I'm a Bell alum. First off: It really was an amazing place. The guy across the hall won the Nobel while I was there, but even going to lunch could result in learning about state-of-the-art in something or another. The data rate of average discussions was quite high; Both parties usually had PhDs.
> What were the reasons why it started to lose that magic?
I could write a book on this. Much of the problem is that the metric-of-success changed and the organization was not prepared/couldn't make the transition. Measuring output in $$ might be good for biz, but is not good for certain types of R&D, nor is it good when it comes time for annual review. Eventually, many of the young capable people realized that they were going to make much more money by leaving Bell, and as the meltdown in 2001-3 showed, they weren't even going to sacrifice "the stability of a big company". (There was terrible turmoil around that time. The fact that developers were going to turn Holmdel into condos threw many alums for a loop. It was quite a loss.)
A very good book could be written on the topic, is one of the most sad tragedies of the 20th century.
All my information is second hand, and is a very complex topic, but basically when AT&T spun off Lucent, and they tried to more directly monetize the innovations they were making, the whole thing started to break down, management sucked, researchers started to bail out, and it became a vicious circle.
My guess is that what happened was the benefits of the monopoly like status vaned off.
We saw that here in DK when they privatized the state controlled telco here.
For a number of decades I guess since the 30s and up till around the eighties those organisations where stable enough with few enough "paradigm" shifts in technology that it would make sense to maintain an R&D division with a long outlook.
But after the internet revolution it's my guess that they couldn't maintain the 10 year horizons they often had the luxury to work within. The competition is now constant and the "innovation cycles" narrowed in which means that you will miss out on revenue each paradigm creates.
I think this is why ultimately places like Bell Labs and Rank Xerox makes no sense anymore.
The irony of all this is of course that in some sense it slows innovation down because each new trend is being sucked dry before the industry moves on.
"Bell Labs (unlike today’s technology companies) had the luxury of serving a parent organization that had a large and dependable income ensured by its monopoly status."
Essentially deregulation of the phone market was a major contribution to the decline.
Similar in a way to what a profitable company can do that is not a pure monopoly (like google or apple).
Companies spend differently depending on competition or profitability, that's obvious. But what's not really obvious is that with a company like Apple or Google how much money they can spend or waste AND they still eak out that large profit. If you make money, you inevitably spend on things that you wouldn't if you were in a lower margin or less certain industry.
And in addition to a predictable revenue stream, the monopoly made Bell research more visible because the 1956 Consent Decree prevented Bell from entering other industries, leading them to publish or give away their inventions rather than holding them for maximum profit. (the transistor predates the Decree, so it may have been partly cultural)
I'm a Bell alum. First off: It really was an amazing place. The guy across the hall won the Nobel while I was there, but even going to lunch could result in learning about state-of-the-art in something or another. The data rate of average discussions was quite high; Both parties usually had PhDs.
> What were the reasons why it started to lose that magic?
I could write a book on this. Much of the problem is that the metric-of-success changed and the organization was not prepared/couldn't make the transition. Measuring output in $$ might be good for biz, but is not good for certain types of R&D, nor is it good when it comes time for annual review. Eventually, many of the young capable people realized that they were going to make much more money by leaving Bell, and as the meltdown in 2001-3 showed, they weren't even going to sacrifice "the stability of a big company". (There was terrible turmoil around that time. The fact that developers were going to turn Holmdel into condos threw many alums for a loop. It was quite a loss.)
A very good book could be written on the topic, is one of the most sad tragedies of the 20th century.
All my information is second hand, and is a very complex topic, but basically when AT&T spun off Lucent, and they tried to more directly monetize the innovations they were making, the whole thing started to break down, management sucked, researchers started to bail out, and it became a vicious circle.
Ah. Thank you.
If anyone has any more information about the decline of Bell Labs, it would be deeply appreciated.
http://www.goodreads.com/book/show/438022.Optical_Illusions
My guess is that what happened was the benefits of the monopoly like status vaned off.
We saw that here in DK when they privatized the state controlled telco here.
For a number of decades I guess since the 30s and up till around the eighties those organisations where stable enough with few enough "paradigm" shifts in technology that it would make sense to maintain an R&D division with a long outlook.
But after the internet revolution it's my guess that they couldn't maintain the 10 year horizons they often had the luxury to work within. The competition is now constant and the "innovation cycles" narrowed in which means that you will miss out on revenue each paradigm creates.
I think this is why ultimately places like Bell Labs and Rank Xerox makes no sense anymore.
The irony of all this is of course that in some sense it slows innovation down because each new trend is being sucked dry before the industry moves on.
From the article:
"Bell Labs (unlike today’s technology companies) had the luxury of serving a parent organization that had a large and dependable income ensured by its monopoly status."
Essentially deregulation of the phone market was a major contribution to the decline.
http://en.wikipedia.org/wiki/Bell_System_divestiture
Similar in a way to what a profitable company can do that is not a pure monopoly (like google or apple).
Companies spend differently depending on competition or profitability, that's obvious. But what's not really obvious is that with a company like Apple or Google how much money they can spend or waste AND they still eak out that large profit. If you make money, you inevitably spend on things that you wouldn't if you were in a lower margin or less certain industry.
And in addition to a predictable revenue stream, the monopoly made Bell research more visible because the 1956 Consent Decree prevented Bell from entering other industries, leading them to publish or give away their inventions rather than holding them for maximum profit. (the transistor predates the Decree, so it may have been partly cultural)