museum the kind of special place that people describe. and many of you have been here before. audi like the new set of? [applause] wish i could say this is a permanent fixture of events that the computer industry museum, but i have to give credit to our good friends are doing a big conference here starting at 9:00 tomorrow morning. [laughter] and when we were trying to work at the logistics' for this we said, well, you see, we have our thing if you have your thing. very generous and said doe will set up early and let you use it. so thanks to our friends had to google for the wonderful a fee. [applause] seventy's all of your members and saying, i was there was stop wasting money of these fancy chairs, just want to allay your concerns. this is part of our revolutionary series, our

speaker series that began with out lots of room at teach it -- the evolution. we have taken the first 30 and made them into a television program which is airing every monday night. the series has been a little bit of a hiatus. it will return on monday, april 2nd, next monday with james smiley talking about her great book, the man who invented a computer which is really about four biographies wrapped into one. intel, providing that support for the speaker series. i want to thank them for their generosity. keplers this year. always happy to have kepler's be our partner for that. c-span book tv is here as well, so this will become part of that c-span book tv series which is regularly featured in the museum now and will be part of the schedule to be due at the check-in the teacher. also, our friends are here, and this will air on radio next

week. april 4th at 8:00 p.m. so you can hear the rebroadcasted sideshow. the book signing will follow this event down in the lobby. question cars are under chair. you want to hear from you tonight. as you hear john get into his discussion feel free to jot down your search to find discussions. also, that me remind you, the aztec for tonight is-tag idea factory. this is simply changing the culture will people like me is to say a pair of the states. we still say things are pleased about yourself phones. now we don't. we say, please tweet and post of facebook, but remember, your phones may make some noise to muscle we would appreciate if you'd make that not happen. now for tonight's program. there is a reason that john turner into of his new book on the history of bell labs, the idea factory. for the better part of the 20th century that is precisely what bell labs represented. recruited some of the nation's

greatest innovative engineering minds that provided a very special hot house for technical creativity and produced some significant breakthroughs. reelected here to have replicas of two of the most significant breakthroughs that were produced at bell labs. the first is the model k adder. the model k. adler is the electronic calculator fashioned by george stevens that bell labs in 1936. he called it the model k because instead fur kitchen table. which is where he assembled a from bits of tin can and scrap realize that he had taken from bell labs. computed to binary digits, and this is a replica that he built in 1980 and donated to the museum. this is part of the revolution exhibit. then, of course, the first transistor, the invention that changed everything.

bardeen and bread and design different too closely spaced "contacts pressed on to the surface of a slab of high purity this is an artifact donated to the museum from the collection of morgan spar's junior. it is a replica of the original. it is still at bell labs. john deere has managed to capture all that bell labs represented. and they are qualities that are often associated with silicon valley, inspired problem-solving , breakthrough design, visionary management, a culture of creativity, the ability to focus of a short-term issue where keeping one eye of the long-term possibilities. or, as he put it, a lab built upon the notion that a team which understood a technology could create advances that were not simply useful the revolutionary. he has used all of his skill as a writer for fast company and the new york times magazine to give us a ripping good yarn which has just the right balance in my view between technical

explanation in human trauma. with him tonight for this cover session is a very good friend of the museum. as many of you know, david, the host of kqed fm program, he frequently appears here as a moderator, and we're glad to welcome him back. ladies and gentlemen, please join me in welcoming john gardner in dave iverson. [applause] ♪ [applause] >> good evening, all. thank you for coming today. thank you for being here. thanks for that introduction. it is a fascinating book, those of you have not had the upper to the to read it yet, and so many interesting things about our culture and our times. and i would like to ask you if you would, just to begin, by reading the first paragraph of the book from the idea factory

and the great age of americans innovation, because it lays out what is so significant about this story. >> sure. >> it does mention google, i should mention. purely a coincidence. this book is about the origins of communications as seen through the adventures of several men who spent their careers working at bell telephone laboratories. even more this book is about innovation, how it happens, why it happens and he makes it happen. it is likewise a belli innovation matters, not just to scientists, engineers, and corporate executives, but all of us. the story is about bell labs and more specifically about life between the late 1930's in the mid-1970s. in the decades before the country's best minds began migrating west to california, many of them came east to new jersey where they worked in capacious buildings located on grassy campuses where deer would

raise the twilight. at the peak of its reputation in the late 1960's bell labs implied about 15,000 people, including some 1200 ph ts. its ranks include the world's most brilliant and eccentric. and it in a time before google, the country's intellectual utopia, it was where the future which is what we now happen to grow the present was conceived and designed. for a long stretch of the tortilla century the most innovative scientific organization in the world. so in many ways we would like to think that it all happened right here within just a stone's throw of this building. is it fair to think of bell labs >> at think so. it did all happen here and there. happened there a little bit before it happened here. and, i think some of the things you see now in the valley, i think, the kind of freedom given

