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July 15, 2011 / marios

Centralized Innovation

There is a great article by Tim Wu on the May 2011 issue of the Communications of the ACM about the advantages and caveats of monopoly in innovation.

The author argues that corporate research lab environments usually yield more innovation than academia, but tend to also stifle disrupting technologies that can harm existing business.

As an example, the author mentions Bell Labs inventing magnetic tape technology in the 1930s, and practically wiping the results because of fears that tape recordings would cut into the telephone business (somehow!), In fact, Bell Labs at the same time had also invented the answering machine (hence they needed tape!).

Magnetic tape technology resurfaced in the 1950s and led of course to magnetic storage (your hard drive) and much more.

You can read more intriguing examples in the full article here.

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