could produce or enhance a revenue stream. The other is that they could reduce risk in the form of patents (reduce competitive risk and risk of patent suits by threat of countersuit). Both of these payoffs improve risk adjusted return on capital (by generating return or reducing risk). The neat thing about R&D for a company that’s paying real taxes is that much of the cost is (from a tax point of view) is an expense. In other words, that allocation of capital doesn’t have the upfront bite taken out of it that occurs when profits are directed to risk free assets. Looking at this from a risk-adjusted return point of view, having a real tax burden increases the appetite for risk by decreasing the relative attractiveness of the risk-free alternative after taxes. This is doubly true for expenditures that look like expenses to tax collectors but look like capital investment for corporate accounting purposes. None of this holds true if a company isn’t paying much in the way of taxes on its profits. It doesn’t mean some amount of R&D isn’t still attractive, but the appetite for risk is lower. And let’s be clear, R&D in research labs is the riskiest kind of R&D. Well, you might say, the 1981 R&D tax credit is sweeter than a deduction. Doesn’t that tilt the scales back? Yes, but subject to the limitations of the tax credit (which are numerous). But, like the deduction, the tax credit is much less valuable for companies that aren’t paying taxes on their profits. And, to be clear, this is a Reagan measure taken with full knowledge of what was expected to happen to corporate tax rates and the impact that might have on R&D investment. It’s a partial mitigant for that, nothing more. I am fully aware that I have murdered both CAPM and the practice of accounting in compressing this down to a reasonable post with what I hope is a clear narrative. My apologies to practitioners of both. (1) An important aside: People make equity investments to take more risk in the expectation of higher return. Beyond the cash cushion necessary for minimizing cash-flow risk, massive cash hoards do nothing but dilute the risk (and return) rational investors are actively seeking to take. There is some argument to be made that large tech companies keep huge cash hoards because their core businesses are riskier than they appear (esp black swan events), but it probably has more to do with founders desire for independence.
amelius 6y ago
Big pharma still has research labs. Or else, where do all their patents come from?
- refurb 6y ago
  Indeed. Biopharma has some of the highest spend on R&D as a percentage of revenue of any industry sector.[1] However, keep in mind a big part of that is development, not research. It's still science and not guaranteed to work, but it's more focused on the development needed to bring a product to market versus doing science to make new discoveries. [1]https://www.statista.com/statistics/270233/percentage-of-global-rundd-spending-by-industry https://www.statista.com/statistics/270233/percentage-of-glo...
Balgair 6y ago
Good overview! I work in a corporate research lab. We're not big (market cap ~25B) but there is a real thirst for innovations. I'll echo the point about Research v Development. We're much more heavy on the development side of things, with time horizons of ~3.5 years. Research is ~10 years. Our research department is just me and 4 other guys. Our development department is much larger. One thing I found different is in M&A. We've purposefully not done a lot of M&As. Mostly because the bureaucracy is so thick here. Monopolizing the time of the smaller companies is simpler and faster than trying to onboard them. I suspect there are healthcare issues involved too. It'll be interesting to see how long things last.
TheGrassyKnoll 6y ago
Well, corporate research money may be drying up, so now the public is being asked to fund it (at least in California). There's a $5.5 billion bond initiative (Proposition 14) on the ballot for 2020. This is similar to proposition 71 which was passed in 2004 for $3 billion, "The California Stem Cell Research and Cures Act”. California Proposition 14, the Stem Cell Research Institute Bond Initiative, https://ballotpedia.org/California_Proposition_14,_Stem_Cell_Research_Institute_Bond_Initiative_(2020)
Razengan 6y ago
There should be [more] publicly-funded, non-profit organizations that do research for research's sake, whose fruits are made available to all. To avoid the problem of controversial projects causing some funding sources to pull their support, there could be mechanisms for funding individual projects. And to avoid the risk of reappropriation by a government or military, they could be hosted in the EU. :)
mark_l_watson 6y ago
I worked at SAIC back when it was a small company (and before changing the name to Leidos). I will forever be grateful for being able to work about 25% of my time on IR&D, all of my own choosing. I think the US government allowed us about 1% or 2% of our gross to be reimbursed R&D - I forget the details. At my last job before retiring (Capital One, a great company to work for BTW) my team had a huge amount of autonomy on what we worked on, but my team was awesome. I don’t really understand the relative merits of many small R&D projects vs. huge infrastructure. Perhaps the industry is just moving to a many small projects approach?
zerop 6y ago
I would attribute it to recent culture of ROI grown in high leadership of the company. They don't understand patience, values, human relationships and necessary soft skills to realise that Innovation and research are vital health of the company. Problem is they are all fast thinkers and great presenters and that's what js valued nowadays in orgs. The innovators and researchers can't sustain in this environment. The leadership wants ROI from everything, even research. That's not going to create a good culture and innovation wouldn't grow.
