mother. [laughter] so what is the kind of thing that leader ron that gives you an idea what these people are like that she just can't learn in real time. ..

>> but arrivistes, biographies. i was devastated by a lot of historical figures. the computer field was quite young. already there were people like ken olsen, gordon bell who had done incredible work. >> to move for my time, actually going to what they look like. been thinking about. >> the industry has made bigger changes in a few decades to printing over a few centuries.

>> at mit we had a computer take up half the building. dustin's of millions of dollars. the computer in your cell phone today is a million times cheaper and a thousand times more powerful. >> we are reporting the events contemporaneously with that happening. rarely in history do you have a chance to do that. would you love to be allowed to hear michelangelo talk about what it was like to paint the sistine chapel. >> this is remarkable. i support the heck of it. at the kid is an important thing. >> that is what the museum is about, the will to understand the history of what has been happening and to see it and feel it. >> with was a graduate student and was complaining about the boroughs' architecture back -- my faculty member toby, steady it. even if you don't like it there is something exceptional that got it to be successful. you need to know what that is.

that's what the computer history museum is all about. >> good evening, everyone, and welcome to the museum. it's my pleasure to welcome you here tonight of behalf of the trustees, our staff, volunteers, everybody worked so are to make the museum the kind of special place that you just heard some people describe. how many people have been here to end of the before? out to you like the new set up? [applause] >> i wish i could say this is a pretty picture of its at the computer history museum, but i do have to give credit to our good friends who are doing a big conference here starting in 9:00 tomorrow morning. what we were trying to work at the logistics' for this we said, well, we have our thing in your thing. google was very generous and so

we will set up early and let you use it. the key to our friends for the wonderful ave. [applause] so in case all of your members and say, was there was stop wasting money, i just want to allay your concerns. this is part of our revolutionary series, our speaker series that began with the launch of revolution, the first 2,000 years of computing downstairs. have taken the first 13 of that series and made them into a television program which is airing every monday night. this series has been a little bit of a hiatus. during march. it will return on monday, april 2nd, next monday. jane smiley talking about her great book, the man who invented the computer, which is really about four biographies wrapped into one. intel has provided major support for the speaker series. i want to thank them for their generosity. keplers is your father bookselling part of the evening which happens after the show.

always happy to have the be our partner. c-span book tv is here as well. this will become part of a series which is regularly featured in the museum bell and will be part of the schedule the you have to check in the future. also, our friends are here, and this will air on radio next week. april 4th. 8:00 p.m. you get your the rebroadcast of tonight's show. the book's qaeda will follow this event have allowed the. you have question cards under chairs. we want to hear from you tonight. as you hear john get into this discussion of the book to a free to jot down your questions. you will be collected as just a bit. let me remind you, you can see that has tied for tonight is idea factory. this has completely change the culture of what people like me used to say appear on the stage. this is complete taste. now we don't say please turn off your cell phone. we say please tweet imposed on facebook.

remember your funds may make some noise. bell for tonight's program. there is a reason that john bird mare entitled his book the idea factory because for the better part of the judge's century that is precisely what bell labs represented. it recruits of the nation's greatest innovative engineering minds, provided them with a very special hothouse for technical creativity and produced some significant breakthroughs. we are lucky here to have replicas of two of the most significant breakthroughs that were produced. fashioned by george tibets at bell labs in 1936. he called the model k because it stood for kitchen table. which is where he assembled it from bits of at tin can and from scrap relays that he had taken

from bell labs. it competed to buy very digits commend this is a replica that he built in 1980 and donated to the museum. this as part of the revolution exhibit. then, of course above the first transistor, the invention that changed everything. they designed it from two closely spaced build contacts pressed on to the surface of a slab of high purity germanium. this, too, as an artifact of it to the museum for the collection of more in sparks jr. it is a replica of the original. still at bell labs. john e. burger has managed to capture it is but all that bell labs represented, and they are "-- there are qualities that are often associated with silicon valley transpire problem-solving to break through designed to a visionary management, a culture of creativity, the ability to focus on a short-term issue but keeping one eye a long-term

possibilities. or, as he puts it to my lab built upon the notion that a team which i understood the technology could create advances that were not simply useful but revolutionary. he has used all of his skill as a writer for both the company and the new york times magazine to give us a ripping good yarn which has cut drive to balance between texaco exploration and human drama. with him tonight for this recession is a very good friend of the museum, david iverson. as many of you know, the host of the forum on friday morning. he frequently appears here as a moderator, and we are glad to welcome back. ladies and gentlemen, please join me in welcoming john and dave. [applause] ♪ [applause] >> did evening. thank you for coming today.

