No science, no startups: The innovation engine we're switching off

https://steveblank.com/2025/10/13/no-science-no-startups-the-unseen-engine-were-switching-off/

by chmaynard • 9 months ago

724 473 9 months ago

steveblank.com

rthrfrd2• 9 months ago

Startup = disruption = threat to existing control.

If you love control and have control, why would you want to create fertile ground for startups?

(This was meant as devil's advocate, not my personal point of view).

aeonik• 9 months ago

That's short term thinking.

You can't stop innovation across the planet, you will lose control over time as adversaries continue to innovate and subsume antiquated control structures.

rthrfrd2• 9 months ago

Oh I completely agree.

api• 9 months ago

Yet it’s a mistake companies and societies repeatedly make, because human brains are wired for zero sum games and paranoia. When you have it, the instinct is to clutch and guard and hoard not grow and expand.

When a company or a society is threatened the usual response is to double down on things that accelerate decline like killing novelty and innovation.

These things worked when we were small primates fighting over limited food sources on the savannah. Our brain stems don’t know what millennium they are in and still run those programs.

teeray• 9 months ago

That's short term thinking.

Which is exactly what our system encourages. You don’t need to think beyond the next quarter / election cycle. You’re only in it to extract as much wealth in the short-term as possible and secure your chair before the music stops playing.

ortusdux• 9 months ago

Everything that is happening in the US screams short term thinking. It feels like the scramble after a leveraged buyout.

Larrikin• 9 months ago

All the people in charge currently are banking on being rich, enjoying society as they have made it, and then dead before it personally affects them.

terminalshort22• 9 months ago

In the 20th century, U.S. companies put their excess profits into corporate research labs. Basic research in the U.S. was done in at Dupont, Bell Labs, IBM, AT&T, Xerox, Kodak, GE, et al. This changed in 1982, when the Securities and Exchange Commission ruled that it was legal for companies to buy their own stock (reducing the number of shares available to the public and inflating their stock price.) Very quickly Basic Science in corporate research all but disappeared. Companies focused on Applied Research to maximize shareholder value. In its place, Theory and Basic research is now done in research universities.

I'm not seeing how you get from share buybacks to a shift in priorities in corporate research. If there's a fundamental reason why it can't be done now how it was before the 80's it's not that.

hiddencost• 9 months ago

Why not?

Suddenly they had a more lucrative was to spend their money, so they did.

computerphage• 9 months ago

Because before buybacks there were dividends. Did the difference between buybacks and dividends really make the difference between doing basic research and not?

7thaccount4• 9 months ago

On one hand, sure. They're able to make an informed decision to maximize return to shareholders.

On the other hand, a ton of amazing inventions came out of that system which created entire industries that went on to turbocharge the economy and create millions of jobs. I can see how someone may feel that a company being able to inflate it's stock price more is less useful to humanity and not worth the trade.

There may have been other reasons as well for the collapse of corporate research like changing tax rates, or maybe we were just in a golden age (1940s-1980s) as new advancements in physics and materials science allowed for a rapid amount of discoveries and now we're back in a slower period.

7thaccount4• 9 months ago

Nothing against research universities as good stuff does occur there, but it just seems like it was such a a huge loss seeing those corporate labs disappear. I think it helps to have scientists and engineers closer to the problem and who don't have to spend a huge amount of their time writing grants and training grad students.

terminalshort22• 9 months ago

And you can have a career track that normal people will actually want. The whole phd -> postdoc -> (maybe) tenured professor thing is such misery that I never even gave it a thought as a career.

cjbgkagh2• 9 months ago

Having worked in corporate labs they really were great and it's a shame they're disappearing.

It's not only share buybacks, I would include offshoring, DEI, and a consolidation of management power as major factors in the destruction these labs. The pipeline has been so bad for so long now that it would take a miracle to get things started again.

The last org I worked at offshored the most promising work to China. Due to some high up international agreement the company had to spend $X on offshored workers so not only were they considered cheap they were considered free because the money had to be spent anyway and was coming out of someone else's budget.

I was working at a Research Org when the DEI push came through and it was a absolute disaster. A lot of projects ended their internship programs and avoided hiring in order to minimize the exposure. The bargain was always, you can have 6 seats but 50% need to be women and 50% need to be minorities, and since everyone got the push at the same time it meant that due to the intense competition for the same people you'd end up really having to scrape the bottom of the barrel. That made a lot of initiatives unviable.

I wasn't working at Yahoo Research but as I heard it was canned following a management rift. They were already bleeding talent for a while but had retained some good people that stayed out of comfort and inertia. The smart people cultivated in research orgs tend to be a competing source of power and management hates that.

ModernMech9• 9 months ago

it was such a a huge loss seeing those corporate labs disappear.

A loss for whom? Society? Of course, and that's exactly why they don't happen anymore -- because while they were a boon for society they were a terrible bet for the company. And when a company has a choice between doing good for their bottom line or doing good for society, 100% of the time they choose their bottom line.

I mean, look at the legacy of Xerox Parc from Xerox's perspective. They invited this guy in, Steve Jobs, and he commercialized their ideas. Today Xerox is worth pennies on the dollar compared to their height, doing none of what Xerox Parc researched. Apple ate their lunch. The ROI for Xerox Parc was terrible for Xerox.

For all the amazing stuff they did, they were not rewarded by the marketplace for it, they didn't produce better products for themselves, they just did other companies' R&D.

That's where universities come in, and where they are vital. If you take them out, their role will not be filled by corporations, because corpos can't stomach the kind of dollars needed to do fundamental research. Only the government can stomach that, and if somehow the voters are convinced all this isn't worth funding, it just won't happen at any level.

moffkalast2• 9 months ago

Yeah if you go check almost any major scientific breakthrough of the past century it usually starts with "some guy was working in a corporate lab with an unlimited budget". We're stagnating as a species a lot more, but at least the shareholders got a payout for their hard work of doing literally nothing. Rent seeking at its worst.

empath75• 9 months ago

You're not missing anything, it's just completely wrong.

photochemsyn• 9 months ago

The article doesn't mention that Bayh-Dole made it legal for a university to exclusively license a patent generated by a government-financed researcher to a corporation.

Prior to this, if a corporation wanted to have exclusive rights to basic patents, they'd have to run their own private research labs to generate those patents. Prior to Bayh-Dole, university inventions were patented but there were no exclusive licensing deals. This means no competitive advantage; anyone can use license the patents (I believe any US citizen) before Bayh-Dole.

So corporations largely stopped funding private research labs like Bell and instead entered into public-private partnerships; on the academic side we saw the rise of the shady enterpreneurial researcher whose business plan was to use government funds to generate patents (not uncommonly based on fraudulent research) which formed the basis of a start-up which was sold to a major corporation.

The fix is simple: patents generated with taxpayer dollars at American universities should be available to any American citizen for a small licensing fee; if people want exclusive rights to patents, they need to put up the capital for the research institution themselves, as was the case with Bell Labs. Practically, this starts with a repeal of Bayh-Dole.

terminalshort22• 9 months ago

This sounds like a much more reasonable explanation for the fall of the corporate labs.

wbl2• 9 months ago

Repealing Bayh-Dole is a terrible idea. A lot of research produces enough to get a patent but still requires a lot more development to get a product. Drugs are probably the best example.

mike_hearn4• 9 months ago

So corporations largely stopped funding private research labs like Bell and instead entered into public-private partnerships

They didn't though. Bayh-Dole was 1980. All the big tech firms have invested massively in R&D since then, and I think it's also true for many non-tech industries or tech-adjacent (e.g. chip manufacturing, oil and gas).

PhotonHunter2• 9 months ago

The obvious retort would be, if the situation were so favorable for corporations before Bayh-Dole, why were so few licensing deals in place before the passage of Bayh-Dole (fewer than 5% of technologies were licensed)?

cratermoon2• 9 months ago

Note the "maximize shareholder value" aspect. That's the essential driving force behind business since then: The Friedman doctrine.

