Strategic innovation
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Strategic innovations



Summary
A government sanctioned monopoly supported the construction of a superorganism American Telephone and Telegraph (AT&T).  Within this Bell Labs was at the center of three networks:
  1. The evolving global scientific network
  2. The Bell telephone network.  And
  3. The military industrial network deploying 'fire and missile control' systems. 
Bell Labs strategically leveraged each network to create an innovation engine
They monitored the opportunities to leverage the developing ideas, reorganizing to replace incumbent opposition and enable the creation and growth of new ideas. 
Once the monopoly was dismantled AT&T disrupted. 
Complex adaptive system (CAS) models of the innovation mechanisms are discussed

The Idea Factory
In Jon Gertner's book 'The Idea Factory' he uses the work of six exemplars to illustrate American Telephone and Telegraph (AT&T) Bell Laboratory's (Bell Labs) strategies for generating revolutionary innovation is the economic realization of invention and combinatorial exaptation. 
s during the period between 1930 and 1970.  His goal is to explore how innovation happens.  Six men: Mervin Kelly (2,), Jim Fisk, William Shockley (2,), Claude Shannon, John Pierce and William Baker; were research scientists, and technical managers who catalyzed the development is a phase during the operation of a CAS agent.  It allows for schematic strategies to be iteratively blended with environmental signals to solve the logistical issues of migrating newly built and transformed sub-agents.  That is needed to achieve the adult configuration of the agent and optimize it for the proximate environment.  Smiley includes examples of the developmental phase agents required in an emergent CAS.  In situations where parents invest in the growth and memetic learning of their offspring the schematic grab bag can support optimizations to develop models, structures and actions to construct an adept adult.  In humans, adolescence leverages neural plasticity, elder sibling advice and adult coaching to help prepare the deploying neuronal network and body to successfully compete. 
and deployment of vacuum tube based amplifiers, transcontinental telephone networks, statistical quality control and the
Walter Shewhart's iterative development process is found in many complex adaptive systems (CAS).  The mechanism is reviewed and its value in coping with random events is explained. 
Shewhart cycle
, germanium and silicon transistors, solar cells, information theory, pulse-code modulation, LASERs, microwave networks, fiber optic communication networks and cellular networks.  

Bell Labs provided the research and development capabilities to AT&T's long distance and local phone operations and its equipment company Western Electric, so as to fulfil AT&T's universal connectivity vision.  From early in its existence, Gertner explains, AT&T contained a multitude of other large companies: local phone companies, long-lines, and Western Electric. 

AT&T early evolution
AT&T in 1910 was an aggressive, unscrupulous competitor intent on developing a monopoly.  They resisted competitors connecting to their network.  But under the chairmanship of Ted Vale AT&T's strategic approach changed. 

Ted Vale's monopoly
Vale realized that AT&T would benefit from competitor's using their network and building
This page discusses the effect of the network on the agents participating in a complex adaptive system (CAS).  Small world and scale free networks are considered. 
network effects
.  He purchased as many local telephone competitors as he could.  He argued for AT&T to be made a politically supervised monopoly highlighting the benefits of 'one policy, one system, universal service'. 

The monopoly strategy led Vale to encourage AT&T to focus on being a technology leader over decades.  Frank Jewett and Harold Arnold set about creating a laboratory at Western Electric built upon the notion that by encouraging their staff to understand a technology, they could create advances that were not only useful but revolutionary.  An industrial lab, Jewett explained, was a group of intelligent men "specially trained in knowledge of the things and methods of science."  A properly staffed and organized lab could avoid the mistakes of cut-and-try experimentation and in turn "bring to bear an aggregate of creative force on any particular problem which is infinitely greater than the force which can be conceived of as residing in the intellectual capacity of an individual." 

Gertner suggests the activities of Bell Labs staff illustrates principles of innovation is the economic realization of invention and combinatorial exaptation. 
as they tried to solve problems identified in the telephone network by collecting ideas about the situation and developing products to be deployed into the network so as to solve the problems and operate without failure for forty or more years.  Bell Labs was, he concludes, a factory for ideas. 

Oil Drops
Gertner contrasts Robert Millikan, leading physicist and teacher and developer of the oil drop experiment, determined the fundamental charge of an electron.  The method balanced gravitational forces on droplets of oil and electric forces on charged particles in the oil drops pushed upwards by electrodes.  The charges of the droplets were all calculated to be multiples of the value -1.5924 * 10**-19 Coulombs. 
experiment with Thomas Edison demonstrating the shift in approach from practical tinkering to leveraging scientifically validated theories to support improved practices. 
  • Edison the great inventor of the prior generation to Millikan had limited interest or respect for theory but gathered huge varieties of materials and tested them in support of improving his many product prototypes.  It was for him a highly successful method.  Edison was totally focused on his work.  He did not even allocate time to bath or sleep regularly. 
  • Millikan was highly networked to the leading scientists in Europe and America (Cornell, Johns Hopkins and University of Chicago).  He introduced his students to European discoveries such as radiation, X-rays, and quanta.  He integrated theory and practice in his experiments.  He was a hard working experimentalist who looked for weak points that could subsequently be improved upon. 

Transcontinental phone calls
Millikan had a close relationship with AT&T.  He had been asked, by a friend at AT&T Frank Jewett, to help identify ways to implement a transcontinental phone call.  AT&T's system failed as the distance of a call increased.  With Millikan's help they concluded repeaters (amplifiers) placed in series in the call path would be a good approach.  But only if de Forest was an American inventor.  Lee de Forest invented the Audion three-electrode vacuum-tube and Phonofilm sound-on-film recording.  The Audion was the foundation for circuit amplifiers. 
's original idea could be understood and radically improved.  Millikan identified three of his best PhD scientists in the area of electrons that could help.  One went to AT&T helping in the improvement of the vacuum tube allowing support of a transcontinental call by 1915.  

Millikan sent various bright students to AT&T.  One of these was Mervin Kelly. 

Mervin Kelly's background
Mervin Kelly was first in his class at school in Gallatin Missouri.  He moved and talked unusually fast and was remarkably energetic: Working on his father's farm.  Helping with the book keeping at his father's shop; and he was gifted at leverage - organizing other boys to deliver newspapers at a handy profit. 

Gallatin intersected rural America and industrialization with a railway passing through it.  Kelly got rapid access to new technology including radios.  Gallatin had cars and diesel generators. 

Kelly followed other scientists from the University of Chicago to AT&T.  Vale's 'Universal Service' vision demanded innovation is the economic realization of invention and combinatorial exaptation. 
to enable the system to cope.  Kelly and the other scientists added theory to Edison's practice developing a radically new approach to product innovation. 

Kelly joined Jewett's Western Electric - the equipment manufacturing arm of AT&T which included research, development, test and manufacture.  He reported into Arnold's research department where he focused on repeaters.  The research department was seen as essential to AT&T's business strategy, by providing a 5 to 10 year out view of the potential fundamental contributions of physics and chemistry to communications.  The leaders wanted the department to provide a freeing environment for genius to assert itself. 

