Dear Rosan,

Thanks for your reply. I see the question, but I’d suggest reframing
it slightly. The issue involves units of analysis. Bell Labs was a
single organization, well funded, purpose-driven, and highly expert.
Different parts of the organization had specific tasks or challenges.
Don’s explanation clarified the way Bell Labs functioned, though –
while some parts of Bell Labs had very specific tasks, others had
extraordinary freedom. In this sense, it would be hard to describe Bell
Labs as highly centralized. AT&T was highly centralized and regulated
– within AT&T, Bell Labs was a protected, nearly independent
entity.

To make an historical comparison, the relationship between Bell Labs
and AT&T is rather like the Library of Alexandria in Ptolemaic Egypt.
The Library had nearly 100 endowed scholars whose salaries and work were
supported by the crown. They lived and worked in a condition of what
would be called academic freedom, in which each scholar was relatively
free to pursue the issues that interested him. Ptolemaic Egypt was a
highly centralized monarchy built on military conquest. The Library
itself was a relatively free institution supported by generous
endowments and special laws designed to enhance its collections,
operations, research activities, and prestige. I don’t want to carry
the analogy too far – AT&T wasn’t an empire and the Ptolemies were
not a monopoly governed under law, but the comparison of a relatively
free organization within a highly centralized controlling authority is
reasonable.

Silicon Valley is an innovation cluster. There is a massive literature
on this, and the characteristics of Silicon Valley – or any great
innovation cluster – are complex, highly situation, and only partially
transferrable.

To what degree could Europe benefit from some of the aspects of Silicon
Valley? Probably a great deal. But nation context plays a role. Silicon
Valley finances and the entire education, public goods, and taxation
structure of the United States together with the financial and economic
structure contains elements that do not work as well for innovation as
one might think. What works seems to work well. It does so at the price
of extraordinary churn and waste. This is justified by the notion of
gales of creative destruction, as Schumpeter would put it. I notice,
however, that these gales of creative destruction often manage to leave
innovators and inventors worse off while managing to reward financiers
and their children.

If you compare this, say, with Sweden (population 9,000,000) and
Finland (population 5,000,000), you have to wonder. Here are two small,
well-educated nations with a robust combination of social goods and
private industry. These nations demonstrate huge innovative capacity
with high levels of productivity and export-driven manufacturing.

At the moment, I’m working on two articles in which I explore several
aspects of design-led innovation in the context of large-scale social
and economic trends. One addresses models of design education for a
special issue of the journal Visible Language. Here, I start with Colin
Clark’s three-stage model of the economy, move through Daniel’s
Bell’s five-stage model, and conclude with my own six-stage model.
This forms a broad background to the issues. Using this background, I
examine the challenges of design in the current manufacturing
environment of the Asia-Pacific century to discuss the skills and
knowledge designers require to work in this world.

The other article is one that Goran Roos and I are writing together.
Goran is professor of strategic design here at Swinburne, but he is also
chairman of VTT International, the international arm of the Technical
Research Center of Finland. In this article, we describe large-scale and
micro-level economic issues and we examine design-driven innovation in
the high-cost manufacturing environment typical of Europe, the United
States, and Australia. We draw on a large source of data collected at
the company level against the background of a broad range of factors.
Among the way, we draw on a wide variety of sources from the Danish
design maturity scale to measure design uptake within individual
companies and the Economist Big Mac Index to examine purchasing price
parity with relation to the comparative value of different currencies in
world markets.

When these articles appear, I’ll post a notice to the list. They
don’t answer your questions directly, but they do clarify some of
the many complex factors that influence the issues that interest you,
while the reference lists provide useful background reading.

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—

Ken, would you say that I got mixed up with business models and
organizational models for innovation? Would it be more accurate(better),
If I have said:  organizationally, Bell Labs (in its heydays) was
centralized; and Silicon Valley in which Face Book is a part, is
decentralized? However, no organization or firm is purely one or the
other but switches between them in emphasis at different times as
company strategy changes. I know that Silicon Valley is not AN
organization as such, but in some innovation literature, Silicon Valley
has been treated as an (organizational) model of innovation.  
 
I have not read much specifically on Face Book. But anecdotally, I can
say that at an internal conference held by Intel, the Chairman  of EIT
() used Face Book as an example to argue/illustrate something has to
change in Europe when it comes to innovation. The take home message was
R&D was necessary but not sufficient for innovation, Europe needed much
stronger entrepreneur culture or I interpreted him to be saying that
Europe needed more young, bold, ambitious, talented, university drop
outs/deviants who defied the 'system'. I had EIT ICT  ( )  in mind when
I mentioned that I know some companies are mixing 'Bell Labs and
Facebook'.

—snip—