Bell Labs as a Pioneer of Culture and Practices that Made Knowledge Workers Productive

A number of elements were needed to create the information economy. Perhaps unsurprisingly, much of what was needed emerged at the company responsible for America's communication: AT&T. Bell Labs did not just develop amazing technology like transistors, fiber optics, lasers and cellular telephones. They developed the practices that made knowledge workers productive.

Three of those practices were a reliance on
1. research rather than just tinkering,
2. creating a community of minds, and
3. crossing boundaries between the private and public sector.

research rather than just tinkering
Thomas Edison tinkered. It took him about 3,000 experiments before he figured out the light bulb. He gained knowledge through trial and error.

No one has the time and money it would take to develop fiber optics, transistors, or satellites with trial and error. To develop products that much more sophisticated than a lightbulb required basic research, gaining an understanding of theory. Bell Labs had folks focused on basic research, on gaining understanding of deeper principles that would enable technologies like fiber optics that could carry thousands of conversations along the same strand or satellites that could seemingly defy gravity while collecting and transmitting information across continents at the speed of light.

Because it was a place where people could perform basic research, nine Nobel Prizes were awarded for work at Bell Labs. The ripple effect of this basic research has still not been fully felt. Three of those Nobel Prizes were awarded for the development of the transistor and one of those prize winners went on to found the first in a series of companies that would lay the foundation for Silicon Valley. It is true that a lot of basic research will never payoff; it is also true that it is impossible to fully calculate the value of successful basic research. Early in the 1900s, William James was explaining pragmatism as assessing the cash value of holding an idea. An idea like transistors and all that it enabled has a value in the trillions and counting.

creating a community of minds
Bell Labs was a community.

It was a creative environment that fostered a rich exchange of ideas, something the science writer Steven Johnson has observed is more important in eliciting important new insights than market forces. The projects at Bell Labs required teams. Those teams required a community. The problems they were solving and possibilities they were pursuing were far beyond the capabilities of any one person.

crossing boundaries between the private and public sector
One of the many reasons that the information economy is a global economy is because ideas show as little respect for borders as clouds or pandemics. Translating ideas into value doesn’t come from rigid barriers between nations or institutions. It comes from a flow of ideas and practices across such lines.

A 2008 study titled "Where do Innovations Come From?" concluded that partnerships between corporations, government laboratories, and university researchers has become essential to innovation. In 2006, for example, 77 of 88 US entities that produced significant innovations had received federal funding.

Bell Labs received government funding in a couple of ways. The first was that the government granted it monopoly status to run the nation’s phone system. This guaranteed steady revenues to fund long-term research. The second was that Bell Labs received billions from the federal government. In World War 2 alone, Bell Labs received thousands of contracts. It was the beneficiary of the funding for these projects and of course the beneficiary of the intellectual capital generated by these projects.

The central question of the information economy was how to make more knowledge workers and make them more productive. Bell Labs gave us some great answers to the question of how to make them more productive. Their technology made the flow of information – and thus ideas – easier, which made knowledge workers more productive. As befits a company responsible for creating and maintaining the phone system that connected an entire nation, it also pioneered a culture and practices for corporate America that encouraged cooperation and a free flow of ideas.

Given the complexity of the problems in the 20th century, any successful effort would find a way to encourage collaboration among lots of really smart and informed people. Because one of the many truths to emerge out of the 20th century is that all of us are smarter when all of us are smarter. As we connect and share ideas, your insights become mine and mine become yours. Often, this inspires yet another insight or idea. If I give you a dollar and you give me a dollar, we walk away no better off. If you give me an idea and I give you an idea, we both walk away better. Technology and culture that encourages communication and collaboration – even across traditional boundaries of private and public sector - is key to making knowledge workers more productive.

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Much of the above information about Bell Labs came from Jon Gertner's The Idea Factory: Bell Labs and the Great Age of American Innovation.