Neutering Science

I wonder how much of the Gross Domestic Product can be attributed to work that came from Bell Labs. Just think of the transistor and the electronics revolution. Yes, I know that people at Purdue University were following a parallel track, but I suspect that industry would have been quicker to recognize the importance of something coming from Bell Labs.

Flush with monopoly profits the old AT&T subsidized pure for science, the sort of thing that has no interest for corporate management — at least if they have to pay for it. AT&T broke up and spun off Bell Labs as part of Lucent, which has been nothing short of a disaster.

Now Lucent, which is about to be part of a corporate merger, is giving the scientists of Bell Labs in corporate marching orders, which is the direct opposite of basic science. Invent something to make us a profit — quick!

Here are my extracts from a recent Wall Street Journal article on the subject.

Silver, Sara. 2006. “With Its Future Now Uncertain, Bell Labs Turns to Commerce.” Wall Street Journal (August 21): p. A 1.

“Jeong Kim took over last year with a direct plan for saving the storied laboratory: Make it profitable. Among his first moves, he set more of its scientific stars to work on breakthrough technologies that could turn quickly into businesses — the opposite of the pure research many live for. Each of these projects is expected to make back six times what it spends on research. Those with the biggest financial potential get the most funding. Researchers often condense their work into eight-minute PowerPoint presentations. Mr. Kim also seeks more government research grants and is aiming to speed the transformation of technology into products by seeking corporate partners and venture capital.”

“Lucent is planning to merge with Alcatel SA of France, a company that doesn’t do the kind of fundamental research that made Bell Labs famous. “Bell Labs does research with a big “R”; Alcatel does research with a little “r,” says Niel Ransom, Alcatel’s chief technology officer until 2005. The deal has stirred anxiety among scientists about what will happen if Alcatel, whose shareholders will own 60% of the combined company, asserts control. Some Bell Labs scientists, worrying that their jobs could be among the 9,000 expected to be cut after the deal is completed, are scouting for new work.”

“Bell Labs produced a series of seminal inventions, including the solar cell, the electronic microphone and the digital computer. Scientists were free to pursue projects that sparked their interests, even ones their supervisors discouraged. As a result, 11 Bell Labs scientists have shared in six Nobel prizes, including one for proving the Big Bang theory.”

“The 1984 breakup of AT&T, followed by the 1996 spinoff of Lucent, ushered in an era of uncertainty for the labs. Lucent slashed funding after the technology and telecommunications bubble burst and demand for Lucent’s products shrank. To stave off bankruptcy, it cut tens of thousands of jobs through buyouts and layoffs and by spinning off or selling units such as Agere, Avaya and Optical Fiber Solutions. It eliminated entire departments at Bell Labs, such as those working on statistics, psychology and economics. By 2003, Bell Labs’ research budget had fallen to about $115 million, less than a third of its mid-1990s level of $350 million, current and former managers estimate. It has since stabilized. The number of researchers fell to just over 1,000 in 2003 from 3,000 in 1999, with 500 moving with divisions that were spun off or sold. Entire hallways on the Labs campus are dark.”

“In addition to his rules on presentations and investment returns for breakthrough technologies, Mr. Kim eliminated a division of labor in which 40% of scientists focused on basic research and the rest tried to turn discoveries into technologies to sell or license. He cut costs by opening and expanding branches in Dublin, Beijing and Bangalore, India.”

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