The rise and fall of the industrial R&D lab
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The rise and fall of the industrial R&D lab
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Re: The rise and fall of the industrial R&D lab
#2I think the big driver for a lot of these research lab consists of two parts. First, the company having a lot of money (many times from having a monopoly) and a desire to keep a bunch of smart people from going to any potential competitors. They really did t need the smart people to make any money, they just needed to keep them locked away from competitors. The best way they could do that was to have these research labs that provided decent money and a lot of support and resources to pursue their intellectual curiosity.
In addition, given that capital funding was a lot harder to acquire back in the day, it was about as good a deal as a smart person could get.
Nowadays, a couple of things have changed. First, a corporate job is no longer expected to be lifelong. In addition, if you have a brilliant idea, it is a lot easier to get funding and do your own startup for that idea, and maybe get acquired by one of the big companies.
Re: The rise and fall of the industrial R&D lab
#3This reads a lot like this blog post [0] that was shared here a while ago, the discussion is quite interesting as well [1]. Although I appreciate the additional background and citations.
[0] https://blog.dshr.org/2020/05/the-death-of-corporate-researc...
Re: The rise and fall of the industrial R&D lab
#4I think the big driver for a lot of these research lab consists of two parts. First, the company having a lot of money (many times from having a monopoly) and a desire to keep a bunch of smart people from going to any potential competitors. They really did t need the smart people to make any money, they just needed to keep them locked away from competitors. The best way they could do that was to have these research l…
Having talked to a lot of old folks who worked there the tax breaks were a huge incentive too. Lowering the corporate tax rate since the 60s has meant that corporations no longer needed to invest in R&D, just pay accountants instead.
Re: The rise and fall of the industrial R&D lab
#5I think the big driver for a lot of these research lab consists of two parts. First, the company having a lot of money (many times from having a monopoly) and a desire to keep a bunch of smart people from going to any potential competitors. They really did t need the smart people to make any money, they just needed to keep them locked away from competitors. The best way they could do that was to have these research l…
Having talked to a lot of old folks who worked there the tax breaks were a huge incentive too. Lowering the corporate tax rate since the 60s has meant that corporations no longer needed to invest in R&D, just pay accountants instead.
I think this is a very important point.
Usually, taxes incentivize companies to spend their profit on making the company better - buy new machines, pay the workers more, invest in r&d. This way, they reduced their taxable profit by spending the money on themselves. The companies profited from getting better, the state (or society) profited from growth and innovation.
Now with reduced taxes, but even more importantly tax evasion and offshoring, this incentive is gone, companies hoard money and pay out to the shareholders.
And that is just lazy. Giving money to the shareholders is like telling your investor that their money is better spent elsewhere.
Re: The rise and fall of the industrial R&D lab
#6Well, I think a major factor is that with less friction for workers to move between countries / industries / companies, it no longer pays for companies to cultivate their talent from within.
Either the talent will leave, or it is easy to find some talent by hiring from elsewhere -- by the way, where the work to cultivate and support the talent has already been done for you. And all you're doing is applying the filter / cutting the top candidates to choose from.
Back when there was much more friction and lack of info for people to move about between good opportunities, you were tied to your employer and a better bet to invest R&D money in. Not now. Except for a few select industries where there are artificial barriers put in place to prevent this. (Certification, unions, national security, etc)
Re: The rise and fall of the industrial R&D lab
#7Earlier quoted context omitted.
Having talked to a lot of old folks who worked there the tax breaks were a huge incentive too. Lowering the corporate tax rate since the 60s has meant that corporations no longer needed to invest in R&D, just pay accountants instead.
I think this is a very important point. Usually, taxes incentivize companies to spend their profit on making the company better - buy new machines, pay the workers more, invest in r&d. This way, they reduced their taxable profit by spending the money on themselves. The companies profited from getting better, the state (or society) profited from growth and innovation. Now with reduced taxes, but even more importantly…
Tax incentives are also responsible for the return of open office plan since 1960s, as depreciation rules regarding buildings and furniture changed.
In addition, you have people believing that Milton Friedman's biggest lie is a law, namely that maximising shareholder value (which is often interpreted to include dividends) is fiduciary duty for the corporation. (It's not)
Re: The rise and fall of the industrial R&D lab
#8I think the big driver for a lot of these research lab consists of two parts. First, the company having a lot of money (many times from having a monopoly) and a desire to keep a bunch of smart people from going to any potential competitors. They really did t need the smart people to make any money, they just needed to keep them locked away from competitors. The best way they could do that was to have these research l…
Having talked to a lot of old folks who worked there the tax breaks were a huge incentive too. Lowering the corporate tax rate since the 60s has meant that corporations no longer needed to invest in R&D, just pay accountants instead.
David Graeber argues this too.
Re: The rise and fall of the industrial R&D lab
#9Earlier quoted context omitted.
I think this is a very important point. Usually, taxes incentivize companies to spend their profit on making the company better - buy new machines, pay the workers more, invest in r&d. This way, they reduced their taxable profit by spending the money on themselves. The companies profited from getting better, the state (or society) profited from growth and innovation. Now with reduced taxes, but even more importantly…
Tax incentives are also responsible for the return of open office plan since 1960s, as depreciation rules regarding buildings and furniture changed. In addition, you have people believing that Milton Friedman's biggest lie is a law, namely that maximising shareholder value (which is often interpreted to include dividends) is fiduciary duty for the corporation. (It's not)
> Tax incentives are also responsible for the return of open office plan since 1960s, as depreciation rules regarding buildings and furniture changed.
Strange. How does that work?
Re: The rise and fall of the industrial R&D lab
#10Here are some interesting conversations with people with long history of working in R&D labs:
https://www.catchingthenextwavepodcast.com/episodes/608-ton-...
https://www.catchingthenextwavepodcast.com/episodes/609-davi...