Gertner notes that Kelly wrote a detailed report on the tube shop processes illustrating the complicated manual work required to create the intricate vacuum tubes used as repeaters in AT&T's network.  Kelly was fully aware of the difficulties of scaling up and improving the robustness of such operations.  But during his management of the tube shop he drove a 80 fold improvement in the life of the repeaters. 

With Millikan's support Clinton (Davy) Davisson, a gifted experimentalist in the research department who shared an office with Kelly, was doing basic research to obtain insights into the nature of things.  And in 1914 with war in Europe Davisson's ideas were applied to making vacuum tubes effective in war use.  This provided positive feedback through the war department and military on the value of AT&T to the politicians in Washington DC.  By 1937 Davisson had won a Nobel Prize for the labs for his work on X-ray diffraction based on Schrodinger's theoretical wave equations for electrons.  This and the relatively high depression era salaries pulled a lot of young scientists into Bell Labs which was by then lead by President Frank Jewett, Research head Oliver Buckley and director of research Kelly. 

Gertner explains that in Kelly's lab the researchers were encouraged to:
  • Explore what interested them. 
  • Let experimentalists and theoreticians work together. 
  • Include physicists, chemists and metallurgists in discussions. 
  • Formally record all ideas and future plans and experimental detail and results in a registered, numbered, managerially and legally tracked lab notebook with dates and witnesses.  The policy was no erasures.  Just initialed lines through mistakes. 
  • Stay isolated from day-to-day politics of the business.  Researchers didn't have to raise funds.  Research on a topic or system could be and was supported for years.  Research could be terminated without damning the researcher.  Only Managers to keep track of how the technology and politics and finances meshed together.  Managers must aim to provide AT&T with the best and most complete telephone service at the lowest possible cost. 
  • Produce a journal, Bell System Technical Journal, staffed by a researcher who summarized important discoveries and theories from universities around the world and inside Bell labs.  This stimulated the Bell researchers, and visiting academics to meet, review and debate the new ideas.  
  • Form into study groups to share understanding and build competence in leading edge ideas. 
Bell Lab's sense of mission--to plan the future of communications--was broad and directed allowing the researchers a circumscribed freedom that was liberating and practical at the same time. 


The depression at AT&T
The US is the United States of America.   1929 - 40 depression was threatening to AT&T.  Between 1930 and 1933 2.5 million households disconnected from the phone network.  Western electric laid-off 80 percent of its workforce.  Bell labs stopped hiring and instituted pay cuts and a four-day workweek.  But by 1935 phone subscriptions and revenue for AT&T were rising and Kelly was able to push to hire scientists for the research department. 

Kelly personally hired Bill Shockley and Jim Fisk from MIT is Massachusetts Institute of Technology.  

Bill Shockley's background
Bill Shockley grew up in Palo Alto and was educated by a Stanford professor, Pearley Ross in physics fundamentals based on his friendship with Ross's daughters.  This led to his attending Caltech and then a PhD at MIT is Massachusetts Institute of Technology.   which gave him a strong background in quantum mechanics and connected him with classmate Jim Fisk.  He was genial, loved practical jokes.  He had an infectious energy and a boundless enthusiasm for physics and enjoyed educating others in it. 

Shockley was viewed as having the quickest mind at Bell labs.  He shared an office with Clinton Davisson

The phone network was a problem rich environment.  Bell labs responded as the start of a supply chain to capture key high quality materials.  Specialists studied the phone network to understand the problems and develop plans and activities to deliver solutions.  Designs, with 40 year robustness, were developed that Western Electric then manufactured.  Statistician Walter Shewhart supported development of quality control procedures including the
Walter Shewhart's iterative development process is found in many complex adaptive systems (CAS).  The mechanism is reviewed and its value in coping with random events is explained. 
PDCA cycle
that helped the supply chain achieve these high robustness requirements. 

Shockley recalled Kelly visiting the office.  "I was given a lecture by then-research director Dr. Kelly, saying that he looked forward to the time when we would get all of the relays that make contacts in the telephone exchange out of the telephone exchange and replace them with something electronic so they'd have less trouble."  Gertner notes that for the rest of his life Shockley considered Kelly's lecture as the moment when a particular idea freed his ambition from its moorings. 

By 1939 Shockley had concluded that semiconductors might be a replacement for vacuum tubes.  He felt there were conditions when they could be good rectifiers and current amplifiers. 

Shockley--theoretician and the experimentalist--Walter Brattain explored the fundamentals of semiconductors.  But their work was interrupted by the outbreak of war. 

War
Kelly ordered Bell labs to switch its focus to supporting the war effort by making all communications based munitions much faster. 

Shockley and Fisk worked on anti-submarine detection and RADAR is radio detection and ranging.  It is a method of finding the position and velocity of a target by sending out a pulse of radio frequency electromagnetic waves and analyzing the reflections returned from the target.  .  Fisk was Kelly's protege eventually becoming president of Bell Labs.  Like Kelly he had an agile mind and a talent for decision-making.  But he was a more polished version of his mentor. 

Shockley improved the methods used to target submarines.  He calculated that bombs were set to detonate too late for the blast to impact the submarines.  By detonating the bombs earlier in the glide path the navy improved the kill rate significantly. 

RADAR location was linked to anti-aircraft gun controllers.  But the signal returning from the plane was extremely weak and needed amplification.  AT&T leveraged Birmingham UK is the United Kingdom of Great Britain and Northern Ireland. 
research on magnetrons.  By designing and building 15 different magnetrons specifically tailored for each situation Fisk, Davisson and others enabled Western Electric to produce more than 50 percent of effective wartime RADARs. 

During the war Kelly developed a post war plan for Bell labs including a vision of its place in an exponentially growing electronics industry.  RADAR opened new opportunities for radio waves and microwave devices.  Similarly he argued telecommunications would start to resemble industries like radio and television with high volume, annual models and a highly competitive set of young businesses.  He suggested Bell labs must change to lead this shift.  Kelly rehired his old research team including Shockley. 
Solid State
Kelly organized the design and building of the Murray Hill research labs.  Moving from New York City would: Reduce interference and noise.  Relieve Labs congestion problems. 
The design was novel reflecting a university setting rather than a factory.  And all aspects were connected so as to inhibit departments becoming silos.  Kelly aimed for a structure that would encourage free interchange of ideas.  So he put the scientists' labs and offices on different floors.  There were 700 foot long corridors.  Offices had modular reconfigurable walls. 

Kelly also reorganized the labs in 1945.  He promoted experts in solid state physics including Shockley and Brattain.  He included detailed changes to promote interdisciplinary groups, mixing together: Physicists and chemists, Metallurgist and engineers, Theoreticians and experimentalists.  He refocused Bell labs towards a unified approach to solid state physics problems.  Any advance depended on advances in chemistry to understand and develop new materials, and metallurgy.

