Where Have You Gone, Bell Labs?
businessweek.com
businessweek.com
If you look at ALU stock mid 2000, it had at a high of over $80. It currently is at 3.80ish with a huge come back from a low of $1.09.
Alcatel and Lucent merged in Dec. of 2006.
In 2007, it lost 3.5 billion on about 18B of sales. In 2008 it lost 5B in 2008 on about 17B of sales. It has had about 4B in cash (&equivalents) and is providing itself with runway to get back into the black with asset sales.
Since the merger, there have been multiple lay off initiatives to try and stop the bleeding. (Not pansy 5-10% cuts, we're talking about deeper broader strokes)
Recently, it has begun to do better but is still rolling deep with legacy products and losses.
ALU is fighting for it's life. Facing these conditions, most companies would have severely cut a 'no short term profit' R&D division.
The cherry to top off this Article is that ALU is a French company with Lucent and Bell as its American subsidiaries.
Edit: Grammar and full disclosure: I am an ALU employee.
Today I don't think anyone is looking for Bell to come back, but for Microsoft, Google, Apple, IBM, Accenture, GE, Boeing, Lockheed, Oracle and other companies with huge cash stockpiles and big teams of scientists to get into more of a pure research role.
Another factor for such a huge decline was it was at a speculative peak in the 2000s. Investors figured that as the internet switched from text to rich media (video, voip, etc), there would be huge bandwidth demands. A little new gadget called the cell phone was also on the rise. The telecommunications infrastructure would have to be laid reaping huge profits for ALU, they all figured. The stock price got pumped up and when, the company could not deliver...
I obviously love the Internet and it's disruptive nature, but do feel it is a small part of the pie that has hurt our economy.
I would argue that it was the open ecosystems around these research labs (e.g. silicon valley, cambridge area, etc) that are the true catalyst. These clusters continue to these day and the spirit continues. The reach is now more global.
Microsoft, for one, invests truly staggering amounts of money in basic research. So does the American defense industry -- for entirely different scales of "staggering".
Freeing the research from academic domination will lead to immense advance in our knowledge. Wikipedia showed that freeing the organization of the known knowledge from the monopoly of the academic middlemen is a good thing. Let's do the same for the unknown knowledge. A research factory employing a huge number of unskilled workers trained to do one thing well (instead of an unnecessary and long academic education) will solve research problems faster and cheaper. Let's eliminate the middlemen in research.
I wrote about this research factory here.
Too bad.
"The kind of people who have jobs at Bell Labs and the 6.7m unemployed are probably pretty disjoint."
The point of the article was that small subset of people who have jobs at research labs create a disproportionate amount of jobs and wealth. The author was not implying that basic research jobs could generate millions of jobs on their own. However, the results of the basic research eventually result in the creation of millions of jobs (e.g. invention of transistor leading to an explosion of jobs in the computer industry. etc.). The article's point is that the only way we are going to be able to generate enough high paying jobs to sustain our standard of living and position in the world is through the investment into basic research.
I don't think anyone can conclusively predict what effect this will have on the job market, or America's position in the global marketplace in decades to come, but it stands to reason that Wall Street's increasing focus on short-term profits is going to have some long-term effects. Do you disagree?
I'd love to see evidence of this fact.
To me, it certainly isn't obvious. There are various companies and products focused on profits at various stages. VC focuses on the long term. Assorted securitized consumer loan products (mortgage backed securities, etc) are also long term investment. HFT companies focus on the short term. There are various medium term investments as well.
Have you any evidence that there has been a shift from long term to short term investments?
[edit: just curious, why am I being downmodded?]
California tried to go it alone on stem cells, at least.
We get what we vote for.