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The death of corporate research labs

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Re: The death of corporate research labs

#111

Post by scarface74 »

partyboat1586 wrote: post #86
kalleboo wrote: post #80

Earlier quoted context omitted.

> My answer: you will suffer from brain drain.and reputation loss,when you buy a smaller company,consumers assume that brand is now dead. You become a cemerery of dreams and ideas. You become an IBM,HP,Xerox and AT&T. Once the damage is done it becomes nearl impossible to recover from. Would Apple be a counter-example? Multitouch, PA Semi, Siri, TouchID, etc etc lots of Apple technology was acquired but nobody lament…

Because all the tech Apple acquired was acquired before it was a big recognisable brand. Also Apple are very good at making it look like they came up with it. Ask someone who doesn't follow the movements of big tech companies 'Who invented Siri?', 'Who invented TouchID?'etc they will say Apple.

You mention Siri as an example of Apple taking credit. Siri was on the App Store before Apple bought it and they kept the name.

But honestly, who cares but geeks about what the general population thinks about who invented it?

Re: The death of corporate research labs

#112

Post by marcinzm »

akiselev wrote: post #30
ramraj07 wrote: post #15

I 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 t…

Exactly. Pharma companies being large multinationals are very risk averse and very lawyer run. People also underestimate the value of everything except inventing the drug. Everything else costs a lot of money to do and a lot of expertise to do well.

Re: The death of corporate research labs

#113

Post by scarface74 »

netcan wrote: post #95
legitster wrote: post #34

Holdup. Lack of anti-trust enforcement is blamed (among other things) for the end of corporate R&D, but Monopoly breakup is exactly what killed Bell labs! 9 smaller companies weren't going to fund their own lab, and the only reason the lab existed was to find new markets to explore. In fact, nearly all of the examples of successful R&D labs came from corporations that so dominated their industry they put money into f…

Very good points. I think we (I, maybe) default to the mistake of thinking in terms of "one big systemic explanation." Ultimately, something like investment in or success at innovation doesn't follow strict rules. The factors that go into it tend to be local. Any practicable "Theory of Innovation" is likely to be true locally, at best. A few years back Neil Degrasse Tyson, advocating for a re-funding of the NASA spac…

Is the Space Shuttle really a great example? Two of the five exploded killing people and it ended up being more expensive and less efficient than the non reusable Russian equivalent.

https://gizmodo.com/the-space-shuttle-was-a-beautiful-but-te...

Re: The death of corporate research labs

#114

Post by Random_ernest »

billme wrote: post #110

R&D is not dead. R&D has been rising globally for over 70 years with no major declines. Globally, $1.7 trillion USD a year is currently spent on RD; roughly 2% of the global GDP. There is more research going on right now than at any point in history at any scale. R&D, similar to startups, is full of broken dreams, surviver bias, etc. — those complaining their source of funding dried up, they never got lucky, etc. The…

One could even argue that a lot of startups are VC backed R&D. Only VC does not care for the scientific, not-directly monetizable outcomes.

Re: The death of corporate research labs

#115

Post by ses1984 »

snidane wrote: post #105
legitster wrote: post #34

Holdup. Lack of anti-trust enforcement is blamed (among other things) for the end of corporate R&D, but Monopoly breakup is exactly what killed Bell labs! 9 smaller companies weren't going to fund their own lab, and the only reason the lab existed was to find new markets to explore. In fact, nearly all of the examples of successful R&D labs came from corporations that so dominated their industry they put money into f…

It seems like a good funding model for basic research to leverage the size of monopoly companies like those mentioned. In the monopoly position they are no longer concerned about competition so don't need to worry about their position ever more. Unlike startups which are constantly in survival mode so basic research with long term benefits is like the last thing they would spend money on. Long term basic research in…

>Unlike startups which are constantly in survival mode so basic research with long term benefits is like the last thing they would spend money on.