Semiconductors proved significant in a variety of ways:
  • Photo-electric effect (converting light into a current driving voltage) was observed in certain crystals.  As these were analyzed and modelled it was realized that impurities were creating positive and negative areas in the crystal.  
  • Brattain investigated the surface properties, while Pearson looked at the bulk properties.  Shockley developed theoretical models to represent the observations and to make predictions.  Shockley argued they needed more theoretical expertise.  Bell labs hired John Bardeen who was known to Jim Fisk and Shockley from Harvard.  Bardeen's approach was to try every angle and doggedly persisting.  He was paired with Brattain the experimentalist allowing them to iterate round a
    Walter Shewhart's iterative development process is found in many complex adaptive systems (CAS).  The mechanism is reviewed and its value in coping with random events is explained. 
    Shewhart cycle
    of theory, experiment, analysis and correction.  They investigated rectifiers turning high frequency AC into DC current.  These were developed with potential leverage in power supplies, and as signal rectifiers and amplifiers in radios.  Shockley postulated the presence of a field effect.  It was not found experimentally for a year.  Then Bardeen looking at a surface effect postulated it was acting as a barrier to the internal field effect linking to the outside.  So the electro chemist Gibney applied an electrolyte.  It cut through the surface barriers producing a field effect in Shockley's magic month.  Bardeen proposed a particular geometry to obtain a solid state amplifier.  Brattain was asked to create a gap in two good points stuck into a germanium chip.  On Dec 16th 1947 they observed amplification along with a very significant power gain.  
  • A demonstration of speech amplified 18 fold without a significant drop in quality was witnessed in Brattain's lab book 24th Dec 1947.  Once a feedback oscillator was also demonstrated labs management agreed a new thing had been created by Bardeen and Brattain.  The device was named the transistor and patented by June 1948.   As was normal at Bell Labs Kelly and other senior managers were not invited to the demonstration to protect the nascent creative process. 
  • Kelly traded access to the technology and patents for maintenance of AT&T's monopoly and licensing fees of $25K.  While popular newspapers missed the importance of the transistor the electronics industry did not: RCA, Motorola, Westinghouse, radio and TV manufacturers asked for information and samples.  Academics at Harvard, Purdue, Stanford and Cornell requested devices.  MIT is Massachusetts Institute of Technology.  's Forrester highlighted the potential in computers. 
  • Shockley was disappointed not to be named a co-inventor of the transistor.  AT&T policy discouraged management from competing with the researchers and engineers.  Over Christmas Shockley invented the junction transistor - an NPN sandwich.  This breaking of policy was never forgiven.  It was a key aspect of the destruction of the Bell Labs transistor team.  Bardeen left for Illinois.  Brattain stopped reporting to Shockley.  
  • Kelly moved the transistor activity from research to the main development department reporting to Jack Morton.  Morton saw innovation as an integrated process with a common industrial goal that included:
    • Science based discovery, 
    • Leveraged engineering based invention,
    • Creation of new markets,
    • Development, manufacture and deployment of substantial quantities through a value delivery system are all needed to generate an innovation - a product with widespread practical use.  
  • To be useful to AT&T the transistor had to displace the deployed vacuum tubes.  It had to be as robust or better.  Morton encouraged Gordon Teal, a metallurgist to develop a process for pulling perfect crystals of germanium enabling the creation of robust junction transistors.  
  • Bill Pfann a metallurgist developed a 'zone refining' process for strafing the impurities out of the rods of Germanium.  The solution had revealed itself to Pfann while he took his after lunch nap.  Kelly considered zone refining one of the most important inventions of the preceding 25 years. 

The Informationist
Gertner introduces Claude Shannon, Claude Shannon was a key figure in information theory and computation.  He developed an electronic circuit using Boolean algebra which simplified the design and operation of a digital computer system enabling architectures such as Von Neumann's to become practical.  He also developed the mathematical models of information transfer which support information entropy. 
as quiet, courteous and 'special'.  During a fellowship at the institute of advanced study at Princeton Einstein commented that Shannon was a brilliant, brilliant man. 
To acquaintances he was judged amiable, friendly and super smart.  But his first wife found he was sometimes cold, sulky and depressed.  He enjoyed playing both the clarinet, and chess to a high standard. 

Since his childhood Shannon had been puzzling over communications and tinkering with machines.  He responded to a request for operators for Vannevar Bush was a professor of engineering -- dean of the MIT School of Engineering, a founder while a student of Raytheon and the top science administrator to President F.D. Roosevelt.  He developed the Differential Analyzer, encouraged Claude Shannon to study genetics, promoted the education-industrial-military complex arguing university and industrial labs should be contracted to develop government research and set the vision of the World Wide Web with his Atlantic article 'As We May Think' outlining the memex. 
's differential analyzer.  He became intrigued with the relays in its control circuits.  Shannon perceived a new way to think about the design and function of logic.  He explained how Boolean algebra could support the control logic design process.  

In 1937 he spent time at Bell labs thinking about relays, switching, circuits and Boolean logic.  Writing this up as a thesis Bush assessed it a 'classic' and he commented on Shannon 'he is shy, personally likeable is an emotion which initiates and maintains an altruistic partnership.  It is a willingness to offer someone a favor.  It is directed to those who appear likely to return the favor.   and a man who should be handled with great care.'   Shannon was judged exceptionally special.  He was to be protected and nurtured. 

Bush was a professor of engineering -- dean of the MIT School of Engineering, a founder while a student of Raytheon and the top science administrator to President F.D. Roosevelt.  He developed the Differential Analyzer, encouraged Claude Shannon to study genetics, promoted the education-industrial-military complex arguing university and industrial labs should be contracted to develop government research and set the vision of the World Wide Web with his Atlantic article 'As We May Think' outlining the memex. 
did not have sufficient time to directly pursue all his interests.  So he encouraged others to investigate them.  He was interested in genetics and encouraged Shannon to work on genetic algebra at Cold Spring Harbor. 

In 1940 Shannon took a temporary job at Bell Labs mathematical research department.  His topic of interest was unconstrained.  He typically asked were there deep fundamental properties common to all aspects of a system. 
He was initially intrigued by a Bell Lab's proposal by Ralph Hartley on ways to measure and think about the rate and flow of information from sender to receiver.  Shannon wondered if TV, radio, telephones and telegraphs were related by common fundamental properties. 
He typically did not discuss what he was working on.  He only hinted to Vannevar Bush was a professor of engineering -- dean of the MIT School of Engineering, a founder while a student of Raytheon and the top science administrator to President F.D. Roosevelt.  He developed the Differential Analyzer, encouraged Claude Shannon to study genetics, promoted the education-industrial-military complex arguing university and industrial labs should be contracted to develop government research and set the vision of the World Wide Web with his Atlantic article 'As We May Think' outlining the memex. 
that he was thinking about communications and the methods by which intelligence enables the achievement of goals in the face of obstacles.  The goals are sub-goals of genes' survival and reproduction and include:
  • Obtaining and eating food
  • Sex
  • Finding and maintaining shelter
  • Fighting for resources - in the preferred hunter gatherer environment loss of resources was critical while possession was often transient. 
  • Understanding the proximate environment
  • Securing the cooperation of others
moves from place to place. 

