

Where Have You Gone, Bell Labs? - designtofly
http://www.businessweek.com/magazine/content/09_36/b4145036681619.htm

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joez
This article deceptively makes little mention of Bell's macro condition. Just
to say it went from 30,000 employees to 1000 in a 7 year span is not the whole
picture. Let me provide some perspective.

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.

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krschultz
I think you have to go back farther than the 2000s for the real reason of its
decline. The government split up the telecoms because they were monopolies,
and that killed the cash cow that was powering all this research. It seemed
bad at the time, but the litany of innovations that came about may have made
it worth the extra price for long distance calling.

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.

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joez
Oh I agree. When a company has such a long storied history like Lucent then
there can be many butterfly effects. It's just lately (past 2 years), the
financial picture for Alcatel-Lucent has gotten really bad.

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...

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paul9290
I think the Internet has hurt our economy and allowed a small part of the
population with the know how to make gains from it. Though overall it's a
small portion of the total population - how many Googles/Yahoos are there and
how plentiful are their jobs - comparing to the industrial age? Also, many
industries have been hurt by the Internet as what we once paid we now pay
nothing for.

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.

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shorbaji
Yes, the centralized research centers of the past are dwindling - giving way
to a new "open innovation" model. However, the article attributes too much to
these silos the successful spawning of industries in the U.S.

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.

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dasil003
Who is doing basic research though? Assume there is a class of ideas which
will take 10-20 years to even result in a marketable product, yet the
applications will be mindblowing compared to anything someone can develop in
<5 years. The current startup model is not going to even touch any of those
ideas.

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silentbicycle
Rob Pike wrote a good analysis of the situation in 2000: "Systems Software
Research is Irrelevant" (<http://doc.cat-v.org/bell_labs/utah2000/>).

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tnovelli
Thanks for depressing me ;-) -- by and large we're in the same sorry situation
9 years later, aren't we?

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silentbicycle
The mainstream adoption of the web has carried some breakthroughs with it, but
it's also held others back (witness the problems caused by people _still_
using IE6). It's nothing new, though - a lot of seemingly novel ideas getting
attention now date back to the 70s. The software industry has always been
about standing on the toes of giants.

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andreyf
Stopped after first paragraph. The kind of people who have jobs at Bell Labs
and the 6.7m unemployed are probably pretty disjoint. Also, the metaphor that
jobs need to be created by large institutional spending is silly. Private
institutions should spend money to make money. Public institutions should
spend money to make the former possible - by investing in education and
training, so our citizens are employable.

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dasil003
Maybe you should read a little more. The point is that any kind of research
that doesn't have immediate applicability is being drastically reduced in the
private sector, and yet that basic research has some of the highest ROI over
the long term. The booming tech industries of today are build on the R&D
spending of decades past.

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?

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yummyfajitas
_...Wall Street's increasing focus on short-term profits..._

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?]

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abalashov
VC focuses on the long term? Really? Where did you get that idea? What VCs do
you know that aren't looking for 3-5 year complete "time horizons" for
"liquidity events?"

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jorgem
The last administration in Washington FOUGHT against science: Stopping stem
cell research, blocking basic research into global warming (and solutions),
etc.

California tried to go it alone on stem cells, at least.

We get what we vote for.

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rabidsnail
It always bothers me when people complain about the number of jobs. Saying we
need to create jobs to end the recession is like saying we need to create
supermarkets to end the famine.

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uuilly
To google.