jillesvangurp 6y ago
I worked at Nokia Research Center for a while when it was still market leader making smart phones. My observation is that most companies that have a research center also have some level of disconnect between their main business and their research branches. The two just operate on different time lines. More worryingly and problematic is that there is also a notion of "not invented here" where business units have very little patience for things coming out of research units because they weren't involved. It's petty and stupid and in Nokia's case a large part of the reason why Apple and Google ate its lunch. It's not that they did not have competing technology but that they didn't know what to do with it. Corporate R&D works best when corporate leadership has some level of affinity with it. Elon Musk is a great example of a true R&D minded leader. All his companies are basically are R&D labs that happen to produce insanely valuable products as a side effect. It takes a certain type of leadership to funnel billions to the right projects and then turn them into successful products. It requires something most business leaders simply don't have: a clue. Elon Musk for all his flaws understands technology deeply. Most of his contemporaries in the car industry are clueless bean counters that know little more about cars than the number of wheels they are typically equipped with. I bet pretty much all of them had R&D labs 20 years ago working on exactly the kind of things that Tesla brought to market successfully. They just bungled turning that into product because of a lack of vision & technical leadership.
- simonh 6y ago
  I remember reading in the early iPhone days that Apple recognised virtually no spending on R&D. That wasn’t because they didn’t do research or develop new products, it’s that they simply didn’t see that as separate from their normal day to day operations. I think that’s the same attitude as You’re describing with Elon Musk. It’s all R&D all the time. That’s just how products are developed. Now it’s different at Apple in that they do recognise a lot if spending on R&D but I think that’s for tax reasons.
  - jillesvangurp 6y ago
    Exactly, Steve Jobs would involve himself deeply with product development and be in the loop on a lot of product detail. What you don't get to see with Apple is all the stuff they don't launch or that lingers on some shelf for years and years. They only talk openly about stuff that they are ready to show and productize giving the false impression that these things just popped into existence. By the time the iphone shipped, they'd been working on it in some form or another for over half a decade or so. Giving people enough room to do stuff like that with an open ended agenda and strategy is exactly how you move forward as a company. The value of people like Steve Jobs and Elon Musk is recognizing the strategic value of efforts like this in an early stage and then making sure it happens. That requires being clued in enough to recognize the strategic value and focused enough to then make it happen. If you look at the timing, this was shortly after they launched OS X and apparently went "what else can we do with this?" (IOS is based on the same architecture). Corporate R&D labs are where this stuff gets parked by companies that are too impatient to wait for that. That's exactly what happened in Nokia.
fallingfrog 6y ago
This is part of a larger pattern where we are not investing in anything anymore that doesn’t bring immediate returns to some investor; not basic research as in the article, not public infrastructure, not planning for things like climate change. It’s all about immediate gratification, fast returns. Kicking the can on every problem and avoiding any unpleasant decisions or long term investments.
mjfl 6y ago
This article argues what I believe is the opposite of the truth: that corporate research productivity is correlated with anti trust enforcement. I think this is very wrong! Bell labs really fell apart AFTER AT&T was broken up. Xerox parc declined AFTER Xerox was ruled a monopoly. Anti trust enforcement KILLED innovation, and I think it’s really important that we get the correct relationship here.
gauravsc 6y ago
I'm not sure how true that is for sectors other than software/AI, but in AI most academic researcher complain that all the moonshot research (often not even commercially applicable) is now solely coming from corporate research labs e.g. Deepmind, Facebook etc., as opposed to universities. They attribute this to poaching of faculty by companies, lack of resources in universities, lack of motivation in grad students to stay in academia.
usrusr 6y ago
Trouble starts with the term R&D which names two separate things that rarely go together (I think PARC was somewhat close to doing both). A company research lab would be decidedly not development or it's not a research lab. The best way to run a company research lab is to run it as a marketing tool, like a slightly more on-topic way of sponsoring a sports team. IBM seems to do it that way, at least whenever a bluishly named supercomputer is ruining yet another human game. I wonder if they are aware of that analogy.
LatteLazy 6y ago
Research has (correctly) been outsourced. If you have a good idea, go prove it and then you can sell it to Acme for $100m. That's a much better deal for Acme because they only need to buy things that work. And it's a much better deal for you (you get $100m to share with your investors instead of a $10 dollar voucher [0] for a $100m idea). [0]: https://en.wikipedia.org/wiki/Tracy_Hall https://en.wikipedia.org/wiki/Tracy_Hall

