10 ms·

The rise and fall of the industrial R&D lab

147 points by npalli 6y ago

RcouF1uZ4gsC 6y ago
I think the big driver for a lot of these research lab consists of two parts. First, the company having a lot of money (many times from having a monopoly) and a desire to keep a bunch of smart people from going to any potential competitors. They really did t need the smart people to make any money, they just needed to keep them locked away from competitors. The best way they could do that was to have these research labs that provided decent money and a lot of support and resources to pursue their intellectual curiosity. In addition, given that capital funding was a lot harder to acquire back in the day, it was about as good a deal as a smart person could get. Nowadays, a couple of things have changed. First, a corporate job is no longer expected to be lifelong. In addition, if you have a brilliant idea, it is a lot easier to get funding and do your own startup for that idea, and maybe get acquired by one of the big companies.
- konjin 6y ago
  Having talked to a lot of old folks who worked there the tax breaks were a huge incentive too. Lowering the corporate tax rate since the 60s has meant that corporations no longer needed to invest in R&D, just pay accountants instead.
  - turbinerneiter 6y ago
    I think this is a very important point. Usually, taxes incentivize companies to spend their profit on making the company better - buy new machines, pay the workers more, invest in r&d. This way, they reduced their taxable profit by spending the money on themselves. The companies profited from getting better, the state (or society) profited from growth and innovation. Now with reduced taxes, but even more importantly tax evasion and offshoring, this incentive is gone, companies hoard money and pay out to the shareholders. And that is just lazy. Giving money to the shareholders is like telling your investor that their money is better spent elsewhere.
    - p_l 6y ago
      Tax incentives are also responsible for the return of open office plan since 1960s, as depreciation rules regarding buildings and furniture changed. In addition, you have people believing that Milton Friedman's biggest lie is a law, namely that maximising shareholder value (which is often interpreted to include dividends) is fiduciary duty for the corporation. (It's not)
      - tome 6y ago
        > Tax incentives are also responsible for the return of open office plan since 1960s, as depreciation rules regarding buildings and furniture changed. Strange. How does that work?
        p_l 6y ago
        By making it so that furnishing a building is much cheaper than other aspects, so cost structure started to "disincentive" making smaller offices vs. plopping big halls.
      - opo 6y ago
        >...Milton Friedman's biggest lie is a law, You are misrepresenting what is called the Friedman doctrine. He didn't claim it was the law of the land. As the wikipedia article states: >...The Friedman doctrine, also called shareholder theory or stockholder theory, is a normative theory of business ethics advanced by economist Milton Friedman which holds that a firm's main responsibility is to its shareholders. This shareholder primacy approach views shareholders as the economic engine of the organization and the only group to which the firm is socially responsible. As such, the goal of the firm is to maximize returns to shareholders.[1] Friedman argues that the shareholders can then decide for themselves what social initiatives to take part in, rather than have an executive whom the shareholders appointed explicitly for business purposes decide such matters for them https://en.wikipedia.org/wiki/Friedman_doctrine https://en.wikipedia.org/wiki/Friedman_doctrine
        p_l 6y ago
  - zwischenzug 6y ago
    David Graeber argues this too.
- culturestate 6y ago
  > a desire to keep a bunch of smart people from going to any potential competitors...they just needed to keep them locked away from competitors Companies still do this today, they just go about it differently. Google started Google X, Cisco has (had?) spin-ins, functionally everyone large enough has an unofficial rest and vest program. Like another commenter said, it just seems like the financial incentives don't lend themselves to formal research orgs anymore.
- amelius 6y ago
  Also, nowadays there are a lot more people with a CS background.
friseurtermin 6y ago
This reads a lot like this blog post [0] that was shared here a while ago, the discussion is quite interesting as well [1]. Although I appreciate the additional background and citations. [0] https://blog.dshr.org/2020/05/the-death-of-corporate-research-labs.html https://blog.dshr.org/2020/05/the-death-of-corporate-researc... [1] https://news.ycombinator.com/item?id=24200764 https://news.ycombinator.com/item?id=24200764
- fuzzfactor 6y ago