Now consider the choices a company makes when executives hold the Friedman doctrine as orthodoxy. Put money into basic research that might generate shareholder value in some unknown time, or buy their own stock back and pump up the price?

terminalshort22• 9 months ago

Why would companies not want to maximize their value before share buybacks?

bluecalm2• 9 months ago

Buying back stock is just as a way to distribute money to shareholders. It's neutral when it comes to "shareholder value". It's the same as paying dividends and having some shareholders reinvest it.

It just saves an extra step and doesn't trigger tax event. It also makes more sense. If you prefer cash you sell it on the market to the company. If you prefer holding shares you don't do anything. You get a choice when it cash out instead of being forced to on regular basis.

overrun115• 9 months ago

Where do you think the capital being returned is going? If it's not being consumed but instead is mostly getting reinvested somewhere else than what is the problem? Capital markets are working as intended to move capital out of a firm that cannot generate high returns with it into ones that can.

dkyc• 9 months ago

It's not even clear that the premise is true. There's lots of 'research' done in the big tech companies.

The biggest reason why companies don't seek to emulate "Dupont, Bell Labs, IBM, AT&T, Xerox, Kodak, GE", is probably that it reads like a list of textbox examples of "companies that failed to execute on their research findings", so clearly there was something wrong with this approach.

_aavaa_• 9 months ago

That isn’t what they’re textbooks examples of.

GE (under Jack Welch specifically) is a textbook example of how financialization and focusing on numbers at the expense of products destroys companies.

Kodak is a textbook example of disruption. Yes they failed to capitalize on digital cameras specifically, but their research in all other areas was very much acted upon.

oblio• 9 months ago

Xerox and Kodak, at least, stumbled into the future and then refused it.

The same thing will happen to Google & co.

And DuPont is very much alive doing DuPont things.

ActorNightly4• 9 months ago

The bigger problem today is that there is simply nothing more left to research. Everything that is being worked on are at most optimizations, which allways have a dollar spent vs dollar returned amount on them.

graycat2• 9 months ago

It can appear that some famous companies pursue pure research as a source of public luster.

Eridrus• 9 months ago

Yeah, it's nonsense.

I think the core problem is that innovators typically only capture low single digit percent of the value they generate for society.

Bell Labs existed in an anomalous environment where their monopoly allowed them to capture more of the value of R&D, so they invested more into it.

This is the typical argument for public subsidy of R&D across both public and private settings because this low capture rate means that it is underprovisioned for society's benefit.

kevindamm• 9 months ago

Something I haven't seen mentioned in this thread or TFA is just how high corporate taxes were (and even personal investment taxes) in the 50s and 60s, and this influenced spending on R&D immensely because that investment wasn't considered taxable income. Tax rates were over 50% for much of the era of Bell Labs and Xerox PARC.

twobitshifter• 9 months ago

Not why it can’t be done so much as why it isn’t done. Share buybacks allow companies to reward executives directly as their compensation is tied to stock price. If we started not doing that, the priorities might shift, but those executives like things the way they are.

Before Tim Cook Apple had never done a buyback - Jobs was always thinking Apple could do better with the money in R&D than paying off shareholders. Wall Street did not approve of this position, but Jobs wasn’t one to listen to anybody, so it did not matter. Most CEOs are not going to take such a strong position when they, the stockholders, and every other executive can be guaranteed a financial reward through a buyback.

bulletsvshumans• 9 months ago

But dividends also result in a concrete financial reward for all shareholders, yes?

xixixao• 9 months ago

Dumb maybe question: Why couldn’t the companies with excess profits just pay they employees more in salaries?

helsinkiandrew• 9 months ago

Share buybacks allow companies to reward executives directly as their compensation is tied to stock price.

To be fair share owners also like the stock price to go higher, they also like dividends (and higher dividends would tend to drive the stock price higher too), but an X% increase in share price caused by buybacks is favoured over an X% dividend because it isn’t immediately taxed.

Uehreka• 9 months ago

Unfortunately CEOs have to do buybacks at every opportunity, because otherwise shareholders will sue them for failing to maximize shareholder value.

Jobs was always thinking Apple could do better with the money in R&D than paying off shareholders. Wall Street did not approve of this position, but Jobs wasn’t one to listen to anybody, so it did not matter.

(Head spins) wait what?! No! You’re not supposed to do that! If you fail to always maximize short term profits, people might start thinking CEOs actually have agency, and they won’t be able to hide behind the “maximizing shareholder value” excuse!

terminalshort22• 9 months ago

If companies want to reward executives directly they can cut out shareholders entirely and pay salaries and bonuses. If companies want to reward shareholders (including executives) they can pay dividends (which Apple did do under Jobs). Nothing about the priorities of companies changed with share buybacks.

badpun5• 9 months ago

The reality seems to be that only the genius founder is allowed to do any unorthodox moves as the CEO. Once he's out, the board selects a CEO that will basically continue business as usual without rocking the boat. The new CEO essentially won't have a mandate to use any controversial or original approach.

JKCalhoun3• 9 months ago

And yet when Jobs returned to Apple he blew up ATG (the Advanced Technology Group) that gave us Quicktime, etc. He also shutdown Apple's research library (and gave all the books to Stanford, I believe).

He seemed to have little patience for "scientists" — preferred engineers that shipped shit.

I think that at best he saw research as expensive, at worst he saw it as elitist.

BurningFrog3• 9 months ago

Share buybacks is not some weird loophole that allows executives to get paid.

Companies are always allowed to reward their executives and other employees by giving them money, stock options, or other rewards.

smaudet• 9 months ago

Maybe some of these 2-brain cell executives should consider that their "buybacks" will be worthless when US throughput starts to be equally worthless compared to the rest of the world...

Of course, I'm being a bit pejorative, they aren't thinking big picture at all, just concerned with what happens tomorrow not the day after...

However, they are in part responsible for the nonsense happening at the moment wrt to American policy, it seems like a game who can light cash on fire the fastest ..

noobermin2• 9 months ago

Isn't corportate csuite compensation the highest it's ever been? This isn't that great of an argument.

ludicrousdispla2• 9 months ago

Jobs was always thinking Apple could do better with the money in R&D

Turns out Jobs was right, relevant article from 2006:

https://appleinsider.com/articles/06/01/16/apples_jobs_says_...

AnthonyMouse3• 9 months ago

Share buybacks allow companies to reward executives directly as their compensation is tied to stock price. If we started not doing that, the priorities might shift, but those executives like things the way they are.

This isn't right but it's adjacent.

Executives don't need buybacks to get whatever compensation. Their compensation is negotiated and you can write the contract to make it whatever.

However, paying dividends is a taxable event, which means shareholders don't like it. You have to pay the tax on the dividend immediately instead of when you sell the shares, even if you just use the money to buy more shares. Buybacks don't work like that unless you're the one who sells your shares in the buyback. Which you can be if you'd rather have the money immediately (and pay the tax) than de facto increase your holdings in the company.

If transferring money to shareholders as dividends forces them to realize taxable gains before they want to then they'd prefer the company keep the money and invest it in something internally instead. Buybacks give them away around that.

But that's not necessarily bad. The shareholders (the ones who sold their shares) get the money instead and then invest it in something else, ideally a different company so that the existing large company doesn't get even bigger.

Also, when the company keeps the money, it doesn't have to use it for R&D at all. Companies often use it to acquire other companies, which is the worst.

You don't really want a tax incentive to make big companies bigger.

rjmunro2• 9 months ago

The whole point of owning shares is to share in a company’s profits. In simple terms, you make money through dividends or buybacks. Without that, there’s really no reason to own the stock. Sure, prices go up and down, and you can try to profit from that, but if a company never plans to return money to shareholders, there’s nothing real behind the price. Eventually you’d just be holding on until the company fades away or goes bankrupt.