thank you for being here. thank you for the introduction. it is a fascinating book for those of you have not had the up to its really get to read it gets at so many interesting things about our culture and our times. i would like testify if you would, just to begin, by reading the first paragraph of the book from the idea factory, and lays out what is so significant about the story. >> sure. this does mention google, i should mention, but that is purely coincidental. this book is about modern communication origins as seen through the inventors of several men who spent their careers working a bell telephone. this book is about innovation, how that happens to malaya happens, and to make it happen. it is likewise about why innovation matters cannot just decide to star engineers, and corporate executives, what all this. the story is about bell labs and

more specifically about the late 1930's and the mid-1970s. is it coincidence. in the decades before the country's best minds became my riding west to california and silicon valley many of them came east to new jersey where they worked into pages glass buildings located unaggressive campuses where deer would raise the twilight. at the peak of the reputation of the late 1960's bell labs employed about 15,000 people, including some 12,000 pasties. its rates include the world's most brilliant and eccentric men love it. the time before gruel the labs was an intellectual utopia, where the future, which is what will happen to call the present, was conceived and designed. for a long stretch of the 20th-century bell labs was the most innovative scientific organization of the world. so in many ways we would like to think that it all happened right here within just of stow's drove this building.

is it fair to think of bell labs as silicon valley before silicon valley? >> i think so. it did all happened here commended it all happen there. it happened there a little bit before it happened here. i think -- some of the things the you see now, the kind of freedom given engineers and researchers, the small teams attacking big problems within larger assistance that could help support them with advice, monday to all sorts of other things, a lot of that does go back to that kind of formula. given autonomy. people who are very capable. some sense of all the things that came out of bell labs of those glory years. mentioned, of course to what these are exhibited, the transistor. but it's impressive.

just rattle off some of the things that grew out of that. >> began in 1925. the telephone companies. but a lot of my book is really focused on those postwar years. the heyday began in 1947 with the invention of the transistor, the point contact transistor. pretty soon after the kim up with the junction transistor, and 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 cells transference which is the precursor for the sort panels a day. there west as a communication, shaded the information theory looking at cutting its channel capacity. three vacation satellites. the first was an echo satellite

which was up passive so-called satellite, have been held star which was an active communication satellite. the unix operating system, the same flintridge carry out of bell labs in the late 60's. assisi d chip, the chargeable device which is really the fundamental unit for digital photography. the lazar, a lot of the semiconductor. so essential to a fiber-optic communications as well as their in every dvd player. it was a pretty big risk. she. >> out does that happen to come out of ma bell? coming, what is the significance of the name? what is in the name? out is that matter, lead to the trail of all the things you just described. >> sure. a little bit of history probably helps. bell labs was formed after the phone company had been around

for about 45 years. at&t was a monopoly that controlled 80-90% of service in the united states. a vertically integrated company. they owned one of the largest manufacturing companies in the world. in the early years to win in the beginning of the 20 a century, western electric had its own engineering department to with at&t, the parent company, had its own engineering department. there was a bit of tension and competitiveness. 1925 they agreed it would create a standalone lab, bell laboratories who has the sort of bottom box of this vertical stack of the company. so ideas would come out of bell labs. ideas and development. there would be transferred to western electric about the manufacturing part of a company, and eventually there would be deployed by at&t which controlled all long distance lines as well as the 23 parts

are whole of the operating telephone company. >> some of the problems, you read a lot about it being a problem rich environment. there was in the dial tone. very basic problems. >> everything. nearly froze use batteries. the altos for rigorous to weigh ups. the amount of detail that went into designing a operator headsets for these women who said its switchboards cortines of people work of his problems for years. sheeting for cables. the cheers for work of the insulation for shooting. there was a level of detail and about a work that was pretty much endless. problems kept proliferating. >> sorry about first time when the science was deployed to solve those sorts of products problems.

>> there was. i mean to whether was -- in a very small research department at the beginning. bell labs was not a huge throng of people in one big department. 10-15 percent of them were working in basic research and applied research. the vast majority were working in development costs of there were looking at near term, mostly engineers. science ph ts were in the research department. the research department started out very small. in the book a talk a little bit about how it's great success, the early vacuum tubes that can amplify phone signals in the early part of the tortoise century. they succeeded in deploying across the truffaut lake they grew and grew as a work more and fundamentally.

>> interval to growth. i mean, amazing statistics. 15,000 people there. a onetime several thousand ph.d. the process to weather worsened the problems. with a looking for problems to solve? >> i mean, the question is a really interesting one to win bella said there is not one reason, but that is, i think one of the main reasons. there were connected to a company with every practical problems. even for people working in applied research and perhaps even those working in basic research of these really far reaching problems, the notion that their work was attached to a company, that it could be practically implemented, that they were dealing with everyday real problems was an incredible catalyst. >> monopoly. that's a good thing.