engineers and researchers, the small teams attacking big problems. a larger system that could help support them. advice of money. all sorts of other things. a lot of that goes back to that formula. the near term thinking and the long-term thinking, as john said in the introduction. and giving autonomy to people who are very capable. >> give us some sense of all the things that came out of bell labs in those glory years. john mentioned that things that are exhibited here, the transistor. but the list is impressive. so just rattle off, if you would, some of the things they grew out of that. >> short. bell labs' began in 1925 as the research and development wing of the telephone company. but a lot of my book is really focused on those postwar years, its heyday really began to my guess you could say, 1947 with the invention of the transistor,

the point contact transistor. after he came up with the transistor. then a host of other kinds of transistors, transistor process is followed. it gets -- after that a lot happened very quick succession. there was a silicon solar cell in 1954 which is the precursor for solar panels today. does a communications, the intermission terry looking at cutting and channel capacity. communications satellites were originally designed and again at bell labs. the first was the echo satellite, the passive so-called satellite and then telstar which was an active communication satellite the unit's operating system, the same language came out of bell labs in the late 60's this ecb chip, the charge coupled device which is really the fundamental unit for digital photography, cell phones, the

theory of the lazar, a lot of the semiconductor room temperature lasers can out of bell labs which are still essential to a fiber-optic communications as well as in every dvd player. it was a pretty big risk. a pretty big risk. and. >> how did that happen to come out of montell? i mean, what is the significance of the name? what is in the name? added that matter that would lead to that trail of all of those things that you just described? >> sure. a little bit of history probably helps. the bell labs actually was formed after the fund company had been around for about 45 years. at&t was a monopoly. they controlled 80-90% of telephone service in the united states. there were a vertically integrated company. they owned one of the largest manufacturing companies in the world, western electric. in the early years, and the beginning of the 20th-century

western electric had its own engineering department and at&t, the parent company, had their own engineering department. there was a bit of tension and competitiveness between the two. in 1925 they agreed they would create a standalone lab, bell laboratories to as this sort of bottom box on this vertical stack of the company. so ideas would, el. they would be transferred to western electric about the manufacturing part of the company and eventually they would be deployed by at&t which controlled the long-distance lines as well as about 23 either parts or all of the operating telephone company. in some of the problems that they had, you read a lot of editing a problem rich environment. want to spend some time talking about bat-to-bat give us some sense of the early problems they had to contend with. there was at downtown. very basic problems that had to be solved. >> right.

everything. the early funds used batteries. no doubt tustin and a rigorous. the amount of detail that went into designing a operator headsets for these women who sat at the sports, teams of people would work on these problems for years cavatinas of kendis work on the sheeting for cables. others work on the insulation between the shooting in the cable. there was a level of detail and an amount of work that was pretty much time was. problems kept proliferate. >> was it the first time when science was deployed to solve those sorts of problems. >> there was. i mean, there was a very small research department at the beginning. again, bell labs was not a huge amount of people in one big department. there were about 10-50% working in basic research and applied research. the vast majority were working in development.

there were looking in near-term, mostly engineers. most of the science ph.d. use or in their research department. the research department started out very small. in the book attack a little bit about how it's great success, the early vacuum tubes that could amplify phone signals in the early part of the 20th-century really gave credibility to this small research department at bell labs. they succeeded in deploying across country phone link, and from then on the research department at bell labs crew and grew. it's sort of worked more fundamentally on the science. >> have what was central to its growth to huckabee, you list these amazing statistics. 15,000 people there. one time several thousand ph.d. s. was it that process, there were so many problems? emmy, were they in a sense looking for problems as of?

>> the question of what made bell labs succeed is a really interesting one. i always say there is not one reason, but that is, i think, one of the main reasons. there were connected to a company with everyday practical problems. even for the people working in applied research and, perhaps, even to those working in basic research on this release far reaching problems, the notion that work was taxed to a company , that it could be practically implemented, there were dealing with everyday world problems, an incredible catalyst. i wrote a draft in the book and then i wondered, nobody can read this book and think for monopolies. i went back and add a line saying, it's obvious there is no reason for a monopoly. but apparently some people skipped over that line. nope.

it is not. although, it is a matter of, i think personally for me sitting with a contradiction that as we come to understand, i think, monopolies are not geared for consumers. the limit choice. the increased cost of technology they can slow the rate of innovation. at this point in time during this time when tele-communications is being developed, a monopoly, i think remarkably was very good for the country and that is created bell labs and delighted to think long term and work on this very vexing problems. >> part of the reason why i ask the question is the part of what comes to read the book is that there is this sense that people had freedom. they had time. they had teams to work together. there was not necessarily this sense of we have to get this done tomorrow. that came in a sense because they had been captured market. they didn't have to worry about competition. >> they have money. yes. there were -- the attached to a

