Page 256 - Grow from Within Mastering Corporate Entrepreneurship and Innovation

Appendix B 241

products. Additional companies opened or expanded their cor-
porate labs. Government facilities that had originally been con-
ceived as temporary were transformed into national labs. The
National Science Foundation came into being, which, along
with the Office of Naval Research, became the major govern-
ment supporter of basic research in the United States. Freder-
ick Terman, one of Vannevar Bush’s students at MIT, fostered
academic-industrial partnerships with companies near Stan-
ford University. With the help of early U.S. government fund-
ing—by 1960, the U.S. Department of Defense was funding 70
percent of electronics R&D in the country—those partnerships
begot today’s Silicon Valley.
Leveraging discoveries from their R&D labs, companies
looked to their operating divisions to conceive and build inno-
vative products. This model was generally productive in regu-
lated industries, such as military hardware and pharmaceuticals,
and in heavily science-based industries, such as advanced mate-
rials and electronics. But by the 1970s, many companies began
questioning the value of their investment in R&D. Their labs did
not seem to be generating commercially useful results often
enough, and few blockbuster products could be traced back to
the labs. Companies of all types were struggling with commer-
cializing new technologies, particularly those that could not find
ready application in existing product divisions. Possessing the
best science was insufficient. Companies needed better ways to
create viable opportunities based on what they were learning in
their labs, and better ways to realize economic value.

Separate or Imitate?

In response to the problem of commercialization, some com-
panies created separate organizations dedicated to finding and