  Science takes time. Time is money on different terms for different people. So science costs money. How much science would you like? >the tension between managing scientists with their own pure research goals in such a way that they produce something commercially viable, while still leaving them enough latitude to make important leaps, seems huge. But these problems were always there in the model. What is harder to identify is an exogenous shock or set of shocks that changed the situation that existed from the 1930s until somewhere between the 1960s and the 1980s. Not that hard. During this period the US dollar had been tied to gold at $35 per ounce while Americans and their firms were prohibited from owning or speculating in gold. The strength and stability of the dollar gave confidence in what it would purchase in the future. This is very important if long-term projects are to be considered. Especially if the projects themselves have uncertain outcomes. Which is actually supposed to be intentional for research. It was pretty good knowing that 35 dollar bills in your wallet would get you an ounce worth of gold, even if you were only allowed to own a limited amount of it, and jewelry form. Then one day Nixon comes along in the early 1970's and destroys the currency by fiat. No longer backed by gold, the dollar floats. Like the Titanic. Gold can't float it was the backing, realistically since before biblical times. As rapidly as possible as many Americans as possible and crucially other target dollar holders were only worth about half of what they were a year or two earlier. From the top corporations to the everyday citizen, it was devastating. With wage & price freezes, middle class was bumped right down to lower-middle with downward pressure going forward. The rich were still rich, but only half as rich. So their losses were actually very significant and added more pain to the economy as a whole. Even in some of the biggest corporations the cutbacks were huge. No way they were going to be able to afford research again until they can get as much of it for $35 as they did when it was really working. There was no recovery from the Nixon Recession. The malaise continued and by the 1980's even the most well-insulated from the initial shock had adjusted to the _new normal_. Never again were Americans going to be able to fit enough dollar bills in one wallet to purchase an ounce of gold, not even close. Never again would the dollar be trustworthy enough to accomplish as legendary a form of scientific progress. It would have to be done in some other way on some other terms for labs that take longer to build than the dollar can be expected to remain stable, with no risk of further losing value.
supernova87a 6y ago
Well, I think a major factor is that with less friction for workers to move between countries / industries / companies, it no longer pays for companies to cultivate their talent from within. Either the talent will leave, or it is easy to find some talent by hiring from elsewhere -- by the way, where the work to cultivate and support the talent has already been done for you. And all you're doing is applying the filter / cutting the top candidates to choose from. Back when there was much more friction and lack of info for people to move about between good opportunities, you were tied to your employer and a better bet to invest R&D money in. Not now. Except for a few select industries where there are artificial barriers put in place to prevent this. (Certification, unions, national security, etc)
- ben_w 6y ago
  > with less friction for workers to move between countries While I agree with regard to companies, I disagree with regard to countries. The equivalent for a nation is education, which would mean every nation would be happy to accept any immigrant who can speak the local language while also doing whatever they can to prevent people leaving. The higher the education, the more this matters, but even K-12 equivalents are ~13 years of state support. Potentially more if they were born somewhere where the state pays for early childhood and p/maternity. Moving country is still hard for most people.
  - usrusr 6y ago
    > Moving country is still hard for most people. That doesn't invalidate the assertion that it used to be even harder before in any way.
- masklinn 6y ago
  > Well, I think a major factor is that with less friction for workers to move between countries / industries / companies, it no longer pays for companies to cultivate their talent from within. The fall of R&D labs also largely correlates with repeated corporate tax cuts: R&D labs were a way for corporations to lower their tax burdens while investing in themselves, which benefited society as a whole (either because the corp produced better value, or because others found avenues for that research). Today they're much better off paying accountants. It's also a bit rich criticising workers when companies were the ones to break the "social contract" and start throwing employees out on the street with little to no warning or recourse.
CTNW 6y ago
Here are some interesting conversations with people with long history of working in R&D labs: https://www.catchingthenextwavepodcast.com/episodes/608-ton-kalker https://www.catchingthenextwavepodcast.com/episodes/608-ton-... https://www.catchingthenextwavepodcast.com/episodes/609-david-millen https://www.catchingthenextwavepodcast.com/episodes/609-davi...
raverbashing 6y ago
Buying off-the-shelf technology works if you want the cookie-cutter solution (which, don't get me wrong, is fine for a lot of things) Now, newsflash for the MBAs, if you just sell the same thing as everybody else, you're just competing on price (and maybe marketing/sales channel). Otherwise you need to get your hands dirty. (Though apparently there's still money in dropshipping to be made, until people realize everything was already on DX/AliExpress) But oh thank to the wise Master minds of Business Administration, everything is on the shelf to buy somewhere and what isn't doesn't exist. R&D? It's a cost center.
- criddell 6y ago
  > Now, newsflash for the MBAs, if you just sell the same thing as everybody else, you're just competing on price (and maybe marketing/sales channel). You don't think MBAs know this?
  - raverbashing 6y ago
    They know, what they don't know is how to get out of that position.
amgreg 6y ago