monopoly give them time. things built by at&t and western electric permit to stay in service for 30-40 years. which is, we now think the market products having a life of a year or two or three, maybe for, these were built to last. >> the telephone poles. they came out of bell labs. that's where they last forever. >> that's right. bell labs, not just one lab. a few different labs in new jersey. they had a small laboratory in just a new jersey which is sort of a country town. they would bury phone poles halfway up and just spend years putting fungicides of them policy would work better, test gophers. the gophers with each of the cable. they wanted to make sure they can have the best cable. you know, it was a company in pursuit of excellence with the money to pursue that excellence and a time and the luxury of

time. >> it is interesting. again, as we come back to the thought of how it was different in some significant way from the mantra that we think of here in silicon valley, in a recent new york times story quoting a founder of facebook saying move fast and break things. and it seems like in some ways to have this interesting contrast between bell labs that big and the slow verses the quickened in a bull. i mean, with is part of your argument. there is a value to be big and slow. >> i think so. i don't think one is better than the other, but i do think the balance is pretty valuable or has proven pretty valuable. i like living in a world with facebook and google, and i used in both. i think that bell labs to move fast times, al star, for

instance, product and very much under the gun and was actually organize in a matter of months to see if they could achieve this very difficult engineering problems in a very quick time friend, but i do think that it is work ask that question which is to the new york times piece, whether we need more of the balance or more of that kind of long-term along range, slower, maybe more methodical. we don't get there as fast. we don't get satisfied as fast, but sometimes i do think the breakthroughs that come about from a can create new industries as they did in the case of bell labs let's let's talk about one of those. a case study example. the one that john mentioned in his introduction, the creation of the transistors in 1947. you references wonderful bill gates "in which you say, if you have the ability to take part in time travel is first up with the bell labs in november of 1947.

so, set the stage for a spirit why would it be that bill gates would want to go there then? will was going on that made it such a rich and inviting place to track. >> if you got in that travel machine would you would go back, if you live in california you might not want to go back to, but a very nice place. i grew up pretty close to there. it was leafy and what it. it was a campus that mr. what these tests are working on is part of the answer. the phone company has essentially to my guess you could say to elements in it that were especially problematic. one was telephone switch offers which were quickly open closed. we just saw the ball, you saw seven there. they broke all the time. they wore out.

iphone system that collected -- connected dollars to each other. the main character my butt stopped. somebody had just hired the year before. said, if there is one thing that we can do, if we can just replaced these switches with something electronic it would become a you know, just a tremendous advantage for the phone company. in addition to the switches, there are also these vacuum tubes. kelly also had spent the early part of his life working of these vacuum tubes. the use vast amounts of power. people know they broke fairly often. they did not operate cold. yet to warm them up. an integral part of repeating phone calls to get from further distances to reassess switches to a vacuum tubes, and in turn he created this solid state team in 1945 right after world war ii

it took them a couple of years to get to that time travel. and this was a team of people working, cal led by bill. if i could talk for a second about what this team was to when the head of research set them up. by some sort of obvious today, but he did something very radical in creating this. he made it unusually interdisciplinary. he did just what physicists working with other physicists. he very much believe that actually new knowledge comes from the interface of different disciplines. he wanted business, chemists, metallurgists, which ago engineers working together to try experimentalists people who were extroverted, introverted. and in that sense he thought that would be the best way of attacking that problem. the second thing he did was rather interesting.

kelly had spent his entire career. factor may built his entire reputation on vacuum tubes and making them better. he used to run a vacuum to shop for western electric. and in creating this decree whittle smelly resulted in the transistor. he was kind of attacking that innovator dilemma had on. if they succeed would render his entire career in science essentially irrelevant which in retrospect to me seems rather courageous. >> said he also did something interesting and upsetting the apple cart of who was in charge. a put somebody in charge in a way that as the people there and was willing to sort of take some risk, not only bring people together three disciplines, but also not necessarily going by security. >> that's right. but the youngest people with the most expertise in this new branch of science and quantum mechanics and the physicists who were most recently really out of m.i.t. and caltech in charge of this group in positions to and

the old guard, some of them were demoted effectively. there is a quote in their that tell you know, there were people crying in offices. it was a revolution, as they called it. >> and there was also the sense, you say at one point that the purpose of this was not so much to build something has to understand it. so it is, again, this idea that it wasn't like we have to get this done tomorrow. there was this -- it was a scientific pursuit. >> there was a scientific pursuit. some of the names did believe that the device would be found if they could understand it. and, again, it kind of goes back to us that philosophy, i think. the early part of his career he shared an office. in the early days kelly ann davidson shared an office. a little like the original odd

couple. this robust fast-moving made. i don't know. but he was paired with clinton davis who was slow moving. he weighed about like 110 pounds. always sick. he would go home and sit in his stocking cap. and yet kelly developed this kind of all. he realize that when nobody else knew the answer to a problem at bell labs and especially a problem involving the science of what was going on in, say, a problematic device nobody can answer it, but davidson could. in departing not just advice on how to fix something, but a parting a deeper understanding they could not just be twice as good, they could create improvements in the work there were doing by orders of magnitude. and understanding something was power. >> i want to read this one passage where you talked about kelly.

