By Gene Bylinsky

Scientific advances at America's top research laboratory run the gamut from building an efficient phone system to discovering evidence of the Big Bang.

Research laboratories within large companies have been one of the great incubators of scientific discovery in the United States. Charles Steinmetz, whose 30years of research at General Electric helped usher in the age of electricity at the beginning of this century, established the model of an alliance between creative genius and big business. In more recent times IBM scientists have designed fundamental computer languages and software; in 1987 two of their colleagues were awarded a Nobel Prize for their pioneering work on

superconductors. Similarly, researchers at Du Pont have used chemical compounds discovered in their labs to develop plastics and other materials put to everyday use.

America's largest and most famous research facility is Bell Laboratories, a division of American Telephone & Telegraph (AT&T). Scientists at Bell Labs have won more Nobel Prizes than any other industrial institution in the world. Yet since 1984, when a federal judge ruled that AT&T must be split up because its control of U.S. telephone service violated

antitrust law, the American scientific community has been concerned about the scaled-down company's support for its distinguished research arm. As the author of this article reports, however, Bell Labs has survived the breakup and its research remains as innovative as ever.

Gene Bylinsky is on the board of editors of Fortune magazine, where he has been a science writer since 1966. He is the author of several books including Mood Control and Life in Darwin's Universe.

68 AMERICA IN CLOSE-UP

2. continued

B

ell Laboratories, the premier corporate research facility in the United States for most of its 62-year history, has produced the transistor, the laser, the solar cell and the first communications satellite, as well as sound motion pictures, the science of radio astro­nomy and crucial evidence for the theory that a Big Bang created the universe. Today the vital signs are still strong at the Bell Lab head­quarters in northern New Jersey, putting to rest fears that without the vast revenue base provided by ЛТ&Т, the parent operating company, Bell Labs might wither into just another run-of-the-mill industrial research and develop­ment (R&D) operation.

Not only has basic research come through the court-ordered break-up of AT&T largely un­scathed, but Bell Labs is also branching into new commercial areas — in part by launching new R&D companies —and looking into licensing of companies as far afield from telecommunications as airlines and shipping firms.

Historically, basic research ab­sorbed only about 10 percent of manpower and spending at Bell Labs, and that proportion remains unchanged. Most of the employees are engineers, who have worked on applications, not basic research.

But basic research at the Labs has always been a huge attention-getter because of its unmatched results and epochal discoveries. The 1947 invention of the tran­sistor set off the world microelec­tronics and computer revolution. Seven Bell Lab scientists have won Nobel Prizes. In 1985 President Reagan awarded Bell Labs the National Medal of Technology — the only U.S. laboratory ever singled out for it.

What happens at Bell Labs is of vital interest to American industry because of the labs' high quality of research and because it has been strong where the United States

now finds itself weak: in the trans­fer of research results into prod­ucts. Says Robert M. White, president of the National Aca­demy of Engineering: "America's problem is not lack of basic re­search but inadequate conversion of scientific discovery to commer­cialization. Bell Labs does that very well indeed."

Bell Labs is striving to help AT&T's businesses by tailoring basic research more closely to the needs of the parent company with­out sacrificing the scope and sweep of investigations. The economics and psychology departments have been cut drastically while robotics and computer science have grown, but that shift in emphasis involved only about 40 of the 200 or so scientists who pursue the purest kind of pure research.

"To an outside observer it may seem that we've gone product oriented, but the intellectual con­tent of the work is the same," says Arno A Penzias, vice-president in charge of research at Bell Labs. Penzias, an ebullient astrophys­icist, made his mark soon after he arrived at the labs in 1961. He was asked to join a committee of older scientists who were trying to devise the best way to calculate the precise positions of communi­cations satellites. The scientists were talking about setting up tall, expensive radio masts when Pen­zias piped up with the suggestion that nature's own radio masts — radio stars, which emit charac­teristic frequencies from fixed po­sitions in the sky—would serve equally well at no cost whatever. Penzias's idea was accepted and the committee disbanded on the spot.

Later, Penzias and his colleague Robert Wilson built measuring devices for Bell Labs' radiotele-scope as part of their effort to track down the source of static that often interfered with their studies of radio waves from the

Milky Way. The noise they studied turned out to be the residual radiation from the Big Bang; for their discovery, the two men shared a Nobel Prize in 1978.

The scope of research at Bell remains wider than at most other industrial labs and even some uni­versities. The staff includes 3430 Ph.D.s — more than the total re­search staff of the closest rival cor­porate lab, at IBM. The scientists at Bell are spread among physics, chemistry, computer science, mathematics, electronics and sun­dry other fields. Bell Labs' method has always been to assemble a huge mass of diverse specialists who interact closely. The spraw­ling headquarters building is an immense beehive. It houses more than 3000 researchers, product developers and support staff along lengthy corridors lined with hundreds of small labs crammed with the latest instruments.