Buybacks are just another way of giving profits back to shareholders—an alternative to dividends with different tax implications. Their purpose isn't to "allow companies to reward executives directly", they are just an alternative way for shareholders to share in the profits.

A company could tie executives compensation to the amount of dividend if it wanted. That might be a good idea.

sholain• 9 months ago

Share buybacks are are at least nominally a financially neutral exercise - it generally does not benefit either shareholders or executives.

They can however signal 'strength' in stock price by creating more demand and signalling to the market that the company itself which has 'insider information' believes the stock price is worth less than the price they're bought for.

It's a fair point about Jobs - but - Jobs was never sitting on more money than the economies of most nations.

Jobs Apple was a consumer product company, Tim Cook Apple is a Private Equity Operating Entity in a way. Their financial operations dictate as much about their valuation as anything else.

NickC254• 9 months ago

The train of thought here is that product people innovate and launch companies, but operations & finance people have no idea how to innovate or create new products.

Putting in a finance/ops person as the CEO will stagnate a company from a product standpoint.

creer2• 9 months ago

Jobs was always thinking Apple could do better with the money in R&D
Jobs wasn’t one to listen to anybody, so it did not matter.

It did matter. Jobs was wrong. Apple indeed couldn't do better. It's not even that Apple couldn't produce R&D results worth all this money. Apple couldn't even manage to spend at that pace. Steve Jobs' projects could and did use a lot of money but nowhere near that pace. And the pace of earnings got better still after Jobs.

Jobs was right on another aspect which was that this pile of money provided Apple solid, safe ground. Apple was safe from any risk of a few years of bad earnings. That was very costly safety.

It took a different CEO to finally work to reverse the damage. That project has taken many years and (arguably) isn't finished yet. And that's in parallel to massive increases in R&D.

It doesn't do a lot of basic science - I expect. But it does or funds a lot of engineering and applied science. that's the point of the article, that in the up-to-recently US system, corporations even with lots of earnings didn't have to.

HardCodedBias• 9 months ago

Of course the relation is minimal if it exists at all.

Stock buybacks are simply a more tax efficient dividend.

_DeadFred_3• 9 months ago

Of course, I forgot how management's compensation used to be 'dividend options'.

tehjoker• 9 months ago

Ma Bell actually was regulated and mandated to put profits into research. It wasn’t a choice though they could go above the minimums I presume.

intalentive2• 9 months ago

I read "stock buybacks in 1982" as shorthand for "financialization and short-term thinking at the expense of long-term gains", which certainly happened across corporate America and Britain starting with Reagan and Thatcher.

terminalshort22• 9 months ago

You state that as if it is a fact, but from what I see the tech industry has engaged in the longest term corporate strategies I have ever seen. Amazon took losses for the better part of two decades before it showed a profit, and public markets would never even fund a venture like SpaceX.

TheOtherHobbes• 9 months ago

In tech it was the switch from creative corporatism, which is focused on opportunities, invention, and infrastructure, to extractive corporatism and oligarchy, which are focused on scams, exploitation, and the creation of rigid hierarchies of privilege.

We're now in the end stage of the latter in the US.

The US still plays at invention - or rather a few of its oligarchs do - but it's far, far behind what's happening in other countries.

dzonga• 9 months ago

share buybacks are sort of a voting mechanism - it shows the company has no other uses for the money than to reward shareholders - hence pumping stock price up.

if the company has a vision - then reinvesting that money into research or what else is better. it might reap the benefits, it might not.

companies use buybacks if they can't do anything productive with the money - Apple is a recent example.

terminalshort22• 9 months ago

And before buybacks they used distributions, which have always been allowed, so there has been no change there.

astrange12• 9 months ago

The buybacks also compensate for dilution from paying employees in shares.

insane_dreamer3• 9 months ago

I'm not seeing how you get from share buybacks to a shift in priorities in corporate research.

pretty easily: stock buybacks allow you to directly reward executives and funnel profits back to shareholders (by increasing share prices), making the company appear more valuable (further driving investment)

research brings long-term benefits, and immediate outcomes don't show up in 10-Qs

constantcrying2• 9 months ago

It is a totally delusional argument. Companies always could reward their shareholders, stock buybacks aren't fundamentally different from paying dividends to shareholders. The idea that stock buybacks are what caused a decrease in company funded basic science is ridiculous.

Only in very rare cases is doing basic science anything but a total waste of money, viewed from a commercial perspective. Companies should seek to be commercial entities, which operate for profit. Anything else is just self destruction.

Look at Bell Labs, it could only exist because some company decided it could use a money shredder. Bell Labs could not survive the dismantling of the Bell telephone monopoly, because ending that monopoly ended the prerequisite that was needed to allow it to exist.

_DeadFred_3• 9 months ago

Yes yes, companies used to compensate management with 'dividend options' so switching to stock options totally didn't pervert management's incentives.

And management doesn't manipulate the stock using stock buybacks. Why would they? Their performance and compensation are only completely tied to stock price. But no, stock buybacks don't allow perverse incentives that lead to short term thinking different than dividends. Totally the same.

m463• 9 months ago

I'm not seeing how you get from share buybacks to a shift in priorities in corporate research

seems to me investing in your own company:

before: use funds actively for research and development

after: use funds passively to "invest" in your company by buying stock

seems like that old parable where someone buries their investment.

EDIT: parable of the talents

https://en.wikipedia.org/wiki/Parable_of_the_Talents

cameldrv• 9 months ago

At least for AT&T, Kodak, and IBM, what was funding their research divisions was monopoly profits. When those dried up, the research dried up as well. The modern equivalent to AT&T is Google.

nobodyandproud2• 9 months ago

This is disingenuous.

The driver behind the buybacks was also the motive to shift from research and manufacturing and into profits.

The massive failure is in inaccurately quantifying the true value of these labs.

aurareturn• 9 months ago

Share buyback is the same as giving dividends - except the share holder doesn’t have to pay taxes until they sell. To the company, they spend the same amount on share buyback vs giving dividends. I don’t see how this argument holds up.

Further more, while some might argue that corporate R&D is better due to being closer to the problem but it is private research and not shared with the world like university research is.

kristianp• 9 months ago

It's not exactly the same: if the company does buybacks and then loses value or goes bankrupt, shareholders never get the benefit of those buybacks.

queuebert• 9 months ago

Corporate R&D dies under the short-term thinking of quarterly profits. The best pure R&D seems to be coming from private companies that are able to sustain losses for long periods of time until a significant breakthrough is achieved (e.g. SpaceX, OpenAI, etc.).

matwood5• 9 months ago

Ah yes. The share buyback boogie man. If only companies couldn’t buy back shares then all that extra money would flow into research, except not. Shareholders would be demanding dividends.

hlfshell• 9 months ago

What's missing from this explanation is that the corporate tax rate was also much higher, but R&D dramatically cut down profit that would be taxed and was taxed lower. So large corporations like Bell Labs and co would basically say "do we give the government X in taxes, or do we spend X on research?". They chose research, so we got the technology that powers our world.

That, combined with stock buybacks and the general take over of Friedman-economics resulted in a far more focused short term thinking and outsourcing research as much as possible due to uncertain horizon risks.

potato3732842• 9 months ago

Exactly.

These days you're better off giving it to a university with strings attached. Sure, they might piss a bunch of it away, but when you account for the dollars on the subject you care about after taxes are leeched out it's still more efficient than building out research within the confines of a for-profit entity that gets taxed at such.

