Book Notes: The Idea Factory: Bell Labs and the Great Age of American Innovation by Jon Gertner

Reading Time: 11 minutes


The Idea Factory: Bell Labs and the Great Age of American Innovation, by Jon Gertner

Publisher : Penguin Books (2013)

ISBN-13: 978-0143122791

Rating: ⭐⭐⭐


Table of Contents

The Book in 3 Sentences

  1. An innovation is the transformation of an idea into a technological product or process that is intended for widespread, practical use. Innovation typically involves a group of people working together in order to implement the transformation of an idea into a discovery, a discovery into an invention, and ultimately, into a technological product intended for commonplace practical use.
  2. Innovation thrives in an environment with a critical mass of thinkers and scientists, working closely together, and with the free exchange of ideas and information. There must be freedom to explore and follow intellectual curiosity, with the goal of solving interesting problems, and acquiring new and fundamental knowledge.
  3. Innovation works best in an environment when there are constant and new problems to solve. It is also accelerated in situations where there is a sense of urgency such as a war or natural catastrophe.

Five Key Takeaways

  1. A revolutionary technology rarely originates out of nowhere. It typically has its origins or foundations that are based on earlier pieces of knowledge. The true impact of an idea, invention, or other scientific piece of knowledge may sometimes only be fully realized years or decades later, as time, people, and ideas gather clarity, momentum, and purpose. Luck and timing also play a large role in innovation. Thus, the true impact of an idea or discovery may take years or decades to be more completely realized.
  2. Creating an innovation-rich environment requires a mass of smart, motivated scientists and thinkers, the free flow of ideas, as well as the ability for scientists and engineers to follow their intellectual curiosity wherever it takes them without repercussion. It is important to find good problems, and follow them where they lead.
  3. Innovation does not exist in isolation. Technologies spawn new technologies. And, innovations spawn new innovations. A new invention often requires the creation of other, peripheral new devices or inventions for its own proper use. Solving one technological problem often leads to other problems that require the creation of new technologies. For instance, the generation of so much digital information leads to new tools to help us manage this information overload.
  4. The purpose of innovation is not simply to invent new technology; it is to create products, systems, and techniques that serve humanity. The purpose of innovation is to better serve man, either better, cheaper, or both. “New gadgets or new technologies are important only when they really make good new things possible or good old things cheaper or better.” pg. 408
  5. Creative environments that foster a rich exchange of ideas appear to be far more important in catalyzing important new insights than the forces of market competition. While market competition excels at producing incremental improvements, it does not do as well at generating huge advances. But, at the same time, it is these new and fundamental advances that provide the biggest and most lasting dividends to society (such as the internet, or antibiotics).

Top 3 Quotes

  • …large leaps forward in technology rarely have a precise point of origin. At the start, forces that precede an invention merely begin to align, often imperceptibly, as a group of people and ideas converge, until over the course of months or years (or decades) they gain clarity and momentum and the help of additional ideas and actors. Luck seems to matter, and so does timing, for it tends to be the case that the right answers, the right people, the right place—perhaps all three—require a serendipitous encounter with the right problem. And then—sometimes—a leap. pg. 60
  • …modern industrial research was meant to apply science to the “common affairs” of everyday life. … “It is an instrument capable of avoiding many of the mistakes of a blind cut-and-try experimentation. It is likewise an instrument which can bring to bear an aggregate of creative force on any particular problem which is infinitely greater than any force which can be conceived of as residing in the intellectual capacity of an individual.” pg. 39 [Frank Jewett, Founding President of Bell Labs, 1975]
  • If an idea begat a discovery, and if a discovery begat an invention, then an innovation defined the lengthy and wholesale transformation of an idea into a technological product (or process) meant for widespread practical use. Almost by definition, a single person, or even a single group, could not alone create an innovation. The task was too variegated and involved. pg. 126


The goal of “The Idea Factory: Bell Labs and the Great Age of American Innovation”  is to discuss the process of innovation, how it happens, why it happens, and the types of people who make it happen. Jon Gertner uses Bell Labs, AT & T’s industrial research lab, as an example of an organization that exemplified the process of innovation, a “factory of ideas” that yielded numerous revolutionary, scientific and technological advances. “For a long stretch of the twentieth century, Bell Labs was the most innovative scientific organization in the world. It was arguably among the world’s most important commercial organizations as well”,  pg. 8

On January 1, 1925, Bell Telephone Laboratories, Inc., popularly known as Bell Labs, was spun out of the engineering department of Western Electric, the manufacturing subsidiary of AT&T to become a standalone company that would produce scientific research and development to be used in the telephone and communications industry.

The purpose of Bell Labs, owned jointly by AT&T and Western Electric, was to “research and develop new equipment for Western Electric, and …conduct switching and transmission planning and invent communications-related devices for AT&T. (p. 38)”

Over the course of 50+ years, scientists at Bell Labs developed innovations like transistors, lasers, radar, satellite communications, mobile telephones, nuclear weapon defense protocols, quality assurance methods, and information technologies that have been integrated into computers, communications, medical surgery tools, factory productivity methods, digital photography, defense weaponry, and a whole other variety of industries and devices and processes.

