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No science, no startups: The innovation engine we're switching off

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Re: No science, no startups: The innovation engine we're switching off

#61

Post by cjbgkagh »

7thaccount wrote: post #8
terminalshort wrote: post #3

> In the 20th century, U.S. companies put their excess profits into corporate research labs. Basic research in the U.S. was done in at Dupont, Bell Labs, IBM, AT&T, Xerox, Kodak, GE, et al. This changed in 1982, when the Securities and Exchange Commission ruled that it was legal for companies to buy their own stock (reducing the number of shares available to the public and inflating their stock price.) Very quickly B…

Nothing against research universities as good stuff does occur there, but it just seems like it was such a a huge loss seeing those corporate labs disappear. I think it helps to have scientists and engineers closer to the problem and who don't have to spend a huge amount of their time writing grants and training grad students.

Having worked in corporate labs they really were great and it's a shame they're disappearing.

It's not only share buybacks, I would include offshoring, DEI, and a consolidation of management power as major factors in the destruction these labs. The pipeline has been so bad for so long now that it would take a miracle to get things started again.

The last org I worked at offshored the most promising work to China. Due to some high up international agreement the company had to spend $X on offshored workers so not only were they considered cheap they were considered free because the money had to be spent anyway and was coming out of someone else's budget.

I was working at a Research Org when the DEI push came through and it was a absolute disaster. A lot of projects ended their internship programs and avoided hiring in order to minimize the exposure. The bargain was always, you can have 6 seats but 50% need to be women and 50% need to be minorities, and since everyone got the push at the same time it meant that due to the intense competition for the same people you'd end up really having to scrape the bottom of the barrel. That made a lot of initiatives unviable.

I wasn't working at Yahoo Research but as I heard it was canned following a management rift. They were already bleeding talent for a while but had retained some good people that stayed out of comfort and inertia. The smart people cultivated in research orgs tend to be a competing source of power and management hates that.

Re: No science, no startups: The innovation engine we're switching off

#62

Post by cratermoon »

terminalshort wrote: post #23
cratermoon wrote: post #21

Earlier quoted context omitted.

Note the "maximize shareholder value" aspect. That's the essential driving force behind business since then: The Friedman doctrine. Now consider the choices a company makes when executives hold the Friedman doctrine as orthodoxy. Put money into basic research that might generate shareholder value in some unknown time, or buy their own stock back and pump up the price?

Why would companies not want to maximize their value before share buybacks?

Your question is a reflection of just how engrained the Friedman doctrine has become in business. Milton Friedman introduced his theory in 1970, but it really got a boost in the 80s. First in 1981 when President Reagan named him to his Economic Policy Advisory Board and again in 1988, when Reagan gave him the Presidential Medal of Freedom and the National Medal of Science.

There are still many competing theories of business ethics, but the Friedman doctrine is what drives corporations today.

Re: No science, no startups: The innovation engine we're switching off

#63

Post by ActorNightly »

dkyc wrote: post #29
terminalshort wrote: post #3

> In the 20th century, U.S. companies put their excess profits into corporate research labs. Basic research in the U.S. was done in at Dupont, Bell Labs, IBM, AT&T, Xerox, Kodak, GE, et al. This changed in 1982, when the Securities and Exchange Commission ruled that it was legal for companies to buy their own stock (reducing the number of shares available to the public and inflating their stock price.) Very quickly B…

It's not even clear that the premise is true. There's lots of 'research' done in the big tech companies. The biggest reason why companies don't seek to emulate "Dupont, Bell Labs, IBM, AT&T, Xerox, Kodak, GE", is probably that it reads like a list of textbox examples of "companies that failed to execute on their research findings", so clearly there was something wrong with this approach.

The bigger problem today is that there is simply nothing more left to research. Everything that is being worked on are at most optimizations, which allways have a dollar spent vs dollar returned amount on them.

Re: No science, no startups: The innovation engine we're switching off

#64

Post by fidotron »

There's something odd in this argument. If you come at it from a Canadian perspective Canada seriously spent on neural network computer science when almost no one else did (many in AI considered the entire thing discredited and impossible), now the (financial) gains from that are almost entirely in a foreign country.

The US science establishment was all about buying and utilizing Russian rocket engines until he-that-shall-not-be-named came along. SpaceX took the breakthroughs that existed in the US in things like control theory, which the same science establishment had failed to value appropriately.

It doesn't look like the science establishments of any country are actually successfully feeding their innovation machines, or have done so for decades. Switching a non functioning system off does at least allow it to be replaced by something that risks doing things when something comes back.

Of course many pure scientists will, legitimately, argue that innovation isn't the point in the first place, and that is a far more solid point, but real academic diversity has been so destroyed by the global consensus making peer review process that much of their progress has effectively stalled.