Bob Metcalfe, self professed “conservative hippie,” inventor of the Ethernet, founder of 3Com, of Xerox Parc fame, has this to offer: > One of the few things that government should do is finance research, because — I have learned from many years — the only companies that can afford to do research are monopolies. Real companies cannot afford to do research other than monopolies. And there are some famous ones. The telephone monopoly — Bell Labs. The computer monopoly — Watson Labs. The copier monopoly — Xerox Parc. And on it goes. In retrospect the monopolies aren't worth it for the research they do. It's nauseating how much we hear about how cool Bell Labs was, but other than the transistor and Unix and the princess telephone, what did we get for all that money? And then for years AT&T as a monopoly sat on innovation — and IBM after that, and Xerox after that — it's just not worth it, so let's kill those monopolies. And if we need research, have it done at research universities. And the other spin I would offer there: as a practitioner of technological innovation, I worry about technology transfer — how do you get technology transferred from the lab into the marketplace. And the best way to do that is with people; and it is the business of universities to graduate people. So let's do our research there, and I think the ARPANet is a great example where government financed the research. Source: https://youtu.be/zKz07DdaKzw?t=3772 https://youtu.be/zKz07DdaKzw?t=3772
- criddell 6y ago
  I just finished reading Mitchell Waldrop's book The Dream Machines which is largely about J.C.R. Licklider and it has a lot of stories about the things Metcalfe is talking about during the 60's and 70's and into the 80's. It's a long, detailed book and I recommend it. After finishing the book it made me feel like progress has slowed tremendously. Look at the changes from 1960 to 1970 or from 1970 to 1980 and compare that to 2010 to 2020. The last decade produced lots of incremental improvements but where are the giant technological shifts? I was born in 1970 and if I look back over my life, the giant change was going from a non-networked world to a networked world. I think it's similar to how my grand parents could remember the world before and after commercial flight or how my great-grandmother remembered the arrival of automobiles. I wonder what it is my kids will point to 40 years from now. A colony on the moon or Mars maybe?
  - 6y ago
Ozzie_osman 6y ago
> No one is quite sure why the lab model failed. It’s obvious that a scenario where Xerox is paying scientists to do research that ultimately mostly benefits other firms, potentially even competitors that help to put it out of business, could never survive. I don't agree with this. The lab companies had gotten really good at attracting some of the smartest people (in academia and elsewhere), designing models to motivate them to invent while giving them tremendous latitude, and then profiting from their discoveries. See people like Wallace Carothers[1], a chemist that DuPont hired out of Harvard and let him run a lab. He ended up inventing nylon which was obviously tremendously profitable for DuPont. So the model did work. I don't have data for this, but I think what actually happened was just a lot more short-termism as investors, companies, and executives focused more and more on short-term profits, so large recurring R&D expenses that might require longer horizons to recoup investments made less sense. [1] https://en.wikipedia.org/wiki/Wallace_Carothers#Move_to_DuPont https://en.wikipedia.org/wiki/Wallace_Carothers#Move_to_DuPo...
micheljansen 6y ago
I worked at a large industrial R&D lab around 2010 and it was awesome. It was not pure R&D, because the lab was funded by various business lines as “clients”, which sometimes came with strings attached, but as a model it worked pretty well. By my estimation about half of the work was real fundamental research with no obvious immediate market or clearly guaranteed business value. There was some pressure to “sell” this work internally after the fact, but that usually ended up making it better. The other half of the work was more directly commissioned by various business lines. They were responsible for product development, but would enlist us to look into 3rd wave innovation and technology (which we would be experts in because we spent the other half of our time on it). The mixed model kept the lab grounded in reality, but also created enough freedom to do real R&D.
LatteLazy 6y ago
Corporations are basically unable to do R&D for a whole bunch of reasons. That's why we have all sorts of start ups and angle investment instead. Once an idea is half proven, then corporations can come in, finance it, run it effectively and market it etc. While also paying off the people actually taking the risk. This is a much better more efficient system for everyone.
- thatcat 6y ago
  How is that better for R&D scientists and engineers? They now have to come up with a possible technology progression, secure funding, build out the tech using some secondary business model, and then convince the corp to buy their company. It only seems more efficient for the corporation.
  - LatteLazy 6y ago
    They actually get rewarded when they succeed. The man who invented artifical diamonds, a billion dollar industry, got 10usd savings bond. Plus no bureaucracy. https://en.m.wikipedia.org/wiki/Tracy_Hall https://en.m.wikipedia.org/wiki/Tracy_Hall Also, I imagine that getting funding from a pool of VCs (looking to fund long shots, with some expertise in the field maybe) is easier than from a single CEO who happens to run the place and has to justify all this on quarterly earnings statements etc...
    - aspaceman 6y ago
      But what if they want to research something that will never, ever be profitable.
      - als0 6y ago
        Isn’t that what academia is for?
