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How Silicon Valley Could Really Change the World

eye on the news

How Silicon Valley Could Really Change the World

Today’s tech firms have yet to match their predecessors for transformative discoveries. July 5, 2015
Photo by Justin Sullivan/Getty Images

When it comes to technology and money, all roads lead to Silicon Valley. But when it comes to support for world-changing science, today’s tech leaders think small. The world awaits the first Nobel Prize for a Google, Apple, or Amazon scientist, or for a researcher funded by any Silicon Valley company. It could be a long wait, given the paltry spending by leading tech companies on the kind of basic science that fuels revolutions and changes civilization.

Compare and contrast: Bell Labs was just 12 years old when one of its scientists won the 1937 Nobel Prize in physics. Bell researchers went on to receive a total of eight Nobels, equaling the historic record of Cornell University and topping Princeton by one (counting science prizes). Five Nobels have gone to researchers at IBM’s labs, established in 1945 to pursue not just new products but also pure science.

The Nobel is just one metric, but it’s a powerful indicator of an institution’s culture and vision. If you google the histories of any of yesterday’s tech giants, from Bell Labs and IBM to GE, DuPont, RCA, Xerox PARC, Ford, and Exxon (one of whose scientists discovered the lithium battery), you’ll find long lists of foundational discoveries in basic materials and science, comparable with those of top research universities. By comparison, today’s accomplishments from Silicon Valley firms are all about products: self-driving cars, clever Apps, thinner smartphones, drones, robotic warehouses, virtual-reality goggles, or a $100,000 electric car.

When Apple reported a $500 million jump in R&D spending for the first quarter of this year, Valley watchers tweeted that something “positively massive” and “disruptive” might be on the horizon—maybe an electric car or a 3-D TV. After all, a mere $150 million bump in Apple’s R&D helped launch the iPhone. But none of these fascinating products rise to the disruptive class of, for example, the first transistor, the first computer or laser, the genome, the semiconductor, the photoelectric effect, the mechanism underlying photosynthesis, or the mathematics of game theory—to say nothing of formulating the laws of electromagnetism or quantum mechanics.

It’s not that disruption (possibly the second most over-used tech word, after “awesome”) isn’t wired into Silicon Valley’s ecosystem. But foundational economic and social transformations don’t come from making products to compete with cab or power companies; they come from basic research that radically advances our understanding of—and thus derivatively, our ability to manipulate and literally engineer—nature’s underlying laws and materials. The apotheosis of such progress is the domain of the Nobel Prizes.

It is time for today’s tech giants to expand their vision in a way that would win a few Nobels. They need to step up, be bold, and make history by launching a major initiative to invest in basic science. This is a critical time. America has exhausted the extant model, dating back to World War II, for funding basic research. Our overall spending on basic research has been declining, a fact highlighted by the broad coalition of universities and researchers that has launched The Innovation Deficit project.

Despite the fact that government has already pared back funding for basic science research, political pressure increases to fund more practical and near-term objectives—in effect, to have federal R&D operate more like corporate R&D—even though there is no crisis in applied research. Business spends more than four times as much on R&D as all federal programs combined (excluding defense). But corporate support for basic science lags at well under 5 percent of total private-sector R&D spending, and even that portion is at risk. One recent survey of business leaders found rising pressure for results-centric funding. Not even corporations lauded as innovators support much basic science, choosing instead to concentrate on engineering projects. Google’s Advanced Technology and Projects group, for example, targets projects with a two-year deadline for commercial viability. Google makes no apology for this sensible business focus, but such metrics bear no resemblance to the timelines of knowledge-centric basic inquiry.

It’s not as though there were no need for scientific discovery, whether in agriculture, health care, or energy. Google’s own engineers recently concluded that their company’s pursuit of new energy technologies to compete with hydrocarbons was doomed without new science. In 2011, Google cancelled a much-ballyhooed project to try to create alternatives cheaper than coal. Google learned what many others already knew: new physics in energy have yet to be discovered. But who knows what scientists will one day learn about, say, the mysteries of “dark energy,” which could infuse the universe. But that’s the domain of basic science—in this case, astrophysics.

Tantalizing science remains unplumbed (with unrealized applications) in myriad areas. To note a few: in the biology of extremophile bacteria (maybe one day engineered to yield finished diesel), in quantum physics (leading to perfect encryption), hyperbolic metamaterials (from invisibility cloaks to computer chips that will leave today’s in the dust), nanoparticle biochemistry (delivering cancer therapeutics at the sub-cellular level), extreme chemistry (catalysts that unlock cheap hydrogen), and complex mathematics (conquering the big-data analytics from health diagnostics to car traffic). And none of this touches on the unlimited “unknown unknowns” yet to be revealed in science.

But how to get corporate America to step up and fill the gap left by the dual retreat of private and government funding of basic science? The solution is to take a page from Google executive Chairman Eric Schmidt’s 70-20-10 model for R&D spending: 70 percent on core business, 20 on related projects, and 10 percent for “strange new ideas that have the potential to be truly disruptive.” Strange new ideas, however, can’t be ordered up like Thai food in Mountview, California. As history has shown, they come from undirected funding of bright scientists, mainly in universities, though sometimes in corporate labs, too. Chairman Schmidt or his Valley compatriots could mount a pledge challenge for science, in the same vein as the giving pledge launched by billionaire Warren Buffet. This new pledge won’t be about giving personal wealth to charities, but rather corporate wealth to basic science research at universities or at corporate labs.

Tech-corporate America can easily afford such a pledge. The collective market value of the top 100 tech companies is measured in trillions of dollars. Only 15 countries have a GDP of over $1 trillion. And if we count America’s Fortune 500, we find collective revenues equal to 75 percent of this nation’s entire GDP—a total greater than the GDP of every other country in the world. If just the top 10 tech companies led the pledge and contributed 10 percent of their current R&D budget—in other words, a few percentage points of overall revenues—it would overnight increase by one-third total American academic science support. And if all of corporate America followed Silicon Valley’s lead, allocating, say, 10 percent of current R&D to basic science, it would double America’s total basic science spending. And that would make history.

Such a commitment would have far greater reach into the future than, say, tech money now flooding into office monuments. Apple’s under-construction headquarters, known as “the spaceship,” has a purported $5 billion price tag, which will make it the most expensive building in history. (The Pentagon, completed in 1943, cost $1 billion in today’s dollars.) Facebook just moved into a new HQ with nine acres of parkland and hundreds of trees on the roof. Google is planning a 60-acre Googleplex (price unknown) with 2.5 million square feet of offices, including four monumental terrarium-like glass domes.

The government has a role to play here, too, of course, but arguably one better directed at improving the R&D tax credit than at trying to match the direct funding muscle of the private sector. Science leadership in the twenty-first century might not (and perhaps should not) come from bureaucratic institutions but from the likes of Google, Apple, Amazon, Facebook, Cisco, Microsoft, Intel and Qualcomm—and even Uber. Serge Haroche, who won the 2012 Nobel Prize in physics, recently called for a restoration of basic research funding “if we’re to have scientific breakthroughs in the future.”

The mantra of Silicon Valley is to disrupt. It’s time for tech’s titans to put their money where their mantra is.

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