355 points by banjo_milkman 6y ago

“ Large corporate labs, however, are unlikely to regain the importance they once enjoyed. Research in corporations is difficult to manage profitably. “ The easy fix is to classify the work as a net positive for a community, and provide tax incentives such that it becomes by definition profitable, since society can cost-in the scenario where the lab doesn’t exist.

lotsofpulp 6y ago
Sounds like an easy way to introduce a million loopholes and legalese trying to define research that is a “net positive” for a community.
- mensetmanusman 6y ago
  If the government/law isn’t up to the challenge, I could see that they would rather do nothing. The downside is R&D moves to other countries.
IfOnlyYouKnew 6y ago
Research can obviously be deducted from profits for tax purposes already, just like most other business expenses. Beyond that, it it's quite hard to set up a system where the incentives still motivate good research. It may also just make more sense for governments to spent the money on university research or institutions like the Max Planck Society, rather than giving it to companies where the public gets less of a say in its use, and any profits are privatized.
- mensetmanusman 6y ago
  Govt. tried that during WW2, it found that nothing got commercialized because you need a business structure surrounding the research.
khuey 6y ago
R&D tax credits are pretty common.
- mensetmanusman 6y ago
  Yes, this is true. Maybe another tax needs to be invented to disincentivize wall st. from trying to kill research (as the article claims)...
  - eru 6y ago
    How about simplifying tax systems instead of adding more loopholes?

mobilefriendly 6y ago

It is pretty strange to blame the "more relaxed antitrust environment in the 1980s" when it was the 1982 anti-trust breakup of Ma Bell that destroyed Bell Labs and ended the monopoly profit flows that subsidized the telecom labs.

lumost 6y ago
A monopoly can only grow revenue by increasing prices, or by creating new use cases and growing the market. The latter tends to pay off better in the long-run. Research tends to take a long-time to hit the market, in a dynamic market there is no reason to expect that a company funding open research would get a strong first mover advantage. A monopoly doesn't have this concern, Intel could fund semi-conductor research with decade+ time horizons and still be the first to put it to use.
- bleepblorp 6y ago
  Modern business management doesn't care about the long-term. Research pays off future managers and owners in years, or decades, but increasing prices now pays off now in bonuses and dividends for current managers and owners. Behavior follows incentives.
  - scarface74 6y ago
    I agree with you in general, but I don’t think any of the 5 big tech companies are only concerned about short term profits. Two are run by founders (Facebook, Amazon), two are run by hand picked successors of founders (Apple, Microsoft) and I can never tell what Google is doing. It has been rudderless for over a decade.
  - eru 6y ago
    What makes you think that business management doesn't care about the long term? Business management is rumoured to care about share prices. And as we can see in the current stock market, shareholders are long term enough to eg see past the current pandemic. They also managed to see past Tesla's losses or Amazon's slim profitability.

IfOnlyYouKnew 6y ago

Corporations still do invest large sums of money into long-term projects: most acquisitions as well as buildings are amortised over a decade or so, which is about the time-frame I would expect research to have, on average. Airplane and car development also comes to mind. So I believe the complaint about "short-termism" has become a bit too popular. It's great to prop up your bona-fides as a cynic. It's less good at explaining actual behaviour. Instead, I believe research has simply become less profitable over time. The decades from about 1920 into the 1980 were a time of extraordinary rapid successes in the hard sciences: the scientific method had been established, and industry, finance, law, transport, and communications all made sudden jumps into modernity, allowing scientific institutions as we know them today to exist. If you read about the history of physics, for example, you'll see photos of the entire class of 192x at some German university, and every single person on the photo later won a Nobel or had at least some minor unit named after them. We have continued to improve institutions, infrastructure, and our ability to broaden the chance to get into the sciences. But, unfortunately, it's almost a rule of nature that progress slows over time. That's sort-of soothing, actually, because it means we aren't entirely incapable of prioritising easier thing. Government-sponsored research can continue at higher prices. But private, for-profit endeavours have a very specific point where expected returns turn negative.

foobarian 6y ago
This 1000%. In the 40s, you invested a bunch of money into a research lab and you got the transistor. If only that kind of payoff could still happen today.
- nopeNopeNooope 6y ago
  I don't get this complaint? The leverage for R&D is vastly higher now than ever before: You leave Zuckerberg in his dorm room and you get Facebook. You leave Larry and Sergey in a garage and you get Google. You leave Steve Jobs and Jony Ives together and you get dozens of products in Apple. The money in vs money out in research has never been more absurdly positive in human history. This is why companies aren't investing in R&D, because they don't need to do as much as they used to, because a little goes a lot farther.

dnautics 6y ago

Maybe it's more fruitful to not just consider the Death of Corporate Research Labs, but also ask ourselves "why did they even exist in the first place?" This day in age, the expectation, for better or worse, is that the State sponsors research; this was very much not the case from, say 1850-1950. Luminaries did tons of basic science research under the auspices of corporate (like Irving Langmuir) and private (like Peter Mitchell) labs. Without assigning causality (I happen to think that the primary cause is "low hanging fruit" phenomenon), the transition to state sponsored research has coincided with a general loss of scientific productivity in many fields, and even in some fields with explosive growth, like genomics, there has been major corporate involvement (half the human genome was sequenced by a not just private, but a wall-street traded, entity). Yet the narrative of late has been "if the state doesn't sponsor it, nobody will". I don't feel like I have a solid understanding of why corporate research labs were a thing, or even, how science got done in the pre-manhattan-project/Vannevar Bush era.