      - LatteLazy 6y ago
        Well they'd never be given that chance under either the corporate or the venture models. That's why governments or charities are for I guess?
dehrmann 6y ago
Part of the fall of the R&D lab is high-profile inventions like the silicon transistor, GUI, and digital camera that the corporation failed to capitalize on. Part of why you do all this research is to find the next big thing, but if you can't see the potential of these inventions and turn them into businesses, what's the point?
- andrekandre 6y ago
  remimds me of... https://www.amazon.com/My-years-xerox-billions-nobody/dp/B0006C0O4O/ https://www.amazon.com/My-years-xerox-billions-nobody/dp/B00...
randcraw 6y ago
I think most of the changes to corporate R&D in the past 30 years closely reflect the shift in focus toward short term profits, thereby reducing stockholder will to invest in high risk new new things like quantum computing or single cell genomics. At the same time, the cultural rise of tech startups has encouraged corporate R&D heads to farm out much of their interest in cutting edge tech to underwrite those startups from afar. By investing in startups from funds separate from mainstream R&D, it's easier to lay blame for failures outside the internal R&D organization. I've worked in big pharma R&D for 15 years and gov't/military R&D for 20 years before that. Increasingly I see the forms of R&D diversifying and extending outside the org's primary lab, just as 100% of DARPA projects are fielded external to the DoD labs. As external R&D investments and partnerships rise, it's little wonder that primary R&D labs shrink and their focus shifts to better serve short term RoI like improving / debugging internal processes and inefficiencies.
thu2111 6y ago
This is a good article but I'm not sure it completely nails it. Firstly, it's not clear the industrial R&D lab has actually fallen. The article starts to engage with this at the end but doesn't really do so properly. It's easy to find examples of firms doing large scale expensive R&D: - Many firms making big investments in AI - Self driving cars - SpaceX reusable rockets, plus all the other Musk firms - Advanced database technologies (e.g. at Microsoft, Google, Amazon) - Advanced compiler R&D (Oracle/GraalVM) - The huge sums thrown around in pharma R&D - Advanced graphics R&D is driven primarily by video game firms - Intel/AMD/ARM/etc in CPU tech - Tons of R&D in oil and gas and those are just examples we're most familiar with. Are these firms running "labs"? No, not in the sense of Bell Labs. That's because this model is not the most efficient model available, and has thus mostly been phased out. Corporate R&D is much better integrated with actual product development than the standalone lab model captures. In the most successful cases we don't even really perceive it as an R&D lab because the entire company is doing R&D constantly, in a completely integrated manner. Google is perhaps the clearest case of a company that has completely integrated R&D with its operations. There is an org called Google Research but IIRC it existed mostly for a trophy hire and isn't especially important: the bulk of actual research is/was done by product teams as an integrated part of their development process. There is no lab, yet at the same time, the lab is everywhere. The second aspect is that it doesn't discuss the role of personality or personal visions of CEOs at all. Yet this is often critical to the decision to do R&D. Why does Google research AI? It's not because it's an obvious, slam dunk move. Google has been doing ML research since the very start of the firm, but other search engine firms didn't. Why did Google research Google Glass? Or self driving cars? Google researches these things because Larry and Sergey thought it was cool. Page has even claimed in the past Google was founded specifically to do AI research (which isn't really right, but whatever). What about SpaceX? Tesla? The Boring Company? Neuralink? These firms exist and do R&D because Elon Musk is a futurist. He doesn't do R&D for economic reasons, let alone for regulatory reasons. He does it because he wants to invent the future. But this type of personality is rare. Our society is not kind to futurists. It doesn't really value them. They're seen as strange or dangerous; the story of inventing new technologies is usually a story of being attacked on all sides, by journalists or politicians or regulators or all of them at once. That's why most companies set up "innovation teams" - the exact opposite of the approach taken by the most innovative companies. They're little silos where people are taken and put in a corner, then told "go innovate". The non-technical CEO has no interest in the innovation team and likely never talks to them directly, let alone gives them direction or ideas. The team members know this and usually just mimic whatever trends they see around them (IoT, blockchain, AI, cloud, etc). Their projects are usually doomed from the start. In the end, for research to be valued people with the power to deploy it must be excited by technology, not intimidated by it. And that isn't most corporate or government leaders today.
fastaguy88 6y ago
The argument being made here, that industrial research labs have disappeared because they did not produce enough return on investment, ignores competing sources of ROI. Today, the easiest way to make a lot of money is in finance, not discovering new things. Other stories on HN have bemoaned how Boeing has destroyed itself by shrinking engineering and expanding cost cutting. As is pointed out in another comment, if the Fed is subsidizing the stock market, finance is the place to be. Research not so much.

