One thing to say about the recently announced Nobel Prize in Physics is that it illustrates, as Congress mulls the nation's R&D budgets, the economic rationale for bigger research investments. After all, the three scientists who shared the award won for work that helped harness light in ways that hastened the development of, yes, the Internet but also the entire digital camera revolution. That's a pretty big pay-off.
But there's another more specific and timely takeaway: All three of the laureates this year carried out their groundbreaking work while working at corporate research labs. And that's actually a problem, because labs like the ones this year's laureates worked in don't really exist now. Congress needs to consider that too as it continues to weigh FY 2010 and 2011 research budgets, climate legislation, and indeed the nation's economic future.
The problem the country faces is that the conditions in which Charles Kao, Willard Boyle, and George Smith made their breakthroughs are harder to come by today. Kao, for example, made his breakthroughs in fiber optics (the thin glass threads that now carry a vast chunk of the world's phone and data traffic) while at Standard Telecommunications Laboratories in the U.K. Similarly, Boyle and Smith designed the first digital imaging technology while working at Bell Labs, the legendary research organization that was once part of AT&T.
What was so special in these corporate labs of the 1960s?
In these settings, world-class scientists were allowed to work on deep-going, "basic" research quite freely, albeit in close proximity to commercial product development. The result was uniquely productive. No wonder Energy Secretary Steve Chu — another Nobel laureate — often recalls fond memories of his time at Bell Labs, calling it a special place that promoted high-intensity collaboration and empowered scientists to conduct long-term basic research that could lead to new breakthroughs while also holding them accountable for delivering products to the parent company. Indeed, millions of jobs have resulted from such contributions to science and technology, including such Bell Labs inventions as the transistor, photovoltaic cells, and cell phone technology.
Unfortunately though, this sort of corporate research platform is in trouble today. As noted in a recent Wall Street Journal article, the tyranny of shorter-term horizons means big companies now spend much less on potentially risky long-term basic research. Meanwhile, much of the action in long-term research has shifted to universities that have a mixed record in commercializing breakthroughs for the good of the regional and national economy. The upshot: Corporations' shorter-term focus combined with universities' variable record at commercialization serves to limit society's overall innovation capacity and so its capacity for high-quality job creation.
All of which points to the need for governments — especially the federal one — to fill holes in the nation's innovation system created by market failures such as big corporations' retreat from deep research. And on this front, when it comes to energy issues, it is a good thing than the Obama administration and Congress are on the case — to an extent. For example, the Department of Energy's FY2010 budget proposal introduced the idea of a network of Energy Innovation Hubs — nicknamed "Bell Lab-lettes" by Chu — that would, to an extent, recreate the special realm of the 1960s-era corporate labs by supporting cross-disciplinary R&D to translate transformative energy technologies into commercially-viable product in the energy space. The only problem is that while Chu requested $280 million to fund eight hubs across a range of topics, the concept has had a rough time gaining approval from congressional appropriators, and the final conference report on DOE's budget provides up to $60 million for only three hubs, two in renewable energy and energy efficiency and one in nuclear energy.
The Waxman-Markey cap-trade bill passed by the House also includes the idea of Energy Innovation Hubs, but added to them a desirable added mission of promoting "regional economic development by cultivating clusters of clean energy technology firms, private research organizations, suppliers, and other complementary groups and businesses." The newly-introduced Boxer-Kerry climate legislation in the Senate also has some vague placeholder language forecasting hubs that will likely be flushed out in forthcoming committee debates. Such initiatives, to be supported with long-term funding, represent an important start.
Can federal R&D funds be shaped by the same principles and approaches as the corporate research model? It's no guarantee, but given that so many of the nation's urgent needs are rooted in advancing innovation it's not a moment too soon to try.