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An elbow-to-elbow crowd swarmed into the Bell Labs auditorium on the western border of Greenwich Village on June 30, 1948. Onstage before the guests and reporters stood bow-tied research director Ralph Bown-the small sign at his feet telling the story in a nutshell: “The TRANSISTOR.” The Bell Labs folks would soon launch into full-scale demonstrations of the revolutionary device, invented the previous December. But Bown spoke first about how AT&T had engineered its achievement.

“What we have to show you today represents a fine example of teamwork, of brilliant individual contributions and of the value of basic research in an industrial framework,” Bown proclaimed.

It should have been a great moment for Bell Labs. After all, technology revolutions don’t happen every day. But from a bottom-line point of view, AT&T’s transistor breakthrough was less than transformative. That’s because when all was said and done, it’s doubtful Ma Bell netted a dime from its invention. Instead, the real winners were the specialized firms with better business plans and focus-names like Texas Instruments and Fairchild Semiconductor-who won the race to ready the transistor for mass production and distribution.

“What we have to show you today represents a fine example of teamwork, of brilliant individual contributions and of the value of basic research in an industrial framework,” Bown proclaimed.

It should have been a great moment for Bell Labs. After all, technology revolutions don’t happen every day. But from a bottom-line point of view, AT&T’s transistor breakthrough was less than transformative. That’s because when all was said and done, it’s doubtful Ma Bell netted a dime from its invention. Instead, the real winners were the specialized firms with better business plans and focus-names like Texas Instruments and Fairchild Semiconductor-who won the race to ready the transistor for mass production and distribution.

Granted, the transistor might seem to be a special case, since as part of an antitrust consent decree AT&T was forced to sell rights to the invention for a modest fee. But to students of the role of science in industrial research, the outcome is all too typical. In fact, for reasons that include corporations’ inability to embrace radical change and a lack of commercial applications, a number of other profound discoveries have failed to produce big returns on investments. The list includes semiconductor lasers (GE and IBM), cosmic background radiation (Bell Labs), the scanning tunneling microscope (IBM) and even semiconductor and superconductor tunneling phenomena (Sony and GE); the last three won Nobel Prizes.

From the perspective of corporations that sponsor the research the lesson is clear: Breakthroughs are hard to come by, and the financial payoffs have a troubling tendency to go to someone other than the originator.

This provides some food for thought about today’s fervent race to push computing beyond silicon. The field is already littered with failures-think gallium arsenide and optical computers-and current contenders include blue-sky propositions ranging from biological systems to quantum computing. This sort of research fits well in an academic environment, where making money is secondary to the advancement of scientific knowledge (at least in theory), yet much of it takes place in industrial labs. So, since history tells us that the chance of a big payday is remote, why do these companies bother?

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