Industrial research - History of Business in the U.S.
Definition: Corporate research aimed at developing new products, manufacturing techniques, and other sources of increased profit
Significance: Industrial research has led to the birth of many important American businesses through the development of new products and the improvement of established products. It has played a significant role in the phenomenal industrial growth of the United States since 1900. Pure scientific research, sometimes called basic or fundamental research, is the study of phenomena through observation and experiment to acquire reliable knowledge about the puzzles or secrets of nature. Industrial research, sometimes called applied or practical research, is the study of natural and other phenomena to discover ideas, processes, and devices of material benefit to humanity. Research and development (R&D) is the process of making scientific and technological knowledge practicable and economically successful in the marketplace.
Although pure scientific research has had a long history, industrial research had a modern origin. Scientific knowledge had been used to establish such industries as those manufacturing beer, iron, textiles, and various chemicals in the ancient, medieval, and early modern periods, and some scholars have been hesitant to sharply distinguish fundamental fromapplied research because both were involved in the formation of new industries. Nevertheless, at the end of the nineteenth and the start of the twentieth century, especially with the foundation of industrial research laboratories, industrial research became characterized by laboratories separated from production facilities. In these laboratories experts in scientific disciplines and engineering worked to improve old and create new products and the means to manufacture them.
Some scholars trace the origin of the industrial research laboratory to the German dye companies during the 1870’s and 1880’s, even though American iron and railroad companies had set up small research laboratories during the 1860’s and 1870’s. Other scholars state that the research laboratory that Thomas Alva Edison founded at Menlo Park, New Jersey, in 1876 was the world’s first industrial research laboratory. Edison hired scientists, engineers, and technicians to help him test his ideas and construct prototypes of various devices. Within a decade, Edison had over five hundred patents, several of which led to the formation of new industries manufacturing such successful products as the phonograph, incandescent lamp, and motion picture. Edison’s accomplishments inspired other companies to found research laboratories, although this was truer of science-based industries than traditional ones. For example, the food-production and coal-mining industries did little research whereas the petroleum-refining and pharmaceutical industries did extensive research.
Alandmark institution in the history of industrial research was the General Electric Research Laboratory in Schenectady, New York. In 1892, General Electric (GE) had been formedby the merger of the Edison and Thomson-Houston companies, and in 1900,Willis R. Whitney established and began managing an influential corporate laboratory for GE. By hiring highly trained scientists and engineers, Whitney was able to keepGEcompetitive in the lightbulb business and to create successful new products. For example, William D. Coolidge, by developing a process for making tungsten wire, enabledGEto manufacture tungsten-filament lamps that were much more efficient than carbon-filament lamps. Whitney often called his laboratory GE’s life-insurance policy because it enabled the company to grow and prosper. Other companies that founded industrial research laboratories were Du Pont in 1902, Goodyear in 1908, General Motors in 1911, and Eastman Kodak in 1912. These laboratories changed the nature of American invention from individualists, exemplified by Edison, to corporate inventors whose innovations were contractually owned by the company.
The Role of Government
World War I, through such institutions as the National Research Council, increased the role of the federal government in controlling industrial research for national defense. After the war, many more companies set up industrial research facilities, and some developed ventures with academic institutions such as the Massachusetts Institute of Technology to fund research projects of potential benefit to American businesses. During this time the term“research and development” began to be used to describe the initiatives to derive marketable products fromscientific and technological knowledge, for example, Du Pont’s cellophane and Kodak’s color film. By the early 1930’s,more than sixteen hundred companies had industrial laboratories employing more than thirty thousand scientists and technicians. During the Great Depression of the 1930’s, many companies reduced their economic distress by curtailing research expenditures, but during World War II, federal funds for industrial research dramatically increased through such institutions as the Office of Scientific Research and Development, blurring further the line between industrial and government research.
By the 1950’s, American industrial research had become a massive enterprise, with more than two thousand businesses spending in excess of $2.5 billion annually to support the work of over a hundred thousand scientists. Government and academic involvement in industrial research also continued to increase, despite some scholarly studies indicating that the transformation of scientific research into commercial and military technologies was neither so simple nor so direct as once believed. Despite these studies and President Dwight D. Eisenhower’s warning about the creation of a dangerous militaryindustrial complex, federal expenditures continued to increase during the 1960’s, accounting for twothirds of all research and development.Asignificant portion of this government investment went into the aerospace and defense industries.
By the 1980’s American companies began to spend more on industrial research than the federal government. This was due to increased competition from Europe and Japan and because of the exponential growth of such fields as biotechnology and computer science. The unprecedented growth of these and other science-based industries depended more and more on the inventive skills of researchers to develop new ideas, processes, and products. In the twenty-first century, some analysts predict that the exponential growth experienced by many American companies will continue, but environmentalists have cautioned that natural limits to growth exist and that more research should be directed to funding new products and processes that will foster sustainability rather than untrammeled development.
Birr, Kendall. Pioneering in Industrial Research: The Story of General Electric Research Laboratory. Washington, D.C.: Public Affairs Press, 1957. The author, one of the first historians to study industrial research, uses his account of the origin and development of the pioneering GE Research Laboratory to analyze the successes and problems of scientists engaged in applied corporate research. Notes and index.
Griliches, Zvi, ed. R&D, Patents, and Productivity. Chicago: University of Chicago Press, 1984. The contributors to this volume study the relationship between investment in industrial R&D and the market success of products that resulted from various patents. References at the end of each contribution and a subject index.
Holland, Maurice. Industrial Explorers. New York: Harper & Brothers, 1928. After an introductory chapter on industrial research, this popular treatment uses narrative accounts of such leaders of American industrial research as Willis R. Whitney, Elmer A. Sperry, L. H. Baekeland, and Arthur D. Little to help readers experience the dramatic discoveries of “industrial explorers.” Illustrated with photographs, and an index.
Reich, Leonard S. The Making of American Industrial Research: Science and Business at GE and Bell, 1876- 1926. New York: Cambridge University Press, 2002. Intended for scholars and industrial researchers, this comparative historical study examines the origin and evolution of industrial research in two important American companies with a view toward making modern American industrial research more efficient. Forty-three pages of notes and an index.
Wise, George. Willis R. Whitney, General Electric, and the Origins of U.S. Industrial Research. New York: Columbia University Press, 1985. According to the author, no one did more to shape American industrial research than Whitney, and this biography traces his life from his birth in upstate New York to his creation and managing of the GE Research Laboratory. Bibliography and index.
See also: Aircraft industry; arms industry; Automotive industry; Bell Labs; Chemical industries; U.S. Department of Commerce; computer industry; Genetic engineering; inventions; pharmaceutical industry.