Sure startups are in survival mode, but they are trying to survive while getting someone else to pay for testing an idea. Aren't startups like VC funded research in a way?

Re: The death of corporate research labs

#116

Post by marcinzm »

durnygbur wrote: post #9

Why would ad companies need research labs?

Every large ad company has a bunch (or a lot) of PhDs that publish papers and generally try to out innovate their competitors. There's research on human behavior, economics (auction theory, etc.), optimization theory, machine learning, etc. For example, modern ad systems are the largest auction houses in human history by orders of magnitude.

Re: The death of corporate research labs

#117

Post by scarface74 »

snidane wrote: post #105
legitster wrote: post #34

Holdup. Lack of anti-trust enforcement is blamed (among other things) for the end of corporate R&D, but Monopoly breakup is exactly what killed Bell labs! 9 smaller companies weren't going to fund their own lab, and the only reason the lab existed was to find new markets to explore. In fact, nearly all of the examples of successful R&D labs came from corporations that so dominated their industry they put money into f…

It seems like a good funding model for basic research to leverage the size of monopoly companies like those mentioned. In the monopoly position they are no longer concerned about competition so don't need to worry about their position ever more. Unlike startups which are constantly in survival mode so basic research with long term benefits is like the last thing they would spend money on. Long term basic research in…

Read the Innovator’s Dilemma. It’s all about asymmetric competition and how to compete against a monopoly. All of the FAANGMs got to be that way by toppling a previous market leader.

Re: The death of corporate research labs

#118

Post by marcinzm »

KKKKkkkk1 wrote: post #20
durnygbur wrote: post #9

Why 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?

They are not monopolies. They own a segment of users but NOT a segment of advertiser budget. They compete with each other for their true customers: advertisers and their money. If one platform gives a higher ROI than another then more advertiser budget will shift to it. Sure, most large advertisers will diversify but even a 1% shift means billions in this case so worth having people try to optimize.

Re: The death of corporate research labs

#119

Post by wegs »

billme wrote: post #110

R&D is not dead. R&D has been rising globally for over 70 years with no major declines. Globally, $1.7 trillion USD a year is currently spent on RD; roughly 2% of the global GDP. There is more research going on right now than at any point in history at any scale. R&D, similar to startups, is full of broken dreams, surviver bias, etc. — those complaining their source of funding dried up, they never got lucky, etc. The…

> There is no magic recipe for success in R&D — and anyone that tells you they are able to outperform the market at scale as it relates to R&D outcomes is lying.

This is complete nonsense. This logic applies well to stock and bond valuation, where you have armies of traders optimizing from public information. It's a pretty frictionless market

It's like telling a parent their kids can't outperform the market at scale in science. Of course they can. They just can't outperform the market at scale in math, athletics, leadership, foreign languages, science, and everything else all at the same time.

In virtually all other domains, you have better organizations and worse organizations. I've been in organizations that do R&D brilliantly, and ones that do it horribly. Did the ones that do it horribly die because of market forces? No. They did other things better.

An organization has many pieces: R&D, marketing, branding, advertising, legal, engineering, sales, strategy, finance, logistics, etc. Most organizations I've worked at were really good at maybe one or two of those, in most areas, followed industry best-practices, and were pretty bad in a few.

I can promise you that MANY people can outperform the market at scale in relationship to R&D outcomes. We just can't outperform the market at scale in ALL of those areas at the same time. Organizations and individuals have areas of focus.

Re: The death of corporate research labs

#120

Post by JunkDNA »

ramraj07 wrote: post #15

I 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…

There is a fundamental difference between a CEO at company operating at GSK's scale and for example, a few hundred person startup biotech. It's a mistake that engineers and domain experts make to assume the CEO always needs to be technical. In small companies, this can be a benefit because the CEO is effectively the leader of everything and often has their hands in a lot. But that just does not scale to a company the size of GSK. The challenges of leading a company of the size of GSK are fundamentally different and start to look a lot more like the challenges of leading other big, multinationals.
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