the site to mike kelly would not want to begin a project by focusing on what was known. he would want to begin by focusing on what was not known. the approach was but difficult and counterintuitive. it was more common practice to proceed with what technology will allow and fell in the gaps afterward. akin to saying, locate the missing puzzle pieces first and then to the puzzle. >> in that think that sums up in many ways while its registered team was created and what its goals were. understand why we don't know and we will solve the puzzle. >> tell us something more. of course, known here. in the end he became infamous in many ways. but what was his role in this? until something about the sort of competitiveness that he, in some ways, kind of violated the norm of the bell labs by the way

in which you went after them. >> it was an intensely collaborative group. this was an error before cubicles. there was an open door policy. no one to -- no one was to be refused device. and the solid state group that began in 1945 and culminated with this invention of transistors, as echo leader it led the work. but when they made advances that ultimately got -- resulted in the point contact transistor, he became envious, jealous, and became himself fascinated by the idea of improving this idea, their work already. and shortly thereafter it resulted in something called the junction transistor. and shockley, the rule at bell labs not only was open door, with the you were not to compete

with the people you managed. a nobel prize winner, phil anderson, when i interviewed him for the bookies said, you know, this was the transgression. he could never be forgiven. and it set him on a path to my think, increasingly -- well, in the weeks after that in the months after that the transistor team that was intense the collaborative, a very cohesive, broke apart. john bardeen pretty soon after went to illinois to become a professor. bratton left working completely just to pursue his own projects. eventually he was stuck in a kind of middle management position at bell labs. as brilliant as he was, it was very clear to the management, the man who just mentioned, that he was never going to succeed at managing people. it was a matter of using his to degradability of phenomenal and select the best that they could.

he became increasingly frustrated with this. and by 1955 he decided to leave and come out here and start the semiconductor. and he had some pretty good people. >> and there is some implication in your book that, while his career sort of went off in various directions and wound up in some degree as i mentioned before, controversy, if not infamy, her that if he had stayed at bell labs that might have been contained. whenever a tragic flaw in might have had i had been contained if he had stayed within the collegial round. >> yes. in a conversation he made that argument. i think it's an interesting argument.

spending a lot of time research and, talking with people who knew him, wonder if he could have been satisfied staying in that position. he increasingly wanted to pursue , as maybe all of us to, more and more ambitious goals. stay in a middle manager position were up to research position. and i think, you know, there was this other model, clinton davis and got shot. chile's best friend these other folks who were revered at bell labs go but there were not on the management track. they all the very high stature. i'm not sure he would have chosen that or could have by temperament. >> was turned back to the transistor. did they know what they have? >> that is a question. at the time.

there is some -- there is a school of history that says they didn't. everything that i read definitely says they did. in fact of the day after the transistor's unveiling the president of bell labs, even after it had been buried in the new york times on page 46 is something, or not, you know, that feeling this time of huge breakthrough. >> remind all this about the new york times. [applause] fifth. >> of the debt would get a seeing breakthroughs in the happened. in that case, you know, the day after the president of bell labs had written a note to his former boss, the first president of bell labs said this book is very important. if you look at the internal correspondence that was coming into the researchers at the time , really every major corporation was writing to them begging for samples.

rca, zenith, the big electronics and pace of the time saying, sending letters to and not just a one guy thinking maybe if we send one to the head of research that would give us once of the we contested. very interesting question was whether they knew its application in computers. they knew it would be useful in the phone system for apple buyers impossibly switches. and the only thing i found, a couple of weeks after the unveiling of the transistor, an mit professor wrote and no to bell labs, i think to ralph, the head of research and said, can you please send a some? we think really has a reputation in high-speed computers the rebuilding. i don't know how high speed they are in retrospect, but he was building these. and immediately, not all the letters get a response, but immediately he wrote back and said, yes to we will send that to you right away. let us know and there is anything we can do to make them work for you. it is unclear from my research whether they understood that

competing application first, but certainly with the forced a letter it became very clear. >> they did share the technology. that is an interesting part of the story. it was something there were trying toward. >> italy two years so they had to share. they entered into a consent agreement with the united states government would only allow them to use the technology for telephone application. in the late 1940's is true, they could have to radically kept to themselves among but even though they have this monopoly status it was -- as i did some of the internal correspondence at the time between the management they felt that it was too big and too significant which almost tenses your previous question. they thought it was so big that they had to share it. the idea was this essentially publicly funded laboratory to keep this technology to itself would not have been acceptable.

