How do you fund a bunch of researchers, given that very little of their work will be readily marketable and the real breakthroughs will likely be to the ultimate benefit of competitors?
Through the years there have been different funding models that have come and gone. At the end of the 19th century there was what I will call the “Marconi model.” Marconi was an amateur tinkerer – as almost everyone was in those days. Supporting himself at his family home outside Bologna, Italy, he invented radio, and then went on to become a legendary entrepreneur with the creation of companies to implement his invention. Sadly, that model doesn’t work very well today. Amateurs have been outclassed, and teams have mostly replaced individuals.
While Marconi was tinkering with radio in Italy, Thomas Edison was using the profits from his inventions to build the first industrial research laboratory in West Orange, New Jersey. You can still visit that lab to see the old apparatus, beakers, and jars of chemicals redolent with the smells of yesteryear. Like those old artifacts, that model of funding research through the sales and licensing of patents is pretty much gone. Most organizations that have tried that approach have been forced to augment their income in other ways.
A little later came the era of the great industrial research labs. I’ll call this the “Bell Labs model.” These research labs were funded from the corporate profits of large industries. Bell Labs in those early years had the powerful advantages of monopoly funding, a great challenge in the evolution of the network, and almost total control of the technology used there. Unfortunately, most of those great labs have now disappeared or morphed their research into directed development. Business managers have become skeptical about the return on investment that long term research yields – especially when competitors without research divisions seem to thrive regardless.
Along came World War II and an incredible new model for research. In a few short years there was an unprecedented burst of technical innovation, including radar, computing, cryptography, and the Manhattan project -- and in the immediate aftermath came the transistor and information theory. This short period stands as an existence proof of what can be done when everyone works extremely hard for a common goal under an existential threat. Shortly thereafter the cold war promoted some of the same government focus on research funding. However, since that period the many smaller wars have not resulted in the same attention. As Norm Augustine observed, it often takes longer today to get approval for a project than it did to fight the entire world war.
The “Internet model” was a wonderful example of government/industry cooperation. The research was funded and managed by government and conducted all over academia and industry in a shared environment. I often think that the Internet could not have come to its present form without the government acting as a central funder and gatekeeper. (I should add, too, that the evolution of GPS had some of these same characteristics.) Unfortunately, once again, this model looks to be broken today. DARPA, which led the Internet project, now focuses almost exclusively on military applications.
The more recent history also brought us the “MCC model” – a research lab funded as a consortium of member companies. On paper this looks like a great idea, sharing the expense, risk, and reward across a number of institutions. In practice, however, it has fallen apart beneath the quibbles and competing objectives of its members.
Then came the Silicon Valley phenomenon – a lethal mix of a great research university, empowered graduates, and hungry venture capitalists. It has been extremely successful, although largely by capitalizing on existing research, rather than by creating the research itself. All over the world cities and states have tried to duplicate Silicon Valley, and although a few have been quite successful, none has neared the output of Silicon Valley itself. I’ve sometimes felt that there must be some special elixir in the air out there.
Today fundamental research in technology is almost the sole province of academia, and is almost exclusively funded by government. As my short history is meant to illustrate, the funding models have changed over the years. They all worked for awhile, and then they didn’t. Perhaps it’s all a cycle that will repeat, and today there is some young Marconi in his or her basement, experimenting with communication via quantum entanglement. But maybe not.