>> i have been accused of being a closet monopolist. i wrote a draft of the book and that i wondered, nobody could read this book and think i'm for monopolies. i went back to battle a line saying it's obvious that there is no reason for monopoly. but that apparently, some people of skipped over. it is not an argument for monopoly, 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 good for consumers. they want a choice. increase the cost of technology, slow the rate of innovation. at this point in time during this time when tele-communications was being developed, the monopoly, i think, arguably, was fairly good for the country in that is created bell labs and a letter to big board chairman work long-term of these very vexing problems. part of the reason why i ask the question is that part of what comes to read the book is this sense that people had freedom,

time caught teams to work together. there was unnecessarily the sense of we have to get this done tomorrow, and that came in the sense because they had captured market. they did not have to worry about competition. >> they had money. and being attached to monopoly give them time. they spelled by at&t and western electric were meant to stay in service for 30-40 years. which is, we don't think of the market products having a life of a year or two or three years, before, these were built to last >> telephone poles. they came out of bell labs. >> it's right. bell labs said this -- it was let's just one. it was a few. they had a small laboratory in chester new jersey which is a country town. halfway up and there would just

spend years putting fungicides of the policy would work better, test gophers. the gophers with the through the cable. there was to make sure they could have the best cable. it was -- it was -- it was a company in pursuit of excellence with the money to pursue that excellence and the time and the luxury of time. >> it is interesting. as we come back to the fun of tyler was different in some significant way from the bond sure we think of here in silicon valley, you reference the bay and the slow verses the quickened the nimble. it's part of your argument that there is a value to being big and slow.

>> i think so. i don't take one study it from the other, but i think the balance is valuable and has proven valuable. add like living in a world with facebook and global, and use them both. and i think that bell labs could not pass the time for help start, for instance, projects done 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 and of very quick timeframe, but i do think that it is worth asking that question, which i nest in that new york times piece whether we need more of a balance or more of that kind of long-term long-range slower, maybe more methodical. we don't get there as fast. we don't get satisfied as fast, but i do think the breakers that to about from it can create new industries, as they did in the case of bell labs. >> let's talk a one of those is

a case study example. the one that john mentioned in his introduction about the creation of the transistor. you reference this wonderful quote from bill gates in which he said that if we have the ability to take part in time travel, his first stop would be bell labs in november of 1947. so it set the stage for a spirit or would it be that bill gates would want to go there and? will was going on that made it such a rich in inviting place to iraq. >> if you got in that time travel machine you would go back to new jersey. very nice place. i grew up pretty close to there. it was leafy and what it in the campus atmosphere. with these guys were working on is part of the answer to that question.

the phone company had essentially i guess you could say two elements that were especially problematic. one was telephone switches to my relays, click the opening closed. just saw the bottle. they broke all the time. they wore out. and think the phone system connected callers to each other. there were slow. the main character in my book stopped somebody who had just hired the year before the holland said to me you know, if there is one thing that we could do to with a kid just replace the switch is this something electronic it would become the you know, just a tremendous advantage for the phone company. in addition to the switches barrels of these vacuum tubes. kelly also have spent the early part of his life working on these tubes. the power. people know they broke poorly

often. did not operate cold. you had to warm them up. the part of repeating phone calls to get them from further distances. switches to a vacuum tubes, and in turn they 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 moment. and this was a team of people working led by bill starkly. if i could talk for a second row what this team was, the head of research to set them up, it might sound sort of obvious today, but he did something very radical in creating this. he made it unusually interdisciplinary. he did not just what physicists working with others. you very much believe that actually develops comes from the interface of different disciplines. he wanted to assist kendis,

metallurgists, to the engineers working together, experimentalists, loaders, people who are extroverted, introverted. and in that sense heat up that would be the best way of attacking that problem. the second thing to a rather interesting to mike kelly had spent his entire career. in fact, he built his entire reputation on vacuum tubes, making them better. he used to run a vacuum to shop for western electric. and in creating this he needed to create what all to believe resulted in the transistor. he was kind of attacking that inevitable that on. if they succeed it would render his entire career in science essentially irrelevant. in retrospect to me it was rather courageous. >> said he also did some interesting in upset in the apple cart of who is in charge. a way that people there, he was willing to take some risks, not

only in bringing people together put different disciplines but also not necessarily going less seniority. >> this new branch of science, quantum mechanics. the sip -- the physicists out of m.i.t. and caltech, and some of them were demoted effectively. there is a quote in their that, you know, there were people crying in offices. it was a revolution dry as they call that. >> the purpose of this was not so much to build something has to understand it. it was like we have to get this done tomorrow. they believe the device would be found because back to the

