Computer History Museum Event Summary: "The Idea Factory" – Bell Labs and the Great Age of American Innovation


Dave Iverson and Jon Gertner at the Computer History Museum
Dave Iverson and Jon Gertner at the Computer History Museum

On March 28, 2012, author Jon Gertner was interviewed at the Computer History Museum (CHM) by KQED’s Dave Iverson about his new book, “The Idea Factory,” which chronicles the history of AT&T Bell Labs.  Mr. Gertner told this author he had spent three solid years researching and gathering information for his most recent book.

During the interview, Gertner highlighted the Labs unparalleled role as an incubator of innovation and the birthplace of some of the 20th century’s most influential technologies.

Seven Nobel prizes were awarded for work accomplished there – including the transistor, discovery of background cosmic radiation left over from the big bang, developing methods to cool and trap atoms with laser light, and Charge Coupled Device (CCD) semiconductor imaging sensors.

The event was part of the CHM’s Revolutionary Series, featuring conversations with some of the most distinguished minds in the computing field. This article is a summary of that event, including selected questions from the audience.

Abstract (provided by the CHM):

“Bell Laboratories, which thrived from the 1920s to the 1980s, was the most innovative and productive institution of the twentieth century. Long before America’s brightest scientific minds began migrating west to Silicon Valley, they flocked to this sylvan campus in the New Jersey suburbs built and funded by AT&T. At its peak, Bell Labs employed nearly fifteen thousand people, twelve hundred of whom had PhDs. Thirteen would go on to win Nobel prizes. It was a citadel of science and scholarship as well as a hotbed of creative thinking. It was, in effect, a factory of ideas whose workings have remained largely hidden until now.

New York Times Magazine writer Jon Gertner unveils the unique magic of Bell Labs through the eyes and actions of its scientists. These ingenious, often eccentric men would become revolutionaries, and sometimes legends, whether for inventing radio astronomy in their spare time (and on the company’s dime), riding unicycles through the corridors, or pioneering the principles that propel today’s technology. In these pages, we learn how radar came to be, and lasers, transistors, satellites, mobile phones, and much more.

Even more important, Gertner reveals the forces that set off this explosion of creativity. Bell Labs combined the best aspects of the academic and corporate worlds, hiring the brightest and usually the youngest minds, creating a culture and even an architecture that forced employees in different fields to work together, in virtually complete intellectual freedom, with little pressure to create moneymaking innovations. In Gertner’s portrait, we come to understand why both researchers and business leaders look to Bell Labs as a model and long to incorporate its magic into their own work.”

Interview and Discussion:

Here are the key points made by Jon Gertner during the interview with Dave Iverson:

1 – Bell Labs was an “intellectual utopia” within the U.S.  It was a “problem solving rich environment where the level of detail and amount of (research) work was endless.”  At its peak, there were 15,000 employees of which 1,200 had PhD’s.  With its research directed at problems and projects its parent company (AT&T) could use, Bell Labs employees had freedom, time, money, and a collaborative work environment without competition.

2 – AT&T was converted in 1921 to a government-mandated “natural monopoly,” exempted by Congress from antitrust laws. That led to it owning its own manufacturing entity- Western Electric which was AT&T’s sole provider of equipment.  Western Electric therefore became one of America’s largest manufacturing companies.  In 1925, Bell Telephone Laboratories became the exclusive home of research and development for AT&T’s other branches – its R & D wing, so to speak.

3 – While Bell Labs became AT&T’s R & D center in 1925, its heyday was during the World War II years and immediately thereafter, according to Mr. Gertner.

Some of Bell Labs great post WW II inventions included:

  • The Transistor (patent by Shockley, Bardeen and Brattain)
  • Silicon Solar Cell (1954)
  • Information Theory (by Claude Shannon)
  • First transcontinental telephone link (1914-15)
  • Digital Communications (transmission & switching)
  • Communications Satellites
  • Unix real time operating system
  • Charge Coupled Devices
  • Laser Theory
  • Semiconductor processing
  • Cellular technology

Editor’s Note on the Invention of the Transistor:

First, John Bardeen and Walter Brattain demonstrated the “point-contact” transistor on Dec. 23, 1947. These two scientists worked in the research group that Shockley led, but they built their transistor with little help from him. Then Shockley broke with Bell Labs’ collaboration norms by separately inventing a second, more reliable, “junction” transistor while he was holed up for several days in a hotel room. Bell Labs would have preferred that Shockley perform his transistor research in his office. Finally, in 1954, Morris Tanenbaum invented the third, “silicon” transistor (the previous designs were germanium). The vast majority of today’s transistors are connected in circuits on silicon wafers.

