The work at Bell Labs that was most valuable to AT+T and the work that was most valuable to the world was fairly disjoint

The work at Bell Labs that made it legendary - the transistor, satellite broadcasting, cell phones, information theory - did not generate a ton of money for AT+T.^1 The work that made AT+T money were the Continuous technology improvements that made telephone poles and vacuum tubes last longer, made telephone easier to use, and slowly improved the sheathing on telephone cables. These small changes added up at scale to save AT+T billions of dollars and convince more people to join their network. Bell Labs was only profitable in conjunction with AT+T.

Arguably, the ‘shiny’ work was still valuable to AT+T because it burnished their image as an all-American center of invention and technology which kept anti-trust regulation off of their back.

The upshot is that without that pressure, there would have been much less incentive for AT+T to support the work at Bell Labs that we now lionize it for. The disjoint between the locally and globally valuable inventions also makes me skeptical of plans to ‘build the next Bell Labs’ that don’t take this into account and assume that if they do great work, they will be able to capture its value. There is a significant class of innovations that would create drastically less value for the world if their value had been captured by their creators.


^1: Arguably information theory did because it let them cram more phone calls in the same telephone lines.

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