>> zero one testing and that we will come mortar attack back about innovation. it's worth noting that they had a few misses. describe the picture. >> sure. they had a lot of missing -- the transistor team had a lot of misses leading up to the breakthrough. i mean, i think anybody who works in the innovative process knows that it's a huge part of that and that it almost always precede success. but then again, there were mrs. santo years that failed in the marketplace disastrously. and the picturephone is just one of these incredibly expensive follies that just did abcaeight, a huge belly flop. and it was, you know, as usual, it was great engineers working on it. it was this to mean no, of visual communication device that was going to change the world before.

we would all be tweeting by picturephone within ten at 20 years after was rolled out. pretty soon after i think something like 40 people had signed up in pittsburgh for a. the failure of it became pretty apparent. you know, i interviewed some of the guys who worked on the picturephone. some of them would make the case to me, we were right. i think that is true, but i think it proves the idea that you can be early in the wrong. that is, you know, part of innovation. >> said so, what do you take from that? and me, as you think about what we learn from bell labs, on those misses, where did they go wrong? why was it that led them down that particular path? without some sort of self correction, was it that we were allowed to pursue those things? the same thing. because you had time you could also pursue something that turned out to be folly. >> i think it could be.

think that's right. i think there are different kinds of failures that occurred are different kinds of misses. for instance, the fiber-optic breakthrough came through. it did not come from bell labs to read and at bell labs they were pursuing something called the waveguide which was going to carry phone signals through a specially designed hollow pipe. and that was, i think, i talked about it in the book, whether these are mistakes of perception of what the future will be or will need or whether there are mistakes of judgment. and i think the picture from was a mistake in judgment in many ways. somebody talk to me and said to me pretty convincingly, it was kind of groupthink. none of us who were working on it even believed it could possibly fail. >> is it in part done, there was not a consequence of failure? i mean, you work -- as a lot you

may know, runs the institute it, he said to me one stock quoted something which was that science is the process of going up valleys to see if they're blind. and it occurs to me in listening to you that there are wonderful things that come from that. but that also then that it allows for you to go down blind alleys. >> i think so. one of the characters in my book that i spend a lot of time writing about was this guy john pierce effaces career here is stanford and work to caltech and i went through his papers. then i came across something he had written a few years before he died. he was considering writing a book about bell labs. he tried to take apart what made it work. he had a sort of forepart formula. one of those was that a researcher who is pursuing something, the research should be terminated without damning

the researcher. there should be no consequences for failure. but, again, that is probably, you know, there are specific failures in that system of failures which the picturephone more closely represented. there was enough money that the consequences were not ever going to be dire. >> love me ask you one more thing about the problem of discovery. it was starting to some of your questions as well. you're right early in the book about eureka moments. as just want to read this one passage because it seems so applicable to what happened a bell labs. we usually imagine that the invention occurs in a flash with your rick a moment at least to a lone inventor tore a startling epiphany. in truth, large leaves for the technology really have a precise point of origin.

at the start forces that preceded invention really begin to allied and often imperceptibly as a group of people and ideas converged and so over the course of months or years or even decades, we gave clarity and momentum. it seems like some much of what happened was that the eureka moment. it really was this collection where the whole command the end, was the product of the some of the parts or even more. >> and i think a lot of the people there, especially in their early days would maintain that they're building a things coming out fast the breakthroughs in that kind of alignment of ideas, that the creation of ideas and discovery leading up to something was really just a matter, of course. >> in the think we are lacking that now? that ability to allow more than

just for the eureka moment, to allow for that long unfold? >> i think that -- having to put on -- pick up the writer had and the pundits at. it is been a difficult process. but i think as a reality check, we still find a tremendous amount of research and development in this country to the tune of something like $150 billion per year. a lot of that goes to military search. a lot of it goes to the part of energy, nasa, a great chunk of it goes to medical research. smaller amounts go to basic research. but it is a different system now a more distributed model. we look to universities and national laboratories, venture-capital firms, shorter

-- businesses with a short time horizon. is it as good or effective as we have had to make i don't know. i think there are definitely gains. there probably are possibly some losses. sometimes i wonder if we should talk about it more at the very least because i think it is a very and complicated problem. i mean, i have been to manufacturing conferences in washington where people in the white house talk about our loss of manufacturing prowess and how that was a vital part of bell labs and western electric. they have this ability to not just an event, but to develop mentally bring these things to manufacturing in a way that required great expertise. >> and you make the point in the book also, one of the problems with outsourcing is that you lose that connection between creativity and product. you lose the chance for

interdisciplinary walking down the hallway, who you bought into valleys to something else. >> i think so. in the case eloquently a couple of years ago. a great review article about the manufacturing system and the sort of feedbacks to innovation. i think it is true and arguable that manufacturing moves, but eventually, you know, development and research to move along with it. i think, for instance, we may have been talking about the battery industry, the lithium ion industry which is now relocated abroad in asia. i think to some extent that is true with the semiconductor industry, certainly the lcd letting industry. yes, there is that danger that you lose manufacturing and you lose that ability to manufacture things. have to be concerned the use other aspects.