Bardeen and Brattain would share the 1956 Nobel Prize in physics, but not Shockley.  Estranged and disgruntled, Shockley left Bell Labs in 1955 to form an eponymous start-up in Mt View, CA.  It was Shockley Labs that layed the foundation for what would become Silicon Valley. The genesis of Shockley Labs and its offspring Fairchild Semiconductor was the subject of a 2006 CHM event summary written by this author:

4 –  Equipment built by Western Electric was to last for at least 30 years (contrast that with today’s cell phones, media tablets and notebook PCs with life times of 18 months or less).  And it was the Bell Labs completed research projects that became the foundation of many different types of telephone company equipment.

Through Western Electric/AT&T, Bell Labs had a connection to the market and thereby to real problems. The fact that it wasn’t a tight coupling is what enabled people to work on many long-term problems.  In sharp contrast with today’s start ups, Bell Labs was big and slow, rather than quick and nimble.  Mr. Gertner hinted that perhaps large R & D projects would be better done by big and slow teams, but he didn’t say how that might happen or funded.

One key accomplishment of the Labs was the replacement of vacuum tubes with electronic circuits in telephone switches.  Of course, the transistor was the key invention that facilitated that replacement.  Bell Labs knew the significance of the transistor and AT&T/Western Electric capitalized on that huge breakthrough by designing them into all types of telephone equipment.

5 – Bell Labs had a lot of misses:

  • The Picture Phone was an “incredibly expensive folly,” according to Mr. Gertner.  In the early 1960s, Bell Labs poured a lot of research dollars and its reputation into an early form of videoconferencing – the PicturePhone- which was a huge commercial failure.
  • Another miss was not perfecting Fiber Optics into commercial products.  That honor went to Corning, not Bell Labs.
  • An audience member cited development of integrated circuits and the Internet (connectionless packet switching) as other misses.

6 – Bell Labs was an entity in which the whole was greater than the sum of its parts.  This may be lacking in today’s diminished research organizations, according to Mr. Gertner.  The structure of the Labs and it’s tie in to Western Electric/AT&T allowed for a “long unfolding of technology development,” Mr. Gerner said.

The U.S. government currently funds > $150 B/year in “long term” research, with most of that going to national labs and universities.

Venture Capitalists have a much shorter time horizon, funding quick payoff “research” projects at its portfolio companies.

7 – With the demise of Bell Labs/Western Electric combo and the strong trend to global outsourcing/ off shoring, the U.S. now lags many countries in manufacturing prowess.  Without captive research labs and manufacturing, you lose the connection between creativity and product development.  The lack of state of the art manufacturing technology in the U.S. could cause it to lose other aspects of innovation and be a long term negative for our economy, Mr. Gertner said.

Author’s Note:  MIT President Susan Hockfield had even a stronger opinion on high tech manufacturing being critical to the U.S. innovation economy.

8 – Bell Labs had a long run of shining glory, that occurred in the unusual environment of a regulated monopoly business. Perhaps even more important, it happened when telecom technology was still separate from the barely emerging computing technology.

Q and A Session:

Mr Gertner did not give many definitive answers during the Question and Answer session, which was somewhat disappointing to this author.  Here are few of the inspiring and thoughtful questions asked by Mr. Iverson, with the answers provided by Gertner:

1 – How to capture the essence of basic research in a public company that is NOT a regulated monopoly?  In particular, how to balance short term profits vs long term vision?

Answer:  It’s out of balance now.  Investing in basic research can pay off in ways we can’t imagine today.

2 – How many Nobel Prizes do you think Google or Facebook researchers will win?

Answer: Gertner avoided any predictions and instead said they would at least be remembered as “great communications platforms.”

3 – How would you compare Bell Labs to IBM Research or other research labs active during its heyday?

Answer:  Gertner again avoided a direct comparison and simply said that he thought Bell Labs’ work would remain unmatched, but that it also benefited from being attached to the AT&T monopoly, which no lab can claim today.

4 – In a changing world economy, where should basic research be focused?

Answer:  In energy and bio-tech, rather than IT. Attacking the big problems in those fields will be essential for break throughs.


Audio Archive of this event is at


Even in his book, Mr Gertner seems to have more questions than answers about the best way to do basic and industry directed research.  Here’s a quote related to that theme from Jon Gertner:

“Are big companies (like IBM, Facebook and Google) taking a wise approach (to research)?  Or, is breakthrough research better left to academics and national laboratories? The flipside of this is to think about whether something valuable has been lost with the demise of big shops like Bell Labs, which is known less for incremental innovations than platform innovations, such as the transistor or laser, that served as the basis for new industries. Without a place like the Labs, is something key to our innovation economy missing—something we may only discover a decade or two from now, when there are few new platforms on which to build the next generation of technology products? We talk an awful lot about the iPad 3 these days, and less about these questions. But maybe we should.”