147 points by npalli 6y ago

I think the big driver for a lot of these research lab consists of two parts. First, the company having a lot of money (many times from having a monopoly) and a desire to keep a bunch of smart people from going to any potential competitors. They really did t need the smart people to make any money, they just needed to keep them locked away from competitors. The best way they could do that was to have these research labs that provided decent money and a lot of support and resources to pursue their intellectual curiosity. In addition, given that capital funding was a lot harder to acquire back in the day, it was about as good a deal as a smart person could get. Nowadays, a couple of things have changed. First, a corporate job is no longer expected to be lifelong. In addition, if you have a brilliant idea, it is a lot easier to get funding and do your own startup for that idea, and maybe get acquired by one of the big companies.

konjin 6y ago
Having talked to a lot of old folks who worked there the tax breaks were a huge incentive too. Lowering the corporate tax rate since the 60s has meant that corporations no longer needed to invest in R&D, just pay accountants instead.
- turbinerneiter 6y ago
  I think this is a very important point. Usually, taxes incentivize companies to spend their profit on making the company better - buy new machines, pay the workers more, invest in r&d. This way, they reduced their taxable profit by spending the money on themselves. The companies profited from getting better, the state (or society) profited from growth and innovation. Now with reduced taxes, but even more importantly tax evasion and offshoring, this incentive is gone, companies hoard money and pay out to the shareholders. And that is just lazy. Giving money to the shareholders is like telling your investor that their money is better spent elsewhere.
  - p_l 6y ago
    Tax incentives are also responsible for the return of open office plan since 1960s, as depreciation rules regarding buildings and furniture changed. In addition, you have people believing that Milton Friedman's biggest lie is a law, namely that maximising shareholder value (which is often interpreted to include dividends) is fiduciary duty for the corporation. (It's not)
    - tome 6y ago
      > Tax incentives are also responsible for the return of open office plan since 1960s, as depreciation rules regarding buildings and furniture changed. Strange. How does that work?
      - p_l 6y ago
        By making it so that furnishing a building is much cheaper than other aspects, so cost structure started to "disincentive" making smaller offices vs. plopping big halls.
    - opo 6y ago
      >...Milton Friedman's biggest lie is a law, You are misrepresenting what is called the Friedman doctrine. He didn't claim it was the law of the land. As the wikipedia article states: >...The Friedman doctrine, also called shareholder theory or stockholder theory, is a normative theory of business ethics advanced by economist Milton Friedman which holds that a firm's main responsibility is to its shareholders. This shareholder primacy approach views shareholders as the economic engine of the organization and the only group to which the firm is socially responsible. As such, the goal of the firm is to maximize returns to shareholders.[1] Friedman argues that the shareholders can then decide for themselves what social initiatives to take part in, rather than have an executive whom the shareholders appointed explicitly for business purposes decide such matters for them https://en.wikipedia.org/wiki/Friedman_doctrine https://en.wikipedia.org/wiki/Friedman_doctrine
      - p_l 6y ago
- zwischenzug 6y ago
  David Graeber argues this too.
culturestate 6y ago
> a desire to keep a bunch of smart people from going to any potential competitors...they just needed to keep them locked away from competitors Companies still do this today, they just go about it differently. Google started Google X, Cisco has (had?) spin-ins, functionally everyone large enough has an unofficial rest and vest program. Like another commenter said, it just seems like the financial incentives don't lend themselves to formal research orgs anymore.
amelius 6y ago
Also, nowadays there are a lot more people with a CS background.

friseurtermin 6y ago

This reads a lot like this blog post [0] that was shared here a while ago, the discussion is quite interesting as well [1]. Although I appreciate the additional background and citations. [0] https://blog.dshr.org/2020/05/the-death-of-corporate-research-labs.html https://blog.dshr.org/2020/05/the-death-of-corporate-researc... [1] https://news.ycombinator.com/item?id=24200764 https://news.ycombinator.com/item?id=24200764