>> i want to ask john, let's also get to some of your questions. if you have not written down there questions yet, there is lots of time to do that. let's get to some of your questions and then i will return to some of my. how many nobel prize winners to use the coming out of twitter, facebook, and google? [applause] [laughter] [applause] >> do i have to answer that? nine. there certainly people. i wonder, you know, i worked in a magazine. the company that covers a lot of that industry. i use those products and they're very cool. i don't certainly think every company or even any company we could talk about basic research should invest in that. i don't think facebook should serve hiring dear medical physicist. i don't think that makes a lot of sense. i don't know if they should be

pursuing. there is that. >> depots at the end of the book a question about what would people think of these sorts of innovations today? what was your conclusion about that track. >> well, in writing the book i wrestled with this question a lot before i even started writing. what is innovation? and i think as a writer we use the term now for almost anything we have this big band. decollate innovation or dumb things innovative. it is turnaround. without making a value judgment that it is a bad thing, it is certainly a bad thing for a writer because it is trying hard to understand what innovation is when it is all sort of mock up. but, i think with bell labs, you can never go to a store and buy a bell labs product or innovation. you know, stuff inside of it

every platform innovations on which the phone system was built and other industries were built to, so these platform innovations are different. in some ways i think that the consumer innovations we might think of now the man is not necessarily that one is better than the other. they're both necessary, but different kinds of innovation. >> i don't think you answered my question. >> sorry. again answer, i hope many way. [laughter] >> what he think of facebook? >> i think -- i imagine it is an amazing communications platform that has swept the world. the proof of its success is in its huge market and and/or. i want to stay away from the subscriber.

the question, i guess that i oppose in the book is, is that the kind of platform through which you build other industries or technologies or thousands or hundreds of thousands or millions of jobs to come out of that. i think that is the more complicated question time and i think that is a good question. i don't know if i have an answer yet, but i don't think -- i think that is something. >> here's a question. the end of the montell monopoly, is there some sort of succession that would take the place? >> i don't think we want to the go back in time. i don't know. suddenly the points was never to create another bell labs in that sense. but, i think the essence, at least offer me of its value was this ability to think long term

and to invest in a long-term and to solve really big problems. i me, you could make the case similarly about ibm. you could make it about nasa and the apollo missions, the manhattan project. i think from my point of view, at least right now, the really big problems are in energy. are we solving this transit problems? i'm not sure and we are. but i think that we need to it. >> a question about anti-semitism. are you the first to mention that there was anti-semitism at bell labs early on? you wrote that it ended in 1944 with kelly hiring the first use employees first. my recollection of the book

there is no anti-semitism. i found bits and pieces and some interviews, sometimes off the record with people trying to piece this together. i can say fairly certainly that that anti-semitism and starter in the main parts of the company than at bell labs. especially at at&t. but starting in the war effort there is some evidence that the past over hiring richard feynman because of that. there is a memo i am very that the archives of really blatant cases of one of the labs preeminent engineers telling people he doesn't like jews. this kind of shocking memo to

read them days. and the war effort did break down that barrier. obviously a great thing. it also brought women into more roles to. so many people involved in the war effort. that was by necessity. the management of the lab's never looked back after that which was certainly a lot of thing. >> this question, bell labs verses ibm. why did one survive tobacco was the difference? >> one interesting question. i wish i knew. i know some about ibm research. i wish anymore to answer that. i think it's clear that the last and survive because it gained its energy, substance by being a test to a monopoly. i can answer that part of the question. it didn't -- it could not survive in its form without that

attachment and without that relationship. when the phone company was broken apart in the early 1980's , after that its revenue faugh declined dramatically. jetstream of real-world problems, that ability to justify its investments in scientific research became more and more difficult one thing that is really interesting, at least to me is that one of the characters to a talk about went to work for ibm research right after he retired from bell labs. he would go the europe to interview the researchers and write these coverage of reports, the ceo. try and delivered to him his conclusions about what ibm research should be continued. proving the stars or at least, as he sighed.

>> given that bell labs was generally get innovation commanded them this the first major innovation in their primary killed -- field. >> good question. how did they miss? i think they missed a bunch of things. i mean, i don't think, you know, i don't think -- i have no one reads the book and come away thinking they're perfect. they missed the integrated circuit. they missed fiber-optic cables. they made decisions over what to pursue and what not to pursue. i think in any highly competitive industry you are eventually going to miss something big. >> work in non monopoly environment within must justify their existence and the profits.

