Where Have You Gone, Bell Labs?(businessweek.com)
businessweek.com
Where Have You Gone, Bell Labs?
http://www.businessweek.com/magazine/content/09_36/b4145036681619.htm
21 comments
I think you have to go back farther than the 2000s for the real reason of its decline. The government split up the telecoms because they were monopolies, and that killed the cash cow that was powering all this research. It seemed bad at the time, but the litany of innovations that came about may have made it worth the extra price for long distance calling.
Today I don't think anyone is looking for Bell to come back, but for Microsoft, Google, Apple, IBM, Accenture, GE, Boeing, Lockheed, Oracle and other companies with huge cash stockpiles and big teams of scientists to get into more of a pure research role.
Today I don't think anyone is looking for Bell to come back, but for Microsoft, Google, Apple, IBM, Accenture, GE, Boeing, Lockheed, Oracle and other companies with huge cash stockpiles and big teams of scientists to get into more of a pure research role.
Oh I agree. When a company has such a long storied history like Lucent then there can be many butterfly effects. It's just lately (past 2 years), the financial picture for Alcatel-Lucent has gotten really bad.
Another factor for such a huge decline was it was at a speculative peak in the 2000s. Investors figured that as the internet switched from text to rich media (video, voip, etc), there would be huge bandwidth demands. A little new gadget called the cell phone was also on the rise. The telecommunications infrastructure would have to be laid reaping huge profits for ALU, they all figured. The stock price got pumped up and when, the company could not deliver...
Another factor for such a huge decline was it was at a speculative peak in the 2000s. Investors figured that as the internet switched from text to rich media (video, voip, etc), there would be huge bandwidth demands. A little new gadget called the cell phone was also on the rise. The telecommunications infrastructure would have to be laid reaping huge profits for ALU, they all figured. The stock price got pumped up and when, the company could not deliver...
I think the Internet has hurt our economy and allowed a small part of the population with the know how to make gains from it. Though overall it's a small portion of the total population - how many Googles/Yahoos are there and how plentiful are their jobs - comparing to the industrial age? Also, many industries have been hurt by the Internet as what we once paid we now pay nothing for.
I obviously love the Internet and it's disruptive nature, but do feel it is a small part of the pie that has hurt our economy.
I obviously love the Internet and it's disruptive nature, but do feel it is a small part of the pie that has hurt our economy.
Yes, the centralized research centers of the past are dwindling - giving way to a new "open innovation" model. However, the article attributes too much to these silos the successful spawning of industries in the U.S.
I would argue that it was the open ecosystems around these research labs (e.g. silicon valley, cambridge area, etc) that are the true catalyst. These clusters continue to these day and the spirit continues. The reach is now more global.
I would argue that it was the open ecosystems around these research labs (e.g. silicon valley, cambridge area, etc) that are the true catalyst. These clusters continue to these day and the spirit continues. The reach is now more global.
Who is doing basic research though? Assume there is a class of ideas which will take 10-20 years to even result in a marketable product, yet the applications will be mindblowing compared to anything someone can develop in <5 years. The current startup model is not going to even touch any of those ideas.
Who is doing basic research though?
Microsoft, for one, invests truly staggering amounts of money in basic research. So does the American defense industry -- for entirely different scales of "staggering".
Microsoft, for one, invests truly staggering amounts of money in basic research. So does the American defense industry -- for entirely different scales of "staggering".
Rob Pike wrote a good analysis of the situation in 2000: "Systems Software Research is Irrelevant" (http://doc.cat-v.org/bell_labs/utah2000/).
Thanks for depressing me ;-) -- by and large we're in the same sorry situation 9 years later, aren't we?
The mainstream adoption of the web has carried some breakthroughs with it, but it's also held others back (witness the problems caused by people still using IE6). It's nothing new, though - a lot of seemingly novel ideas getting attention now date back to the 70s. The software industry has always been about standing on the toes of giants.
Developing ideas take so long because of the present academic ownership of research. Is there a reason why research is a monopoly of academic bureaucrats called PhDs? There is no reason for this. The best reasearchers do research for the love of it not for career. Best researchers are independent.
Freeing the research from academic domination will lead to immense advance in our knowledge. Wikipedia showed that freeing the organization of the known knowledge from the monopoly of the academic middlemen is a good thing. Let's do the same for the unknown knowledge. A research factory employing a huge number of unskilled workers trained to do one thing well (instead of an unnecessary and long academic education) will solve research problems faster and cheaper. Let's eliminate the middlemen in research.
I wrote about this research factory here.
http://zeynel1.wordpress.com/2009/08/29/research-factory/
Freeing the research from academic domination will lead to immense advance in our knowledge. Wikipedia showed that freeing the organization of the known knowledge from the monopoly of the academic middlemen is a good thing. Let's do the same for the unknown knowledge. A research factory employing a huge number of unskilled workers trained to do one thing well (instead of an unnecessary and long academic education) will solve research problems faster and cheaper. Let's eliminate the middlemen in research.