philosophy shared an office with a gun in plan davison. in the early days, they shared office. there were really the original odd couple. this robust best moving it might have had adb, i don't know, but clinton davis, slow-moving fanatic. he weighed about 110 pounds, always sick. he would go home and said in a stocking cap and write equations yet kelly developed this kind of all and realize that when nobody else knew the answer to a problem and especially one involving the science of what was going on with the problematic device the wicked interest, but davidson could. in importing not just advice on

how to fix something, but a deeper understanding. they could not just to tauruses good. they could create improvement in the work they're doing. >> i want to read this one passage. you talk about him. he said one board kelly would not want to begin a project for focusing on what was known. you would want to begin by focusing on what was not known. but difficult and counter intuitive. more common practice to proceed with what technology will allow and fill in gaps after words. akin to saying locate the missing puzzle pieces first and then to the problem. >> that sums up by the transistor was created and what the goals were. understand why we don't know and we will solve the puzzle.

>> tell us something more. of course, he is known here in the end became intimate in many ways for the matters of race. but what was his role in this? and tell us something about the sort of competitiveness to my he in some ways piloted the norm by the way in which she went after them. >> it was an intensely collaborative group. this was an error before cuticles. an open-door policy. no one was to be refused advice no matter how well known warfare issue was. in the solid state group that culminated with this invention of transistor, as echo leader, she led the work. but yet when a native dances that ultimately got -- resulted in the point context transistor, certainly became india's, jealous, and became himself

fascinated by the idea of improving this idea that it was their work already. and shortly thereafter it resulted in something called the junction transistor. end sharply, the rule of all it was open door with that you were not to compete with the people you managed. this was the transgression. increasingly in the weeks after that and the onset after that eventually he was stuck in the

kind of middle management position at bell labs. as brilliant as he was it was very clear to the management, he was never going to succeed at managing people. it was a managed it became increasingly frustrated. by 1955 decided to leave and come out your and start the semiconductor. some pretty good people. >> and there are some implications in your book that while his career soared 01 off and various directions then and what about is some degree as i mentioned before, and to me, but if he had stayed at bell labs that might have been contained. that part of him, whenever a tragic flaw you better vet might

have been contained if he had stayed with them a more collegial role? >> in a conversation with the and ross he had made that argument. it is an interesting argue it. it is a hypothetical. something about the character from spending a lot of time reading about him, researching, talking with people in new have, i wonder if he could have been satisfied staying in a position. he increasingly wanted to pursue , as may be all of us to come more and more ambitious goals and to stay in a kind of middle management position or even just a pure research position like some other duple in the book, claude shannon who had no aspirations to a manageable level. he just wanted to do his work. i think there was this other model. clinton davidson, his best friend, who was really a pier researcher. other folks who were revered.

they were not on the management track. they held a very high stature, but i'm not sure he would have ever chosen better could have but to permit. >> to bring back to the transistor for a moment to mendocino what happened? >> that is a question that does knitted me. at the time -- i mean, there is some -- there is a school of history that says they did not. everything that i have read definitely says that they did. in fact, the day after the unveiling the president of bell labs, even after it had been buried in the new york times on page 46 of something, there were not -- you know, not seen in this huge richter. >> really did seem breakthroughs when they happen. in that case, the day after the president of bell labs had

written a note to his former boss, the first president of bell labs. this looks very important to us. and it really was. if you look at the internal correspondence that was coming in to the researchers at bell labs at the time every major corporation was writing to them begging for samples. rca, zenith, the big electronics companies of the time saying is sending letters of just one guy, but thinking maybe of rescind one that will give us one so that we contested. very interesting question is whether they knew its application in computers. the new it would be useful in the phone system for amplifiers and switches. then the only thing i found was a couple weeks after the unveiling of the transistor and mit professor wrote a note to bell labs, the head of research. can you please send us some? we think it really has an

application in high-speed computers and we're building. i don't know how high speed there were in retrospect, but he was building these. immediately not all the letters would get a response, but immediately he wrote back and said we will send them to you right away. at this moment there is anything we can do to make them work. it is unclear whether they understood that computing application at first, but certainly they did share the technology. that is an interesting part of the story. it was something that there were trying toward. >> in later years they had to share. they entered into a consent agreement with the that is this government which only allowed to use the technology for telephone applications or military applications, but in the late 1840's during it's true that they could have theoretically kept to themselves, but even though they have this monopoly status as i did some of the

internal correspondence at the time between the management, they felt it was too big into significant. they thought it was so big that they had to share it. keep this technology to itself. >> i want to ask you something in it will come back to talk more about innovation and the way in which preceded, but it is worth noting that they had a few misses. describe the picture phone. >> sure. they had a lot of messes. they had -- i mean, the transistor camelot. leading up to the breakthrough. i think anybody who who works in the innovative process those that failure is a huge part of that. there were messes of fears that filled the marketplace disastrously as usual, great

