Every Generation Finds a New Way to Innovate

Adventures in research funding

Illustration: Harry Campbell

How do you fund a bunch of researchers, given that little of their work will be readily marketable and the real breakthroughs will often benefit your competitors more than yourself?

Through the years, different funding models have come and gone. At the end of the 19th century there was what I'll call the Marconi model. Marconi was an amateur tinkerer when he invented radio. He went on to become a legendary entrepreneur, creating a number of companies to implement his invention. Benz, Birdseye, Sikorsky...a lot of innovators started companies on the Marconi model. Sadly, it doesn't work very well today. Amateurs have been outclassed, and teams have mostly replaced individuals.

While Marconi was tinkering with radio in Italy, Thomas Edison was using the profits from his inventions to build the first stand-alone industrial research laboratory, in West Orange, N.J. It became self-sufficient through the selling and licensing of its patents. You can still visit that lab to see the apparatus, beakers, and jars of chemicals redolent with the smells of yesteryear. But like those old artifacts, the Edison model of funding research has been put on the shelf. Most organizations that tried that approach have been forced to augment their income in other ways.

Next came the "Bell Labs model" of great industrial research labs that were contained within and funded by the profits of large corporations. Unfortunately, most of them—at companies like IBM, Xerox, HP, and Intel—have now disappeared altogether or devoted themselves to directed development instead of research. Senior management has become skeptical about the return on investment of long-term research, especially when competitors without research divisions seem to thrive regardless.

Along came World War II with a new model for research. An unprecedented burst of technical innovation gave us radar, computing, electromechanical cryptography, and the Manhattan Project—an existence proof of what can be done when everyone works extremely hard for a common goal under an existential threat. Shortly thereafter, the Cold War promoted some of the same government focus on research funding. But, as aerospace expert Norman Augustine has observed, it often takes longer today to get approval for a project than it did to fight the entire world war.

This led to the "Internet model," a wonderful example of government/industry cooperation. Research was funded and managed by government and conducted all over academia and industry in a shared environment. I often think that the Internet could not have come to its present form without the government acting as a central funder and gatekeeper. (The evolution of GPS had some of these same characteristics.) Unfortunately, like the others, this model appears to be broken today. The Defense Advanced Research Projects Agency, which led the Internet project, now focuses almost exclusively on military applications.

Recent history has also brought us the "MCC model" (for the Microelectronics and Computer Technology Corp.)—a research lab funded as a consortium of member companies. On paper this looks like a great idea—sharing expenses, risks, and rewards across a number of institutions. In practice, however, it has fallen apart beneath the quibbles and competing objectives of its members.

The newest model, the Silicon Valley phenomenon—a lethal mix of a great research university, empowered graduates, and hungry venture capitalists—has been extremely successful, although largely by capitalizing on existing research. All over the world, cities and states have tried to duplicate Silicon Valley, and although a few have been quite successful, none has neared the output of the original. I've sometimes felt that there must be some special innovation-inducing elixir in the air out there.

Today fundamental research in technology is almost the sole province of academia and is almost exclusively paid for by government. As my short history is meant to illustrate, the funding models have changed over the years. They all worked for a while, and then they didn't. Perhaps it's all a cycle that will repeat, and today there is some young Marconi in his or her basement, experimenting with communication via quantum entanglement. But maybe not.

This article originally appeared in print as "Adventures in Research Funding."

About the Author

Robert W. Lucky’s long career in research leaves him particularly well qualified for this month’s column. The holder of 11 patents, Lucky worked for many years at Bell Labs before becoming vice president for applied research at Telcordia Technologies, in Piscataway, N.J. In 1972 he was made an IEEE Fellow “for contributions to the theory and practice of data communications.”

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