UncleOxidant 6y ago
> This day in age, the expectation, for better or worse, is that the State sponsors research But the state (at least the US state) has been cutting spending on research over the last several years - and those cuts have accelerated under the current administration which does not seem to understand the value of basic scientific research.
- scarmig 6y ago
  Cutting research is an overstatement: US federal R&D funding has been increasing, just at a significantly lower rate than GDP. Since it's ideas being created and not widgets, you'd expect the same number of researchers to create at least as much positive impact for society through idea generation. It seems obvious that they haven't. I don't think it's anything nefarious about government funding (or lack thereof) that did it; it's just we've already picked all the low hanging fruit. Plucking all the undiscovered ideas at the frontier of knowledge will be increasingly expensive, because if they were cheap to discover, we already would have. Though I always wonder if there's some trove of cheap ideas hanging out somewhere...

aborsy 6y ago

Research is very hard and has low financial rewards. If it’s funded by state, it’s poorly paid (think of grad students, postdocs, APs). If it’s funded by corporate, it’s basically tedious product design and it’s not interesting science or even proper research anymore. In industry, it’s typically done by second class citizens. Long term research is worse. We have the classical problem of creating value vs capturing the value. I believe that’s a major factor. I often meet students and the vast majority want good paying 9-5 jobs and don’t want to bother with research or academic papers.

the-dude 6y ago

Previously : https://news.ycombinator.com/item?id=23246672 https://news.ycombinator.com/item?id=23246672

Sniffnoy 6y ago

Non-mobile link: https://blog.dshr.org/2020/05/the-death-of-corporate-research-labs.html https://blog.dshr.org/2020/05/the-death-of-corporate-researc...

akbirkhan 6y ago

I'm really confused. When looking at artificial intelligence it seems that actually we have dominating corporate labs which through integrated services (such as compute and data), totally dominate academia. It's coming to the point where researchers that want to make a difference are actively choosing corporate research labs over academic ones.

chrisseaton 6y ago
> I'm really confused. When looking at artificial intelligence it seems that actually we have dominating corporate labs which through integrated services (such as compute and data), totally dominate academia. But this is just one unique case - where access to a lot of data and a lot of compute makes a huge difference. I'm not sure that it translates to many other fields in CS.
- jlangemeier 6y ago
  Corporate research is still going to somewhat be at the whimsy of what's bleeding edge AND has some applicable value; the idea of it just is a little different with things like the 10% or 20% "constructive free-time" model. Each engineer in FAANG-like companies just get a 10-20% salary allotment instead of the equivalent expense of researcher headcount. The idea of "constructive free time" for work is just the "agile" iteration of the research lab.
  - uxp100 6y ago
    Except “constructive free time” mostly isn’t a thing anymore, right?
    - eru 6y ago
      You can still get 20% time at Google. But you have to take it. They don't shove it in your face.
breck 6y ago
This headline doesn't jive with my experience having worked with lots of folks in corporate R&D at big tech. After looking at the data in the paper I think it's far too soon to talk about the "death of corporate research labs". > These examples are backed by systematic evidence...The figure also shows that the absolute amount of research in industry, after increasing over the 1980s, barely grew over the 20 year period between 1990 to 2010. Other data show the same decline That seems like a cherry-pick. In that very same figure, you can see that 2015 is about 300% of 1990. So from 1990 to 2015 corporate research spending grew 5% on average annually. I'm not sure how you could refer to that as "dying". Of course, the paper doesn't use that term, just the parent blog post. I have no sense of non-tech research labs, and maybe if you exclude those corporate research labs are indeed dying, but the headline is click baity.