The mathematical research department was initially setup under Thornton Fry to support the engineers in their work.  By encouraging mathematicians to look into any interesting new problem that Bell Labs identified it grew to include:
  • Statistical quality control, 
  • Conceptualizing circuits,
  • Development of digital computer based on telephone relays using Shannon's ideas about Boolean algebra.  
During the Second World War the department focused on 'fire control' of anti-aircraft guns via RADAR is radio detection and ranging.  It is a method of finding the position and velocity of a target by sending out a pulse of radio frequency electromagnetic waves and analyzing the reflections returned from the target.   sensing.  This activity was highly successful with AT&T's systems intercepting 90% of the V1 flying bombs over London.  Shannon initially worked on fire control but then became interested in secret methods of communication.  To Shannon this was like a game.  He wrote A Mathematical Theory of Cryptography in 1945.  It covered histories and methodologies of various secrecy systems.  He catalogued the types including:
  • Ideal systems which were unbreakable. 
  • Practical systems which were still viable if the ideal systems proved too cumbersome. 
He also included a mathematical proof demonstrating that languages like English are filled with redundancy and predictability and discussed the implications for cryptography. 

At night Shannon worked on Information Theory writing a paper A Mathematical Theory Of Communication.  It included:
  • General rules and unifying ideas -
    • Information can be treated like a physical quantity, like mass or energy. 
    • All communication systems are architecturally the same. 
    • Information can be represented via its ability to resolve uncertainty on receipt.  In a redundant scheme receipt of initial string will indicate what will follow. 
    • Binary representation allows for a medium independent coding of the information. 
  • Measures. 
    • Each channel has a maximum capacity. 
    • A particular message will have a certain flow rate in a specific channel. 
  • Robustness - showing how added error correction codes allow for recovery of a damaged message.  This was a key new idea being counter intuitive. 
Based on Information Theory Shannon and Barney Oliver developed a digital representation of a phone call using Pulse Code Modulation.  It was used during the war to support telephone communication between the UK is the United Kingdom of Great Britain and Northern Ireland. 
and US is the United States of America.  .  It proved to be far more robust than the analog encoded circuits.  But Shannon was not interested in the details of the implementation.  He was excited by the elegance and interest of the problem. 

By 1949 Shannon had switched his attention to Automata.  But he became increasingly reluctant to explain his activities.  And he procrastinated and ignored what bored him.  He worked alone and ignored people who didn't believe his ideas.  Shannon viewed the Bell Telephone System as a highly complex machine, an immense computer that was transforming and organizing society.  It was an analog for automata:
  • Highly reliable,
  • Broad but using simple tasks over and over again.  He thought about how to build a simple machine that was able to do deep computations fast. 
  • He used chess as a simple model.  He looked at:
    • Its purpose,
    • The logical theory behind its mechanisms.  
    • Explanations of why the program could be useful concluding that it could replace humans in automated tasks. 
  • He developed a maze and mouse called 'Theseus' at home.  The mechanism learned as the mouse moved around the maze.  When he took it into Bell Labs it was a surprise.  It became popularly famous making Shannon a minor celebrity.  Fortune magazine profiled Shannon's Information Theory and Norbert Wiener's Cybernetics popularizing these ideas.  
  • He began exploring his ideas on the potential mechanisms of the human brain having his ideas built as simple machines by David Hagelbarger.  
By 1955 Shannon was finding Bell Labs lack of structure problematic.  He focused much of his time juggling and riding a unicycle.  When MIT is Massachusetts Institute of Technology.   invited him to work for them he concluded that the scholarly environment would help and so he left AT&T. 

Overall Gertner concludes Shannon was unique in being able to anticipate a different era twenty to fifty years ahead.  Repeatedly Shannon founded a field, stated all the major results and proved most of them.  But he was also an exemplar of Mervin Kelly's 'guys who wrote the book'. 

Kelly had discussed Bell Lab's model for 'inventing ways to invent things for the future' with the Royal Society.  He argued that AT&T had a manageable repeatable process, enabled by a steady stream of funding based on the telephone monopoly.  Kelly also stressed the leverage of really smart people:
  • Researchers providing a reservoir of new knowledge, principles, materials, methods and art through discovery.  Anyone with a problem was encouraged by policy to go to the guy who wrote the book such as Shockley, Tukey or Shannon.  
  • Technical assistants sustaining the reservoir of practical innovation is the economic realization of invention and combinatorial exaptation. 
    s. 
  • Systems engineers developing ways to enhance the phone system from these reservoirs while coping with the very high odds of failure.  Kelly stressed the driving force of the needs and problems generated by the Bell System and its users.  Problems included:
    • Military necessity,
    • Need to make components cheaper,
    • Need to make things faster,
    • Evolving with societies changing needs,
    • Finding markets for the products,
    • Coping with the cascading impacts of new technology deployment. 
  • Focused on the problems of manufacturing of devices, switches and transmissions aligned to the delivery system. 
  • Educating all the others so as to obtain a higher level of awareness than a standard education achieved. 
The monopoly revenue was also necessary to support the military and government contributions of AT&T.  Kelly spent half his time on military and government business, sustaining the view of the beneficial monopoly.  He argued that to keep the country strong it must have a strong military and a strong economy and AT&T should support both.  He had the same security clearance as the CIA chief.  He was one of the President's wise men consulted along with Vannevar Bush was a professor of engineering -- dean of the MIT School of Engineering, a founder while a student of Raytheon and the top science administrator to President F.D. Roosevelt.  He developed the Differential Analyzer, encouraged Claude Shannon to study genetics, promoted the education-industrial-military complex arguing university and industrial labs should be contracted to develop government research and set the vision of the World Wide Web with his Atlantic article 'As We May Think' outlining the memex. 
.  He was asked to become the President's science advisor but instead suggested Princeton's Robert Oppenheimer, or the presidents of Harvard, MIT is Massachusetts Institute of Technology.   or Cal Tech.  Still having AT&T as part of the growing military-industrial complex was valuable. 

Gertner notes that Kelly was asked to recommend ways to replace the University of California in managing Sandia labs.  He proposed placing Sandia under an experienced industrial contractor.  His recommendations were accepted by the Atomic Energy Commission and the Government asked AT&T to implement the recommendations, as long as AT&T did not profit from the arrangement. 
As Sandia's contractor AT&T became involved in guided-missile strategy.  Bell lab's expertise in RADAR is radio detection and ranging.  It is a method of finding the position and velocity of a target by sending out a pulse of radio frequency electromagnetic waves and analyzing the reflections returned from the target.   and communications was leveraged into success in this program.  Nuclear arms and telecommunications were becoming increasingly integrated.  AT&T became contributors to distant early warning (DEW) remote RADAR installations which were made possible by Bell Labs microwave communications expertise. 

