Bell Labs and Xerox PARC are the poster children for successful corporate R&D labs, but I wonder if, to some extent, they were in the right place at the right time? The advent of modern computing and digital telephony provided rich soil for impactful research.
I worked for a large R&D lab a while back after completing my PhD, but the organization turned out to be completely directionless. Funding went to snake-oil salesmen who charmed executives with flashy proposals that they could never deliver on. I don't think there were any major successes during the time I was there, or since.
They also paid their Bay Area researchers about half the salary of FAANG senior engineers, so they really couldn't retain top talent. This is the downside of being a corporate R&D lab that's not funded by a near-monopoly.
I think the largest corporate R&D lab at the moment must be Huawei. Last time I've heard from someone working there, they have more than 10K PhDs working for them and even only half of them working on R&D that is really massive. It also being helped by the fact its founder is an ex military R&D engineer.
The silver lining is that since doing R&D is necessary for progress and innovation, it will happen elsewhere. I foresee that the majority of R&D exercises will move to university and industry sponsored research will be the norm rather than the anomaly. This is also fueled by the fact that graduate students' stipends are much much lower. You did mention that in Bay Area the researchers are paid half of the FAANG senior engineers. In most developed countries, the salary of university graduate students probably a quarter (4x lower) of the company's researchers. The developing countries has the worst by being paid 10x lower than the BAY Area researchers.
Google has a ton of PhDs, too, but the vast majority don't do R&D. I'm guessing the same is true at Huawei.
Anecdata: My team of 12 or so at Google had (I think) 4 PhDs, and what we did was the usual "turn one proto into another" Google work that barely required a CS undergrad degree, to say nothing of a PhD. My wife has a PhD, works as a software engineer, and also does pretty routine data plumbing work.
I too worked in an R&D lab after my PhD. Which projects to fund was always a problem. No-one knows which projects are going to succeed. Do you stick with a group that has been making steady progress for 5 years or switch to something else that sounds more revolutionary?
Under different leaders my lab flip-flopped from "blue sky, do what interests you" phases to "we need to focus on value" phases.
Neither produced anything revolutionary. But the blue skies phases did produce some useful work.
Research is a risk. Funding it is like gambling. Don't bet more than you are prepared to lose.
> Bell Labs and Xerox PARC are the poster children for successful corporate R&D labs, but I wonder if, to some extent, they were in the right place at the right time? The dawn of modern computing and digital telephony provided rich soil for impactful research.
I think this is part of it. But als,o there were just so few companies who were doing serious R&D for technology. Breakthroughs were new and unique. These days there are so many different companies constantly innovating that breakthroughs are the expectation/norm.
Yes there are two things that drive innovation, competition and new technology/timing.
Many of these companies that have beneficial monopolies/oligopolies for a while they know if they don't innovate others still will even if there are no major competitors at that time. They know timing/technology capability, hardware, software, design or other are at a point where they must progress.
Amazon is a great example of this with how much they reinvest in research and development. It would hard for another non engineering/product innovation company to compete. Right now the Amazon market leading position is beneficial, in some cases they over step, but mostly it is beneficial. Google might be another. Both have flashes of abusing their position but mostly they are still innovating and pushing forward. These companies also inspire small startups to make products that are extended research and development divisions and select the best outcomes. While some acquisitions are bad, mostly the fact that being purchased by one of the larger companies shows they are into R&D and it leads to more of it.
ISPs and banks for instance are two areas where they are stifling innovation, growth and ISPs in particular our network suffers due to this monopoly/oligopoly grip they have on this needed utility.
Bell Labs was back in a time also that had more engineer/product/creative people with leadership roles and the ability to influence the power structures. So direction has changed quite a bit with that. R&D is very hard to justify to the value extractors even if the value creation is clear or maybe isn't as obvious yet.
The mere fear of missing out on technology/timing and potential competitors is the only thing that drives innovation at all. Once monopolies/oligopolies start to use their power position for holding others back by stifling competition rather than them moving forward and using their power position as a booster for product/innovation value creation, that is when anti-trust is needed.
Microsoft for instance in the 90s started to abuse their position, so the anti-trust started. What the world got out of that was Apple resurgence (even got a loan from Microsoft at zero hour of $100 million to stay afloat), Google, Amazon, etc. It even turned out good for Microsoft as they are a much better company today, recognizing innovation over limiting competition is the way forward.
Without the mere fear of being broken up, Microsoft slowed.
With the anti-trust case, it slowed them down just enough to allow competition to get closer.
Anti-trust is the blue shell in Mario Kart.
Anti-trust blue shell is very much needed if the main player gets too far ahead and abusing their position, that game is no fun. Anti-trust is the rubber band AI system that keeps the game competitive [1].
Additionally, monopoly/oligopoly are bad when the value creators (engineering, product, creative) lose power to the value extractors (business, finance, marketing) in a company.
It really isn't the fault of value extractors to extract the most value from the created value, but if there is no competition or balance between creation/extraction, that leads to stagnation on value creation and eventually more power plays that abuse market leading positions to stifle competitors. Ultimately we all lose when that state is entered.
Here's a great quick point by Steve Jobs about product stagnation and the managers/business side and how they can run amok if not controlled to allow value creation to continue, and how monopolies or problems that arise when only the business/managers are in charge. [1]
> It turns out the same thing can happen in technology companies that get monopolies, like IBM or Xerox. If you were a product person at IBM or Xerox, so you make a better copier or computer. So what? When you have monopoly market share, the company's not any more successful.
> So the people that can make the company more successful are sales and marketing people, and they end up running the companies. And the product people get driven out of the decision making forums, and the companies forget what it means to make great products. The product sensibility and the product genius that brought them to that monopolistic position gets rotted out by people running these companies that have no conception of a good product versus a bad product.
> They have no conception of the craftsmanship that's required to take a good idea and turn it into a good product. And they really have no feeling in their hearts, usually, about wanting to really help the customers.
Market leaders should always fear the anti-trust blue shell, when that fear is gone the game is not competitive and we all lose.
I think the nature of research is to create the chance to be at the right place at the right time. Bell Labs and PARC in particular, many of their inventions do not seem to be inevitable extensions of what came before.
Of course, it's also possible to run a research lab poorly and do nothing of value, naturally I don't know anything about your experience.
> but I wonder if, to some extent, they were in the right place at the right time?
It's certainly true for PARC, which owes its success in large part to the ARPA research community that preceded it. Many of the same people from that community came to PARC when in the beginning, as government funding was drying up elsewhere
I worked for a large R&D lab a while back after completing my PhD, but the organization turned out to be completely directionless. Funding went to snake-oil salesmen who charmed executives with flashy proposals that they could never deliver on. I don't think there were any major successes during the time I was there, or since.
They also paid their Bay Area researchers about half the salary of FAANG senior engineers, so they really couldn't retain top talent. This is the downside of being a corporate R&D lab that's not funded by a near-monopoly.