Like many lectures and discussion these days, this one produced more questions than answers, i.e. what’s the significance of Bell Labs today and the best way to do both basic and targeted research?

The idea of big, slow, but steady resonates with me a whole lot more than quick and nimble (with cutting corners to accelerate product- to- market time).  But one problem with that approach now is that product lifetimes are much shorter than they were in the heyday of Bell Labs.  So maybe a more balanced approach between these two extremes is the best solution for doing research.  But then we are left with one more big question:  who will fund it?


The author sincerely thanks John C. Hollar, President and CEO of the CHM, for his diligent review of this article and his helpful suggestions to improve its accuracy.  Mr. Hollar has done a spectacular job in leading all aspects of exhibits and programs at the Museum.  He is also a very skilled interviewer and a master of opening remarks, which sets the stage for the event that follows.

0 thoughts on “Computer History Museum Event Summary: "The Idea Factory" – Bell Labs and the Great Age of American Innovation

  1. Anonymous set of comments from a long time Bell Labs Researcher. Note that these comments offer an insider’s perspective and opinion, which bring up many points that were NOT discussed or even mentioned at this CHM event.

    The PicturePhone was a huge commercial failure:

    **It was premature, coming out before compressed digital video had been invented. In addition, the Bell System had service problems in the regular telephone network that made regulators unsympathetic to a new video service.**

    -Another miss was not perfecting Fiber Optics into commercial products. That honor went to Corning, not Bell Labs.

    **The most important early research on optical fiber transmission was done not at Bell Labs but by Charles Kao at Standard Telecommunication Laboratories (STL) in Harlow, England, for which he received the Nobel prize. [See] Bell Labs at first preferred millimeter microwave – I believe there are still miles of rectangular metal waveguide under the Holmdel lawn – but to their credit did switch to optical fiber when Kao’s results were verified.**

    -An audience member cited development of integrated circuits and the Internet/ packet switching as other misses.

    **Bell Labs missed the boat on data networking in general, despite having several very good people working in this area. This was a case of telephone thinking blocking creativity to some extent, and undermining management support to a huge extent.**

    -Some other Bell Labs negatives not discussed at this CHM event:

    **Bell Labs was a great institution, but it had significant downsides as well. One was the “Bellhead” perspective that discouraged serious innovation in data networking as suggested above. A second was bitter resistance to allowing other manufacturer’s subscriber equipment access to the network, which made black telephones persist with very little change far beyond when they should have. A third was a slowness to market; many great innovations were not pursued because the marketing people saw no demand among telephone users, until later when other vendors already had market presence.**

    -Bell Labs had a long run of shining glory, that occurred in the unusual environment of a regulated monopoly business.

    **Although hinted by the words “regulated monopoly”, this review doesn’t mention what may have been the most important reason for Bell Labs’ success: the cost-plus system. Guaranteed a rate of return of 12% after expenses, it was in the Bell Systems’ interest to make Bell Labs as expensive as possible. Of course regulatory commissions had to go along, but with the brilliant reputation of Bell Lab it was usually not difficult to get them to approve the expenses for Bell Labs. In effect Bell Labs was supported by a Bell Labs tax on all telephone users, which was pretty much everyone. The government could have continued Bell Labs as a government laboratory by continuing this tax, but it was apparently not politically feasible. Perhaps an opportunity missed.**

    1. While never having worked at Bell Labs, I did consult for them throughout the 1980s till 1995. I agree with the comment above that the Labs missed the data networking market, even though they had a huge effort in the late ’70s to deploy a value added X.25 packet switching network. Was it cause they were Bell Heads rather than Net Heads? What does that mean anyway?

      Here’s a quote from a book review corroborating my assertion:

      “Although Gertner does not overlook Bell Labs’ failures, he might well have extracted some lessons from what may be AT&T’s worst technological oversight: The company not only declined to participate in a project by the Pentagon’s Advanced Research Projects Agency, or ARPA, to develop a data network known as ARPAnet, but actively interfered with the effort by claiming that data transmissions would foul its phone lines. ARPAnet, of course, was the seed of the Internet. The irony here is that as early as 1967 John R. Pierce, one of the lab’s leading executives, had forecast the evolution of communications into a single network carrying voice, text, video and data; AT&T’s failure to pay attention to Pierce’s vision left it on the outside of the Internet looking in. But it’s not part of Gertner’s story.”