AT&T licensed transistors to: RCA, GE, Raytheon and targeted for volume production in 1953 with the intent of starting to replace vacuum tubes and electromechanical switches.  Transistors were still expensive but were already useful to the military.  It was clear that transistor switches would be orders of magnitude faster.  But deployment into the phone network required that the replacement components be better, cheaper and able to operate for 30 to 40 years.  This presented AT&T with a dilemma.  It took twenty years to fully develop a new cost effective robust electronic switching system. 

Changing from expensive germanium to ubiquitous cheap silicon should significantly reduce the cost of the transistors.  And germanium was not proving to be robust enough -- failing at high temperatures.    Shockley advocated for replacement with silicon.  Shockley teamed with a chemist Morris Tanenbaum.  Since he wasn't a physicist Shockley did not feel challenged by Tanenbaum so they got on well and made progress.  But silicon was problematic.  It required extreme temperatures and purity that drove the raw material price back up.  And at high temperatures the crucibles released impurities.  Tanenbaum and his lab technician Buehler developed a process for pulling silicon at a varying rate to control the types of impurities.  They produced long crystals with dozens of n-p-n sandwiches.  Slicing one from the stack they made the world's first working silicon transistor in January 1954.  But the complex fabrication process limited the practical uses of this device. 

Cal Fuller had been experimenting with impurities in germanium and silicon.  He developed a diffusion process where a long silicon crystal is cut into thin round slices which are heated in a furnace in a gas containing an impurity such as aluminum.  The impurity bombarded the surface of the silicon slowly forcing their way to the interior.  By varying the diffusing impurity a series of thin coats of p- and n- type materials was built up.  On March 17th 1955 Tanenbaum melted an aluminum wire through the thin top layer making a good contact.  The resulting silicon transistor performed better than any germanium transistor in existence.  This transistor would be easy to manufacture.  Morton and thus Kelly backed switching manufacture over to diffused silicon transistors. 

Diffused silicon was also used to create a solar energy converter.  Cal Fuller and G. I. Pearson were attempting to develop a silicon power rectifier.  But Pearson observed that the material was highly sensitive to light.  He shared the details with Daryl Chapin who was attempting to build power sources for remote telephone installations.  Working remotely the three perfected a silicon solar battery fifteen times more efficient than previous cells.   But the cell was a financial failure costing too much to provide the needed power. 

Around the same time systems engineers at AT&T were interested in removing the congestion on the long-distance phone network.  This was currently supported by underground coax cables.  The new plan would replace the backbone with far less expensive line of sight microwave towers.  Microwave towers would shape the future of telecommunications.  Gertner noted it would also seal the fate of Bell Labs -- providing an entry point for MCI into the Bell system. 

In 1953 Bell Labs struggled to deploy network bandwidth across the Atlantic.  Cables were difficult to lay and maintain and very costly.  Radio waves were affected by unpredictable interference.   They succeeded in developing a cable and ship based deployment, recovery and repair system which operated without failure for twenty-two years after it was activated. 

Shockley had by now left Bell Labs to setup his own company with the support of Fred Terman was a Stanford University engineering dean, and later provost of the university.  He encouraged the development of a cluster of engineering companies based around the university including Hewlett-Packard.  He encouraged William Shockley to setup a startup in Palo Alto catalyzing a further cluster of semiconductor companies. 
who was by then Stanford University's provost.  He was not able to attract many AT&T scientists so he hired young solid state physicists Gordon Moore, Robert Noyce, Jean Hoerni and Eugene Kleiner.  Kelly helped Shockley with this transition and he also lobbied the Nobel committee to award the physics prize for the transistor.  On November 2 1956 Brattain, Bardeen and Shockley heard they were sharing the prize. 

The government was looking to close down a 1949 Justice Department lawsuit to break Western Electric from AT&T.  It asked AT&T for concessions to allow it to continue its network monopoly intact.  AT&T proposed:
  • To allow almost free access to its patents. 
  • It would stay out of the consumer electronics and computer markets.  
The government accepted AT&T's proposal. 

Digital information - a strength and a weakness for AT&T
Bell labs had developed an almost mythical status is a publically accepted, signal that one possesses assets: wealth, beauty, talent, expertise, access & trust of powerful people; to be able to help others. 
.  William Whyte's The Organizational Man argued that Bell Labs (thinkers like Shannon) and General Electric were proof of the virtues of free research.  They attracted brilliant men and were outstandingly profitable because they believed in 'idle curiosity'.  Fortune's Francis Bello extolled Bell Labs power of organized industrial research and noted the combined power of the transistor and information theory to influence the future.  But inside Labs some scientists pointed out that such digital networks did not benefit from being designed and run by one operator. 

An Instigator
John Robinson Pierce, Gertner argues was Bell Labs great instigator.  Typically he dropped ideas on people.  He approved quickly and then moved on.  He had lots of nervous energy. 

He grew up in Iowa and Minnesota.  He had always been interested in new technology: Electric motors, steam engines, EMF means electric and magnetic fields.  , radios.  He found algebra, geometry, chemistry easy.  He built and wrote about building a glider.  He viewed it as 'something complicated that really worked, that was a practical realization of purpose rather than mere tinkering.' 

He went to Caltech, by that time run by Millikan, where he concluded he was too clumsy to be a good chemist and that aeronautical engineering was boring.  But he enjoyed electrical engineering and was viewed as exceptional and quick.  He was also seen as eccentric.  He was picked up by Bell Labs to work on vacuum tubes.  But he was given total freedom to explore.  He felt a little freedom was helpful but too much was horrible. 

Shockley explained vacuum tube physics to Pierce and the two became friends.  Pierce always gravitated to the smartest people and they liked is an emotion which initiates and maintains an altruistic partnership.  It is a willingness to offer someone a favor.  It is directed to those who appear likely to return the favor.   him.  He viewed Shannon and Kelly as heroes.  And like Kelly, Pierce tore ideas apart looking for the good ones.  So, many people at Bell Labs feared him.  Actually he was just pragmatic and focused on actions. 

Gertner argues an instigator is a rare person who seeks to get others to do things.  Pierce said it was because he was lazy!  More likely he had so many interests he could not do them all himself, like Bush.  He was able to get most others interested in something that hadn't occurred to them before.  Shannon was the exception who ignored everyone else's ideas.  Also, once Pierce had identified a good idea he championed it and publicized it.  He became aware of Kompfner's travelling wave tube and promoted it inside Bell Labs.  He wrote about communicating by bouncing waves off the moon.  This was the catalysis for the development of satellite communication. 

Trans-Atlantic calls provided an obvious application of such satellites but the technologies arrived slowly and piecemeal:
  • Horn antenna
  • Silicon solar battery - which finally found a problem that it matched. 
  • Low power amplification required the transistor. 
  • Travelling wave tube
  • Maser developed by Pierces former colleague Charles Townes
  • Rocket launchers driven by the Sputnik launch competition. 
Pierce also had to wait for Mervin Kelly to retire since he was against investing in satellites.  Finally with all the enablers present Pierce pushed for:
  • A passive 'Echo' reflective balloon satellite allowing validation of all the ground systems including computers to track the satellite, transmitters and receivers.  Pierce felt it had proceeded smoothly because few people perceived its practical importance.   and later 
  • An active Telstar satellite. This became a sensation allowing Congress and the Kennedy administration to push all private companies out of the international satellite business. 

