Jorge Turiel

The transistor, Unix, nylon, Teflon and the laser all have one thing in common: They were a result of the golden age of corporate R&D. In 1985 IBM had 400,000 employees but only 8 called "Wild Ducks." They could break all the rules, pull people off other projects, get budget on demand, and reported directly to the CEO. Bell Labs alone produced 11 Nobel laureates and 28,000 patents. Its budget came from American phone bills. Fortune 500 companies won 41% of America's top innovation awards in the 1970s. By 2006, that number dropped to 6%. Here's what killed American R&D: 1. The hostile takeover wave of the 1980s pushed executives toward short-term results 2. The AT&T breakup gutted Bell Labs from 26,000 to 19,000 3. Venture capital gave the best researchers a better deal than staying inside a corporation 4. Offshoring broke the feedback loop between making things and understanding them 5. Jack Welch turned GE from an industrial research company into a financial engineering shop and donated RCA's research lab to a nonprofit 6. The 2017 tax law penalized R&D spending so aggressively that some companies faced 4x higher tax bills for doing more research Today the U.S. spends nearly $1 trillion a year on R&D, but two-thirds of it goes to incremental product improvement. The labs that built modern America are gone. I'm reverse-engineering what made them work. And what a modern skunkworks looks like.