  2. Thanks Alan for writing this great summary of an institution that was a symbol of U.S. research prowess in its day. The world has changed, thanks to some the innovations spawned out of these research labs, and one has to wonder how much an Internet connected world obsoletes the centralized research model embodied in Bell Labs?

    To the question of will Google or others take the place of Bell Labs, it might not exactly take the place, but they have created some interesting things with their policy that allows their engineers a certain percentage of time to work on their own projects. Granted, most of these won’t go anywhere, but they have had some successes. And some of the tangential projects they are undertaking, such as the autonomous car, could change our daily lives in the not-to-distant future.

    In general, the flattening of industries caused by the Internet has had to have a positive effect on research as well. Now, information that was trapped in books in libraries is available to virtually everyone and the means for educating can take place at any time and almost any place (without live instructors). So, it’s probably appropriate that this discussion occurred at the Computer History Museum. What’s amazing is how quickly something becomes history in this age of the Internet.

  3. Anonymous comment from a very well respected Computer Historian:

    “I think people may find the detail you give helpful. On the other hand, I have more sympathy for Gertner’s answers than you do. Studying history really helps us to understand the past rather than giving any direct authority on the present, but 3 of the 4 questions are about the present. That’s usually when addressing an audience of technology people or computer scientists, but it draws discussion away from the work being presented. Only question 3 is one you’d reasonably expect him to have a good answer for, but his knowledge of the history may be too narrow. I know a number of academic historians who could have done better with it, however Gertner is a journalist telling the story of one lab to a popular audience rather than an expert on this history of corporate R&D.

    It’s also very hard to say how the success of Bell Labs could be duplicated today. As he notes, it was made possible by a quasi monopoly and a kind of central management of technology that is no longer possible. A lot of things have changed, including America’s position in the world. So the answer may be more public funding, but that’s not looking very promising politically and in any event academic research follows a different model. Thus your point that he and the book provide more questions than answers regarding present day issues is not a surprise.”

  4. Excellent summary with a lot of information to digest and think about. Especially liked the 2 anonymous comments!

  5. Understood that replies (comments) would be made on the event summary
    web site. I just took a look and there’s still only one response.

    Are there no other comments on either the article or the comments?

    1. Sorry there are no rebuttals or opinions on your incisive comments on Bell Labs. I’m equally disappointed.
      Here is a link to the video for this event, just posted:

  6. I am listening to a presentation right now regarding call termination issues in rural areas. Because of pricing arbitrage opportunities, there are incentives for companies to game the system and, as a result, non-standard equipment is being installed in the network as “Least Call Routes” are being implemented. The upshot is up to 25% of voice traffic is not terminated in some rural areas.

    Although this wasn’t necessarily part of the innovation part of Bell Labs, the standards and testing was a huge value in ensuring a quality voice network. Granted, competition was stifled and the Carter Phone decision opened the world to innovation that might not have otherwise happened in the same time frame.

    Having said that, in some ways what we are saying with loss of a strong standards and testing organization is that, “Voice is devolving into a best effort service,” according to David Lewis of ANPI (a large long distant minutes aggregrator for rural carriers) at the IP Possibilities conference just now.

    1. Ken, You point out the benefits of a regulated telecom monopoly (AT&T) vs the current sytem of inconsistent FCC and PUC regulation of common carriers.

      Much worse than that, IMHO, is the total failure of the 1996 FCC Telecom Act which was supposed to create more competition in major markets. Today, most CLECs are gone- wiped out by the mamoth presence of AT&T, Verizon and the MSOs (Comcast, TW Cable, Cox, Cablevision, etc) that hold franchises in various areas throughout the U.S.

      So while your comment doesn’t have anything to do with innovation at Bell Labs or elsewhere, it does point out the deficiencies of the telecom ecosystem now in place, especially when compared to the internal regulation & control that was inherent in the Bell System

  7. Another great article by a telecom veteran!
    By and large, I agree with Alan’s summations. Bell Labs was a unique institution in many ways. However, Bell Labs could not have survived in a world which discarded single telecom monopolies and embraced fast-paced globalization.
    I also agree the so called deregulation has produced a mixed bag. The politicized and uneven decisions by FCC have not served public interests in many cases. FCC members are generally political appointees with their own agenda. They are also directly and indirectly influenced by industry lobbying and enticements.

    1. Agree with Basant, that this was an excellent article with a lot of insghtful reporting! When’s the next CHM event Alan Weissberger will cover?

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