linguae 6y ago

As a (non-PhD) researcher who works for one of the last traditional industrial research labs in Silicon Valley, I've noticed this trend for years. I've seen industrial research labs either close or become increasingly focused on short-term engineering goals. I also have noticed that newer Silicon Valley companies have adopted what Google calls a "hybrid approach" (https://research.google/pubs/pub38149/ https://research.google/pubs/pub38149/) where there are no divisions between research groups and product groups, and where researchers are expected to write production-quality code. I've noticed many of my PhD-holding peers taking software engineering positions when they finish their PhD programs, and I also noticed more people who were formerly employed as researchers at places like IBM Almaden and HP Labs switch to software engineering positions at FAANG or unicorn companies. Unfortunately, as someone who is also working toward finishing a PhD, I've seen very little guides for CS PhD students that reflect this reality. To be honest, I love research and I'd love to stay a researcher throughout my career, but I don't have the same love for software engineering, though I am comfortable coding. Unfortunately with these trends, traditional research is now largely confined to academia, which is very competitive to enter and where COVID-19's effects on its future are uncertain at this time, and federal laboratories such as Los Alamos and Lawrence Livermore. I fear losing my job (nothing lasts forever) and having to grind LeetCode since there are few other industrial research labs, though given the reality maybe I should start grinding LeetCode anyway.

wrnr 6y ago
I have but a highschool degree and coding is the way I make money, try as I might not to feel any schadenfreude for every researcher failing to secure funding or find gainful employment in their special interest area, I am only human. The BS that people with the title Philosophiae Doctor get away with is a bane on society. Don't get me wrong, I love bio, math and physics, but too often it feels like what is called research is a job program for thick skulled idiots. Maybe you can be saved from this faith, and learn what the real world can teach you on the nature of reality.
- MattGaiser 6y ago
  > learn what the real world can teach you on the nature of reality. People focused on the "real world" tend to only see the world as it is now. That is the exact opposite of what research is generally about.

kratom_sandwich 6y ago

Previous discussion: https://news.ycombinator.com/item?id=23246672 https://news.ycombinator.com/item?id=23246672

timkam 6y ago

What worsens the problem is that publicly funded research often solves toy application problems (at least in CS); academics know that they need to "apply" their research to get funding/citations/publications with relatively little effort, but from an industry/real-world perspective, many application scenarios hardly make sense and are hand-wavy-ly evaluated (for example, in applications of CS, too often the code is not shared so that the results are practically not reproducible). The current system simply rewards researchers who manage to get into the top venues with the least effort possible, and for many who aren't brilliant the pseudo-application approach is the way to go. IMHO, this broadens the gap between academia and industry, because it's hard for a practitioner to pick out the few relevant nuggets in a stream of half-baked applied research.

f00zz 6y ago

This sounds a bit hyperbolic when you have Microsoft doing pie-in-the-sky research on topological quantum computing, Google and IBM research teams arguing over quantum supremacy, etc.

TabTwo 6y ago

Looking out of my office window in Stuttgart I can see the big sign „Nokia Bell Labs“. You can almost smell all the history this sign carries

jrochkind1 6y ago

Interesting, after the Bell Labs example, I was going to guess that anti-trust enforcement meant that companies weren't big enough to afford an internal lab anymore. But the OP, quoting/citing Arora et al, actually suggests the REVERSE causative correlation: > Historically, many large labs were set up partly because antitrust pressures constrained large firms’ ability to grow through mergers and acquisitions. In the 1930s, if a leading firm wanted to grow, it needed to develop new markets. With growth through mergers and acquisitions constrained by anti-trust pressures, and with little on offer from universities and independent inventors, it often had no choice but to invest in internal R&D. And that in fact later "lack of anti-trust enforcement... killed the labs". Makes sense to me. Goes to show that our "intuition" (of course informed by cultural assumptions) for how capitalism works and it's effects isn't necessarily accurate.

CharlesMerriam2 6y ago

This type of article comes up from time to time, and is generally wrong on many points. * Corporate Labs are not for primary research, at least in the United States. In the U.S., any primary research is done at universities, developed from research to prototype and patent at NASA, and then licensed to a U.S. company to go to product. For non-primary research, prototypes are developed by corporations via grants from government agencies. * Bell Labs, before AT&T monopoloy breakup, was a special business case. Its funding existed in a game of legislation maneuvering. It is not an exemplar. * Think of labs as "tier 5 tech support, when the engineers are stumped". Most labs are holding areas for smart people to solve sudden business problems. For those who read the famous analysis of criticality accidents in non-military settings, you need some smart folk hanging around to prevent disasters. For example, Sun Labs had people working (forever) on some hopeful breakthrough. Howard Davidson, a failure engineer, was pulled off task when server boxes started breaking (paper washers being glued in manufacturing) or card connections started failing (silver substituted for gold). These were high impact problems not solvable by line engineers. Similarly Ricoh Labs had a day when everyone was pulled off to disassemble a large machine and figure out a feeding problem that had a hard solution. Intel keeps materials PhDs in the fab areas just in case something comes up that would slow throughput. * Many labs have reputations no longer deserved. I worked at PARC and found some teams made magic and others made bloat. Look at the short term results, meaning the past decade, to rate a lab.