engineers working on it. it was this, you know, visual communications device that was going to change the world of. we would all be communicating by picturephone. the managers believe within ten or 20 years after it was rolled out, but pretty soon after, within 12 or 18 months of something like 40 people hence side up. some of them would make the case , google said, we are right. at the best route to what i think it proves the idea that you can barely in the wrong. that is to value the vocal part of innovation. >> as you think about what we

learned, of those misses, where do we go wrong? what was it that led them down that particular path? allowed to pursue those these direct the same thing. this strengthens their weakness if. you could pursue something that turned out to be folly. >> i think it could be. that think there are different kinds of fears that occur or different kind of missives. for instance, the bar barack dick richter came through at corning, not bell labs off. at bell labs there were pursuing something called the waveguide which was going to carry phone signals through a specially designed hollow pipe. i talked about of the but whether these are mistakes of perception of what the future will be of whether there are mistakes of judgment. at the the picturephone was a mistake of judgment in many ways somebody just talk to me as if

-- is said to be pretty convincingly like kind of groupthink. none of us or working on a political boss with fell. >> in part a place where there was not a consequence for failure? as some of you may know, you runs the institute. quoted something. science is the process of going a palace to see if they're blind. and it occurs to me that there are wonderful things to come from that. it allows for you to get out blind alleys. >> one of the characters has been the lot of time writing about was john pierce to finish his career here at stanford and worked at caltech.

i came across something he had written a few years before he died. he was considering writing a book. tickets are what made it work. a four part formula, and one of those was that a researcher who is pursuing something through research should be terminated without damning the researcher, but there should be no consequences for failure. again, that is probably, specific fell year and then there is systemic failure. the picturephone maybe more represented. and there were not -- there was enough money of the consequences were not ever going to be dire. >> that bst one more thing about the process of discovery and then we will look at some of your questions as well. you're right early in the book about eureka moments.

the moment that leads to an inventor toward a starling a passionate. leslie and technology, and really has a precise point of origin. at the start forces that precede an invention begin to allied of the course of months or years are decade it gave clarity a momentum. it seems like so much of what happened was not the eureka moment. it really was this collection with a hole in the end was the product of the some of the parts are even more. >> and that think a lot of the people, especially in the early days maintain that there were building of things coming out of breakthroughs at the time.

that kind of alignment of ideas. >> to you think we're lacking that? that ability to allow more than just for the eureka moment, to allow for that long unfolding? >> i think that -- picked up the writer had and put down the pound and at and is been a difficult process. i think the 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 comes to military research. a lot of it goes to the department of energy, nasa, the

great check going to medical research. smaller amounts go to basic research. it is a different system now. it is a more distributive model. we look to a universities and national laboratories, venture-capital firms fund more. businesses with a shorter time horizon. is it as good or effective as we have had? at don't know. at think there are definitely gains, possibly some losses. sometimes i wonder if we should talk about it more at the very least because i think it is a very rich and complicated problem. i mean, i think that the manufacturing conference in washington, for instance where people talk about our loss of manufacturing prowess and how that was a vital part of bell

labs and western electric. they had this ability to not just in bed, but to develop and really bring these things to manufacturing in a way that required great expertise. >> did you make the point of the book that that is in your view one of the problems with outsourcing. you lose the connection between creativity and products. you lose the chance for interdisciplinary walk around the hallway, was you bump into the lead stood. >> i think so. made the case very eloquently in business week. a great part of the business review article about the manufacturing ecosystem and the sort of be back to innovation. i think it is true and arguable that manufacturing moves, but eventually development and research can move along with it. for instance, we talked about the battery industry in the lithium ion industry which is no really located abroad in asia.

and i think to some extent that is true with the semiconductor industry costly the lcd letting industry. so there is a danger the u.s. is manufacturing and you lose that ability to manufacture things. you have to be concerned that use other aspects of your innovation economy. >> i want to ask john to of a let's also get to some of your questions. if you have not written down your question, lots of times you do that. just the data pass them out to people who will collect them. let's get to some of your questions and that now will return to some of my. how many nobel prize winners do you see coming out of twitter, facebook, and you will. [laughter] >> do i have to answer that? there are certainly great people. i wonder, you know, i'd work in a magazine company that covers a lot of that industry.

