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Private sector Nobel Prizes

By Tom Quirk - posted Wednesday, 17 January 2007

A crowning achievement for a scientist is the award of a Nobel Prize. For an academic institution the winner is a real live jewel in the academic crown. But what about those winners who were not in these institutions? Are there any policy lessons to be learned?

Since the Nobel Prizes were first awarded in 1901 there have been about 20 laureates from the private industrial sector out of more than 500 awards for chemistry, medicine and physics. There are also a number of Do-It-Yourself Laureates.

The Australian winners of the Nobel Prize for Medicine in 2005 - Barry Marshall, on internal medicine fellowship training at Royal Perth Hospital, and Robin Warren, a hospital pathologist, at the time of their original observations - have said that much of their prize-winning work was done in their spare time. The unanswered question is how many Nobel Laureates did their key work in their spare time?


The ultimate DIY personal achievement was 100 years earlier. In 1905 Einstein published three remarkable papers on Brownian motion, quantized light and special relativity. He was not awarded the Nobel Prize until 1924. It was for quantized light. But the papers were written in his spare time while he was a clerk in the Swiss Patent Office in Berne.

Nobel awards often illustrate the unusual utility of discovery and the two DIY prizes above certainly do that.

This does not fit with the received wisdom for governments. Policy makers have in mind a linear model of discovery giving rise to technology that in turn gives rise to business. They would even like areas for discovery defined by national needs.

Harold Wilson, when prime minister of the United Kingdom, was going to “forge the new Britain in the white heat of the technological revolution” thought to emerge from scientific research. There was lots of government funded research and development initiatives while the country became an economic shambles and the IMF was called in to help put it to rights.

Is there anything to be learned about the path from discovery to business from the Laureates of the private sector? The research directors in business must be loosely equivalent to government bureaucrats as they set policy and direction.

One would expect the industrial Nobel winners to be drawn from the great “high technology” companies of their time. That is indeed the case. In the early years up to 1940, the few Laureates come from I.G.Farben, Marconi, Bell Laboratories and General Electric. In the second half of the 20th century, Bell, IBM, General Electric and Dupont are all contributors. These prizes are roughly split between fundamental discoveries and processes with a small number of device awards.


Some of the awards in the private sector are for quite staggering developments. The invention of the transistor at Bell Laboratories by Shockley, Bardeen and Brattain (1956) was the first part of a transforming invention for the 20th century. This in turn begat the second part: the integrated circuit (or silicon chip) from Robert Noyce and Jack Kilby (2000). Noyce did not live to share the award (he died in 1990) but he was one of the “Traitorous Eight” who walked away from Shockley’s management and, with others, eventually founded Intel. Kilby was at Texas Instruments.

There are other echoes of the past in the prizes. Sir James Black (1988) created the beta-blocker drug for ICI and then a drug to suppress acid in the stomach for Smith Kline. This stopped a revenue stream for surgeons cutting out stomach ulcers thus proving the pill was mightier than the knife. Marshall and Warren (2005) then challenged the wisdom of the origin of ulcers thus modifying a very successful treatment with a simpler one that threatened drug company revenue as well as medical teaching.

The “most remote from business” prize and the winner of the celestial steak knives must be Penzias and Wilson from Bell Laboratories (1978) for their discovery of the cosmic microwave background radiation. It was noise in their microwave receiver. They could not remove it and finally by elimination determined that it was universal, not just galactic, in origin. Their colleagues down the road at Princeton knew just what it was, the echo from 300,000 years after the creation of the universe.

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About the Author

Tom Quirk is a director of Sementis Limited a privately owned biotechnology company. He has been Chairman of the Victorian Rail Track Corporation, Deputy Chairman of Victorian Energy Networks and Peptech Limited as well as a director of Biota Holdings Limited He worked in CRA Ltd setting up new businesses and also for James D. Wolfensohn in a New York based venture capital fund. He spent 15 years as an experimental research physicist, university lecturer and Oxford don.

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