This is why we no longer have corporate research labs and damn near every university is bristling with BigCo funded stuff.

nobodywillobsrv• 9 months ago

A few points that seem to be going unstated here:

a) allowing share buy-backs might be good or bad. But it isn't good or bad unconditionally! The restrictions on the buyback policy should matter. Ideally, buybacks should make prices boring not create ultra thin books with hefty valuations that are cheaper to manipulate. But it seems the regulations around buybacks are in line with incentivizing growth and not stabilizing real prices.

b) to some extent putting uncertain/opaque research inside corporations is a defense against getting into regimes where it becomes easier to manipulate prices. I hadn't thought of it before, but if if important public companies become beholden to traded price and it becomes easy enough for large foreign entities to move markets, then it is simply a matter of "pricing" short term market punishment of a company for any policy you don't like. Yes, this might seem a bit far fetched, but remember that this kind of incremental worsening of outcomes is precisely what people say is hapenning via regulation and legal challenge in key industries.

Just some interesting thought legs spun off from the discussions here.

philipallstar4• 9 months ago

I'm not seeing how you get from share buybacks to a shift in priorities in corporate research.

Share buybacks are just the new go-to thing to blame. Economics students (at least "development economics") are memorising this concept all over the globe, so you can expect it more and more.

modo_mario• 9 months ago

New? It's been blamed for a long time now.

And it makes sense on this front.

You make tax optimising by dumping profits on R&D less attractive (and around the same time change patenting law with bayh-dole) and make it more attractive to spend it on stock buybacks to directly benefit shareholders

Results seen in the real world line up as less is spent on the former and more on the later so i'm not sure how the blame is unfounded

RcouF1uZ4gsC• 9 months ago

I would agree the anti-monopoly action had far more to do with that.

Basically, if you you think you can leverage your R&D into maintaining your monopoly and extending it to other areas it makes sense if for nothing else to keep the smart people who might otherwise disrupt your monopoly connected to you.

But if you are going to get broken up, just take as much short term profits as soon as you can

notfromhere• 9 months ago

New Deal-era regulations on financial flows made it painful tax-wise to remove cash from a company. So you either had to pay it as dividends, or you invest it in R&D, wages, or benefits for employees (this is why companies used to have very plush benefits even for lower level managers). When combined with pretty aggressive anti-trust, it also funneled cash into business expansion via conglomerates.

Companies were asset rich (which is the seam of valuable companies that private equity has been strip mining for 40 years, but even those are running out now).

Share buybacks are more symbolic that the Reagan era made it easy to take cash out of companies, which led to a race to the bottom of extracting as much cash as possible while leaving little for operations, wages, or expansion.

advisedwang• 9 months ago

Previously a company could:

1. Re-invest profits in R&D. Benefit to shareholder: potentially grow the value of their shares dramatically.

2. Make a dividend. Benefit to shareholder: cash that they can re-invest or use, LESS capital gains tax.

Ending stock buybacks creates another option:

3. Buyback stock. Benefit to shareholder: increased share value, and they can control when it is realized.

If there are boards that believe (3) > (1) > (2), then allowing stock buybacks will result in those companies shifting R&D investment into buybacks.

echan00• 9 months ago

this is great except nobody who should read this article is reading it

fundad2• 9 months ago

The people who should read this article and won't are actually an anti-growth movement. The silicon valley bros I work with are lapping up the sabotage because they want a lower standard of living in America and less science and innovation because they are already comfortable enough. Their sites are set only on the short-term gains of anti-Muslim and anti-abortion sentiment and "though talk" on immigration. Results are not that important. They claim that there would be enough funding if universities funded it with their endowments.

The anti-government sentiment is frankly anti-American. Even the ones who are naturalized don't know the basics about how ballots are validated ("If my wife vote with a provisional ballot, couldn't just anybody?"). I thought there was some testing for naturalization but it must be easy to cheat.

Anyone who convinced themselves that "economic anxiety" was actually a thing should talk to any MAGA or "centrists" about the present state of the economy.

terminalshort22• 9 months ago

SV bros want less science and innovation, and are anti-abortion / anti-immigration? Have you been to SV?

zkmon3• 9 months ago

> Scientists are driven by curiosity

Ok, then why do they get affected by funding? The truth is, today there is not a scientist, artist, researcher or writer who is not driven by funding. The era for curiosity-driven science is was over a long time ago.

The direction of research or science is all driven by funding.

ninetyninenine2• 9 months ago

Everything in the world is driven by money. There was never such a thing as curiosity driven science.

What pays for your leisure time so you can be alive and not starve? Money. Nobody on the face of the earth can just be curious and do science and not starve.

holden_nelson• 9 months ago

if scientists are so curious, why do they have to eat??? checkmate atheists

Less snarky: getting funding and making a living in academia, which is the most accessible way to be a scientist, has been cutthroat since long before this administration. If it were more accessible, or if staying alive weren't so damn expensive, I think we'd see more curiosity-driven science being performed.

Also, I don't believe one negates the other. As an engineer, my work satisfies my curiosity / desire to build, and I would do it for $50k, but I'm not gonna take a pay cut to prove how curious I am.

vanviegen• 9 months ago

I believe that most scientists start out being driven by curiosity. Just like most politicians start out being driven by ideology.

Unfortunately, we've created a system that wears them down to being driven largely by self-preservation.

Many people eager to better the world come of age every second. It's just that once they've amassed enough power to make a dent, most of them have been worn down.

suriya-ganesh• 9 months ago

Lets say the scientist takes $0 home (which is ridiculous btw). even then you would need the almighty "funding" to setup a lab, recruit participants, etc.

Anybody doing science at a University is definitely doing it at a significant discount to their salary (phds are paid ~$50K at the high end) at a private company.

some_guy_nobel3• 9 months ago

Here we have someone who clearly practices little real science, as evident by the ease with which they speak absolute statements that apply extremely broadly.

zkmon3• 9 months ago

I'm sure you are a Scientist. I worked as a Scientist (not a data scientist etc), worked on pure science projects that ran under grants from government, spoke at international conferences presenting the findings etc. Believe me. Every single move in this "science" work was guided by funding. Not just my projects, but all of them.

throwaway091025• 9 months ago

Maybe we shouldn't have required 'kissing the ring' segments in every scientific grant proposal

fundad2• 9 months ago

The utter lack of self-awareness needed to post something like this now should humiliate them, of course it's a throwaway account.

mikestew• 9 months ago

With all those pronouns and not an antecedent in sight, what and who are you taking about?

Ar-Curunir3• 9 months ago

Er what? This is very vague.

flanked-evergl• 9 months ago

Academia has become a racket that is actively hostile to technological progress. I want them to get exactly 0 of my tax money for anything.

anon84873628• 9 months ago

I understand why academia might be a racket. But why do you think they are actively hostile to technological progress? Are we including all the premier institutions in that claim?

LogicFailsMe• 9 months ago

Tenured academia, sure, burn it to the ground, no survivors, mostly a temple of mean girls and enablers of those mean girls. Adjunct and other non-tenure track professors, however, not so much. They do the real work along with the postdocs and grad students. And they get the least recognition. And oh the bellyaching when they leave academia with no hope of a tenured position and 10x their salary by pivoting to industry.

j2kun• 9 months ago

Engineers design and build things on top of the discoveries of scientists

I agree with a lot in this post, but I think it's also worth mentioning how this is a two-way street. Practical considerations often drive theory research as much as the other way around.

MathMonkeyMan• 9 months ago

I like to imagine that thermodynamics happened because industrial metallurgy and boiler design advanced to the point where people started asking "what are the fundamental constraints?"

There's a chance that it didn't actually happen that way, though.

edit: I also heard that Louis Pasteur did work for breweries, answering the question "Why do some batches come out nasty while most are fine, given the same inputs?"

ludicrousdispla2• 9 months ago

The history of steam engines would suggest that our understanding of thermodynamics developed out of a large base of first-hand experience. Same story for Calculus. And the t-statistic was developed by a QA guy (student) at Guinness.

fidotron3• 9 months ago

There's something odd in this argument. If you come at it from a Canadian perspective Canada seriously spent on neural network computer science when almost no one else did (many in AI considered the entire thing discredited and impossible), now the (financial) gains from that are almost entirely in a foreign country.

