True Innovation

“INNOVATION is what America has always been about,” President Obama remarked in his recent State of the Union address. It’s hard to disagree, isn’t it? We live in a world dominated by innovative American companies like Apple, Microsoft, Google and Facebook. And even in the face of a recession, Silicon Valley’s relentless entrepreneurs have continued to churn out start-up companies with outsize, world-changing ambitions.

But we idealize America’s present culture of innovation too much. In fact, our trailblazing digital firms may not be the hothouse environments for creativity we might think. I find myself arriving at these doubts after spending five years looking at the innovative process at Bell Labs, the onetime research and development organization of the country’s formerly monopolistic telephone company, AT&T.

Why study Bell Labs? It offers a number of lessons about how our country’s technology companies — and our country’s longstanding innovative edge — actually came about. Yet Bell Labs also presents a more encompassing and ambitious approach to innovation than what prevails today. Its staff worked on the incremental improvements necessary for a complex national communications network while simultaneously thinking far ahead, toward the most revolutionary inventions imaginable.

Indeed, in the search for innovative models to address seemingly intractable problems like climate change, we would do well to consider Bell Labs’ example — an effort that rivals the Apollo program and the Manhattan Project in size, scope and expense. Its mission, and its great triumph, was to connect all of us, and all of our new machines, together.

In his recent letter to potential shareholders of Facebook, Mark Zuckerberg noted that one of his firm’s mottoes was “move fast and break things.” Bell Labs’ might just as well have been “move deliberately and build things.” This sounds like the quaint pursuit of men who carried around slide rules and went to bed by 10 o’clock. But it was not.

Consider what Bell Labs achieved. For a long stretch of the 20th century, it was the most innovative scientific organization in the world. On any list of its inventions, the most notable is probably the transistor, invented in 1947, which is now the building block of all digital products and contemporary life. These tiny devices can accomplish a multitude of tasks. The most basic is the amplification of an electric signal. But with small bursts of electricity, transistors can be switched on and off, and effectively be made to represent a “bit” of information, which is digitally expressed as a 1 or 0. Billions of transistors now reside on the chips that power our phones and computers.

Bell Labs produced a startling array of other innovations, too. The silicon solar cell, the precursor of all solar-powered devices, was invented there. Two of its researchers were awarded the first patent for a laser, and colleagues built a host of early prototypes. (Every DVD player has a laser, about the size of a grain of rice, akin to the kind invented at Bell Labs.)

Bell Labs created and developed the first communications satellites; the theory and development of digital communications; and the first cellular telephone systems. What’s known as the charge-coupled device, or CCD, was created there and now forms the basis for digital photography.

Bell Labs also built the first fiber optic cable systems and subsequently created inventions to enable gigabytes of data to zip around the globe. It was no slouch in programming, either. Its computer scientists developed Unix and C, which form the basis for today’s most essential operating systems and computer languages.

And these are just a few of the practical technologies. Some Bell Labs researchers composed papers that significantly extended the boundaries of physics, chemistry, astronomy and mathematics. Other Bell Labs engineers focused on creating extraordinary new processes (rather than new products) for Ma Bell’s industrial plants. In fact, “quality control” — the statistical analysis now used around the world as a method to ensure high-quality manufactured products — was first applied by Bell Labs mathematicians.

So how can we explain how one relatively small group of scientists and engineers, working at Bell Labs in New Jersey over a relatively short span of time, came out with such an astonishing cluster of new technologies and ideas? They invented the future, which is what we now happen to call the present. And it was not by chance or serendipity. They knew something. But what?

At Bell Labs, the man most responsible for the culture of creativity was Mervin Kelly. Probably Mr. Kelly’s name does not ring a bell. Born in rural Missouri to a working-class family and then educated as a physicist at the University of Chicago, he went on to join the research corps at AT&T. Between 1925 and 1959, Mr. Kelly was employed at Bell Labs, rising from researcher to chairman of the board. In 1950, he traveled around Europe, delivering a presentation that explained to audiences how his laboratory worked.

His fundamental belief was that an “institute of creative technology” like his own needed a “critical mass” of talented people to foster a busy exchange of ideas. But innovation required much more than that. Mr. Kelly was convinced that physical proximity was everything; phone calls alone wouldn’t do. Quite intentionally, Bell Labs housed thinkers and doers under one roof. Purposefully mixed together on the transistor project were physicists, metallurgists and electrical engineers; side by side were specialists in theory, experimentation and manufacturing. Like an able concert hall conductor, he sought a harmony, and sometimes a tension, between scientific disciplines; between researchers and developers; and between soloists and groups.

ONE element of his approach was architectural. He personally helped design a building in Murray Hill, N.J., opened in 1941, where everyone would interact with one another. Some of the hallways in the building were designed to be so long that to look down their length was to see the end disappear at a vanishing point. Traveling the hall’s length without encountering a number of acquaintances, problems, diversions and ideas was almost impossible. A physicist on his way to lunch in the cafeteria was like a magnet rolling past iron filings.