Futures: Real and Imagined
At the New York world fair AT&T had an opportunity to demonstrate the complexity of the phone system and their vision to the general public.  But while Pierce suggested: Personal hand-carried telephones, FAX, and computer information retrieval; the exhibit eventually included just: push-button dialing, Telstar function and the video phone.  AT&T executives used the fair to perform a market assessment of the video phone.  The results were badly misinterpreted.  The product while fascinating, was in reality costly, its value was unproven and it would struggle to get network effects.  It was a flop. 

By 1964 Bell Labs had spent $100 million developing ESS no 1, its electronic switching station.  It was a computerized switch intended to cope with the increasing complexity of setting up, routing and re-routing telephone system circuits.  It would replace cross bar switching infrastructure and be better and cheaper.  But to the telephone systems users ESS was initially an incremental improvement.  Eventually its call routing and forwarding would enable true mobility. 

Jim Fisk by then president of Bell Labs felt that in the future the Bell system would:
  1. Need to be faster.  It was felt ESS and touch tone dialing would help with this. 
  2. Need to send more information digitally.  Deployment of T-1 lines using PCM would help here. 
  3. Become more congested.  Fisk proposed to cope with this by increasing the transmission frequency.  Circular waveguides supported use of high frequency radio waves to carry circuits. 
Fisk did not get involved in the detail of Bell Labs.  For this he depended on his deputy Julius Molnar.  His other deputy Bill Baker was head of Bell Labs' research division.  Mervin Kelly hired both Fisk and Baker.

Baker was a chemist, graduating with a PhD from Princeton in 1939.  He tuned his technical appreciation of chemistry methods while identifying a perfect turkey food for his mother's business.  He was highly intelligent.  He was highly secretive.  Baker considered science rests on a foundation of inquiry rather than certainty.  He perceived that progress was really the struggle to understand the composition of materials and to fashion new and better ones where possible.  He felt Shockley and Peirce had a new approach to science bridging the gap between the best science of the academy and the important applications that a modern society needed.  They attacked the fundamental hard problems that until then were left to the great universities. 

Baker and Fisk were accomplished administrators.  Baker was very close with his deputy John Pierce.  He leveraged Pierce's valuation of new ideas and he supported Pierce-driven efforts. 
He was appreciated by the government who used him to manage the development of communications analysis to support the NSA.  Baker leveraged Pierce, Luis Alvarez and John Tukey to search for new concepts of inter-conversion of information and intelligence enables the achievement of goals in the face of obstacles.  The goals are sub-goals of genes' survival and reproduction and include:
  • Obtaining and eating food
  • Sex
  • Finding and maintaining shelter
  • Fighting for resources - in the preferred hunter gatherer environment loss of resources was critical while possession was often transient. 
  • Understanding the proximate environment
  • Securing the cooperation of others
.  He understood how information works and how it flows.  He eventually consulted to President Eisenhower, Kennedy, Johnson, Nixon, Ford and Reagan. 

Gertner noted that Baker understood transistors enabled digital technology.  So he saw a grand future for AT&T.  During the 1950s and 1960s a stream of semiconductor innovation is the economic realization of invention and combinatorial exaptation. 
s emerged from Bell Labs.  They were licensed to GE, RCA, TI and Fairchild where Noyce and Moore had moved after working for Shockley.  Jack Kilby visited Bell Labs in 1952 for a seminar in how transistors work.  As transistor devices grew in scope the connections became a significant issue -- called the Tyranny of numbers.  Alternative strategies for solving this issue were identified by Bell Labs (Functional devices) and other companies.  Kilby and Noyce both identified integrated circuits (IC) as the strategy.  Bell Lab's Morton argued that ICs could never be reliable.  Kilby and Noyce assumed the manufacturing challenges could be worked out over time.  For Bell Labs the significance was that an important advance in solid-state engineering, though built upon Labs discoveries occurred outside.  Bell Labs had developed all the technologies and processes but no one had the foresight except Noyce and Kilby. 

Similarly while Charles Townes had invented the maser, and worked at Bell Labs in the late 50s on lasers the first working examples were built at Hughes aircraft.  Still Bell Labs did develop a continuous ruby laser which would be important in using high frequency light to carry telephone calls.  Pierce had understood the potential of a laser for increasing communication bandwidth and so Labs had suggested to academics that they refocus their research towards laser development.  Bell labs engineers worked on technology to modulate voice and data signals and impress them on a laser beam. 

Bell Lab's engineers were also puzzling over what medium the light should be transmitted through?  International telephone and telegraph (ITT)'s Charles Kao was researching glass fiber as a medium.  Baker and Fisk bet on wave guides as more feasible.  In 1970 Corning announced the creation of pure glass fibers which essentially killed wave guides. 

Bell Lab's was still innovating developing charge coupled devices (CCD) now used in digital photography and computer technologies including UNIX is a computer operating system.  It is a registered trademark of AT&T. 
and 'c is a small portable computer programming language developed by Dennis Ritchie of AT&T Bell Labs to support implementaton of a portable UNIX operating system. 
'. 

Every twenty years the US is the United States of America.   Government reassessed if it should continue the AT&T monopoly.  Over the years this had resulted in:
  • 1913 AT&T agreed to stop buying local phone companies and allow others access to i's long-distance network. 
  • 1956 consent decree allowed AT&T to continue its regulated monopoly on phone service but forced the company out of the computer business and improved external access to AT&T's patents. 
  • The late 1960s with service problems undercutting AT&T's public image,
    • Federal communications commission (FCC) allowed independent manufacturers to connect their equipment to the Bell Network.  
    • FCC lawyers agreed with Microwave Communications Inc. (MCI) that its long distance network would add value being much cheaper than AT&T's offering.   AT&T argued it was providing end-to-end service which allowed Lab's scientists and engineers to innovate broadly.  But the FCC mandated MCI access in 1971.  
  • 1974 the Department of Justice (DOJ) consequently filed a sweeping antitrust suit alleging an unlawful conspiracy to monopolize communications services.  The DOJ - U.S. Department of Justice. 
    requested the courts break off:
    • Western Electric from AT&T as well as
    • The local phone companies.  
Bill Baker accepted the government's view that telephone networking was a mature industry and that AT&T no longer expected to have to demonstrate new technical communications functions.  He concluded Bell Labs should concentrate on maximizing the efficiency, performance and economy of its network and innovation is the economic realization of invention and combinatorial exaptation. 
s.  He was assuming this focus would provide AT&T an advantage in a competitive environment.  With hindsight Gertner notes this was a mistake.  The network still offered lots of new niche opportunities.  Manufacture and deployment of fiber optic networks and mobile telephones totally transformed the nature of the network. 

