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Derek Lowe The 2002 Model

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Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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November 7, 2013

Organizing Research

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Posted by Derek

Here's an article in Angewandte Chemie that could probably have been published in several other places, since it's not specifically about chemistry. It's titled "The Organization of Innovation - The History of an Obsession", from Caspar Hirschi at St. Gallen in Switzerland, and it's a look at how both industrial and academic research have been structured over the years.

He starts off with an article fromThe Economist on the apparent slowdown in innovation. This idea has attained wider currency in recent years (Tyler Cowen's The Great Stagnation is an excellent place to start, although it's not just about innovation). I should note that the Economist article does not buy into this theory. Hirschi dissents, too, but from another direction:

Despite what the authors would have us believe, the “innovation blues” lamented in the The Economist have little to do with the current course of technological development. The source of the perceived problem arises instead from a sense of disappointment over the fact that their innovation theory does not hold up to its empirical promise. The theory is made up of a chain of causation that sees science as the most important driving force behind innovation, and innovation as the most important driving force for the economy, and an organizational principle maintaining that the three links in the chain function most efficiently under market-oriented com- petition.

The problem with this theory is that only the first part of its causal chain stands up to empirical scrutiny. There is every indication that progress in scientific knowledge leads to technical innovations, but it is highly unlikely that a higher level of innovation results in greater prosperity. . .

He then goes back to look at the period from 1920 to 1960, which is held up by many who write about this subject as a much more fruitful time for innovation. Here's the main theme:

A comparison between these previously used formulas with those used today strongly suggests that our greatest stumbling block to innovation is our theory-based obsession with innovation itself. This obsession has made scientists and technical experts play by rules stipulating that they can deliver outstanding results only if they are exposed to the competitive forces of a market; and if no such market exists— as in the case of government research funding—a market has to be simulated. Before 1960, the organization of innovation had hewed to the diametrically opposite principle. . .

I have a couple of problems with this analysis. For one, I think that parts of the 19th century were also wildly productive of innovation, and that era was famously market-driven. Another difficulty is that when you're looking at 1920-1960, there's the little matter of World War II right in the middle of it. The war vastly accelerated technological progress in numerous areas (aeronautics, rocketry, computer hardware and software, information science and cryptography, radar and other microwave applications, atomic physics, and many more). The conditions were very unusual: people were, in many cases, given piles of money and other resources, with the understanding that the continued existence of their countries and their own lives could very well be at stake. No HR department could come up with a motivational plan like that - at least, I hope not.

Hirschi surveys the period, though, with less emphasis on all this, but it does come up in his discussion of Kenneth Mees of Eastman Kodak, who was a very influential thinker on industrial research. It was his theory of how it should be run that led to insitutions like Bell Labs:

The key to success of an industrial laboratory, he explained, lay in the ability of its directors to recreate the organizational advantages of a university in a commercial setting. Industrial scientists ought to be given the greatest possible latitude to conduct their research as they see fit, with less outside interference, flat hierarchies within the institution, and department heads who are themselves scientists. Like professors at universities, he contended, the senior scientific staff should hold permanent appointments, and all scientists ought to have the opportunity to publish their research results.

Readers here will be reminded of the old "Central Research" departments of companies like DuPont, Bayer, Ciba and others. These were set up very much along these lines, to do "blue sky" work that might lead to practical applications down the road. It's absolutely true that the past thirty years has seen most of this sort of thing disappear from the world, and it's very tempting to assign any technological slowdown to that very change. But you always have to look out for the post hoc ergo propter hoc fallacy: it's also possible that a slowdown already under way led to the cutbacks in less-directed research. Here's more on Mees:

For Mees, industrial research was a “gamble”, and could not be conducted according to the rules of “efficiency engineering”. Research, he insisted, requires a great abundance of staff members, ideas, money, and time. Anyone who is unwilling to wait ten years or more for the first results to emerge has no business setting up a laboratory in the first place. Mees established the following rule for the organization of scientific work: “The kinds of research which can be best planned are found to be those which are least fundamental.” But because Mees regarded the basic sciences as the most important source of innovation, he advised research directors to try not to rein in their scientists with assignments, but instead to inspire them with questions.