Another element of the approach was aspirational. Bell Labs was sometimes caricatured as an ivory tower. But it is more aptly described as an ivory tower with a factory downstairs. It was clear to the researchers and engineers there that the ultimate aim of their organization was to transform new knowledge into new things.

Steven Chu, secretary of the Department of Energy, won a Nobel Prize in 1997 for his work at Bell Labs in the early 1980s. He once said that working in an environment of applied science like Bell Labs “doesn’t destroy a kernel of genius, it focuses the mind.” At Bell Labs, even for researchers in pursuit of pure scientific understanding, it was obvious that their work could be used.

Still another method Mr. Kelly used to push ahead was organizational. He set up Bell Labs’ satellite facilities in the phone company’s manufacturing plants, so as to help transfer all these new ideas into things. But the exchange was supposed to go both ways, with the engineers learning from the plant workers, too. As manufacturing has increasingly moved out of the United States in the past half century, it has likewise taken with it a whole ecosystem of industrial knowledge. But in the past, this knowledge tended to push Bell Labs toward new innovations.

Mr. Kelly believed that freedom was crucial, especially in research. Some of his scientists had so much autonomy that he was mostly unaware of their progress until years after he authorized their work. When he set up the team of researchers to work on what became the transistor, for instance, more than two years passed before the invention occurred. Afterward, when he set up another team to handle the invention’s mass manufacture, he dropped the assignment into the lap of an engineer and instructed him to come up with a plan. He told the engineer he was going to Europe in the meantime.

In sum, he trusted people to create. And he trusted them to help one another create. To him, having at Bell Labs a number of scientific exemplars — “the guy who wrote the book,” as these standouts were often called, because they had in fact written the definitive book on a subject — was necessary. But so was putting them into the everyday mix. In an era before cubicles, all employees at Bell Labs were instructed to work with their doors open.

Saddled with a difficult problem, a new hire there, an anxious nobody, was regularly directed by a supervisor toward the guy who wrote the book. Some young employees would quake when they were told to ask a question of famous mathematicians like Claude Shannon or legendary physicists like William Shockley. Still, Bell Labs’ policy was not to turn them away.

THERE was another element necessary to Mervin Kelly’s innovation strategy, an element as crucial, or more crucial even, than all the others. Mr. Kelly talked fast and walked fast; he ran up and down staircases. But he gave his researchers not only freedom but also time. Lots of time — years to pursue what they felt was essential. One might see this as impossible in today’s faster, more competitive world. Or one might contend it is irrelevant because Bell Labs (unlike today’s technology companies) had the luxury of serving a parent organization that had a large and dependable income ensured by its monopoly status. Nobody had to meet benchmarks to help with quarterly earnings; nobody had to rush a product to market before the competition did.

But what should our pursuit of innovation actually accomplish? By one definition, innovation is an important new product or process, deployed on a large scale and having a significant impact on society and the economy, that can do a job (as Mr. Kelly once put it) “better, or cheaper, or both.” Regrettably, we now use the term to describe almost anything. It can describe a smartphone app or a social media tool; or it can describe the transistor or the blueprint for a cellphone system. The differences are immense. One type of innovation creates a handful of jobs and modest revenues; another, the type Mr. Kelly and his colleagues at Bell Labs repeatedly sought, creates millions of jobs and a long-lasting platform for society’s wealth and well-being.

The conflation of these different kinds of innovations seems to be leading us toward a belief that small groups of profit-seeking entrepreneurs turning out innovative consumer products are as effective as our innovative forebears. History does not support this belief. The teams at Bell Labs that invented the laser, transistor and solar cell were not seeking profits. They were seeking understanding. Yet in the process they created not only new products but entirely new — and lucrative — industries.

There’s no single best way to innovate. Silicon Valley’s methods have benefited our country well over the course of several decades. And it would be absurd to return to an era of big monopolies. Today’s telecom industries are thriving, and customers likewise have access to a dazzling range of affordable devices and services, which most likely would not have been true had the old phone company remained intact. Though it had custody of the world’s most innovative labs, AT&T introduced new products and services slowly, and rarely cheaply. As Time magazine once put it, “Few companies are more conservative; none are more creative.”

But to consider the legacy of Bell Labs is to see that we should not mistake small technological steps for huge technological leaps. It also shows us that to always “move fast and break things,” as Facebook is apparently doing, or to constantly pursue “a gospel of speed” (as Google has described its philosophy) is not the only way to get where we are going. Perhaps it is not even the best way. Revolutions happen fast but dawn slowly. To a large extent, we’re still benefiting from risks that were taken, and research that was financed, more than a half century ago.