ChrisLomont 6y ago

As of 2016 corporate R&D was at a record high. https://www.aip.org/fyi/2016/us-rd-spending-all-time-high-federal-share-reaches-record-low https://www.aip.org/fyi/2016/us-rd-spending-all-time-high-fe...

seanmcdirmid 6y ago
R&D measures often include a lot more D than R.
- ChrisLomont 6y ago
  Do you claim this was not the case when R&D spending was demonstrably lower? I see no evidence demonstrating that when I looked for it.
  - seanmcdirmid 6y ago
    I'm claiming that the R part of R&D was always tiny to begin with. That rising spending R&D is not indicative of much more R compared to dedicated research labs.
    - ChrisLomont 6y ago
      >That rising spending R&D is not indicative of much more R compared to dedicated research labs. R&D are not binary options. I know in some fields a massive amount of published papers are coming from corporations, and I suspect if I could find data on it that the percentage of peer-reviewed publications from corporations is much higher than in the past. Certainly in various CS and math disciplines I work with, corporations have made massive inroads. You're trying hard to push at a possible loophole in the rise in spending, but without evidence that more spending was not spent on what you think it should be, it's sensible to assume it was actually spent on increased R AND D. Otherwise, for every conjecture you can make without evidence, I can just as easily make the opposite conjecture, and neither has been demonstrated. Take a few moments and try to source some good evidence - I looked at a few directions and didn't find anything one way or the other, except that spending has increased.

totesraunch 6y ago

This is Capitalism. Let the government and educational institutions spend all of the money, do the real work and research, and then as a private company swoop in and reap all of the benefits. A blatant example would be Gilead Truvada for PrEP. US Tax payer funded research and all profits go straight to Gilead.

refurb 6y ago
A blatant example would be Gilead Truvada for PrEP. US Tax payer funded research and all profits go straight to Gilead. That's such a gross oversimplification to the point it's just wrong. If you want to read how one of the two drugs in the combo was developed, I'd suggest this journal article [1] - I warn you, the story evolves over 15 years. The initial discovery of the class of compounds was done at Emory university. Emory then partnered with Burroughs Wellcome. Burroughs Wellcome was then acquired by Glaxo, who halted the research. The rights then went back to Emory, who then spun it out to a start-up called Triangle Pharmaceuticals, who was then acquired by Gilead who brought Truvada to market. Emory did sue a number of manufactures as they had a patent, but it was settled with a fat ($525M) cash payment to Emory and an on-going royalty stream. [1]https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5777139/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5777139/
kleiba 6y ago
At least in my understanding, the reason why governments have in interest in this kind of model is that companies in return provide employment and pay taxes (if you're lucky). In the EU, there is a really strong focus these days on exploitation of the results that come out of the research projects they fund (Horizon 2020) that you sometimes almost feel a bit out of place as a researcher. As in: why should a researcher at a university care deeply about how their findings can be turned into products by some companies? I mean, not only are they usually not really qualified for such questions, but also if they were interested in product development, they'd probably work in industry (perhaps even for a higher salary).

ylem 6y ago

I remember an interesting article (I can't find the reference) that made the claim that for a number of pharma labs, the advantage in hiring researchers is not that they are likely to make a great discovery--but rather that they will be up to date with the literature and be able to recognize a potentially great discovery and to productize it. This is not necessarily trivial as a number of things that work in an academic lab setting don't translate into actual usable drugs.