I wrote about this research factory here.
http://zeynel1.wordpress.com/2009/08/29/research-factory/
Stopped after first paragraph. The kind of people who have jobs at Bell Labs and the 6.7m unemployed are probably pretty disjoint. Also, the metaphor that jobs need to be created by large institutional spending is silly. Private institutions should spend money to make money. Public institutions should spend money to make the former possible - by investing in education and training, so our citizens are employable.
Maybe you should read a little more. The point is that any kind of research that doesn't have immediate applicability is being drastically reduced in the private sector, and yet that basic research has some of the highest ROI over the long term. The booming tech industries of today are build on the R&D spending of decades past.
I don't think anyone can conclusively predict what effect this will have on the job market, or America's position in the global marketplace in decades to come, but it stands to reason that Wall Street's increasing focus on short-term profits is going to have some long-term effects. Do you disagree?
I don't think anyone can conclusively predict what effect this will have on the job market, or America's position in the global marketplace in decades to come, but it stands to reason that Wall Street's increasing focus on short-term profits is going to have some long-term effects. Do you disagree?
...Wall Street's increasing focus on short-term profits...
I'd love to see evidence of this fact.
To me, it certainly isn't obvious. There are various companies and products focused on profits at various stages. VC focuses on the long term. Assorted securitized consumer loan products (mortgage backed securities, etc) are also long term investment. HFT companies focus on the short term. There are various medium term investments as well.
Have you any evidence that there has been a shift from long term to short term investments?
[edit: just curious, why am I being downmodded?]
I'd love to see evidence of this fact.
To me, it certainly isn't obvious. There are various companies and products focused on profits at various stages. VC focuses on the long term. Assorted securitized consumer loan products (mortgage backed securities, etc) are also long term investment. HFT companies focus on the short term. There are various medium term investments as well.
Have you any evidence that there has been a shift from long term to short term investments?
[edit: just curious, why am I being downmodded?]
VC focuses on the long term? Really? Where did you get that idea? What VCs do you know that aren't looking for 3-5 year complete "time horizons" for "liquidity events?"
"Stopped after first paragraph."
Too bad.
"The kind of people who have jobs at Bell Labs and the 6.7m unemployed are probably pretty disjoint."
The point of the article was that small subset of people who have jobs at research labs create a disproportionate amount of jobs and wealth. The author was not implying that basic research jobs could generate millions of jobs on their own. However, the results of the basic research eventually result in the creation of millions of jobs (e.g. invention of transistor leading to an explosion of jobs in the computer industry. etc.). The article's point is that the only way we are going to be able to generate enough high paying jobs to sustain our standard of living and position in the world is through the investment into basic research.
Too bad.
"The kind of people who have jobs at Bell Labs and the 6.7m unemployed are probably pretty disjoint."
The point of the article was that small subset of people who have jobs at research labs create a disproportionate amount of jobs and wealth. The author was not implying that basic research jobs could generate millions of jobs on their own. However, the results of the basic research eventually result in the creation of millions of jobs (e.g. invention of transistor leading to an explosion of jobs in the computer industry. etc.). The article's point is that the only way we are going to be able to generate enough high paying jobs to sustain our standard of living and position in the world is through the investment into basic research.
The last administration in Washington FOUGHT against science: Stopping stem cell research, blocking basic research into global warming (and solutions), etc.
California tried to go it alone on stem cells, at least.
We get what we vote for.
California tried to go it alone on stem cells, at least.
We get what we vote for.
It always bothers me when people complain about the number of jobs. Saying we need to create jobs to end the recession is like saying we need to create supermarkets to end the famine.
To google.
If you look at ALU stock mid 2000, it had at a high of over $80. It currently is at 3.80ish with a huge come back from a low of $1.09.
Alcatel and Lucent merged in Dec. of 2006.
In 2007, it lost 3.5 billion on about 18B of sales. In 2008 it lost 5B in 2008 on about 17B of sales. It has had about 4B in cash (&equivalents) and is providing itself with runway to get back into the black with asset sales.
Since the merger, there have been multiple lay off initiatives to try and stop the bleeding. (Not pansy 5-10% cuts, we're talking about deeper broader strokes)
Recently, it has begun to do better but is still rolling deep with legacy products and losses.
ALU is fighting for it's life. Facing these conditions, most companies would have severely cut a 'no short term profit' R&D division.
The cherry to top off this Article is that ALU is a French company with Lucent and Bell as its American subsidiaries.
Edit: Grammar and full disclosure: I am an ALU employee.