fuzzfactor 6y ago
Science takes time. Time is money on different terms for different people. So science costs money. How much science would you like? >the tension between managing scientists with their own pure research goals in such a way that they produce something commercially viable, while still leaving them enough latitude to make important leaps, seems huge. But these problems were always there in the model. What is harder to identify is an exogenous shock or set of shocks that changed the situation that existed from the 1930s until somewhere between the 1960s and the 1980s. Not that hard. During this period the US dollar had been tied to gold at $35 per ounce while Americans and their firms were prohibited from owning or speculating in gold. The strength and stability of the dollar gave confidence in what it would purchase in the future. This is very important if long-term projects are to be considered. Especially if the projects themselves have uncertain outcomes. Which is actually supposed to be intentional for research. It was pretty good knowing that 35 dollar bills in your wallet would get you an ounce worth of gold, even if you were only allowed to own a limited amount of it, and jewelry form. Then one day Nixon comes along in the early 1970's and destroys the currency by fiat. No longer backed by gold, the dollar floats. Like the Titanic. Gold can't float it was the backing, realistically since before biblical times. As rapidly as possible as many Americans as possible and crucially other target dollar holders were only worth about half of what they were a year or two earlier. From the top corporations to the everyday citizen, it was devastating. With wage & price freezes, middle class was bumped right down to lower-middle with downward pressure going forward. The rich were still rich, but only half as rich. So their losses were actually very significant and added more pain to the economy as a whole. Even in some of the biggest corporations the cutbacks were huge. No way they were going to be able to afford research again until they can get as much of it for $35 as they did when it was really working. There was no recovery from the Nixon Recession. The malaise continued and by the 1980's even the most well-insulated from the initial shock had adjusted to the _new normal_. Never again were Americans going to be able to fit enough dollar bills in one wallet to purchase an ounce of gold, not even close. Never again would the dollar be trustworthy enough to accomplish as legendary a form of scientific progress. It would have to be done in some other way on some other terms for labs that take longer to build than the dollar can be expected to remain stable, with no risk of further losing value.

supernova87a 6y ago

Well, I think a major factor is that with less friction for workers to move between countries / industries / companies, it no longer pays for companies to cultivate their talent from within. Either the talent will leave, or it is easy to find some talent by hiring from elsewhere -- by the way, where the work to cultivate and support the talent has already been done for you. And all you're doing is applying the filter / cutting the top candidates to choose from. Back when there was much more friction and lack of info for people to move about between good opportunities, you were tied to your employer and a better bet to invest R&D money in. Not now. Except for a few select industries where there are artificial barriers put in place to prevent this. (Certification, unions, national security, etc)

ben_w 6y ago
> with less friction for workers to move between countries While I agree with regard to companies, I disagree with regard to countries. The equivalent for a nation is education, which would mean every nation would be happy to accept any immigrant who can speak the local language while also doing whatever they can to prevent people leaving. The higher the education, the more this matters, but even K-12 equivalents are ~13 years of state support. Potentially more if they were born somewhere where the state pays for early childhood and p/maternity. Moving country is still hard for most people.
- usrusr 6y ago
  > Moving country is still hard for most people. That doesn't invalidate the assertion that it used to be even harder before in any way.
masklinn 6y ago
> Well, I think a major factor is that with less friction for workers to move between countries / industries / companies, it no longer pays for companies to cultivate their talent from within. The fall of R&D labs also largely correlates with repeated corporate tax cuts: R&D labs were a way for corporations to lower their tax burdens while investing in themselves, which benefited society as a whole (either because the corp produced better value, or because others found avenues for that research). Today they're much better off paying accountants. It's also a bit rich criticising workers when companies were the ones to break the "social contract" and start throwing employees out on the street with little to no warning or recourse.

CTNW 6y ago

Here are some interesting conversations with people with long history of working in R&D labs: https://www.catchingthenextwavepodcast.com/episodes/608-ton-kalker https://www.catchingthenextwavepodcast.com/episodes/608-ton-... https://www.catchingthenextwavepodcast.com/episodes/609-david-millen https://www.catchingthenextwavepodcast.com/episodes/609-davi...

raverbashing 6y ago

Buying off-the-shelf technology works if you want the cookie-cutter solution (which, don't get me wrong, is fine for a lot of things) Now, newsflash for the MBAs, if you just sell the same thing as everybody else, you're just competing on price (and maybe marketing/sales channel). Otherwise you need to get your hands dirty. (Though apparently there's still money in dropshipping to be made, until people realize everything was already on DX/AliExpress) But oh thank to the wise Master minds of Business Administration, everything is on the shelf to buy somewhere and what isn't doesn't exist. R&D? It's a cost center.

criddell 6y ago
> Now, newsflash for the MBAs, if you just sell the same thing as everybody else, you're just competing on price (and maybe marketing/sales channel). You don't think MBAs know this?
- raverbashing 6y ago
  They know, what they don't know is how to get out of that position.

