Subject: How Was Bell Labs Funded?

• In the article Making every researcher seek grants is a broken model (URL)

reference was made to Bell Labs as follows:

“Funding should go in a single block to a relatively large research organization of, say, hundreds of scientists. This is how some of the most effective, transformative labs in the world have been organized, from Bell Labs to the MRC Laboratory of Molecular Biology. It has been referred to as the “block funding” model.”

. . .

“Side note: the distinction I’m talking about here, between block funding and PI funding, doesn’t say anything about where the funding comes from or how those decisions are made.

. . .


“The block organization allows for specialization: researchers can focus on research, managers can manage, and one leader can fundraise for the whole org.” [Not how Bell Labs worked, no one manager did this, see below]

Subject: How Was Bell Labs Funded?

“When The AT&T Monopoly Held Sway over U.S. telecommunications, R&D managers at Bell Labs and Western Electric were assured steady funding that allowed them to look forward 10 or 20 years—the kind of long view that truly disruptive technologies need in order to germinate and thrive. That combination of stable funding and long-term thinking produced core contributions to a wide variety of fields, including wireless and optical communications, information and control theory, microelectronics, computer software, systems engineering, audio recording, and digital imaging. Accumulating more than 30 000 patents, Bell Labs also played host to a long string of scientific breakthroughs, garnering six Nobel Prizes in physics [see sidebar, "Bell's Nobels"] and many other awards.

The funding came in large part from what was essentially a built-in “R&D tax” on telephone service. Every time we picked up the phone to place a long-distance call half a century ago, a few pennies of every dollar—a dollar worth far more than it is today—went to Bell Labs and Western Electric, much of it for long-term R&D on telecommunications improvements.”

Source: The End of AT&T - IEEE Spectrum (URL)

Richard Matula [Member of the Technical Staff, MTS, Bell Labs in the 90s]

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There is no shortage of complaints about the existing "grant” model, but try as I may, finding the “best” way to spur innovation remains elusive.

I am wondering, however, if we could set basic parameters and create innovation “corridors” by bringing together the “Triple Helix” of govt, private business, and academia: https://www.lianeon.org/p/the-triple-helix-of-innovation

If, for example, we switch from a student loan model to an ISA/equity model, universities will specialize and provide more affordable and rigorous coursework. They will also have an incentive to work closely with private businesses who will (hopefully) hire graduates. Private businesses would partner with unis to gain early access to the best talent.

If the government were to provide block grants to research universities, leaving them to decide how to best allocate the funds, it could form the “perfect” fusion between entrepreneurship, talent, and capital that could be very powerful.

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