The New York Times recently ran an excellent profile of Bell Labs by Jon Gertner entitled “True Innovation.” The pieces attributes much of the Labs’ success to onetime chairman of the board Mervin Kelly, who gave researchers time and substantial research autonomy – out of the recognition that true innovation is a product of time-consuming exploration of high-risk ideas. Gertner ends the profile in part lamenting contemporary companies’ emphasis on the quick payoff in regard to innovation. Nevertheless, it is important to recognize that an institution that takes the long-view when it comes to research and specifically encourages high-risk, high-reward breakthroughs still exists today. That institution, ARPA-E, is very much cut from the same cloth as Bell Labs.
To be sure, there are key differences between ARPA-E and Bell Labs. The former’s efforts are specifically targeted at transformational energy research while the latter was much more fundamental or “blue sky” in its approach. Also, whereas ARPA-E – a governmental entity – identifies and supports promising technologies, the privately-owned Bell Labs developed technologies in-house. Nevertheless, the organizations are linked by a common commitment to “move deliberately and build things,” as Gertner puts it. “This is what ARPA-E is all about: invent a new learning curve and let it compete with other technologies that are out there,” Energy Secretary Steven Chu said during his keynote speech at the recent ARPA-E Energy Innovation Summit. Furthermore, like Bell Labs, ARPA-E recognizes that it may be years before its investments pan out.
If anything, ARPA-E is arguably better situated than Bell Labs to act as an incubator for technological game changers for many of today’s challenges because it is more focused and deliberate in its approach. Unlike Bell Labs, the agency has taken care to actually identify promising avenues of research, while also taking care to keep an open mind in regard to breakthrough ideas. Take, for example, ARPA-E’s recently announced $44 million round of funding for next-generation transportation fuels from both natural gas and algae, followed by the agency also announcing a $150 million open funding opportunity that any transformation energy technology idea can potentially take advantage of with up to a $10 million investment. This open announcement is like Bell Labs in that it’s focusing on potential breakthroughs, but deliberate in targeting high-impact energy ideas. And these projects aren’t given carte blanche support like Bell Labs. Instead, ARPA-E invests in project ideas for up to three years and if those ideas don’t meet project benchmarks, funding is reallocated to other ideas that may be showing greater promise. Finally, the agency has also helped justify a government role in innovation by illustrating the power of the public-private partnership: 11 of the projects funded by ARPA-E to the tune of $40 million have leveraged more than $200 million in private investment. In the agency’s first two years alone, its activities resulted in $285 million in follow-on private investment and led to 17 patent filings, as noted in an ITIF report.
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