amgreg 6y ago

Bob Metcalfe, self professed “conservative hippie,” inventor of the Ethernet, founder of 3Com, of Xerox Parc fame, has this to offer: > One of the few things that government should do is finance research, because — I have learned from many years — the only companies that can afford to do research are monopolies. Real companies cannot afford to do research other than monopolies. And there are some famous ones. The telephone monopoly — Bell Labs. The computer monopoly — Watson Labs. The copier monopoly — Xerox Parc. And on it goes. In retrospect the monopolies aren't worth it for the research they do. It's nauseating how much we hear about how cool Bell Labs was, but other than the transistor and Unix and the princess telephone, what did we get for all that money? And then for years AT&T as a monopoly sat on innovation — and IBM after that, and Xerox after that — it's just not worth it, so let's kill those monopolies. And if we need research, have it done at research universities. And the other spin I would offer there: as a practitioner of technological innovation, I worry about technology transfer — how do you get technology transferred from the lab into the marketplace. And the best way to do that is with people; and it is the business of universities to graduate people. So let's do our research there, and I think the ARPANet is a great example where government financed the research. Source: https://youtu.be/zKz07DdaKzw?t=3772 https://youtu.be/zKz07DdaKzw?t=3772

criddell 6y ago
I just finished reading Mitchell Waldrop's book The Dream Machines which is largely about J.C.R. Licklider and it has a lot of stories about the things Metcalfe is talking about during the 60's and 70's and into the 80's. It's a long, detailed book and I recommend it. After finishing the book it made me feel like progress has slowed tremendously. Look at the changes from 1960 to 1970 or from 1970 to 1980 and compare that to 2010 to 2020. The last decade produced lots of incremental improvements but where are the giant technological shifts? I was born in 1970 and if I look back over my life, the giant change was going from a non-networked world to a networked world. I think it's similar to how my grand parents could remember the world before and after commercial flight or how my great-grandmother remembered the arrival of automobiles. I wonder what it is my kids will point to 40 years from now. A colony on the moon or Mars maybe?
- 6y ago

Ozzie_osman 6y ago

> No one is quite sure why the lab model failed. It’s obvious that a scenario where Xerox is paying scientists to do research that ultimately mostly benefits other firms, potentially even competitors that help to put it out of business, could never survive. I don't agree with this. The lab companies had gotten really good at attracting some of the smartest people (in academia and elsewhere), designing models to motivate them to invent while giving them tremendous latitude, and then profiting from their discoveries. See people like Wallace Carothers[1], a chemist that DuPont hired out of Harvard and let him run a lab. He ended up inventing nylon which was obviously tremendously profitable for DuPont. So the model did work. I don't have data for this, but I think what actually happened was just a lot more short-termism as investors, companies, and executives focused more and more on short-term profits, so large recurring R&D expenses that might require longer horizons to recoup investments made less sense. [1] https://en.wikipedia.org/wiki/Wallace_Carothers#Move_to_DuPont https://en.wikipedia.org/wiki/Wallace_Carothers#Move_to_DuPo...

micheljansen 6y ago

I worked at a large industrial R&D lab around 2010 and it was awesome. It was not pure R&D, because the lab was funded by various business lines as “clients”, which sometimes came with strings attached, but as a model it worked pretty well. By my estimation about half of the work was real fundamental research with no obvious immediate market or clearly guaranteed business value. There was some pressure to “sell” this work internally after the fact, but that usually ended up making it better. The other half of the work was more directly commissioned by various business lines. They were responsible for product development, but would enlist us to look into 3rd wave innovation and technology (which we would be experts in because we spent the other half of our time on it). The mixed model kept the lab grounded in reality, but also created enough freedom to do real R&D.

LatteLazy 6y ago

Corporations are basically unable to do R&D for a whole bunch of reasons. That's why we have all sorts of start ups and angle investment instead. Once an idea is half proven, then corporations can come in, finance it, run it effectively and market it etc. While also paying off the people actually taking the risk. This is a much better more efficient system for everyone.

thatcat 6y ago
How is that better for R&D scientists and engineers? They now have to come up with a possible technology progression, secure funding, build out the tech using some secondary business model, and then convince the corp to buy their company. It only seems more efficient for the corporation.
- LatteLazy 6y ago
  They actually get rewarded when they succeed. The man who invented artifical diamonds, a billion dollar industry, got 10usd savings bond. Plus no bureaucracy. https://en.m.wikipedia.org/wiki/Tracy_Hall https://en.m.wikipedia.org/wiki/Tracy_Hall Also, I imagine that getting funding from a pool of VCs (looking to fund long shots, with some expertise in the field maybe) is easier than from a single CEO who happens to run the place and has to justify all this on quarterly earnings statements etc...
  - aspaceman 6y ago
    But what if they want to research something that will never, ever be profitable.
    - als0 6y ago
      Isn’t that what academia is for?
    - LatteLazy 6y ago
      Well they'd never be given that chance under either the corporate or the venture models. That's why governments or charities are for I guess?

