While I fully agree with the outline of the change in scientific organization (move from private labs to public science in the universities), I think they have misidentified the reasoning. It is not the anti-trust deregulation, which waxed and waned many times. It is the fall of USSR, the end of the Cold War, and consequential reorganization of scientific financing. Public universities were somewhat anti-military, and didn’t receive much funding with potential military applications; all of it went to private labs. After the end of the Cold War, this situation changed.
The death of corporate research labs
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Re: The death of corporate research labs
#22Why would ad companies need research labs?
You're sadly downvoted, but you're making a good point. The digital ad companies are at this point operating mature stable businesses in monopoly markets. Do such companies really need to invest in R&D?
How do you think those companies got to be mature monopolies? Someone had to do the research to find out which “hot singles near you” banner ad has the highest conversion rates.
I say that tongue-in-cheek, but only partly. There actually is a ton of research that goes into following things like cultural trends and human psychology to ensure maximum ad consumption. Advertising in the middle of a mobile game or on Netflix requires an entirely different school of thought than advertising on traditional cable TV or news websites.
A notable “innovation” (though many may not respect it very much) is the new paradigm of advertising stuff via Instagram influencers and the functionality built into the app to facilitate it. Someone had to research and design that, just like such companies now are probably trying to find the best way to advertise in VR/AR platforms or in rideshares.
Re: The death of corporate research labs
#23The challenge is that companies have poor track records of determining what the market will want, so how can you know what to research unless it is a better version of what you already do? Companies like Intel and Nvidia and the pharma companies do that kind of research because you can reasonably guarantee that someone will want a faster chip or a better cure for a disease. But beyond that, what does the market want…
Startups are more or less externalized R&D facilities and the acquisitions happen only after a team has eliminated sufficient risk. Sometimes thats in the form of revenue but sometimes it’s research or some other signal.
Re: The death of corporate research labs
#24I have often found it baffling that tech giants, with near unlimited resources to fund all sorts of things, don't establish these kinds of labs. I'm aware that there are many things called something like "{Google, Facebook, Twitter, ...} Labs" but from what I understand they are significantly different from the corporate research labs of old.
Why spend so much on product research when you can simply wait for some startup to create a new product and bring it to market while you can just acquire them or create a clone and drive them out of business abusing your dominant position.
Re: The death of corporate research labs
#25The sheer scale of the short-sighted profit-seeking tunnel vision pandemic among American corporations is terrifying to anyone whose life doesn't revolve around spreadsheets. It results in businesses looking absolutely amazing right up until they run off a cliff.
Re: The death of corporate research labs
#26Earlier quoted context omitted.
You're sadly downvoted, but you're making a good point. The digital ad companies are at this point operating mature stable businesses in monopoly markets. Do such companies really need to invest in R&D?
How do you think those companies got to be mature monopolies? Someone had to do the research to find out which “hot singles near you” banner ad has the highest conversion rates. I say that tongue-in-cheek, but only partly. There actually is a ton of research that goes into following things like cultural trends and human psychology to ensure maximum ad consumption. Advertising in the middle of a mobile game or on Netf…
Digital ad tech may be mature but search is not. If it was then the experience of using any search engine would be very much the same but in my experience that is not close to being true yet.
Re: The death of corporate research labs
#27I am curious what the author thinks about the same problem in pharma/biotech. On the one hand, they are kind of _forced_ to do research in one form or another to power the pipelines, so clearly corporate research is still alive there. However, given the pathetic track record the industry seems to hace, and arguably complete lack of any real innovation (almost all of the drugs in most pipelines are just antibodies or…
CEOs are usually business people. The "product" they work with is the development and sustenance of the business and shareholder value. They sometimes have domain knowledge but if they don't, the board should have access to a sufficient supply to make sound technical decisions.
Re: The death of corporate research labs
#28I am curious what the author thinks about the same problem in pharma/biotech. On the one hand, they are kind of _forced_ to do research in one form or another to power the pipelines, so clearly corporate research is still alive there. However, given the pathetic track record the industry seems to hace, and arguably complete lack of any real innovation (almost all of the drugs in most pipelines are just antibodies or…
>If the CEO of a company is not fundamentally versed in the fundamental technology they make can the company actually be successful?
the fundamental technology of modern pharma is the same as the one of cosmetics company - marketing. To convince people that this lipstick or anti-cholesterol drug matches their lifestyle the best, or even more - to sell people on the lifestyle of that lipstick, that drug, etc.
Re: The death of corporate research labs
#29Can confirm. I have seen this happen from very up close in the European research arena. The big corporate labs were either completely gutted, or severely constraint and reoriented towards very short term practicalities, basically just development centers fulfilling contract research.
Re: The death of corporate research labs
#30I am curious what the author thinks about the same problem in pharma/biotech. On the one hand, they are kind of _forced_ to do research in one form or another to power the pipelines, so clearly corporate research is still alive there. However, given the pathetic track record the industry seems to hace, and arguably complete lack of any real innovation (almost all of the drugs in most pipelines are just antibodies or…
Pharmaceutical companies largely focus on the mechanical bits of clinical trials, logistics, manufacturing, distribution, marketing, etc because those are much more predictable at the scale of a large multinational. They're not the R&D powerhouses they once were because they have run out of easy small molecule drugs.
Since the market size/fit/price sensitivity is extremely predictable and there are so few customers to negotiate with (insurance companies, nationalized healthcare, medical purchasing groups, etc.), this is far more efficient for pharmaceutical companies than having a broad and risky drug discovery pipeline. Instead they acquire early and mid stage biotech companies with promising pre-clinical trial results or phase 1/2 successes - in essence externalizing the risk of early R&D even further to academia, venture capital, private equity, and retail investors. With the increasing availability of easy capital of the last few decades, this has become even more of a win-win for investors and the pharma giants recently.