I don't find a lot to argue with in that sort of thinking, but that might be because I like it (which doesn't necessarily mean that it's true). I hope it is, and I would rather live in a world where it is, but things don't have to be that way. I do think, though, very strongly, that the application of what's called "efficiency engineering" to R&D is a recipe for disaster. (See here, here, here, here, and here for more). And there are people in high places who apparently agree.

The Ang. Chem. article goes on to note, correctly, that many of these big industrial research operations were funded by monopoly (or near monopoly) profits. AT&T, IBM, Eastman Kodak and others began to use their research arms as public relations tools to argue for that status quo to continue.

Because monopolies could not be justified directly, the only route the companies in question had open to them was a detour that required more and more elaborate displays of their capacity for innovation. Once again, architecture proved to be well suited for this purpose. In the late 1950s and early 1960s, several American industrial groups built new research centers. They opted to locate them in isolated surroundings in the style of a modern university campus, and favored a new architectural style that moved away from the traditional laboratory complexes based on classic industrial buildings such as the one in Murray Hill. . .

The architecture critics of the time soon came up with an apt name for these buildings: “Industrial Versailles”. The term was fitting because the new research centers were to industrial innovation what Versailles had been to the Sun King: complexes of representation, as the historians of technology Scott Knowles and Stuart Leslie have detailed.

We actually owe a lot of our current ideas about research building design to the thoughts about what made Bell Labs so productive in the 1950s - as you keep digging, you keep finding the same roots. Even if those theories were correct, whether the later, showier buildings were true to them is open for debate.

Hirshci finishes up his piece with the 1957 Sputnik launch, which famously had a huge effect on academic science funding in the US. I only realized when I was in my 20s that my whole impression of the science facilities in my own middle and high school in Arkansas were shaped by that event. I'd sort of assumed that things like this were just always ten or twenty years old, but that was because I was seeing the aftereffects of that wave of funding, which reached all the way to the Mississippi Delta. Here's Hirschi on the effects in higher education and beyond:

The explosion of government research funding resulted in serious quandaries about how best to allocate these funds. There were countless research institutes, and there was a need for clear rationales as to which institutions and individuals would be entitled to how many dollars that came from taxes. An attempt was made to meet this challenge by introducing an element of marketlike competition. Artificial competition for project-related subsidies, to be regulated and controlled by the funding agencies, was set in motion. Successful proposals needed to provide precise details about the scope of each project and a set time frame was assigned for the completion of a given project, which made it necessary for grant seekers to package fundamental research as though it were application-oriented. This set-up ushered in a period in which innovations were proclaimed well before the fact, and talked up as monumental breakthroughs in the quest to secure funding. Representation became integral to production.

It did not take long for this new regime to have drastic reverberations for industrial research. The flood of money that inundated the research universities heightened the incentive for industrial groups to outsource costly laboratory work to universities or public research centers. At the same time, they were inspired by the public administration's belief in the rules of the market to pay heed in their own research divisions to the credo that the innovative impulse requires the intensity of a competitive situation. In the long run, the private sector did its part in making the new form of market-oriented project research the only accepted organizational principle.

To my eye, though, this whole article wraps up rather quickly like this. It seems like a reasonable short history of research organization in the mid-20th century, followed by several assertions. Hirschi's not advocating a return to the 1950s (he explicitly states this), but it's hard to say what he is advocating, other than somehow getting rid of some of what he seems to feel is unseemly competition and market-driven stuff. "The solution can only lie in the future" is a line from the last paragraph, and I hope it reads better in German.

Comments (19) + TrackBacks (0) | Category: Who Discovers and Why


1. Michael McGovern on November 7, 2013 12:22 PM writes...

You're missing a </i> tag.

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2. Curious Wavefunction on November 7, 2013 12:56 PM writes...

"No HR department could come up with a motivational plan like that - at least, I hope not."

I definitely hope so!

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3. The Fat Layer on November 7, 2013 1:24 PM writes...

In my opinion, Mees' point that "Research, he insisted, requires a great abundance of staff members, ideas, money, and time." is true.

1) Abundance of staff means more brains, more ideas and knowledge. You can create knowledge with few people, but it will take a lot longer.

2) Abundance of time: Realistic time lines are needed and, unless you run with tons of good luck, it will take time to discover, validate, perfect and translate those discoveries into products.