>> i don't know if they can. i don't know how you can capture the value of basic research when you are a public company and you are investing in that kind of risky research. it's such a large scale which is , i think why government, to some extent, steps into several. >> talk about a couple of others all come back to your question. you go where he still have more and will get to the rest of these. a couple of other case studies are interesting and indicative of this question we are exploring about the time. one of them is that it is the creation of or the story of figuring out. it seems like essentially driving around. so, describe what went on in order to figure out the concept. >> with some funds, which actually was one of my favorite

parts of writing the book and researching it, by that time it wasn't just a small teams of people working on problems in the lab. hundreds of people working on a very, very big system project. different kinds of people working on different aspects. systems engineers and new jersey working on it. researchers working on basic knowledge of what happens with the internet transmissions. these cuts would drive all over new jersey testing things. the early 1970's in the you know. can you hear me nelson the stuff trying to understand what happens. it was not completely understood what happens when you drive through forced her into a tunnel or what happens with a mountain in the distance. it was not known how far your transmission to travel.

one of the most interesting aspects of the self audit for was that some of the people who solve these problems actually came from bell labs military. 1-in particular is that a lot of time talking had done a lot of work on radar, discriminatory radar work in the south pacific were bell labs said a very small facility in working with western electric. and at the time he came back from the tour of duty we have part of these highly sophisticated microsystems, came back and then said they're going to discontinue the kind of thing he was doing. somebody suggested you talk to these guys working on cellular. and it was, again, part of the serendipity of bell labs that he was the guy who had the kind of knowledge that very few people in the world had that one particular time. they drafted him into the

project. and, soon enough he had a fan. he was going down to philadelphia and had cleared up the van and ripped up the torrance and stuffed it with a lot of electronic equipment. it would test out the signals to try and make a working soften system go. >> and it is some ways not unlike the story of the creation of the satellite. it is also, that just -- is sort of science by accumulation. you write that they grew up on 16 different discoveries. one boy all the way back to 1937. again, it is not the eureka moment but this collective enterprise. >> yes. i think so. i think perhaps a misunderstanding. alloys make the case that we can just look at our smart phones and have the same kind of, you know, understanding. certainly it is not -- it is this incredible integration of

some many -- summons work over the past 50 years. so many people working on these things. some improvements on the breakthroughs. all integrated into one beautifully designed phenomenal product. >> one of the things, you also get the sense of all of these different characters. let me introduce you to one more and then i'll come back to your question. this is an individual by the name of shanahan many of you may know of. the contributions with the term. [inaudible] he barred it from john who suggested it. statistician. >> this is why shannon. i just want to read this portion john can describe what made him so interesting. one year his wife, he bought his wife unicycle.

quickly began writing and then he began building his own, challenging himself to see how small they could make one still righted. he was in the office and would take a break from work and write his unicycle up and down the hallways. when he got a pogo stick he would go up and down the hall on that. so here, man who rarely show up on time for work, often played chess are filled with amusing machines of a, frequently went down the halls juggling or of knowing but did not seem to care really what anyone thought of him or his pursuits. he did was interesting. he was categorized as a scientist, but it seemed obvious that he had the temperament and sensibility of an artist. such a wonderful description. and there was room for him, and for that sort of -- for a guy who was bug going down the hallway. >> yes. there really was.

he had learned that kind of ability, i think, to be eccentric. let's talk about the open-door policy of bell labs, the only person i ever heard of mexico's their door and never complained about it by creating this amazing treatise ..

one being what i call the channel capacity of the system, and he explained how you can measure capacity and make sure you could overcome the systems and how they become crafting codes so you can essentially sending a message with pretty much virtual perception as long as you create these. interested in developing these ideas practically. these are the correcting codes or digital communications which

they also wrote a long paper about, but he isn't interested in developing them in the system. he is very interesting in developing the idea. >> that is part of what is interesting now to the ivory tower but held the equivalent of the tenured faculty. people who could pursue knowledge. >> a lot of the folks in the research were telling me that it was better than academia because for them they didn't have to apply for grants for one thing. the head of vast amounts of money could use for experimentation of the needed to. >> you have this freedom to work >> you have this freedom to work on your work. >> here's the question that remains. what is or was the relationship between bell labs and princeton?

>> bell labs and princeton, as far as i know, there was very little. eventually from bell labs people went to princeton after they did, and at least in that time period between 1945 to 1982 there is no saturation i'm aware of. stomaches this with or not wondering about the relationship does princeton see that there would be a kind of ancestor what is that? >> you know in the book, too, i talk about bell lab execs and they hired truman who is the dean of stanford to create the stanford eco system of entrepreneurs. they hired the new jersey to

create some sort of analog. there were problems with new jersey. as i understand at least princeton science program was theoretically oriented. the geography wasn't necessarily suitable, it was to spread out between say princeton and rutgers and the pharmaceutical companies and there was this whole plan for something called summit university which is going to be modeled after cal tech and was went be in northern new jersey and remanded the plan. it was expensive and bell labs decided they couldn't find it. >> how and why is the government regulated monopoly at&t more innovative than a government monopoly. >> it's a good question. >> it's a beautiful question.