From the 1960s Bell Lab's scientists viewed optical networking as important to improve capacity.  But they concluded a number of innovation is the economic realization of invention and combinatorial exaptation. 
s were needed:
  • Room temperature laser,
  • Fiber optics.  Having accepted fiber optics would be a key technology AT&T had to match Corning with low scattering and absorption.  In the early 1970s Corning and Bell Labs agreed to share their patents on fiber production.  Both companies identified ways to reduce absorption and scattering.  And the fibers became more flexible.  
  • Splicing of fibers. 
  • Adding amplifiers to sustain the signal as it attenuated. 
By 1975, just fifteen years later, fiber optic networks were available for test deployment in AT&T's network. 

Mobile phones were also ready to field test by 1975 but they had taken many years, of stop-and-start evolution to develop and manufacture.  Ship-to-shore radio telephony for affluent passengers and police mobile radio communications were supported in 1920s.  The demands of the military during the Second World War focused Bell Labs and Motorola on compact mobile communications for tanks and planes.  In the wake of the war AT&T supported the development of a business selling mobile telephone service to car owners. 

But the systems lacked suitable radio spectrum, which the FCC was allocating to other industries.  In 1947 AT&T petitioned the FCC for more ultra-high-frequency (UHF) spectrum.  The petition included Doug Ring and Rae Young's proposal to operate cells of coverage. In 1952 the FCC allocated the spectrum to mass communication.  John Pierce and AT&T executives continued to lobby for mobile telephony spectrum.  When by 1967 the FCC became disappointed with the low quality and take-up of UHF television they asked AT&T for more proposals. 

Already in 1966 Dick Frankel, Phil Porter and Joel Engel had started informally to investigate Ring and Young's proposal to support car phones.  They concluded all the technology enablers were present: computer enabled signal strength sensing, location, handoff and routing and capacity planning based on ICs and the ESS.  The FCC decision to consider proposals was the catalyst.  And without the experience to contemplate failure the three got AT&T, via Bill Jakes and Gerry DiPiazza to invest $100 million over three years to deploy cellular wireless. 

To handle Motorola and government monopoly concerns AT&T announced they would only build and operate cellular networks, not the handsets. 

By 1980 the success of both optical and cellular network technologies seemed assured.  But AT&T appeared headed for breakup.  Judge Harold Greene and the DOJ - U.S. Department of Justice. 
's William Baxter took on the new chairman of AT&T Charles Brown.  Baxter viewed AT&T as both vertically and horizontally integrated.  Given Judge Green's apparent hostility Brown decided to settle.  On Jan 8 1982 AT&T agreed to divest its local phone companies and it would be allowed to enter other industries such as computers.  Bill Baker viewed it as announcing the death of the 'idea factory' and Peter Drucker agreed. 

Gertner assesses the appropriateness of applying the Bell Labs innovation is the economic realization of invention and combinatorial exaptation. 
model today.  Gertner reiterates John Pierce's comment to a U.S. Senate subcommittee "The only really important thing about communications is how well it serves man," he said.  "New gadgets or new technologies are important only when they really make good new things possible or good old things cheaper or better."  He recalls Mervin Kelly's larger view of innovation was that a great institution with the capacity for both research and development--a place where a "critical mass" of scientists could exchange all kinds of information and consult with one another for explanations--was the most fruitful way to organize a "creative technology". 

Gertner argues that Kelly's conception was matched to its situation.  As industrial science evolved a different model of innovation arose.  Silicon Valley entrepreneurs proved that new ideas didn't need to be attached to a large corporation.  He says instead of a factory of ideas it is a geography of ideas--an innovation hub.  Bill Baker aimed to respond to the Silicon Valley innovation hub, hiring Fred Terman to map out an innovation hub for New Jersey.  Terman's response proved too costly for the New Jersey companies to fund. 

Gertner identifies the Bell Lab's innovation factory as the architecture being applied to biomedical problems at Janelia Farm, a research center of the Howard Hughes Medical Institute.  Janelia is supported by a multibillion-dollar endowment.  Gertner notes that early results suggest Janelia is out innovating academics working in the traditional federally financed medical research network.  Gertner also identifies U.S. secretary of energy Steven Chu's innovation hubs as using Bell Lab's architectures.  These hubs aim to innovate in clean energy. 

Gertner notes that the
This page reviews Christensen's disruption of a complex adaptive system (CAS).  The mechanism is discussed with examples from biology and business. 
innovator's dilemma
did not seem to undermine Mervin Kelly's business models.  He suggests that it is the monopoly that protected Kelly from its force. 



Complex adaptive system
This page introduces the complex adaptive system (CAS) theory frame.  The theory is positioned relative to the natural sciences.  It catalogs the laws and strategies which underpin the operation of systems that are based on the interaction of emergent agents. 
John Holland's framework for representing complexity is outlined.  Links to other key aspects of CAS theory discussed at the site are presented. 
(CAS) theory
applies directly to the
This page discusses the effect of the network on the agents participating in a complex adaptive system (CAS).  Small world and scale free networks are considered. 
network
of
Plans are interpreted and implemented by agents.  This page discusses the properties of agents in a complex adaptive system (CAS). 
It then presents examples of agents in different CAS.  The examples include a computer program where modeling and actions are performed by software agents.  These software agents are aggregates. 
The participation of agents in flows is introduced and some implications of this are outlined. 
agents
 which Gertner details in exploration of Bell Labs. 

Gertner illustrates the existence of a controlled and catalyzed flow of dynamic, smart, young men into an innovation is the economic realization of invention and combinatorial exaptation. 
network within AT&T.  He suggests that Robert Millikan acted as: an academic network hub, as a
Agents use sensors to detect events in their environment.  This page reviews how these events become signals associated with beneficial responses in a complex adaptive system (CAS).  CAS signals emerge from the Darwinian information model.  Signals can indicate decision summaries and level of uncertainty. 
sensor
for AT&T, and a role model providing a viable
Plans emerge in complex adaptive systems (CAS) to provide the instructions that agents use to perform actions.  The component architecture and structure of the plans is reviewed. 
memetic toolkit
to transform the fledgling scientists into creative agents within Bell Labs.  Network hubs enable efficient association with other equivalents including Vannevar Bush was a professor of engineering -- dean of the MIT School of Engineering, a founder while a student of Raytheon and the top science administrator to President F.D. Roosevelt.  He developed the Differential Analyzer, encouraged Claude Shannon to study genetics, promoted the education-industrial-military complex arguing university and industrial labs should be contracted to develop government research and set the vision of the World Wide Web with his Atlantic article 'As We May Think' outlining the memex. 
.  It appears key that:

The strategy of AT&T supporting the government in times of war helped make its research scientists aware of additional
Agents use sensors to detect events in their environment.  This page reviews how these events become signals associated with beneficial responses in a complex adaptive system (CAS).  CAS signals emerge from the Darwinian information model.  Signals can indicate decision summaries and level of uncertainty. 
signal, sensor
and action problems including cryptography, mobile communications, RADAR is radio detection and ranging.  It is a method of finding the position and velocity of a target by sending out a pulse of radio frequency electromagnetic waves and analyzing the reflections returned from the target.   and fire control. 