dehrmann 6y ago

Part of the fall of the R&D lab is high-profile inventions like the silicon transistor, GUI, and digital camera that the corporation failed to capitalize on. Part of why you do all this research is to find the next big thing, but if you can't see the potential of these inventions and turn them into businesses, what's the point?

andrekandre 6y ago
remimds me of... https://www.amazon.com/My-years-xerox-billions-nobody/dp/B0006C0O4O/ https://www.amazon.com/My-years-xerox-billions-nobody/dp/B00...

randcraw 6y ago

I think most of the changes to corporate R&D in the past 30 years closely reflect the shift in focus toward short term profits, thereby reducing stockholder will to invest in high risk new new things like quantum computing or single cell genomics. At the same time, the cultural rise of tech startups has encouraged corporate R&D heads to farm out much of their interest in cutting edge tech to underwrite those startups from afar. By investing in startups from funds separate from mainstream R&D, it's easier to lay blame for failures outside the internal R&D organization. I've worked in big pharma R&D for 15 years and gov't/military R&D for 20 years before that. Increasingly I see the forms of R&D diversifying and extending outside the org's primary lab, just as 100% of DARPA projects are fielded external to the DoD labs. As external R&D investments and partnerships rise, it's little wonder that primary R&D labs shrink and their focus shifts to better serve short term RoI like improving / debugging internal processes and inefficiencies.

thu2111 6y ago

This is a good article but I'm not sure it completely nails it. Firstly, it's not clear the industrial R&D lab has actually fallen. The article starts to engage with this at the end but doesn't really do so properly. It's easy to find examples of firms doing large scale expensive R&D: - Many firms making big investments in AI - Self driving cars - SpaceX reusable rockets, plus all the other Musk firms - Advanced database technologies (e.g. at Microsoft, Google, Amazon) - Advanced compiler R&D (Oracle/GraalVM) - The huge sums thrown around in pharma R&D - Advanced graphics R&D is driven primarily by video game firms - Intel/AMD/ARM/etc in CPU tech - Tons of R&D in oil and gas and those are just examples we're most familiar with. Are these firms running "labs"? No, not in the sense of Bell Labs. That's because this model is not the most efficient model available, and has thus mostly been phased out. Corporate R&D is much better integrated with actual product development than the standalone lab model captures. In the most successful cases we don't even really perceive it as an R&D lab because the entire company is doing R&D constantly, in a completely integrated manner. Google is perhaps the clearest case of a company that has completely integrated R&D with its operations. There is an org called Google Research but IIRC it existed mostly for a trophy hire and isn't especially important: the bulk of actual research is/was done by product teams as an integrated part of their development process. There is no lab, yet at the same time, the lab is everywhere. The second aspect is that it doesn't discuss the role of personality or personal visions of CEOs at all. Yet this is often critical to the decision to do R&D. Why does Google research AI? It's not because it's an obvious, slam dunk move. Google has been doing ML research since the very start of the firm, but other search engine firms didn't. Why did Google research Google Glass? Or self driving cars? Google researches these things because Larry and Sergey thought it was cool. Page has even claimed in the past Google was founded specifically to do AI research (which isn't really right, but whatever). What about SpaceX? Tesla? The Boring Company? Neuralink? These firms exist and do R&D because Elon Musk is a futurist. He doesn't do R&D for economic reasons, let alone for regulatory reasons. He does it because he wants to invent the future. But this type of personality is rare. Our society is not kind to futurists. It doesn't really value them. They're seen as strange or dangerous; the story of inventing new technologies is usually a story of being attacked on all sides, by journalists or politicians or regulators or all of them at once. That's why most companies set up "innovation teams" - the exact opposite of the approach taken by the most innovative companies. They're little silos where people are taken and put in a corner, then told "go innovate". The non-technical CEO has no interest in the innovation team and likely never talks to them directly, let alone gives them direction or ideas. The team members know this and usually just mimic whatever trends they see around them (IoT, blockchain, AI, cloud, etc). Their projects are usually doomed from the start. In the end, for research to be valued people with the power to deploy it must be excited by technology, not intimidated by it. And that isn't most corporate or government leaders today.

fastaguy88 6y ago

The argument being made here, that industrial research labs have disappeared because they did not produce enough return on investment, ignores competing sources of ROI. Today, the easiest way to make a lot of money is in finance, not discovering new things. Other stories on HN have bemoaned how Boeing has destroyed itself by shrinking engineering and expanding cost cutting. As is pointed out in another comment, if the Fed is subsidizing the stock market, finance is the place to be. Research not so much.