The US science establishment was all about buying and utilizing Russian rocket engines until he-that-shall-not-be-named came along. SpaceX took the breakthroughs that existed in the US in things like control theory, which the same science establishment had failed to value appropriately.

It doesn't look like the science establishments of any country are actually successfully feeding their innovation machines, or have done so for decades. Switching a non functioning system off does at least allow it to be replaced by something that risks doing things when something comes back.

Of course many pure scientists will, legitimately, argue that innovation isn't the point in the first place, and that is a far more solid point, but real academic diversity has been so destroyed by the global consensus making peer review process that much of their progress has effectively stalled.

nemomarx2• 9 months ago

How's China doing? They seem to have a lot of research going on that feeds into their manufacturing fairly quickly from the papers I hear about

PaulHoule• 9 months ago

Notably China is a big country and Canada is a small country. If there is some innovation that is going to improve productivity globally by %X the amount of benefit that goes to China is always going to be bigger than the benefit that goes to Canada.

fidotron3• 9 months ago

China are certainly better at turning the results of research into products, whether that research was them or anyone else.

The canonical example here is 5G. Once again the US science establishment had the guy, he ends up doing the breakthroughs for polar coding, they failed to appreciate him, he left and ended up being funded by Huawei.

https://en.wikipedia.org/wiki/Erdal_Ar%C4%B1kan

The US science establishment isn't broken as an innovation engine because of Trump - it's because they're clearly rewarding the wrong things.

What isn't so clear is if Chinese science is creating Chinese startups. It may yet happen.

titanomachy• 9 months ago

Because talent and ideas move so easily between the US and Canada, any useful basic science that Canada comes up with will ultimately be monetized in the country with 10x the population, 15x the GDP, and 100x the stock market and VC funding depth.

This could start to change if present US hostility towards all things foreign results in a shift in investment and migration.

vivalahn• 9 months ago

Talent and ideas move so easily to the US from Canada*

keenbrowne• 9 months ago

Research is necessary but not sufficient. Also need access to capital (and eventually capital markets) and a sufficiently sophisticated legal framework/safety framework so you can enforce contracts at least most the time. Good research is just a vehicle for producing knowledge and talent.

graycat2• 9 months ago

Good research is just a vehicle for producing knowledge and talent.

Yup, it was surprise seeing that once have a good STEM field Ph.D., written a lot of STEM and (early) AI software, and have published some peer-reviewed papers, are then condemned as in a felony conviction from ever having money enough to buy a house or to participate in the real world. A surprise.

But so far have missed the law that actually forbids doing some good math research, writing corresponding software, starting an LLC business as a sole proprietor, self-hosting a related Web site, getting users, running ads, and making (oops, forgive the transgression of mentioning) MONEY. Horrors! Uh, that's actually the same kind of "money" that people selling food, clothing, cars, and houses and providing medical care, private K-college education talk about.

Gee, cut out a lot of middle stuff, i.e., save on management, lawyers, office space, recruiting, HR legal issues, insurance, utilities, software developers, cloud fees, server farm staff, servers (an AMD FX 8350 can send a lot of the Web pages with still image banner ads), ....

Just now evaluating Macrium Reflect. Anyone have any experience? Uh, will it copy a disk partition that has a bootable instance of Windows so that the target disk partition will also be bootable or will it copy only whole hard disks with all the partitions, ....???? Similarly for Acronis and Windows Image. E.g., if make an Image of a bootable partition, will the partition written to boot? Right, just use the TIFO method!

mplewis• 9 months ago

"real academic diversity" is doing all your lifting here

TimorousBestie• 9 months ago

There’s not enough information to determine what the phrase is supposed to mean in context.

unix_fan• 9 months ago

I’m blind, and participate in a lot of research projects to create accessible technology, which are mostly done by universities. What I have noticed as a foreigner participating with US based universities is that, a lot of this research while very high-quality and very well done does not actually result in anything that the intended audience gets to use or experience. And a lot of this is due to the amount of red tape, as well as a lack of risk taking. This means that without trying to go commercial a lot of these projects end up shelved and many potential users simply never see the benefits.

chris_va• 9 months ago

I think the article does not explain this well, but (having worked in an applied science field for many years) much of the work is picked up from these failed projects by other members of the field. Sometimes this is quick, sometimes years later. Anyway, while it might not immediately evident, shelved projects often do move the state of the art forward and unlock someone else's success (hence part of the argument for it being a public funded system). Of course, a lot do not, but that is the nature of research.

terminalshort22• 9 months ago

Not only did SpaceX make breakthroughs considered impossible by the "experts" in the industry, they did it by hiring a guy who literally built rocket engines in his garage to design the engines. The key here is personality. And the type of person who actually wants to build things and get things done absolutely recoils at bureaucracy and the type of people who like it.

When you build something to the point where there is a bureaucratic "establishment" in control you can be sure that innovation slows to a crawl. You may still have a few individual scientists doing great work, but you can be sure that some miserable bureaucrat will pat him on the back and stick it in a drawer somewhere never to see the light of day again. The same is true whether that bureaucratic establishment is at a government or in universities, or any other type of bureaucratic organization.

rainsford2• 9 months ago

"Building things" is not science, it's engineering. We could certainly compare the outcomes of "bureaucratic" science against the free market variety, but there's basically no free market science going on to support such a comparison.

This isn't a value judgement. Engineering is just as important as science, but just as more science is not a replacement for engineering, neither does better engineering free us from the need to keep pursuing science. And at the end of the day, SpaceX might be an impressive engineering company, but we still need the scientists. And it's weird how often the success of SpaceX is brought up as an implicit argument that we can send all the scientists to work on farms or whatever without any ill effects.

It also seems notable that a company like SpaceX is an obvious candidate to bring back the 20th century style corporate funded scientific research organizations to underpin their engineering efforts in a way that would presumably be free of the hated "bureaucracy". But if they've done so, I haven't heard about it.

gamblor9563• 9 months ago

It's not like they were able to use NASA's designs for reusable rockets...

Oh wait..they did...

Because NASA thought reusable rockets were possible decades ago. The reason they never built them was because certain Congressmen blocked the funding.

rainsford2• 9 months ago

The US science establishment was all about buying and utilizing Russian rocket engines until he-that-shall-not-be-named came along. SpaceX took the breakthroughs that existed in the US in things like control theory, which the same science establishment had failed to value appropriately.

I feel like you're confusing "science" and "engineering". SpaceX is fundamentally an engineering company, not a scientific one. Don't get me wrong, they've done impressive work in engineering innovation, but that's fundamentally different from scientific research. And as the article points out, engineering innovation from the likes of SpaceX is usually reliant on that foundational scientific innovation, which in turn is essentially useless without an engineering partner to realize scientific discoveries.

It doesn't look like the science establishments of any country are actually successfully feeding their innovation machines, or have done so for decades.

Really? Is it just a coincidence that up until recently the US had some of the most robust scientific funding and was an unbeatable source of engineering innovation? For that matter, are there any real counterexamples where science research is non-existent but engineering excellence abounds?

epistasis• 9 months ago

"Seriously spent" where serious is less than the cost of a single bomber for the military. I forget what Geoffrey Hinton said it was, but it was an embarrassingly small pittance.

Military spending is largely economic dead weight, roughly the equivalent of handouts. And the end result is deterrence in a game of prisoners dilemma. Yet it is sacrosanct, and subject to ever increasing budgets for no gain.

bloppe• 9 months ago

Just look at all the handouts going to Ukrainian soldiers right now. What silly economic dead weight!

astrange12• 9 months ago

The % of US GDP spent on defense has been going straight down ever since Eisenhower gave that speech about the MIC.

(Another fun fact is defense companies make fewer profits during war, not more. Presumably because they have to make real products instead of designing imaginary ones.)

daninus142• 9 months ago

military spending being dead weight is the most ridiculous statement I've heard in a long time. Do you know nothing about US, British, and Dutch history?