valenciarose 6y ago

Under-taxation of corporations plays a significant role in the decline of research spending. While potential competitive advantage is one reason to pursue research and development, taxes and the interplay between tax and corporate accounting are another reason (even prior to 1981). While taxes paid by corporations benefit the general public, from the corporation’s point of view taxes are money out the door with zero possible return. So what does a prudent corporation do with its profits? It recognizes that they are potential capital and seeks to maximize the risk-adjusted return on capital. It can bank them at the risk-free rate of return, but we should remember taxes will take a healthy chunk out of that return on the front end. It can pay them out to investors as dividends (increasing the return on remaining capital by reducing the denominator). Note that under rational tax schemes the risk adjusted return on capital should be equivalent to investing at the risk free rate of return (modulo management of cash-flow risks). It can buy riskier assets with higher return, such as other companies. And it can make much riskier investments, like research and development. As with most things financial, the best overall risk adjusted return on capital is diverse in both kind and in risk level. It should do all of those things (treating dividends as equivalent to investment at the risk free rate of return), with the proportion going to each tuned to achieve the aggregate optimum(1). Also, can you see how a regulated utility with(like AT&T of old) would find R&D attractive for spicing up its asset mix? Think of R&D as producing a stream of lottery tickets with the drawing in the distant future. Those lottery tickets (for a tech company) can pay off in two ways. One is that they could produce or enhance a revenue stream. The other is that they could reduce risk in the form of patents (reduce competitive risk and risk of patent suits by threat of countersuit). Both of these payoffs improve risk adjusted return on capital (by generating return or reducing risk). The neat thing about R&D for a company that’s paying real taxes is that much of the cost is (from a tax point of view) is an expense. In other words, that allocation of capital doesn’t have the upfront bite taken out of it that occurs when profits are directed to risk free assets. Looking at this from a risk-adjusted return point of view, having a real tax burden increases the appetite for risk by decreasing the relative attractiveness of the risk-free alternative after taxes. This is doubly true for expenditures that look like expenses to tax collectors but look like capital investment for corporate accounting purposes. None of this holds true if a company isn’t paying much in the way of taxes on its profits. It doesn’t mean some amount of R&D isn’t still attractive, but the appetite for risk is lower. And let’s be clear, R&D in research labs is the riskiest kind of R&D. Well, you might say, the 1981 R&D tax credit is sweeter than a deduction. Doesn’t that tilt the scales back? Yes, but subject to the limitations of the tax credit (which are numerous). But, like the deduction, the tax credit is much less valuable for companies that aren’t paying taxes on their profits. And, to be clear, this is a Reagan measure taken with full knowledge of what was expected to happen to corporate tax rates and the impact that might have on R&D investment. It’s a partial mitigant for that, nothing more. I am fully aware that I have murdered both CAPM and the practice of accounting in compressing this down to a reasonable post with what I hope is a clear narrative. My apologies to practitioners of both. (1) An important aside: People make equity investments to take more risk in the expectation of higher return. Beyond the cash cushion necessary for minimizing cash-flow risk, massive cash hoards do nothing but dilute the risk (and return) rational investors are actively seeking to take. There is some argument to be made that large tech companies keep huge cash hoards because their core businesses are riskier than they appear (esp black swan events), but it probably has more to do with founders desire for independence.

amelius 6y ago

Big pharma still has research labs. Or else, where do all their patents come from?

refurb 6y ago
Indeed. Biopharma has some of the highest spend on R&D as a percentage of revenue of any industry sector.[1] However, keep in mind a big part of that is development, not research. It's still science and not guaranteed to work, but it's more focused on the development needed to bring a product to market versus doing science to make new discoveries. [1]https://www.statista.com/statistics/270233/percentage-of-global-rundd-spending-by-industry https://www.statista.com/statistics/270233/percentage-of-glo...

Balgair 6y ago

Good overview! I work in a corporate research lab. We're not big (market cap ~25B) but there is a real thirst for innovations. I'll echo the point about Research v Development. We're much more heavy on the development side of things, with time horizons of ~3.5 years. Research is ~10 years. Our research department is just me and 4 other guys. Our development department is much larger. One thing I found different is in M&A. We've purposefully not done a lot of M&As. Mostly because the bureaucracy is so thick here. Monopolizing the time of the smaller companies is simpler and faster than trying to onboard them. I suspect there are healthcare issues involved too. It'll be interesting to see how long things last.

TheGrassyKnoll 6y ago

Well, corporate research money may be drying up, so now the public is being asked to fund it (at least in California). There's a $5.5 billion bond initiative (Proposition 14) on the ballot for 2020. This is similar to proposition 71 which was passed in 2004 for $3 billion, "The California Stem Cell Research and Cures Act”. California Proposition 14, the Stem Cell Research Institute Bond Initiative, https://ballotpedia.org/California_Proposition_14,_Stem_Cell_Research_Institute_Bond_Initiative_(2020)

Razengan 6y ago

There should be [more] publicly-funded, non-profit organizations that do research for research's sake, whose fruits are made available to all. To avoid the problem of controversial projects causing some funding sources to pull their support, there could be mechanisms for funding individual projects. And to avoid the risk of reappropriation by a government or military, they could be hosted in the EU. :)

mark_l_watson 6y ago

I worked at SAIC back when it was a small company (and before changing the name to Leidos). I will forever be grateful for being able to work about 25% of my time on IR&D, all of my own choosing. I think the US government allowed us about 1% or 2% of our gross to be reimbursed R&D - I forget the details. At my last job before retiring (Capital One, a great company to work for BTW) my team had a huge amount of autonomy on what we worked on, but my team was awesome. I don’t really understand the relative merits of many small R&D projects vs. huge infrastructure. Perhaps the industry is just moving to a many small projects approach?