Jon Gertner uses the history of Bell Labs to try to discover a framework for the process of  innovation. He tries to determine whether there is a formula for innovation, and whether that formula can be replicated in today’s society, particularly in order to solve challenges that Gertner terms as today’s “wicked problems”:  climate change, the search for renewable energy, infectious disease, information overload, and so on.

The Young Turks

The book is focused around the biographies, personalities, and achievements of six significant Bell Labs employees: Mervin Kelly, Jim Fisk, William Shockley, Claude Shannon, John Pierce, and William Baker. With the exception of Mervin Kelly, the eldest of the group, the other five men were also sometimes known as the Young Turks, revolutionaries who believed in the mission of Bell Labs, as well as in the importance of technological innovation, and worked in what was termed as “an institute of creative technology.”  pg. 9. The book also details the contributions of John Bardeen and Walter Brattain, two scientists who helped invent the transistor (and, along with Shockley, later won the Nobel Prize in Physics for their work at Bell Labs).

Five Young Turks

  1. Jim Fisk
  2. William Shockley
  3. Claude Shannon
  4. John Pierce
  5. William Baker

Bell Labs

  • The idea behind the formation of Bell Labs in 1925 was that scientific research would play an increasingly greater role in the telephone company business. As a standalone subsidiary of AT&T, Bell Labs would be empowered to investigate and explore any and all ideas, inventions, and technologies related to human communications, whether it be conducted through wires or radio or recorded sound or visual images.
  • Curiosity and scientific research and exploration was strongly encouraged, to the extent that famous science fiction writer Arthur C. Clarke referred to Bell Labs as “a factory for ideas.”
  • Company progress would be measured in decades, instead of years, providing a long-term sense of mission. “The value of the old Bell Labs was its patience in searching out new and fundamental ideas, and its ability to use its immense engineering staff to develop and perfect those ideas.” pg. 413
  • Scientists and engineers at Bell Labs were given wide latitude to experiment and explore how basic and fundamental questions of physics or chemistry might have an impact on communications. “The point of this kind of experimentation was to provide a free environment for “the operation of genius.” pg. 33”


  • The term “innovation” dates back to sixteenth-century England, and originally described the introduction into society of a novelty or new idea, usually relating to philosophy or religion. By the middle of the 20th century, the words “innovate” and “innovation” were just beginning to be applied to technology and industry. pg. 126.
  • Innovation is not a single action or invention, but rather, a total process of interrelated parts. An innovation is not solely a single idea, the discovery of a new phenomena, nor is it the development of a new product or manufacturing technique. It isn’t even solely the creation of a new market. Innovation is the sum of all these interrelated parts working together to transform an idea into a technological product or process that is intended for widespread, practical use.
  • It is possible, to some extent, to create a formula or framework for generating innovation. Developing innovation requires the existence of most, if not all, of the following characteristics:
    • A problem-rich environment.
    • A critical mass of smart, driven scientists close to one another so they can exchange ideas and information; they also need to be properly equipped
    • A stable source of capital and funding
    • A market for the products of innovation
  • Technologies spawn new technologies. A new invention often requires the creation of other new devices or inventions for its own proper use. For instance, the generation of digital information leads to new tools to help us manage this information overload. Solving one technological problem often leads to other problems that require the creation of new technologies.
  • There is a difference between innovative consumer products, and innovation that provides a revolutionary leap in the sum of human knowledge and produces a whole new foundation or platform of science and knowledge.

Innovation, Timing, & Unintended Consequences

  • “Ideas and plans are essential to innovation,” he [John Pierce] remarked, “but the time has to be right.” pg. 389
  • … to an innovator, being early is not necessarily different from being wrong. pg. 316

War as a Catalyst for Innovation

  • War can be a catalyst for innovation. War creates a sense of urgency, and generates new technologies and innovations in record time that might have taken much longer under normal conditions of peace.
  • From the middle of 1940, about 75% of Bell Labs’s research and development was redirected toward developing electronic devices for wartime (WW2).
  • Kelly assigned Bill Shockley to help develop applications for a new technology known as radar (radio detection and ranging). Radar used high-frequency radio echoes to determine the presence and location of unseen objects in space. It was both an offensive and defensive weapon, and comprised multiple devices that could be used on the ground, on water, or in the air. “It could be used to spot enemy aircraft, guide gunfire and bombs toward a target, identify enemy submarines, and land a plane at night or in thick fog”. pg. 77
  • In addition, the conscription of many Bell Labs scientists into the military effort during WW2 led Lab executives to hire hundreds of women to replace them.
  • Also, for the first time, not wanting to pass over the best scientists on religious grounds, the Lab began to hire Jews, a turnaround from its prior attitude of anti-Semitism. (Bell Labs passed on a young Richard Feynman, a former colleague of Shockley’s at MIT who would eventually be drafted into the Manhattan Project)