The main way the US, UK, and the Netherlands historically became rich was through maritime trade. Maritime trade was basically only possible due to those countries' military expenditures on having strong navies. I know the media makes a big focus on US special forces and other things, but the US Navy is basically the most important and foundational part of all of the US military power. The US and Allies were always interested in maintaining freedom of navigation and trade at the seas.

Just take a look at how much money was lost due to trade shipping costs due to the Houthis in Yemen. Consider that today it's cheaper than ever to ship things, and even today, it was so terrible. Shipping by land is terrible. The only historically economically feasible way to do maritime trade has been with Navies to provide protection from pirates.

light_hue_1• 9 months ago

Canada is also reaping outsized rewards for that investment. There are plenty of AI jobs in Canada that never would have existed.

The problem is that in Canada we're willing to invest a little for a long time. But we're not willing to make big bets.

You can raise far more capital in the US than in Canada. So naturally large rewards come to those who are willing to make large bets.

fidotron3• 9 months ago

The problem is that in Canada we're willing to invest a little for a long time. But we're not willing to make big bets.

Element AI.

It's not that the bets are not made, the winnings are captured by those that corrupt the existing system before it's even started, so tney go nowhere. This has been the status quo for so long everyone assumes it is what is happening with every new initiative.

tick_tock_tick• 9 months ago

That's purely an issue of living next to the USA and Canada's system not rewarding risktakers/startups like the USA does. If you have the next billion dollar idea would you rather get rich in Canada or the USA?

mitthrowaway23• 9 months ago

I'd rather get rich in Canada, but I will still find it much easier to fund my pursuit of a billion dollar idea in the USA.

tdb7893• 9 months ago

I don't really understand how you come to the conclusion that the current system is non-functioning. There are tons of examples of it working (I even have members of my family who took their research to make products) and for the rocket example experts didn't think it was literally impossible, just not cost effective with the current technology (e.g. the space shuttle was reusable but very expensive). I don't think that's some huge failure given SpaceX had a lot of launch failures and went nearly bankrupt before the first launch (and even after that it was a long road to profitability, I thought it took 20 years to get to an operating profit). This is also ignoring how SpaceX is operating within the current system also.

It's not perfect but if you replace the system you're gonna find the same sorts or errors since it's impossible to accurately guess future value of uncertain engineering projects.

justonceokay• 9 months ago

he-that-shall-not-be-named

Who are you talking about? It’s childish

doctorpangloss• 9 months ago

There are successes in Canada, surely Google’s presence there counts for something. It’s an huge multinational corporation, some big AI units are in London and Toronto. Among startups in AI, Ideogram. Public funding in the arts in Canada is also really good, and it’s not an accident Ideogram is there and not here.

50% of VC is biotech, HistoSonics is on the front page of HN, and it was a PhD project turned into a huge company with deep, liquid capital markets. BBC doesn’t really write about that but the venture system that made HistoSonics was super sophisticated, full of very bright people willing to take huge risks, and while the inventor isn’t going to be a billionaire, she is still there inventing stuff, and she’s not going to be poor either.

Nobody is asking economists in the article any questions. How does R&D show up as something measurable? - thats really the meaning of financial we care about in this case, as opposed to economic or humanistic, where it’s pretty obvious that Canada, Russia, and the US, among other smaller countries like Israel and Finland, benefit from R&D more than financially, compared to say the UAE, which has spent relatively much more but yielded far less. A very attractive measure, to me, is the productivity of sectors that are basically indexes on a nation’s geography, like real estate, agriculture and minerals, versus innovations-driven sectors like healthcare, education and technology. In relative terms, given how great the weather is and how much oil there is, California and British Columbia (for EXAMPLE) swing way above their weight, no?

Instead of asking why Canada is doing this or that - Canada is doing quite well - we should be looking at South Korea.

kjkjadksj2• 9 months ago

Its not that spacex did anything novel really. People act like the shuttle died when it has been continually developed to this day. The shuttle always had a dual use as a commercial and military technology. The commercial activity was not economically viable. The military activity was and remains an important capability. That is why the shuttle still flies. Only it is called the x37b and does not require the complexity of sending humans into space.

jovial_cavalier• 9 months ago

Engineers design and build things on top of the discoveries of scientists.

In the last 80 or so years, this has been the case, but I don't think it's historically the norm. It just so happens that through whatever accident of scientific history, we were set up perfectly for a series of discoveries in basic theory that lent themselves well to immediate implementation and productization. We had a "science cycle" to match the business cycle that looked like this: Come up with a theory -> works? (yes: proceed, no: start again) -> publicize result -> collect huge sums of money -> plow that into new experiments -> find a problem with current theory -> start again. I don't think there is much disagreement that this cycle has slowed down considerably over the last 30-40 years.

Science by its nature is descriptive. As a discipline, it isn't actually geared towards discovering maxima in a space of design possibilities. No scientist invented the automobile or the airplane or the steam engine. A more typical mode is that engineers demonstrate that something is possible, and scientists recapitulate/integrate it into theory.

rob_c• 9 months ago

I thought this was going somewhere rather than aiming to be a dictionary with pictures or am I missing a key paragraph?

cjs_ac• 9 months ago

Countries that neglect science become dependent on those that don’t. U.S. post-WWII dominance came from basic science investments (OSRD, NSF, NIH, DOE labs). After WWII ended, the UK slashed science investment which allowed the U.S. to commercialize the British inventions made during the war.
The Soviet Union’s collapse partly reflected failure to convert science into sustained innovation, during the same time that U.S. universities, startups and venture capital created Silicon Valley. Long-term military and economic advantage (nuclear weapons, GPS, AI) trace back to scientific research ecosystems.

The US has an extremely entrepreneurial culture, which is why Americans are so good at building innovative businesses. In the UK, money is seen as grubby and the class system has consistently placed barriers between those with ideas and those with money. Similarly, the Soviet Union struggled to make use of its innovators due to the strictures of central planning. Australia punches well above its weight in scientific research but is unwilling to engage in any economic activity other than digging rocks out of the ground and selling them to China.

So the idea that scientific research is a limiting factor in economic growth is not general; it's specific to the US and countries with that same entrepreneurial culture.

howerj• 9 months ago

The UK has an extremely entrepreneurial culture as well, which is shown in the data (number of businesses registered, number of startups, both per capita), it ranks very highly, along with other indicators of innovation, it might not be as entrepreneurial as the USA, but globally it ranks very highly. The fact that you mention the Soviet Union and its central planned economy and the (outdated and stereotyped view of the) British class system almost like they are equivalent really undermines your point as well.

intalentive2• 9 months ago

"Government funding is the engine of economic innovation" is a tacit admission we have a planned economy.

pkilgore• 9 months ago

"Venture funding is the engine of economic innovation" is a tacit admission we have a planned economy.

ModernMech9• 9 months ago

That would depend on how the funding is controlled. If funding approvals had to go through partisan bureaucrats in the White House for approval, yes, that's a planned economy. Historically it's been disparate groups of scientists who decide how block grants from Congress get divided. I've had colleagues who go and work at the NSF just for that role. I wouldn't say that guy making decisions about what kind of programming languages research gets funding is planning the economy.

I also wouldn't say Congress allocating this or that block grants toward broad areas is planning the economy either. Usually planned economies are bad because it's one guy or one committee doing the planning, and they're really just a dysfunctional and doesn't incorporate evidence to make decisions. You get better decisions when you spread the planning across groups of loosely affiliated experts in their field.

mike_hearn4• 9 months ago

The difference between a planned and unplanned economy isn't whether the bureaucrats claim to be politically neutral, scientists or anything else. The first head of GOSPLAN was a scientist and its members were academics.