zerop 6y ago

I would attribute it to recent culture of ROI grown in high leadership of the company. They don't understand patience, values, human relationships and necessary soft skills to realise that Innovation and research are vital health of the company. Problem is they are all fast thinkers and great presenters and that's what js valued nowadays in orgs. The innovators and researchers can't sustain in this environment. The leadership wants ROI from everything, even research. That's not going to create a good culture and innovation wouldn't grow.

jillesvangurp 6y ago

I worked at Nokia Research Center for a while when it was still market leader making smart phones. My observation is that most companies that have a research center also have some level of disconnect between their main business and their research branches. The two just operate on different time lines. More worryingly and problematic is that there is also a notion of "not invented here" where business units have very little patience for things coming out of research units because they weren't involved. It's petty and stupid and in Nokia's case a large part of the reason why Apple and Google ate its lunch. It's not that they did not have competing technology but that they didn't know what to do with it. Corporate R&D works best when corporate leadership has some level of affinity with it. Elon Musk is a great example of a true R&D minded leader. All his companies are basically are R&D labs that happen to produce insanely valuable products as a side effect. It takes a certain type of leadership to funnel billions to the right projects and then turn them into successful products. It requires something most business leaders simply don't have: a clue. Elon Musk for all his flaws understands technology deeply. Most of his contemporaries in the car industry are clueless bean counters that know little more about cars than the number of wheels they are typically equipped with. I bet pretty much all of them had R&D labs 20 years ago working on exactly the kind of things that Tesla brought to market successfully. They just bungled turning that into product because of a lack of vision & technical leadership.

simonh 6y ago
I remember reading in the early iPhone days that Apple recognised virtually no spending on R&D. That wasn’t because they didn’t do research or develop new products, it’s that they simply didn’t see that as separate from their normal day to day operations. I think that’s the same attitude as You’re describing with Elon Musk. It’s all R&D all the time. That’s just how products are developed. Now it’s different at Apple in that they do recognise a lot if spending on R&D but I think that’s for tax reasons.
- jillesvangurp 6y ago
  Exactly, Steve Jobs would involve himself deeply with product development and be in the loop on a lot of product detail. What you don't get to see with Apple is all the stuff they don't launch or that lingers on some shelf for years and years. They only talk openly about stuff that they are ready to show and productize giving the false impression that these things just popped into existence. By the time the iphone shipped, they'd been working on it in some form or another for over half a decade or so. Giving people enough room to do stuff like that with an open ended agenda and strategy is exactly how you move forward as a company. The value of people like Steve Jobs and Elon Musk is recognizing the strategic value of efforts like this in an early stage and then making sure it happens. That requires being clued in enough to recognize the strategic value and focused enough to then make it happen. If you look at the timing, this was shortly after they launched OS X and apparently went "what else can we do with this?" (IOS is based on the same architecture). Corporate R&D labs are where this stuff gets parked by companies that are too impatient to wait for that. That's exactly what happened in Nokia.

fallingfrog 6y ago

This is part of a larger pattern where we are not investing in anything anymore that doesn’t bring immediate returns to some investor; not basic research as in the article, not public infrastructure, not planning for things like climate change. It’s all about immediate gratification, fast returns. Kicking the can on every problem and avoiding any unpleasant decisions or long term investments.

mjfl 6y ago

This article argues what I believe is the opposite of the truth: that corporate research productivity is correlated with anti trust enforcement. I think this is very wrong! Bell labs really fell apart AFTER AT&T was broken up. Xerox parc declined AFTER Xerox was ruled a monopoly. Anti trust enforcement KILLED innovation, and I think it’s really important that we get the correct relationship here.

gauravsc 6y ago

I'm not sure how true that is for sectors other than software/AI, but in AI most academic researcher complain that all the moonshot research (often not even commercially applicable) is now solely coming from corporate research labs e.g. Deepmind, Facebook etc., as opposed to universities. They attribute this to poaching of faculty by companies, lack of resources in universities, lack of motivation in grad students to stay in academia.

usrusr 6y ago

Trouble starts with the term R&D which names two separate things that rarely go together (I think PARC was somewhat close to doing both). A company research lab would be decidedly not development or it's not a research lab. The best way to run a company research lab is to run it as a marketing tool, like a slightly more on-topic way of sponsoring a sports team. IBM seems to do it that way, at least whenever a bluishly named supercomputer is ruining yet another human game. I wonder if they are aware of that analogy.

LatteLazy 6y ago

Research has (correctly) been outsourced. If you have a good idea, go prove it and then you can sell it to Acme for $100m. That's a much better deal for Acme because they only need to buy things that work. And it's a much better deal for you (you get $100m to share with your investors instead of a $10 dollar voucher [0] for a $100m idea). [0]: https://en.wikipedia.org/wiki/Tracy_Hall https://en.wikipedia.org/wiki/Tracy_Hall