Communication & Information

  • In July and October 1948, Claude Shannon published “A Mathematical Theory of Communication” , “the magna carta of the information age,” in the Bell System Technical Journal.
  • “…information can be treated very much like a physical quantity, such as mass or energy.” pg. 151
  • “The fundamental problem of communication,” …“is that of reproducing at one point either exactly or approximately a message selected at another point.” pg. 151
  • One shouldn’t necessarily think of information in terms of meaning. Rather, one might think of it in terms of its ability to resolve uncertainty. Information provided a recipient with something that was not previously known, was not predictable, was not redundant. pg. 152
  • Shannon suggested it was most useful to calculate a message’s information content and rate in a term that he suggested engineers call “bits”—a word that had never before appeared in print with this meaning. pg. 153
  • The bit “corresponds to the information produced when a choice is made from two equally likely possibilities. If I toss a coin and tell you that it came down heads, I am giving you one bit of information about this event.” pg. 153
  • (1) All communications could be thought of in terms of information; (2) all information could be measured in bits; (3) all the measurable bits of information could be thought of, and indeed should be thought of, digitally. pg. 153
  • Shannon was suggesting that all information, at least from the view of someone trying to move it from place to place, was the same, whether it was a phone call or a microwave transmission or a television signal. pg. 154
  • His calculations showed that the information content of a message could not exceed the capacity of the channel through which you were sending it. Much in the same way a pipe could only carry so many gallons of water per second and no more, a transmission channel could only carry so many bits of information at a certain rate and no more…. Anything beyond that would reduce the quality of your transmission. pg. 154
  • The upshot was that by measuring the information capacity of your channel and by measuring the information content of your message you could know how fast, and how well, you could send your message. pg. 154
  • He showed that any digital message could be sent with virtual perfection, even along the noisiest wire, as long as you included error-correcting codes—essentially extra bits of information, formulated as additional 1s and 0s—with the original message. pg. 154
  • All modern communications engineering, from cell phone transmissions to compact discs and deep space communications, is based upon this insight. pg. 155
  • in 1949, a year after the communications paper was published, it was published in book form for a wider audience. Shortly thereafter communication theory became more commonly known as information theory. pg. 155

Creativity & Curiosity

  • He once told an interviewer, “I think you impute a little more practical purpose to my thinking than actually exists. My mind wanders around, and I conceive of different things day and night. Like a science-fiction writer, I’m thinking, ‘What if it were like this?’ or, ‘Is there an interesting problem of this type?’ … It’s usually just that I like to solve a problem, and I work on these all the time.” pg. 379

Monopoly and Antitrust

There were two major antitrust lawsuits filed against AT&T.

The first antitrust lawsuit, filed in 1949, alleged that AT&T and Western Electric (AT&T’s equipment manufacturing arm) “had “unlawfully restrained and monopolized trade and commerce in the manufacture, distribution, sale and installation of telephone equipment.”  pg. 188. It sought to break off Western Electric from AT&T.

That case was settled in 1956, with AT&T maintaining its monopoly, but agreeing to limit its business solely to publicly regulated communications services or to military work, to not enter the computer or consumer electronics markets, and to license its present and future US patents to all American applicants.

The second antitrust lawsuit was filed against AT&T (with Bell Labs and Western Electric as co-defendants) by the Department of Justice on November 20, 1974.  The Department of Justice alleged that “AT&T and Co. had engaged in “an unlawful conspiracy” to monopolize communications service”.  pg. 324. The government sought to break off Western Electric from AT&T, and to separate some or all of the local phone companies owned by AT&T into independent companies.

The government believed that AT&T’s control of almost all the local networks [e.g. New York Telephone, New England Telephone, Southern Bell, Northwestern Bell, etc] created a bottleneck preventing long-distance competition, such as MCI, from thriving.  pg. 355-6

On January 8, 1982, the Justice Department and AT&T reached an agreement. AT&T would agree to divest its local phone companies, which would all become separate corporations in their own right. In return, AT&T would now be free to enter into all other industries, such as the computer and consumer electronics industry from which it had been previously barred, per the old consent decree made in 1956.  AT&T would also retain its long-distance telephone service, and it would no longer be forced to give away its technologies.

After the antitrust settlement of 1982, Bell Labs eventually became a regular industrial lab, with a more constrained area of focus. It was no longer able to primarily dedicate itself to pure and unfettered research.

After losing its monopoly status, AT&T could no longer afford to dedicate years or even decades to the pursuit of curiosity. It was now accountable to market forces, which incentivized incremental improvements, rather than game-changing discoveries, and rewarded short-term thinking. The old Bell Labs system had produced payoffs that were too far off in the future as a commercial innovation, if such payoffs ever even occurred.

The Next Bell Labs

  • Janelia Farm is an elite research center for the Howard Hughes Medical Institute that opened in 2006 with the primary goal of understanding consciousness and how the human brain processes information
  • Janelia is modeled after Bell Labs and backed by a multibillion-dollar endowment. It is set up as a close, interdisciplinary exchange of ideas between the world’s brightest science researchers, all of whom are given ample funding and tremendous freedom, and encouraged to “take risks and to flirt with failure as they “explore the unknown.”
  • The creation of a clean-energy economy in the 21st century will also provide opportunities to look for a new Bell Labs. “It will involve the management of vast, sophisticated, interconnected systems, much like communications networks, that require great technological leaps forward as well as constant, incremental improvements”. pg. 422