3) Abundance of money: People, equipment, facilities, consumables, creation of proprietary or not-off-the-shelf technology, etc., all costs money, tons of it.

Now, I don't quite agree with Mees' quote "The key to success of an industrial laboratory, he explained, lay in the ability of its directors to recreate the organizational advantages of a university in a commercial setting."

Companies (for profit, that is) are product oriented and conduct research for translational purposes. Academia, for the most part, focus on basic research, in creating knowledge, but not much in creating products for commercialization purposes (although this started to change recently).

It takes focus, discipline, and rigor for scientists not to get derailed on discoveries following a never-ending let's-see-where-this-takes-us path. This is what most academics do, and it is reflected in the nature/source of funding research mechanisms. The more they discover the merrier.

Not so much in industry. You need to run with a discovery, develop it, and see if you can take it to the finish line in the form of a product (i.e., drug, device).

Like anything in life, balance is key. If companies are to adopt and "recreate the organizational advantages of a university" it should be done setting expectations and boundaries, because if they engage in non-directional, unfocused, boundaryless research, they risk running in all directions, burning through cash, and ending without a product to show for.

Innovation should be allowed and fostered, but there should be accountability for the tangibles results such freedom should produce.

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4. RKN on November 7, 2013 1:55 PM writes...

I've soured a bit to what I perceive is an excessive fixation on "innovation" by grant reviewers. Some of it stems, I think, from the inability of some reviewers to understand the distinction between invention and innovation.

I like to give the example that the graphical user interface was an invention (largely by Xerox); the implementation of that invention inside computers, printers, copiers, handhelds, etc., by Jobs and eventually many others, is innovation.

Reviewers of our SBIR mistook our description of the novelty of our inventions (algorithms) as a claim for innovation, when in fact the innovation lies in implementing these algorithms in sturdy software and building a company around it to deliver the utility to academic and industrial users.

Oh well.

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5. Mobio on November 7, 2013 2:03 PM writes...


"Innovation" is now a specific criterion for NIH grant reviewers to comment on so this may explain (in part) the fixation on this topic.

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6. simpl on November 7, 2013 2:24 PM writes...

Yes, it reads better in German - Style: Swiss caustic acedemia - click on the footlink "find more content like this article".
I never bought the idea of increasing wealth on Earth by shooting something off the planet - surely a common good like a better national grid, or banking system, would have brought more benefit?
We have also got better at blocking innovation - Bells labs got broken up, copyright stops rounded corners on phones...
Finally, not all innovation must happen within a fixed discipline - chemistry is too slow, so we jump to try antibodies - the growth points are often at the common boundaries.

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7. CMCguy on November 7, 2013 3:42 PM writes...

"No HR department could come up with a motivational plan like that - at least, I hope not." I wonder if its going too far in analogy as except for the opposite of getting "piles of money and other resources" isn't current situation about the continued existence of pharma companies in continuing doing drug development and the R&D peoples careers and livelihoods being at stake? Doubt can say there is planning by HR, or even the Execs for whom HR normally fronts, as more attempt at chasing "easy fixes/herd" to accommodate "stockholders" who clamor for quick profits.

One of the issues with innovation is that proper timing and serendipity appears can frequently be part of converting a seed or multiple seeds together to a fruitful garden. Not sure any attempts at management of those is realistically possible.

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8. jbosch on November 7, 2013 7:19 PM writes...

Innovation seems on the opposite end of what is fundable these days - at least by NIH.

If you propose what you think, you will be hit by the "overly ambitious" stick.

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9. barry on November 7, 2013 7:54 PM writes...

“The kinds of research which can be best planned are found to be those which are least fundamental.”

couldn't have said it better myself, so I'll just second it.

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10. Alex S on November 8, 2013 12:17 AM writes...

I think that an important element of this is the limitation caused by fixating on "goals" and "outcomes". Most of the really innovative stuff just can't be predicted. Much of the best industrial research (e.g. Bell Labs) flourished when scientists were free to follow their curiosity into new and unexpected areas (of course it also helps to have a protected monopoly to fund your free-wheeling R&D). Needless to say, discoveries also need to come fast enough to drive the creation or improvement of products before the old ones drop off the market. A fundamental problem that Pharma is now facing (caused by a variety of factors) is that it's taking too much research (longer time lines, more expensive experiments, as well as higher failure rates) to produce new products. That creates even more pressure to focus on goals, which leads to more risk aversion, less innovation, etc. Not a virtuous cycle.