it to you know, i use those products and they're very cool. i don't certainly think every company or even any company that could talk about basic research should invest in that. i don't think facebook should start hiring tyrannical physicists. adult that makes a lot of sense. i don't -- i don't know if they should be pursuing. so there is that, too. >> at the end of the book you pose a question about what would people at bell labs in its heyday think of these sorts of innovations today. what was your conclusion about that? >> well, in writing a book i wrestled with the question of what before i even started. innovation. and i think as a writer we use the term now for almost anything. we have this big ben. because it innovation are some things innovative and a guest

around a lot. without making a value judgment that is a bad thing is certainly a bad thing for a writer because it is trying to understand what is innovation when it is all sort of mock duck. but i think you can never get to a store and buy the products or innovation. physicists. it was planned for renovations on which the system was built. other industries were bill thomas of these plans for renovations were different. in some ways i think the concern renovations we might think of now. it is not necessarily that one is better than the other. they're both necessary. different kinds of innovation as i see it. >> of the kids of my question. >> sorry. a good answer anyway. [inaudible] >> would these just think of facebook? i think they would -- i imagine

they would see it as an amazing communications platform that has swept the world. the proof of its success is end the huge market and and/or. the subscriber, you are a subscriber. the question, i guess, opposes in the book. is that the kind of platform through which you build other industries and technologies or thousands or hundreds of thousands and millions of jobs the amount of that. i think that is a more complicated question. i think that is a good question. i don't know if i have an answer to it yet, but i don't think -- i think that is subject to think about. >> here is a question. with the end of the montell monopoly, is there some sort of succession that will take the place?

>> i don't think we want to go back in time. i don't know. certainly the point of writing the book was never to create another bell labs in that sense, but i think the essence, at least for me of the value was visibility's think long term and to invest. the long term and to solve really big problems. you can make the case similarly about ibm, nasa. the apollo missions, manhattan project. and i think from my point of view the really big problems are in energy, solving those problems and not sure we are caboclo we need to.

he wrote that it ended when they begin hiring the first use. >> is a great question i think i can say fairly certainty that the strain of anti-semitism was are in the main parts of the company that it ever was. especially at at&t. but starting of the war effort, there is some evidence that the

past over hiring richard feynman, for instance because of that. there is a memo and of that the archives of our really blatant case of one of the labs. engineers just telling people he just doesn't like jews. you know, kind of a shocking memo to read down days. and the war effort did sort of break down the barriers of science for much of the labs. obviously a great thing. also brought women into morals. there were so many people involved of the war effort. just by necessity. the management of the labs, they never looked back after that. this is certainly a lot. >> this question, bell lazaruses ibm. why did one survived? what was the difference to back. >> what an interesting question. i wish that i knew. i know some about ibm research. i wish i knew more to answer

that. a think it's clear that bell labs did not survive because it gained its energy and sustenance by be attached to monopolies. i can answer that part of the question. it could not survive in its four without that attachment and without the relationship. with a phone company was broken apart in the early 1980's after that the revenue just declined dramatically, and that stream of problems, that ability to justify its investments in scientific research became more and more difficult as time went on. just a quick aside, one thing that is really interesting to one of the characters talk about , went to work for ibm research right after he retired from bell labs. he was going to europe sent it

to the researchers at wright discomfiture reports for the ceo. in trying to deliver to have his conclusions about what ibm research should be continued and to the rising stars or. >> given that bell labs was generally good innovation, how did they miss the first major innovation in their primary field, the bleeped pocket switching. >> a good question. how did they miss? i think they missed a bunch of things. i mean, i don't think you'd know, i hope when he read the book you come away thinking that perfect. the integrated circuit. the best fiber-optic cables. they made decisions over what to pursue and what not to pursue. i think in in the highly

competitive industry you, you know, eventually miss something big. >> how would a similar program work in a no monopoly environment where projects must justify their existence to wreck >> i don't know if they can't commit to be honest. i really don't. i don't know how you can capture the value of basic research when you are a public company. you are investing in that kind of risky, so to speak or research. such a large scale, which is to my take a white government to some extent steps into that role. >> us talk about a couple of others and will come back to your question. go ahead if you have more common we will get to the rest of these. couple of key studies that i think our interest in indicative of this question we are exploring. and one of them is the creation of the story of figuring out

cellphone transmission which seems like essentially traffic around. every caress soap would describe what would on in order to figure out the concept of the cell phone. >> i mean, the cellphone story which actually was one of the parts of writing the book and research it, and by that time it was just small teams of people working on problems of the lab. it was does is of hundreds of people working on a very, very big system to a project. different kinds of people with me on different aspects of the cellular telephone. there were systems engineers and the jersey or connecticut. there are researchers also working on basic knowledge of what happens with the into the transmission. these guys, rich event and it would literally drive all over new jersey testing things. the early 1970's, you know, can

you hear me know if soda stuff, trying. you know, what happens. it was not completely understood what happens when you drive through a forest or into a tunnel or what happens. it was bought about how far your transmission to travel. these are very difficult questions. one of the most interesting aspects of the cell phone effort was that some of the people who solve these problems actually came from bell labs military work. what that in particular i spend a lot of time talking with have done a lot of work on radar, some big of discriminatory rare work. a very small facility working with western electric. at the time he had come back from this tour of duty where he had worked of these highly sophisticated microsystems, came back and then said they would

