Dear Rosan,
The way that the conversation has evolved, comparisons are in order.
This is especially the case once you raise issues such as the monopoly
status of AT&T or the idea that Bell Labs was in some way a greater
beneficiary of the military-industrial complex than Facebook is.
Under any circumstances, it’s incorrect to say that Bell Labs was
vertically integrated. Vertical integration involves the integration of
different parts of a value chain from supplies to production or
production to distribution. When Ford Motors decided to manufacture its
own steel, this was vertical integration. So, too, was the decision of
major automakers to create and maintain their own distribution services
rather than selling cars through eternal distributors as the
manufactures of books or appliances do. So, too, the decision of General
Motors to finance their own cars was a case of vertical integration in
the value chain.
While Bell Labs solved problems for AT&T or Western Electric in the way
that R&D divisions do, Bell Labs was not part of the normal AT&T supply
chain. The fact that AT&T owned Bell Labs did not make it a vertically
integrated part of the company. The immense freedom that Bells Labs had
in pursuing basic science demonstrates the special role of Bell Labs in
the old AT&T structure. Vertically integrated R&D labs solve short-term
business problems. Thirteen Nobel Laureates at Bell Labs won their
prizes for fundamental science.
But neither does Facebook use a distributed model. It is a wholly owned
private corporation. The owners of Facebook may do with it as they
please. While the location of Facebook in Silicon Valley means the firm
now owes something to Silicon Valley culture, Facebook is no more
distributed than Ford Motor Company was. Just as Henry Ford was
undisputed head of his firm, so Mark Zuckerberg is undisputed head of
Facebook. Like all successful firms, Facebook has networks with many
individuals and companies, but Facebook is not a node in a distributed
model.
Mark Zuckerberg is an extraordinary entrepreneur and a person of real
achievement, much as Henry Ford was. Together with Bill Gates and Warren
Buffett, Zuckerberg will be giving 50% of his life earnings to charity,
so a great chunk of that hundred billion will be doing good in the
world.
Even so, I don’t want to romanticize the contribution of Facebook
itself.
If your purpose is to understand how companies invent and innovate, and
how they create value as well as capture it, there is more to see. I
accept the fact that you may not want to compare Bell Labs and Facebook.
Even so, if you posit them as models of invention and innovation, then
comparisons are in order.
Yours,
Ken
Professor Ken Friedman, PhD, DSc (hc), FDRS | University Distinguished
Professor | Dean, Faculty of Design | Swinburne University of Technology
| Melbourne, Australia | [log in to unmask] | Ph: +61 3 9214 6078 |
Faculty www.swinburne.edu.au/design
--
Rosan Chow wrote:
—snip—
Just want to make clear the third time: I did not and do not want to
mix, compare or justapose Bell Labs and Facebook. My view is and has
been that there are variations exist apart from them and it is not
necessary to polarize them. If credits have to made, then I would
suggest that it was Gunnar who pointed to the article whose author
started all the justaposition/comparison. However, in this complex world
we live in, who knows, who else has triggered this originally.
Anyway, once again, from what I have read: organizationally, Bell Labs
represented the ‘vertically integrated model’ and the silicon valley
in which Facebook is a node, represents a ‘distributed model’. Both
rely on collaboration among many different actors: creative and talented
and dedicated individuals, capitals, and different kinds of
organizations. But as others might know, most (if not all) companies
lean toward one model or the other depending on their strategies at
different times. And no company is ever PURELY integrated or
distributed. These are conceptual distinctions that provide clear cut
clarity but practices are messy.
So the forth time: I suggest not to polarize Bell Labs and Facebook!
—snip—
|