The Idea Factory: Bell Labs and the Great Age of American Innovation

AT&T is an iconic company with an amazing history. Author Jon Gertner used it to tell a fascinating story on innovation. How American Telephone & Telegraph (AT&T) and its Bell Labs subsidiary transformed itself over several decades to become a leader in communications, computers, and other high-tech marvels.

Much is taken for granted when we use our iPhones or Android devices to text, email, and video others virtually anywhere in the world. Yet, 70 years ago this would have been unthinkable. Which brings me to the story of how Bell Labs invested in basic research to explore, discover, and ultimately become an “idea factory.”

To understand Bell Labs is to realize the role it played through much of the 20th century when the telecom industry went from local connection over copper wires to global connection via satellite communication. It was a time of discovery that no one company could do on its own without outside support. Back in 1921, the U.S. Congress formally exempted the telephone industry from federal antitrust laws.

At its peak in the 1960s, Bell Labs employed around 15,000 employees, including 1,200 PhDs. Many of the research scientists were thinking 10 to 20 years into the future. Not only did AT&T have ample funds to invest, it held a monopoly over the U.S. telephone industry with no serious competition. Furthermore, Bell Labs was a trusted partner of the Department of Defense, NASA, and several U.S. Presidents (e.g., FDR, Truman, & Eisenhower) who relied on its scientific prowess to solve key challenges. Even the Manhattan Project benefited from scientific input from Bell Labs on nuclear fusion when building the atomic bomb in the 1940s.

Courtesy of Westview News

Bell Labs was about physicists, mathematicians, and chemists working together in lab settings to formulate and prove theories. This typically involved years of research, vast sums of money, and much frustration before some of these challenges could be solved. “The value of the old Bell Labs was its patience in searching out new and fundamental ideas, and its ability to use its immense engineering staff to develop and perfect those ideas,” according to the author.

And behind those great efforts were some of the most brilliant scientists ever assembled. These were mostly curious-minded, Depression-era offspring who enjoyed tinkering and learning new knowledge. They were further inspired by extraordinary professors to become newly-minted PhDs with grand ambitions. AT&T built a recruiting pipeline into several prestigious universities, like at Cal Tech, MIT, Stanford, and the University of Chicago. Thus, a steady stream of new hires with Science, Technology, Engineering, and Mathematics (STEM) backgrounds flowed into Bell Labs.

Known as the Young Turks, this band of exceptionally talented PhDs applied fundamental science to create thousands of revolutionary ideas seldom dreamed of before.

From Thomas Edison’s definition of genius, they demonstrated that it took “one percent inspiration and ninety-nine percent perspiration” to produce major breakthroughs in science.

Some of these first-of-their-kind accomplishments included the silicon transistor, sonar and radar detection, satellite communication, solar battery, laser, fiber optics, microwave links, and cellular telephony (mobile communication). “They learned that the impossible is not impossible,” according to one of the Turks, John Pierce. And from these efforts came nine Nobel prizes to Bell Lab researchers.

The original home of Bell Laboratories beginning in 1925, 463 West Street, New York. CC BY-SA 4.0

So, what was it that made the Bell Labs an idea factory? Was it a handful of brilliant, driven, and creative individuals who called themselves “Young Turks” or the result of thousands of engineers and scientists working together? More than likely, it was a combination of both groups functioning as one to solve the impossible. The author described “a place where a ‘critical mass’ of scientists could exchange all kinds of information and consult with one another” to achieve what he called “creative technology.”

We learn how William Shockley got most of the notoriety for inventing the transistor when in fact two other principals were equally, if not more involved in the early discoveries. Nowhere in the AT&T story does the “lone genius” with predestined DNA enter the picture. Even Thomas Edison of GE fame had a team of scientists working for him in nearby Menlo Park, New Jersey. Instead, it was often small teams of gifted individuals collaborating, networking with other engineers to gain perspective, and eventually solve problems with novel ideas.

It was fascinating to realize the connection between the Bell Labs and Silicon Valley. It goes back to when William Shockley – Nobel Laureate and Bell Lab inventor of the transistor – decided to move back to where he grew up in Palo Alto, not far from Stanford University in 1955. He founded Shockley Semiconductor as the first business in Silicon Valley to design and engineer transistors. Two of his initial hires were Gordon Moore and Robert Noyce, who went on to create the Intel Corporation. Along with Bill Hewlett & David Packard’s success at HP, Stanford’s proximity, and venture capital money to bankroll new startups, Silicon Valley took hold and became what it is today thanks in part to Bell Labs and its silicon transistor.


Dr. Robert Bornhofen
Dr. Robert Bornhofen
Dr. Robert Bornhofen is a scholar-practitioner with over 25 years of experience. As a scholar, he currently teaches strategy at Cornell University and the University of Maryland Global Campus. As a practitioner, his corporate career includes a variety of leadership roles at Fortune 500 companies IBM, Delta Air Lines, & Citibank. Dr. Bornhofen earned his Doctorate degree at the University of Maryland, a Master of Science degree from Colorado State University, and a Bachelor of Science degree from the University of Minnesota. As a conference speaker, Dr. Bornhofen presents at various industry forums. His current focus is on innovation within the water utility sector. As a researcher and author, Dr. Bornhofen published over 20 papers on topics related to innovation strategy. Passionate about change, Dr. Bornhofen embraces the creative spirit that goes into problem-solving, where smart people come together to transform great ideas into extraordinary outcomes. His articles reflect this passion and desire for continuous learning.

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