Re: No science, no startups: The innovation engine we're switching off

#65

Post by jovial_cavalier »

>Engineers design and build things on top of the discoveries of scientists.

In the last 80 or so years, this has been the case, but I don't think it's historically the norm. It just so happens that through whatever accident of scientific history, we were set up perfectly for a series of discoveries in basic theory that lent themselves well to immediate implementation and productization. We had a "science cycle" to match the business cycle that looked like this: Come up with a theory -> works? (yes: proceed, no: start again) -> publicize result -> collect huge sums of money -> plow that into new experiments -> find a problem with current theory -> start again. I don't think there is much disagreement that this cycle has slowed down considerably over the last 30-40 years.

Science by its nature is descriptive. As a discipline, it isn't actually geared towards discovering maxima in a space of design possibilities. No scientist invented the automobile or the airplane or the steam engine. A more typical mode is that engineers demonstrate that something is possible, and scientists recapitulate/integrate it into theory.

Re: No science, no startups: The innovation engine we're switching off

#66

Post by nyeah »

xixixao wrote: post #59
twobitshifter wrote: post #48

Earlier quoted context omitted.

Not why it can’t be done so much as why it isn’t done. Share buybacks allow companies to reward executives directly as their compensation is tied to stock price. If we started not doing that, the priorities might shift, but those executives like things the way they are. Before Tim Cook Apple had never done a buyback - Jobs was always thinking Apple could do better with the money in R&D than paying off shareholders. W…

Dumb maybe question: Why couldn’t the companies with excess profits just pay they employees more in salaries?

They could, but then they'd have to report lower profits by the same amount. I want to actually defend this though: Corporate profit is a very narrow measure, by design. It was never intended to capture how well the nation is doing.

Re: No science, no startups: The innovation engine we're switching off

#67

Post by Macha »

xixixao wrote: post #59
twobitshifter wrote: post #48

Earlier quoted context omitted.

Not why it can’t be done so much as why it isn’t done. Share buybacks allow companies to reward executives directly as their compensation is tied to stock price. If we started not doing that, the priorities might shift, but those executives like things the way they are. Before Tim Cook Apple had never done a buyback - Jobs was always thinking Apple could do better with the money in R&D than paying off shareholders. W…

Dumb maybe question: Why couldn’t the companies with excess profits just pay they employees more in salaries?

That would not make the share price number go up, which in turn means it doesn't make the leadership's net worth number go up, which means the leadership won't make that choice.

Re: No science, no startups: The innovation engine we're switching off

#68

Post by ceejayoz »

xixixao wrote: post #59
twobitshifter wrote: post #48

Earlier quoted context omitted.

Not why it can’t be done so much as why it isn’t done. Share buybacks allow companies to reward executives directly as their compensation is tied to stock price. If we started not doing that, the priorities might shift, but those executives like things the way they are. Before Tim Cook Apple had never done a buyback - Jobs was always thinking Apple could do better with the money in R&D than paying off shareholders. W…

Dumb maybe question: Why couldn’t the companies with excess profits just pay they employees more in salaries?

That would set a precedent they don’t want. Investors and the Federal government have little interest in labor gaining power.

Re: No science, no startups: The innovation engine we're switching off

#69

Post by vladms »

xixixao wrote: post #59
twobitshifter wrote: post #48

Earlier quoted context omitted.

Not why it can’t be done so much as why it isn’t done. Share buybacks allow companies to reward executives directly as their compensation is tied to stock price. If we started not doing that, the priorities might shift, but those executives like things the way they are. Before Tim Cook Apple had never done a buyback - Jobs was always thinking Apple could do better with the money in R&D than paying off shareholders. W…

Dumb maybe question: Why couldn’t the companies with excess profits just pay they employees more in salaries?

Companies are controlled by shareholders who appoint the board who appoint the CEO. If the CEO decides to pay employees more, the board will change him because shareholder put money to get money out, not to give to employees.

Companies can give "shares" to employees, which means excess profits can be made dividends out of which employees "touch a bit".

If you would have your own company (privately own and full control) you are of course free to share the excess profit as you see fit.

Edit: and of course, share buy back avoids some taxes that you must pay, which in other schemes would have to be paid.

Re: No science, no startups: The innovation engine we're switching off

#70

Post by nemomarx »

fidotron wrote: post #64

There's something odd in this argument. If you come at it from a Canadian perspective Canada seriously spent on neural network computer science when almost no one else did (many in AI considered the entire thing discredited and impossible), now the (financial) gains from that are almost entirely in a foreign country. The US science establishment was all about buying and utilizing Russian rocket engines until he-that-…

How's China doing? They seem to have a lot of research going on that feeds into their manufacturing fairly quickly from the papers I hear about
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