Shrinking Bell Labs

2:30 PM -- As a followup to the sale of Bell Labs 's old HQ, we now have parent company Alcatel-Lucent (NYSE: ALU) shuttering fundamental physics research.

Nature broke the story, and Wired put up some details yesterday. It's an understandable decision, particularly for a struggling company in a difficult economy.

It's also no surprise. Basic research isn't part of the corporate charter any more, not for public companies. Quarterly earnings and the needs of hedge-fund traders come first.

Even a decade ago, before Lucent's collapse, it was clear Bell Labs couldn't go on forever as a beacon of scientific research. Same for Xerox's Palo Alto Research Center (PARC) , which had clearly passed its glory days.

All along, we've been asking where basic research will come from, and the answer is still evasive. I'm not convinced "the market" will adequately cover it. That leaves universities and the government, but with their dwindling funds, they're being called upon to behave more like businesses.

This goes beyond national interest; as a civilization, we should be worried about these things. But there may not be an answer that fits with today's economic fashion.

— Craig Matsumoto, West Coast Editor, Light Reading

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Stevery 12/5/2012 | 3:33:41 PM
re: Shrinking Bell Labs From the (heartbreaking) Wired article:
Nature, which first reported the news, says just four scientists are left working the fundamental physics department in Murray Hill, New Jersey.

So was 11111 shut down?
or 1111?
or 111?

Just how much "shut" down?
(And who would've guessed: Chainsaw Pat, we barely knew ye.)
lrobieson 12/5/2012 | 3:33:37 PM
re: Shrinking Bell Labs
In general in the United States, the Corporate Business environment does not allow Basic Research to thrive due to having to meet financial goals.

It's simple. China and Japan will have to continue to lead the Basic Research effort.

The United States will fall behind until the US Government starts to spend more on Basic Research.

What's so bad about depending on China for the Basic Research? I can think of many reasons why it's not smart for the US to rely on China but will not mention here.

bollocks187 12/5/2012 | 3:33:31 PM
re: Shrinking Bell Labs Lance - well said.

Although we have moved into other areas of research e.g. search engines - wow ;-)

It is very bad that we depend on these folks let alone trust them

Fact not Fiction
whyiswhy 12/5/2012 | 3:33:17 PM
re: Shrinking Bell Labs Bell labs never did basic research out of the goodness of their hearts.

They had two specific business objectives:

a) Develop intellectual property that would lead to additional revenue / lower costs for the company,
b) Add justifiable overhead in the era of regulated monopolies and the cold war to increase both revenue and profit.

I don't see us going back to a regulated monopoly, and with China and Russia basically lawless, basic IP is not worth much here (where we do have laws) anymore.

The US government can and should spend more on basic research in many fields (not just technology), but it seems US doctors have a majority on both sides of the aisle convinced docs and nurses need more money.

It would be interesting to see how much money in the medical sector of the economy is domestic (labor, buildings, utilities) and how much is exported (medicine, machines). Basic figures like that should tell what the ROI is.

We gotta invest more in things other countries want to buy from us, and replacing / eliminating things we have to buy from others, and cut back on things with no ROI, like things / services we can't sell to anyone but ourselves.

HomerJ 12/5/2012 | 3:33:00 PM
re: Shrinking Bell Labs Bells Labs could do all this wonderful research because AT&T was a fat monopoly rolling in profit. Clearly, by deregulating everything, the US govt is "letting the market decide". Well, the market has decided that basic research is no longer something important. So, who decided to "let the market decide"? Well, the US population did by electing who they elected. So when folks in the US complaign about China doing all the research now, they shouldn't blame the French. Blame yourselves for electing people who insist that the capital markets are always the most efficient and they are the best at deciding everything. Lesson learned? Governments really do have a place. Just like we depend on the govt for the army and firemen. Maybe we should have let the govt keep an eye on the telecommunications markets too.
Pete Baldwin 12/5/2012 | 3:32:56 PM
re: Shrinking Bell Labs Judy Estrin weighs in on the subject, in an interview from Sunday's Mercury News:

whyiswhy 12/5/2012 | 3:32:54 PM
re: Shrinking Bell Labs The market will always seek fast money, and money can be made by cutting long term costs like basic research (or health care, or retirement for that matter).

The government has to provide offsetting incentives / outright grants / requirements or we get "built to cash" instead of "built to last".

Our company has found that outsourcing to China / Thailand saves only a miniscule amount on the direct cost. This is basic business 101, which is: the Thai company only cuts his price low enough to get the business, regardless of the cost (to him). The rest is his profit, not ours.

When we stack in the added logistics costs and delays (need to carry more inventory to cover longer pipelines and quality issues), it costs more.

I'd be curious as to others experience.

paolo.franzoi 12/5/2012 | 3:32:53 PM
re: Shrinking Bell Labs
Plenty of fundamental research going on in biotech in the US.

I suspect there just is not a lot of fundamental research in comms systems required nowadays.

nodak 12/5/2012 | 3:32:51 PM
re: Shrinking Bell Labs You are right, there is plenty of research in biotech because when you file that patent, you have 7 years to charge as much as you can to help recover cost before generics hit the market, not to mention the customer has someone to help pick up the tab (insurance). For some reason, telecom research does not seem to be able to get these type of patents.

Telecoms answer to basic research during the beginning of the boom was to let a start-up get funded, get a working prototype into customer testing and a revenue stream started before buying it up. Initially this was not too over the top (Cisco buying Cerent, Ciena buying Lightera and ONI), but as the bubble picked up steam, the last two portions were ignored (Ciena buying Cyras and Nortel buying Xros). Right now, there does not appear to be a demand for much in they way of new technology or no one has come up with the next WDM or EDFA type technology allowing a major reduction in cost.
whyiswhy 12/5/2012 | 3:32:46 PM
re: Shrinking Bell Labs The rest of the truth...

You forgot to mention Washington would make sure no US citizen could easily buy the original or the generic at lower prices, especially from Canada or Mexico.

Both medicine and law get both preferential treatment and protection from competition in Washington. They are the last of the guilds.

Somehow, that's OK, but anyone discussing similar treatment for any other profession / industry is clearly a socialist, to quote the former governor of CA.

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