how could they get the idea is to put a piece remember how to pass that. they didn't use the word doping. it was before they used that phrase. this is for the engineers out there. they actually go around and he thought it could be the best thing he used. he had a stash of it that he used before the war and to get out of this experiment. >> the monopoly of at&t the government regulators allow the cost to be added to every phone bill and the kremlin's would be an explicit tax on the telephone service as the proceeds going to r&d would never pass the congress today. >> can you read the first part

of that? that is true. estimate was funded by the monopoly of at&t. the government regulators allow the talks to be added to every phone bill. >> one to one-and-a-half% of every person's phone bill is essentially went to bell labs and was like in national laboratory in that sense in that it was funded buy not totally the taxpayers but by some counts rivers. that's right. >> that's like mandatory being subscribed? [laughter] >> where did the at&t marketing innovation come from they didn't have to actually go out and sell. >> that's true. they had a tremendous department the was really good at selling this image as a kind of benign entity.

where did it come from? >> where did in market innovation was that from bell labs? >> there is no marketing there. >> so they were human factors department and its possible there but i'm not aware of anything coming out of it. >> was there any patent dispute that came out of the invention of the transistor? >> there were complicated patent stories where he tried to patent in the particulars but after it came out as far as i know the challenges know. i don't remember there being any litigation's to the patent, and we went through fairly smoothly.

>> as a former bell labs and we i remember all of the products require tariffs approval, competitors to delay the rollout for a year. did you encounter that in your interviewer's? if i'm not reading it right, my apologies to the person was wondering if you require tariffs approval did you encounter that? >> i'm not sure what that person is talking about. one thing you deal with an utterly history are all of these hearings in the local operating committees where they want to raise rates. these were more rate hike hearings. i don't know if that is what we are talking about in this particular question that there's a constant kind of tension of at&t or local operating companies wanting to raise rates in california. for instance i had 300 visiting pages of testimony.

in the 1950's they were explaining why the need to upgrade the switching systems of it put a higher rate in place. >> there are many questions about the key factors are to innovation. so, let's spend a little bit of time and the remaining moments. on that factor. if we could sort of walk through those is a starting with this idea of giving something time and then bringing together a multidisciplinary approach to this problem environment? >> i think those were at this moment in time people were working in different kind of innovation and the take may be different lessons out of it. i think having a stream of practical problems with that is what you are working on or not is incredibly vital. i think they are multidisciplinary aspects that are quite essential or was quite essential to their approach to

problem-solving very often. i think freedom for some researchers was incredibly useful. sometimes they are not because of what management was are around the people to do but because the researchers decided that they were going to defy the management come and there is at least a few instances of that occurring, too, and yet that was sometimes allowable as well. money is very important. money for the short term, money to hire the best people and to have a good number of people who can work together and money that ensures that he will be around for the next year and maybe the next five years for the next ten years. as i see it, i think those are the essential ingredients. >> what about the question of whether or not, you know -- i

don't get the sense i guess where i want to go -- i don't get the sense of there being tension that we hear so much about competition and tension and that pushes innovation forward how do you get a great sense reading the book that there was tension? there was the shockwave competition, but outside of that there was a lot of competitiveness where there was tension his, what do you do with that? there was competition sometimes in the later years they set up competing groups to compete against each other kind of internal competitions. i think that larger question that made me think of something which might be seen as maybe the competition that we sort of now can create an official of market competition which is true to some extent. we get amazing consumer products out of that kind of competitive

marketplace. but if you look at the history of bell labs in the organization that wasn't really competing with anyone else you start to wonder how does that happen if we get these breakthroughs out of that. we got those breakthroughs because it was a place where there was a rich exchange of ideas and problems that could be solved and needed to be solved. and i think to some extent the big breakthroughs elsewhere, you know, certainly the internet was not created because of market competition, so those big returns i think for the most part a rise out of the need to move ahead in curiosity and a willingness to fail. >> what do you come in the and as we come to the conversation, should we take from bell labs'

story. you said your book is not an argument for creating bell labs. but what can we take from it would be useful for us to think about as we think about the problems that we have to solve, and the way in which that sort of innovative spirit might be brought to bear? >> a think the most important take away for me is that notion of balancing the short term hemet topple some innovation economy that we have now that we admire rightfully quite a bit with a sort of wander term vision coming and i think that can be vital. and i think it has gotten out of balance a little bit, and to me that is crucial. the other thing here with the investments and basic research can pay off in ways that you cannot imagine. bill gates the other day was saying on wall street journal

the we should double our national investment and i think in the bill labs innovation stream of innovation sort of proved that those investments, those endeavors into the basic science can change the world, they can change the economy, the can create jobs. they don't pay off quickly, but they pay off in ways that are just amazing. >> could it to then be brought to bear on problems like energy, you know, something that is in so much of the forefront right now on climate change? are there other things we can keep out that we can use in attacking some of those problems? >> i hope so. we have our energy secretary from bell labs, and he knows that process better th