discontinue the kind of thing he was doing it. somebody suggested to botox to these guys working on cellular. maybe you have something for them. it was again, part of the serendipity of bell labs. he was a guy with a kind of knowledge that very few people in the world had at the one particular time. they drafted him into the project. yes. soon enough he had a van. going around to philadelphia. they cleared out the event or cut the torrance, stuffed it with a lot of electronic equipment. they would test the signals to try to make a working cell phone system go. >> not unlike the story, the creation of the satellite. it's science by accumulation. you're right that there was -- that drew upon 16 different discoveries. going all the way back to 1937. again, made is that the eureka

moment. is this collective enterprise. >> as. i think so. i think that is, perhaps, the misunderstanding. the case that weakens is look at our smart phones and have the same kind of, you know, understanding. certainly it is not -- it can't be -- you know, it is this incredible integration of so many -- so much work over the past 50 years, so many people working hard on this thing, so many improvements of the breakthroughs and all integrated into one beautifully designed a phenomenal product. >> one of the things that is great about the book when you get the sense of all of these different characters. what to introduce it to one more, and then i will come back to your questions. this is an individual by the name of clark shane and in many of you may know. among his contributions to what the term. is that right? >> well, that's right.

he barred it from a man he suggested it. a statistician, very famous person also. >> services claude shannon. and i just want to read this portion. did john can describe what made him so interesting. one year his wife gave him a unicycle as a gift. setting quickly began writing in it he began building his own cuts challenging himself to see how small he could make one that could still be written. he was in the office and he would take a break from his work and write his unicycle up and down along always. he would not to passerby's a lesson was juggling and zero. then he got up of the stick. he would go up and down the hall that. so here a man who rarely showed up on time for work, often played chess are filled with the machines all they. frequently went down the hall juggling or pau going and did not seem to care really what anyone thought of him or his

pursuits. he did what 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 is room for him and for that sort of, for a guy who was pummeling of all ways. >> yes. there really was. he had learned that kind of ability, i think to the eccentric. let's talk about the open-door policy, the only person i ever heard of who actually close the door and nobody complained about it. ..

>> his other fundamental contributions was communication was only as good as the container it went through. >> i guess the best way to explain his theory was one being that he looked at the -- i guess we call it a the channel capacity of the system for sending messages, and he explained how you can message capacity and how you could make sure you could overcome the noise in any system, and also that work led to what was called error correcting codes so you could essentially send any message with pretty much virtual perfection as long as you created these error correcting

codes. shannon was a theorist and was not developing the ideas practiceically like with the error practice codes or digital communications. he was working on pcm which shannon also wrote a long paper about, but he was not interested in developing them to be used in the system. he just was very interestedñi in developing the idea. >> in that sense, it was in some ways almost like an ivory -- not an ivory tower, but had the equivalence of ten year faculty and people who could pursue knowledge. >> absolutely, and, you know, a lot of the folks who were working in research there told me, you know, it was better than ac academia because for them, they didn't have to apply for grants for one thing. i mean, nay had, you know, vast sums of money toñr use for

experimentation. >> you could use a pogo stick too. >> you could, and you didn't have to teach classes, but had the freedom to work on your work. >> here's a question that relates to that. what is or was the relationship between them ?

>> the executives were aware early on, and in the 1960s, they hired thurman, the dean of stanford and create that stanford ecosystem of entrepreneurs. they hiredded him in new jersey, phil baker did and said, you know, can we create an analog here in new jersey? you know, there were problems with new jersey, as i understand it at least, princeton's sciences program was too theoretically oriented, the geography was not suit l, too spread out, and there was this whole plan for something called summit university which is going to be model after cal tech to be in northern new jersey and remained a plan. it was expensive, and bell labs decided they couldn't fund it, and it was put on the shelf. >> how and why is the government regulated monopoly at&t more

innovative than a government monopoly and the post office? [laughter] >> boy, that's a good question. [laughter] >> you get a pass. >> it's a beautiful question. i can't even, yeah. >> how did they get the idea to poke a piece of germanium of gold wire? >> of course. in the days before that, they were trying silicone as well, n types and p types. they didn't use the word "doping,"nd it was before they used that phrase. this is for the engineers out there. they used gold because it was around, and he thought it would be the best thing to use. he had a little stash of it he used before the war that he put away and took it out for the experiment. >> funded by the monopoly

revenues of at&t, and the regulators allowed bell labs to be added to every phone bill, and equivalent was a tax on tch service with the proceeds going to research and development would never pass congress today. >> uh-huh, yeah. read the first part again. it's true. >> funded by the revenue of at&t, and the government regulators allowed the cost of bell labs to be added to every phone bill. >> that's right. 1% or 1.5% of every person's phone bill went to bell labs, and it was like a national laboratory in that sense in that it was funded by not totally the taxpayers, but by phone subscribers. that's right. >> that's sort of like mandatory being subscribed? >> yeah. [laughter] >> we won't go there. where did the at&t innovation come from?