Academic funding is absolutely a planned economy. No way around that. It's literally committees of people allocating money requisitioned through tax and deciding what to spend it on, whilst having no skin in the game themselves.

terminalshort22• 9 months ago

Funding approvals do have to go through partisan bureaucrats. Until recently when the Trump administration killed it, NIH grant proposals had to contain a "diversity statement."

roncesvalles• 9 months ago

That's a strawman, you're not quoting anyone and the article doesn't imply anything so reductive.

jldugger• 9 months ago

This seems quite adjacent to today's Nobel Prize announcement that sustained growth comes from understanding why an innovation works, so we can apply it in new domains.

ilamont• 9 months ago

Universities spend ~$109 billion a year on research. ~$60 billion of that $109 billion comes from the National Institutes for Health (NIH) for biomedical research, National Science Foundation (NSF) for basic science, Department of War (DoW), Department of Energy (DOE), for energy/physics/nuclear, DARPA, NASA.

Let's talk about the other $49B.

I read or heard someplace that at many universities tuition paid by students in the social sciences is effectively subsidizing the STEM fields, as the history department or psychology professors are unlikely to require huge investments in new buildings, specialized equipment, etc., yet they pay the same tuition fees as STEM majors. Families/students paying full freight at a private university are looking at undergraduate degrees that cost $250k-$400k all in.

That can't be the whole picture, as money also flows from rich donors, corporate partnerships of various types, and at some schools such as MIT licensing fees.

It doesn't seem like tuition can keep growing at the rates that it has to make up the shortfall from government research cuts, but what about the other areas?

echelon4• 9 months ago

I read or heard someplace that at many universities tuition paid by students in the social sciences is effectively subsidizing the STEM fields

Diploma mill universities in my state are consolidating the smaller STEM universities and trade schools to build football and sports programs, gyms, and "lifestyle" amenities.

This university in particular [1] mints basket weaving degrees and has used consolidation to build sports programs [2] and lavish facilities for sports.

It's also been a revolving door of politician to high-ranking, high-compensation executive staff positions.

This university [3] has used funding to acquire properties from the state, such as the 1996 Olympic Stadium [4].

Neither of these universities does real, impactful research. The latter is ranked as an R1, but everyone at the "real" R1s in our state will tell you this is a fabrication. They're diploma mills and extract six figures from their student body. They turn this money into sports facilities and upper level faculty pay.

[1] https://en.wikipedia.org/wiki/Kennesaw_State_University

[2] https://en.wikipedia.org/wiki/Kennesaw_State_Owls_football

[3] https://en.wikipedia.org/wiki/Georgia_State_University

[4] https://en.wikipedia.org/wiki/Centennial_Olympic_Stadium

treis5• 9 months ago

This is absurd. These universities aren't diploma mills. They're solid institutions in the "directional state U" tier.

some_guy_nobel3• 9 months ago

Raising (already record high) tuitions that have far, far outpaced wages and inflation should be a last resort. You can start by cutting bloated admin, reduce fraudulent procurement/graft (e.g. the $700k Berkeley Chancellor's fence: https://www.cbsnews.com/sanfrancisco/news/700k-iron-fence-co...), vanity construction, study abroad admin budgets that dwarf actual student grants, and the executive compensation/perks by admin.

And this is just mentioning a sample of admin bloat, never mind the other areas.

echelon4• 9 months ago

This.

Cut spending on admin staff and facilities.

Schools do not need amenities to attract students. They need lower tuition. You could teach students out of a tent and do away with all the flashy health spas and do a better job at the core mission of empowering students.

No new buildings, no land acquisitions, no taking over facilities from the state for millions of dollars.

University leadership does not need to make $300k, $600k salaries. They should make what the median professor makes.

Universities will tell you they need all of this to compete with other universities. So to get the ball started, tax all of this as a negative externality and give it to the universities that do not spend in this way. Or turn it into scholarships.

Speaking of scholarships, stop putting a cap on admissions. Let everyone that wants to come in do so if they meet academic thresholds. Let them stay if they maintain a good GPA.

And make student loan debt dischargable. That might mean not everyone qualifies for a loan, but by making the system an "infinite money glitch", universities have grown into gluttons for tuition. They've taken this "free, unlimited money" to grow to obscene proportions. It's malinvestment propped up by an artificial quirk of economics.

clusterhacks2• 9 months ago

tuition paid by students in the social sciences is effectively subsidizing the STEM fields

This is not true at my state flagship R1 institution. Tuition and fees make up a little over 10% of the institution's total revenue. General funding provided in our state budget provides a larger percentage of the total revenue to the university and federal research funding provides an even larger percentage than the state.

The essential takeaway here is that our state taxes subsidize the actual cost of providing education to in-state students. In-state students are mandated to be at least 80%-ish of students.

The professors in the STEM fields are required to raise a significant percentage of their salary via research grants ("soft" money), teaching, and service work. The non-STEM professors are more often funded via "hard" money - eg, the institution has committed to pay the salary of history professors.

I googled and apparently a little more than 70% of undergraduate students in the US attend public schools. I don't know much about how funding works at the private universities that have the other 30% of undergraduate students.

rapatel03• 9 months ago

I read or heard someplace that at many universities tuition paid by students in the social sciences is effectively subsidizing the STEM fields

I'm very skeptical of this claim.

In fact up until a recent funding method change from the Trump Administration, most grant money was subject to "overhead"--a nebulous nonsensical accounting trick that allowed the university administration to get upwards of 60% of the dollars that are earmarked for grants. If you invent something, the school will take 70% of the revenue from the innovation. Much like VC, some big wins can power the school for years.

Actually, most highly productive research universities use the research as a prestige magnet and marketing tool to help grow endowments and keep up in the US News college rankings.

I would be great if the funding weren't so opaque. We may be able to find accounting info for the public univeristies. I would bet money that, Liberal arts tuition likely goes into administration, endowments, and campus improvements for student life (better food in the dining halls...)

uolmir• 9 months ago

In fact up until a recent funding method change from the Trump Administration, most grant money was subject to "overhead"--a nebulous nonsensical accounting trick that allowed the university administration to get upwards of 60% of the dollars that are earmarked for grants.

We're better than this here. Don't spread misinformation. First of all overhead is listed as a percentage, such as 55% or 60% or whatever but the university doesn't get that fraction of the total grant. You work up the so called direct costs, ie the line item salaries of the researchers, the reagents, etc. and then the overhead is 60% of that figure. So it would work out to be 38% of the total dollars granted.

It's also not a trick. It's a negotiated amount that is supposed to avoid each grant requesting some amortized fraction of the cost of office space and other necessary but shared expenses.

I and most people agree that's it's possibly too high, but it's ignorant to treat it like a scam.

jleyank2• 9 months ago

If you want new disease treatments and cures, you need to fund applied science (using the aforementioned definitions). Follow-on compounds can almost be engineered, but finding novel targets and coming up with candidates is a research problem. And dealing with the side-effects that appear can flip back from engineering to science. The Ozempic class of compounds has done wonders driving research in obesity and (I think) addictive behaviours.

Bringing it to market requires money and management and luck. Many/most of the promising candidates fall out along the way.

Agraillo• 9 months ago

When dealing with patents, public interest, and their consequences, Bell Labs should be treated separately imo. My vague recollection of the book The Idea Factory [1] and a brief search indicate that AT&T was always treated as a special case due to its status as a regulated monopoly. This status at least culminated in the 1956 Consent Decree [2], which required making all prior patents royalty-free and (as I read elsewhere) mandated that all future patents be licensed on reasonable terms. Given Bell Labs' well-known portfolio-including the transistor, laser, CCD, DSP, and fiber-optic-related patents, this shows a significant exception to how other companies might have innovated and monetized their innovations.

[1] https://en.wikipedia.org/wiki/The_Idea_Factory

[2] https://en.wikipedia.org/wiki/Bell_System#1956_Consent_Decre...

sillywabbit• 9 months ago

Not to be confused with:

https://mitpress.mit.edu/9780262731423/the-idea-factory/

cadamsdotcom• 9 months ago

It feels like in the past 20-ish years, maybe longer, game-changing innovations have become rarer, making science lower ROI.

