Comment by hlfshell
4 months ago
What's missing from this explanation is that the corporate tax rate was also much higher, but R&D dramatically cut down profit that would be taxed and was taxed lower. So large corporations like Bell Labs and co would basically say "do we give the government X in taxes, or do we spend X on research?". They chose research, so we got the technology that powers our world.
That, combined with stock buybacks and the general take over of Friedman-economics resulted in a far more focused short term thinking and outsourcing research as much as possible due to uncertain horizon risks.
Exactly.
These days you're better off giving it to a university with strings attached. Sure, they might piss a bunch of it away, but when you account for the dollars on the subject you care about after taxes are leeched out it's still more efficient than building out research within the confines of a for-profit entity that gets taxed at such.
This is why we no longer have corporate research labs and damn near every university is bristling with BigCo funded stuff.