was it bell labs? they didn't have to sell, bell labs. >> that's true. they sold themselves. they had a tremendous publicity department. they were good at selling an image of bell as a benign entity. where did it come from, is that the question? >> where did the marketing innovation come from for the phone company? was that from bell labs? >> no, there was no marketing research and development there. there was the human factors department, and it's possible -- i'm not aware of anything coming out of there used for marketing, but it's probably unlikely. >> this question is were there any patent disputes that came out of the invention of the tran sistor or disputes? >> there was a patent story, a device where they tried to patent it, i don't know if i should go into the particulars,

but after it came out, as far as i know in terms of challenges, no -- i don't remember there being any litigation or challenges to patent, and they went through fairly smoothly. >> here's one about as a former bell labs employee, i remember that all new products required tariff approval, competitors could delay product rollouts for a year. did you encounter that in your interviews. i don't know that i fully understand the question. if i'm not reading it right, my apologies, but this person wonders if that the required tariff approval delayed product rollouts, did you encounter that in -- >> i don't know what period they're talking about, but digging in the archives, you know, there were hearings in front of the local operating companies where they wanted to raise rates.

those were rate hike hearings. i don't know if that's what we're talking about in this particular question, but there was a constant kind ofçó tension of at&t or the local operating companies wanting to raise rates in california for instance. i read 300 visiting pages of testimony from the 1950 #s. bell labs was explaning why they needed to upgrade the switching system for a higher rate to be put in place, yeah. >> the last remaining questions are about what the key factors are to innovation. let's spend time in our remaining moments on that, on that factor. if we could walk through those, is it starting with this idea of giving something time and in bringing together multidisciplinary approach to this problem rich environment? >> i think those were, at least at bell labs in the moment of time, and i think different

people working in different kinds of innovation take maybe different lessons out of it, but i think having a stream of practical problems whether you're working on that or not is vital. the multi disciplinary aspect was essential in their approach to problem solving fairly often. i think freedom for some researchers was incredibly useful. sometimes innovations occurred there not because of what management was allowing people to do, but because the researchers decided they were going to defie management, and that -- there's 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. money to hire a good number of people who could work together. money that ensures you'll be

around for the next year and maybe the next five years or the next ten years. as i see it, i think those are the essential ingredients. >> what about the question of whether or not failure -- i guess where i want to go with the question, john, is i don't get a sense of tension. we hear about competition and tension and that that's what pushes innovation forward. i don't get a great sense in reading the book there was tension. i mean, there was the shock wave competition, but outside of that, was it a place where there was a lot of competitiveness? where there was tension? where, oh, my god, if i deponent -- if i don't get this done, i'm going to lose my job? >> i don't know about that. in later years, they set up competing groups against each other, internal competition. i think it raises the larger question that i personally think is something which might be seen

as maybe the competition myth that we sort of now kind of equate innovation with market competition which is true to some extent certainly. i think we get great, amazing consumer products out of that kind of competitive marketplace, but if you look at the history of bell labs as a company, as an organization that was not really competing with anyone else, you start to wonder, well, you know, how does that happen if we get breakthroughs out of that? i mean, we got breakthroughs because it was a place where there was a rich exchange of ideas and a rich exchange of problems that could be solved and needed to be solved, and i think to some extent the big breakthroughs elsewhere, you know, certainly, you know, the interpret was not created -- internet was not created because of market competition. i mean, those big breakthroughs, i think, for the most part arise

out of a kind of need to move ahead, a deep curiosity, a willingness to fail and sort of explore the unknown. >> so what do you, in the end as we come to the end of our conversation, do -- should we take from the bell labs story? you said earlier that your book is not an argument for recreating bell labs, but what can we take from it that would be useful as we think about the problems that we have to solve and the way in which that sort of innovative spirit could be brought to bear? >> uh-huh. i think the most important take aways for me, really, is that notion of balancing the short term high metabolism innovation economy that maybe we have now, and that we admire rightfully quite a bit with the sort of longer term vision, and i think that can be really vital, and i

wonder if things have gotten out of balance a little bit, and to me, that's crucial. i think the other thing, too, is investments in basic research can pay off in ways that you can't imagine. you know, i saw bill gates the other day saying on the wall street journal website we have to double our investments in the string of innovations that proves that those investments, those endeavors into basic science can change the world. they can change the economy. they can create millions of jobs. they don't pay off quickly, but they pay off in ways that are just amazing. >> and could they then be brought to bear on problems like energy, you know, something that's so much in the forefront now and climate change? are there things we can tease out of the successes at