The physics-research division alone employs 250; it's larger and more diverse than most university physics departments. Investiga­tions range from basic studies of the nature of matter, including such current topics in theoretical physics as instabilities and chaos, to building ceramic superconduc­tors and creating so-called neural networks in silicon chips that mimic rudimentary animal brain pathways. Electronics and optics are two other large areas of em­phasis. Recently AT&T began to install the world's most advanced fiber-optic transmission system, developed at Bell Labs, which can speed 24,000 telephone calls simultaneously through a pair of fibers, each twice the thickness of a human hair. It has 40 percent more capacity than any other commercial system.

The most basic work at Bell Labs has a way of merging into development, though that's not immediately apparent from the activities of some of the basic

THE U.S. ECONOMY 69

scientists. One recently reported on the activities of ants in the jungles of Brazil; another observes faint galaxies at the edge of the universe from observatories in Chile and Hawaii. The student of ants, Thomas Gradel, reports that a major cause of acid rain in the Amazon is formic acid, a pungent, colorless substance released by the decomposing bodies of anls. How­ever, Gradel's interest in the Amazonian ants is highly prac­tical: he is a corrosion chemist, and part of his job is to find out why telephone equipment can fail in various environments.

The stargazer, astrophysicist J. Anthony Tyson, has his feet on the ground as well. He is trying to improve another Bell Lab inven­tion, the charge coupled device — in effect a silicon chip that can see. It has revolutionized astron­omy because it collects light up to 1000 times more efficiently than film, but it also has potential uses as the eyes of robots and in the precision manufacture of semi­conductors. Tyson is one of a handful of Bell's basic scientists who "couple us to the universe of science," as Penzias says. "It's a small but vital part of our business strategy to have a few scientists do work that gives Bell Labs a con­nection to the universities and the rest of the scientific community that it couldn't get otherwise."

Among other things, such con­nections help attract young scien­tists. Bell Labs pays competitive or somewhat higher salaries than other major corporate labs, such as those at IBM and Du Pont. And although Penzias says that some scientists earn more at Bell

Labs, money is not the main draw for most of them. The freedom, the facilities and first-class col­leagues come before that.

Harvesting the fruits of research happens faster than it did in the good old days. Bell Lab President Ian M. Ross is a subdued British-born Ph.D. in electrical engineer­ing with several advances in semi­conductors to his credit. He cites the emergence and the rapid adop­tion of a remarkable mathematical shortcut to the celebrated travel­ing-salesman problem, which re­quires devising the shortest poss­ible route connecting a given number of destinations. Indian-born mathematician Narendra Karmarkar described this new in­sight in 1984. Where programmers and mathematicians once took days to solve a problem with thousands of variables, the Kar­markar algorithm allows them to do so in minutes. AT&T is already using the algorithm to design a vast and complex phone network among the 20 nations of the Pacific Rim. The algorithm is useful in other fields as well; Bell Labs is getting ready to apply it to airline and shipping businesses.

Competing against the rest of the world is teaching Bell Labs' product developers to couple R&D even more closely to both manufacturing and market needs. In the past, technology drove Bell Labs' development; now the cus­tomer does. A classic example of a technology-driven product: the Picturephone of the mid-1950s. It worked well, but market studies of the potential demand for it failed to make clearjust who could afford to use it. Nowadays Bell Labs

would let the market determine whether it would develop a Pic­turephone.

Into the competitive world today Bell Labs' developers are bringing such impressive products as a gigantic computerized elec­tronic switching system, which can cost several million dollars and handles up to 300,000 tele­phone calls an hour. Bell Labs is also helping install a system that will connect McDonald's 7500 hamburger outlets and the com­pany's administrative offices. In all these activities Bell Labs' peo­ple think they have a competitive advantage because research has been integrated into the work of the parent company better than at any other industrial lab.

Just as it opened the new world of microelectronics by inventing the transistor, Bell Labs is now far along in harnessing the electron's ephemeral cousin, the photon, for the task of information movement and management. In Bell Labs' bag of surprises there even could be an optical computer superior to its electronic counterpart. Pro­gress in that field in recent months has been exceptionally rapid. The optical computer, using laser beams instead of electrical con­nections, would work 1000 times faster than today's electronic variety—an almost unimaginable boon to everyone from theoretical physicists to weather forecasters.

Bell Labs' basic scientists insist that competition is nothing new for them, that they have always competed against the world at large. As Arno Penzias puts it, Bell Labs traditionally has been a place that "made its own future happen."

IBM: international Business Machines: large American corporation.