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11. Anonymous on November 8, 2013 3:36 AM writes...

"A fundamental problem that Pharma is now facing (caused by a variety of factors) is that it's taking too much research (longer time lines, more expensive experiments, as well as higher failure rates) to produce new products. That creates even more pressure to focus on goals, which leads to more risk aversion, less innovation, etc. Not a virtuous cycle."

Patient: Doctor, doctor, it hurts when I do this (waggles arm).
Doctor: So stop doing it!

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12. Anonymous BMS Researcher on November 8, 2013 5:51 AM writes...

I forget who said, "if all three of time, effort, and results can be stated in advance then what you are doing is not research."

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13. Anon on November 8, 2013 10:24 AM writes...

When twitter can IPO at 25 billion USD, where is the motivation for investors?

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14. dearieme on November 8, 2013 6:45 PM writes...

I don't know the answer for firms, but for university research it's easy. More use must be made of drawing lots.

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15. Cellbio on November 9, 2013 10:35 AM writes...


I like your thoughts. It strikes me this mentality of invention=innovation plagues many aspects of start-ups, from the academic invention through the not so rare lack of realization of value that experienced drug developers bring through effective implementation.

The discussion a few days back on decision making and the value of single data points also neglected the aspect that a decision to develop something comes with a commitment to try like hell to make it work through insightful and creative implementation (positively impacting the probability of success through continued innovation). On the negative side this can lead to never letting go or failing to see troubling signs.

The last quoted section dealing with innovations claimed before the fact is where I see the root of many problems today. Claiming impact of discoveries on human health well before any sober assessment would allow is an industry supported by University tech transfer or media departments. Whether Francis Collins or a multitude of others that follow the same grant-getting oversell techniques, the news of our impending bettering of the human condition as a result of the latest basic research findings occurs daily. Some of the best at this story telling step into companies, both large and small, to run R&D with no experience in drug development but with a story that sells well to CEOs and investors.

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16. Zero on November 10, 2013 1:55 PM writes...

Is it telling that the Angewandte article costs a fortune to read while the Economist's is free?
Tragically, modern scientific research is too often seen as a cash trough by those working within it. A sense of entitlement has replaced purpose and obligation.

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17. Rich Rostrom on November 11, 2013 11:36 PM writes...

Money for research has to come from somewhere. If money is allocated to research without any specific expectation of results, then research will become like the medieval Catholic church (or the 18th-19th century Anglican church): a massive array of sinecures for people going through the motions, or for hobbyists pursuing their private interests. Leavened, to be sure, by an energetic, genuinely passionate minority.

To carry the analogy further - the Church shed a lot of its parasites when it faced competition from Protestant sects.

The analogy has another piece: scientific talent, like religious devotion, is not something that can be bought at any price. The best are not in it for money. That's why a Bell Labs approach of letting those people just do their thing can be immensely successful.

But can it be scaled up? Can it avoid institutional corruption over the long term?

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18. wlm on November 12, 2013 11:21 AM writes...

@17, Rich Rostrom:
I believe that your first and third paragraphs contradict each other.

If the best researchers are not in it for the money, and the Bell Labs approach of letting researchers do their thing worked, then why does your first paragraph say that open-ended funding leads to the creation of scientific parasites?

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19. wlm on November 12, 2013 11:46 AM writes...

@16, Zero:
There is a big difference between scientific *publishers* and scientists. So no, I don't think it's telling that Angewandte costs more than the Economist.

FWIW, there's also the fact that the Economist uses it's content to sell advertising as well as its own (other) products. For Angewandte, articles like this *are* the product.

It would be odd for scientific research to be "often be seen as a cash trough" given that the financial rewards are generally so meager and uncertain compared to the time and effort invested.

In fact, to the extent a sense of "purpose and obligation" have declined (and I'm not convinced that it has), I would suggest that it is because the quid pro quo for that obligation, in terms of jobs and funding, has diminished so drastically.

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