Private sector Nobel Prizes

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.

Even IBM in the 1980’s allowed researchers to try to measure the mass of the neutrino, the smallest and least interactive of nuclear particles. The supposed justification was if the neutrino had mass then the universe might not go on forever and IBM would not have a continuing business.

The last 15 years have not seen more prizes going to the big industrial research laboratories. Part of the explanation may be that IBM and Bell Laboratories are changed companies. IBM no longer dominates computing. Lucent Technologies, the successor to AT&T struggles with Bell Laboratories.

Also the culture has changed. The big corporations used to reflect the East Coast US philosophy of corporations doing and controlling everything relevant to their business. This might include a central research laboratory that could be a reflection of university departments. But, with the West Coast corporations, the approach was more co-operative with technology spread over a number of independent companies, many acting as suppliers of components or equipment. As the centre of technical innovation moved to California, the East Coast businesses lost their markets and their corporate model was abandoned.

Thus we now see Intel, Microsoft, Cisco and others, all the equal financially of the older East Coast corporations. There may not be a central research function. Laureates have emerged from this distributed system. The integrated circuit was a prize winning device and Kary Mullis (1993), inventor of the Polymerase Chain Reaction (PCR) while at Cetus, now part of Chiron, is perhaps the first of a line from the new biology frontier.

Unlike Einstein, Marshall and Warren, these industrial researchers did not make their discoveries in their own time. Their research directors encouraged them to explore their fields, even though few discoveries directly benefited their corporations. It was part of the corporate culture of the time and it brought great kudos to the organisation. It may have helped recruit bright engineers and scientists.

In Australia in the 1990’s, BHP closed a number of research centres, as did ICI.

What of the Australian government? Do these events point to a new approach to national needs, distributed research funding and to reappraising the role of the CSIRO?

For policy makers, the private sector achievements are an example of the likely success of national needs. Corporations have corporate needs but scientific research frequently delivers to a wider community without direct or immediate benefit to the corporation. Discoveries achieve technical utility through diverse pathways. Finally from the West Coast of the US there are signs that plurality is important in creating a more vibrant technical and business environment.