70 AMERICA IN CLOSE-UP

A French-Fry Diary: From Idaho Furrow To Golden Arches

For the Potato That Qualifies, McDonald's Has a Slicer, Sprayer, Drier—and Ruler

BY MEG COX

OAK BROOK, ILL. 2/8/82

D

eep within the high-rise confines of McDonald's Corp. headquarters, inside his "war room," Chair­man Fred Turner ponders a weighty business issue: the fate of five Idaho potatoes. The potatoes have been transplanted from their American homeland to a field in far-off Holland. Delicate negoti­ations with the government of the Netherlands preceded the move; eight months in Dutch quarantine followed before the potatoes could be planted. "God, I hope they didn't die," Mr. Turner ex­claims.

Lower-level McDonald's operatives are asked to check. Alas, the news is bad. The five potatoes, estranged from their native land, have fallen victim to a virulent foreign potato virus. Once again, McDonald's Corp.'s costly, 10-year struggle to take its favorite source of French-fried potatoes to Europe has been thwarted.

Thwarted but not defeated. This company didn't get to be king of fast food by taking French fries lightly. The attention McDonald's lavishes on the spindly side order suggests something approaching a corporate obsession.

And why not? French fries currently pour more than $1 billion a year into McDonald's cash registers, nearly 20% of annual revenue. They are the most profitable food served under the Golden Arches. Seven of every 10 customers arriving after the breakfast hour order fries.

To keep them that way, McDonald's has spelled out no fewer than 60 specifications a strip of potato has to meet to make it into the fry­ing basket. To frustrate imitators, it has a patent on the precise com­bination of steps in making its fries. The restaurants even use a spe­cial blend of frying oil. Its name: Interstate 47.

THE U.S. ECONOMY 71

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Now, frying is important, but what good is it if you don't have a sturdy potato to begin with? At McDonald's the tuber of choice is the russet Burbank. "People think all potatoes are alike, but they aren't," says Bill Atchley, the chief of McDonald's crew of spud scouts. He explains: "A russet Burbank potato has a distinctive taste and a higher ratio of solids to water, which makes for crispier fries."

There are plenty of russet Burbanks in the U.S., but overseas is an­other matter. Mr. Atchley recently returned from the Philippines, where he spent much of his time on his hands and knees in the dirt trying to teach farmers to plant the right kind of potatoes. "If we can grow these potatoes in the Philippines, we'll learn a lot about how to do it in other tropical countries," he says.

But the big target is Europe. No russet Burbanks are grown there, and the Common Market doesn't allow potato imports. Never mind that the Continent offers several hundred other varieties; Mr. Turner says they are small and yellow and low in solids, producing, he adds with distaste, "small and soggy" French fries.

The state of the art in French-fry making today can be seen at the J. R. Simplot potato factory in Caldwell, Idaho, which processes a good portion of the billion potatoes McDonald's uses each year. "Mac fries," like the ones Simplot prepares for other companies, begin their journey on an assembly line, where women in aprons pluck out the bad potatoes. Like the others, those going to McDonald's are chopped, prefried and frozen.

But there are subtle differences. Other fries are blanched, or quick-scalded, in water; McDonald's has its steamed, figuring that water carries off flavor and nutrients. All the fries in the assembly line are prefried, then dried; but those going to McDonald's are dried at higher heat, to make them chewy. The time and the heat are covered by the patent.

Nor is McDonald's indifferent to the amount of moisture that slips away between the frying and the drying. Company food scientists monitor this. They call it "drier-frier weight loss."

Else.where on the Simplot production line, other people's fries are dipped in sugar to make them brown better. Mac fries get doused in sugar too, but they are sprayed rather than dipped. Spraying the sugar on makes the fries brown unevenly, the company believes, and that makes them look more natural.

In looks, though, color isn't everything. Fries have to be the right length, too. What hungry diner wants to look into his bag and find a bunch of little stubby fries? McDonald's is ruthless about length: 40% of all fries must be between two inches and three inches long;

72 AMERICA IN CLOSE-UP

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another 40% must be over three inches; the other 20%— well, it doesn't hurt to have a few stubby ones.

McDonald's is convinced all this trouble pays off. It says a 1975 telephone survey showed that Mac fries were the favorite of 70% of those called.

Even some gourmets like them. "I think McDonald's fries are re­markably good," says television chef Julia Child. "They're cooked in extremely fresh fat." Nutritionists tend to be less enthusiastic. Isobel Contento, a nutrition professor at Columbia University in New York, says, "About half the calories in French fries come from fat, there are very few vitamins, and you'd feel a whole lot fuller eating a comparable amount of green vegetables."

WAYNE STAYSKAL Courtesy Chicago Tribune

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THE U.S. ECONOMY 73

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