AT&T was part of the golden age
This page discusses the mechanisms and effects of emergence underpinning any complex adaptive system (CAS).  Key research is reviewed. 
emergent
set of businesses with positive return economics from network effects, including railways, oil distribution companies, and financial trusts.  The telephone network acted as an
This page reviews the catalytic impact of infrastructure on the expression of phenotypic effects by an agent.  The infrastructure reduces the cost the agent must pay to perform the selected action.  The catalysis is enhanced by positive returns. 
infrastructure amplifier
.   But with federal help AT&T became supported by congressional
This page discusses the physical foundations of complex adaptive systems (CAS).  A small set of rules is obeyed.  New [epi]phenomena then emerge.  Examples are discussed. 
rules
helping it become an
This page reviews the strategy of setting up an arms race.  At its core this strategy depends on being able to alter, or take advantage of an alteration in, the genome or equivalent.  The situation is illustrated with examples from biology, high tech and politics. 
evolved amplifier
.  A rich protected environment allowed AT&T to follow the
E. O. Wilson & Bert Holldobler illustrate how bundled cooperative strategies can take hold.  Various social insects have developed strategies which have allowed them to capture the most valuable available niches.  Like humans they invest in specialization and cooperate to subdue larger, well equipped competitors. 
superorganism
This page reviews the strategy of bundling multiple products within a single offer in a complex adaptive system (CAS).  The mechanism is discussed with examples from biology and business. 
bundling
strategy.  But when the market share and revenue guarantees were removed AT&T's
This page reviews the inhibiting effect of the value delivery system on the expression of new phenotypic effects within an agent. 
extended phenotypic alignment
constrained its ability to respond to businesses entering its markets from other niche environments.  Gertner illustrates how MCI
This page discusses the strategy of going around the competitor's flank to reach and assault its rear. 
enveloped
AT&T's one system universal service business. 

Within AT&T Gertner identifies various facets which supported the innovation is the economic realization of invention and combinatorial exaptation. 
of new technologies.  Key aspects include:
Gertner notes the concern of AT&T scientists about reduced justification for AT&T's
E. O. Wilson & Bert Holldobler illustrate how bundled cooperative strategies can take hold.  Various social insects have developed strategies which have allowed them to capture the most valuable available niches.  Like humans they invest in specialization and cooperate to subdue larger, well equipped competitors. 
Superorganism
network monopoly and
This page reviews the strategy of architecting an end-to-end solution in a complex adaptive system (CAS).  The mechanism and its costs and benefits are discussed. 
end-2-end
architectural approach following the release of Shannon's Information Theory and AT&T's Transistor patents.   From a
This page introduces the complex adaptive system (CAS) theory frame.  The theory is positioned relative to the natural sciences.  It catalogs the laws and strategies which underpin the operation of systems that are based on the interaction of emergent agents. 
John Holland's framework for representing complexity is outlined.  Links to other key aspects of CAS theory discussed at the site are presented. 
CAS
perspective what is needed is the capability to adapt effectively as the environment changes.  The US is the United States of America.   systems
To benefit from shifts in the environment agents must be flexible.  Being sensitive to environmental signals agents who adjust strategic priorities can constrain their competitors. 
flexibility
allowed it to benefit from both the monopoly phase of AT&T and the subsequent competitive period.  While the US proximate environment is rich enough the flexibility should be maintained requiring the
Plans emerge in complex adaptive systems (CAS) to provide the instructions that agents use to perform actions.  The component architecture and structure of the plans is reviewed. 
memetic plan
to be preserved somewhere within the system.  The US nation benefited significantly from AT&T both responding to the monopoly opportunity and being aware that its preservation depended on providing enough benefits back to the US. 

Over time Bell Labs failed to value
To benefit from shifts in the environment agents must be flexible.  Being sensitive to environmental signals agents who adjust strategic priorities can constrain their competitors. 
strategic flexibility
, rejecting strategies that turned out to be ground breaking such as ICs and glass fiber communications media.  The leaders had matured and were cognitively inclined to use and defend strategies they had learned during development is a phase during the operation of a CAS agent.  It allows for schematic strategies to be iteratively blended with environmental signals to solve the logistical issues of migrating newly built and transformed sub-agents.  That is needed to achieve the adult configuration of the agent and optimize it for the proximate environment.  Smiley includes examples of the developmental phase agents required in an emergent CAS.  In situations where parents invest in the growth and memetic learning of their offspring the schematic grab bag can support optimizations to develop models, structures and actions to construct an adept adult.  In humans, adolescence leverages neural plasticity, elder sibling advice and adult coaching to help prepare the deploying neuronal network and body to successfully compete. 
and that had served them well. 

Gertner compares and contrasts Bell Labs innovation process with Silicon Valley's leverage of
This page discusses the benefits of geographic clusters of agents and resources at the center of a complex adaptive system (CAS). 
geographic clusters
.  He notes that it now seems more appropriate to apply the innovation factory in neuroscience and clean energy.  But
This page discusses the mechanisms and effects of emergence underpinning any complex adaptive system (CAS).  Key research is reviewed. 
emergence
at the adjacent possible is best supported by maintaining the schematic structures to support a rich toolbox.  Mead and Conway's standardization of VLSI is very large scale integration of silicon on a single chip.  Robert Noyce and Jack Kilby realized that all components of a circuit could be fashioned on one chip of semiconductor material removing the interconnection wiring constraint.   and the IETF process support Silicon Valley's clusters analogously to Bell Lab's supporting of ideas by formal processes for managing lab notebooks, and networking.  

The Idea Factory is an insightful book highlighting key aspects of the
Good ideas are successful because they build upon prior developments that have been successfully implemented.  Johnson demonstrates that they are phenotypic expressions of memetic plans subject to the laws of complex adaptive systems (CAS). 
innovation process
via powerful examples from Bell Lab's greatest years. 









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This page looks at schematic structures and their uses.  It discusses a number of examples:
  • Schematic ideas are recombined in creativity. 
  • Similarly designers take ideas and rules about materials and components and combine them. 
  • Schematic Recipes help to standardize operations. 
  • Modular components are combined into strategies for use in business plans and business models. 

As a working example it presents part of the contents and schematic details from the Adaptive Web Framework (AWF)'s operational plan. 

Finally it includes a section presenting our formal representation of schematic goals. 
Each goal has a series of associated complex adaptive system (CAS) strategy strings. 
These goals plus strings are detailed for various chess and business examples. 
Strategy
| Design |
This page uses an example to illustrate how:
  • A business can gain focus from targeting key customers,
  • Business planning activities performed by the whole organization can build awareness, empowerment and coherence. 
  • A program approach can ensure strategic alignment. 
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