If that’s true (maybe it’s not? all I have is vibes!), if it is indeed true, and science is becoming less able to convert into invention- it stands to reason that at some point it becomes rational for a country to direct resources elsewhere. Political will becomes strained, and politicians decide it’ll be popular to defund and discourage science.

And maybe that is how the US got here.

bamboozled• 9 months ago

Maybe but the successful part of the US got there through science and tech. So I think more science and tech is a better prospect long term.

Nasrudith• 9 months ago

It depends upon the field you are talking about for diminished return and less innovations. Returns have been thoroughly diminished when it comes to raw power in weaponry for instance. With anti-ship missiles already it is rather 'you get hit and you die'. Railguns haven't really been working out well for instance, and even if they did succeed all they would do is create 'stable magazines' while adding 'unstable' additional power production. Precision is the area where real work is being done, lumping in drones as an example of precision compared to say missiles or bombs which just explode at a destination, or mines which just explode when anything triggers it.

There are some major advancements in biotech for instance that are nothing to sneeze at, and even more in the pipeline (which admittedly may not pan out). Organs may not qualify as an invention technically, but being able to manufacture them certainly does. Not to mention how environmental tech is needed now more than ever.

Science being less convertible to inventions could have counterintuitive effects if it were true. Like smaller nations being in a 'don't even bother' situation while superpowers gain a literal monopoly on invention due to the rareness raising the barrier to entry to get anything meaningful out of it.

Politicians defunding and discouraging science is based more around memes and suppressing dissent than anything concrete. The reason not to create such 'stability' is generally that when the rest of the world passes by it will not be kind to you. But even if science somehow became literally useless tomorrow (an impossibility, of course), I highly doubt that politicians would not be such rigorous cost-oriented stewards that they would consider it worth the political capital to uproot the entrenched bureaucracies which no longer serve a purpose. Even if they knew it for certain was useless they might consider the spending a worthy price to pay for false hope. Crowds get real ugly when you tell them that things will never get better.

foobarian• 9 months ago

Used to be you could throw a handful of metal scrap into a vacuum chamber, hook it up to high voltage and get a handful of patents right off the bat. That ship has long sailed

hobobaggins• 9 months ago

Tons of words have been written about the Trump Administrations war on Science in Universities.

... followed by lots more words that don't support this premise.

up2isomorphism• 9 months ago

The science research today in most universities are not driven by curiosity at all. It is most funding drive and in a lot of cases researchers has even less freedoms than an industrial professionals.

SushiMon• 9 months ago

TBH, it makes sense for large incumbents to sell out science on the altar of politics because they are now will profit more from rent seeking than from innovation.

noobermin2• 9 months ago

The gravy train will crash. Fortunately, given many of those who facilitated it will die within 20 years, and then that will be someone else's problem.

11101010001100• 9 months ago

The good news is that you can't 'theoretically' stop a gravy train.

quantummagic• 9 months ago

Then fund science. Just because the government has done it previously doesn't mean it always has to be like that forever.

Maybe if science depended on the average Joe actually having a living wage, enough to donate some directly to science, the incentive structures of our society would become more healthy than they currently are.

Rich people, worrying about rich people jobs and outcomes, is getting a little tiresome. We don't care about your women's studies "research" grants. Maybe something will actually be done about income inequality, if you want to save the things you actually care about. Until then, let it burn; a lot of us will barely notice the difference.

astrange12• 9 months ago

Income inequality in the US hasn't increased since 2014. Wage inequality severely decreased between 2019 and 2023.

https://www.nber.org/papers/w31010

Sometimes good things happen!

khafra• 9 months ago

Then fund science. Just because the government has done it previously doesn't mean it always has to be like that forever.

I do. I'm not one of these wealthy startup founders, just a guy earning a salary--but I've donated to foundations doing basic research many times; and even to individual researchers when they lost a grant but were doing work that I wanted to see the results of.

However, funding science in general this way is likely to miss a lot of value. Not everyone makes basic research a priority in their charitable giving. More importantly, not everyone has my impeccable research taste: not to sound elitist, but if the average American's priorities determined the directions for basic research, we'd have thousands of studies on why vaccines cause autism, an nothing on weird stuff like the medical potential of gila monster saliva.

guywithahat• 9 months ago

Not only that, but science was largely a privately-funded industry until a few decades ago, and many would argue governments do a bad job of funding science because a lot of nonsense gets wrapped up in it. It's frustrating because people will whole-heartedly claim science research needs more funding, and then hand the funding over to John Money so he can publish what happens when you sexually abuse children (spoiler: they committed suicide).

I don't think a lot of the people defending government backed research understand everything they're defending

arunkd13• 9 months ago

I think to prosper out of science / innovation you need cheap energy. I really think, Trump realizes that the age of cheap energy has past.

lutusp• 9 months ago

But few people have asked what, exactly, is science? How does it work?

The author asks the question, but then never answers it. That isn't surprising -- nearly no one outside science understands how it works.

* Science rejects authority and doubts expertise. The greatest amount of scientific eminence is trumped by the smallest amount of scientific evidence.

* The basic scientific posture is that a theory is assumed to be false until proven true.

* Contrast this outlook with pseudoscience, where a theory is assumed to be true until proven false.

* A conscientious scientist lists all the reasons his theory might be wrong. In other fields, this task is left to critics.

This summary may seem to be at odds with modern scientific practice, but that's because much of modern scientific publishing is not science, it's marketing.

In a now-famous science story, during an astronomy conference a researcher stood up and confessed that he had made a mistake -- his detection of an exoplanet actually resulted from a failure to subtract Earth's own annual motion from his data.

The audience came to its feet and gave the researcher a standing ovation.

That is science.

lgleason• 9 months ago

What almost nobody in SV wants to talk about it the gutting of STEM in the early 90's when real wages for STEM began it's decline in the US via labor arbitrage. Of course Blank and most of Silicon Valley benefited from this, because it allowed them to get cheap, compliant labor. Eric Weinstein did a great paper on this years ago https://users.nber.org/~sewp/references/archive/weinsteinhow... . Looking at the current unemployment in STEM, which is higher than the national average, this arbitrage has just hit a point where it has killed the goose that laid his golden egg.

rester324• 9 months ago

What pisses me off the most about this, is that CEOs still preach about how life-long learning is a must. Stop that fucking bullshit, will ya? If you as a CEO don't give a flying fuck to invest in knowledge, than you have no right to preach from that high horse of yours to do that myself.

edit: to clarify I am arguing against putting in the effort on my own expense which benefits the company because I need to foot the bill which the company should have, so I am not arguing against such self-improvement which obviously benefits me

Peteragain• 9 months ago

I do feel this is a case of Americans believing their own propaganda. What the US does well is efficiency. The problem is, capitalism has pushed the time to ROI (return on investment) to get shorter. 5 years is what venture capitalists were working on. At one point there was status for a corporation to have a research lab of quality - in the same way as corporations had glorious architecture for their headquarters, Bell labs was about status. These research labs provided a safe space for curiosity driven scientists. In the interests of efficiency (and because it no longer had kudos) the labs were abandoned and - in a classic US way - it was decided the State should do the science. The trouble now is that the Universities are thinking about their ROI. Curiosity driven science has no home at the moment.

utopiah3• 9 months ago

Oh no, Steve Blank is now pro big government like Mariana Mazzucato! /s

PS: teasing aside she did write The Entrepreneurial State: Debunking Public vs. Private Sector Myths in 2013 on the topic.

Vektorceraptor• 9 months ago

My brain reads “No science, no startups” — alarm bells. This kind of mono-causal oversimplification can only be anti-Trump clickbait — I ignore the post. A few seconds later, guilt kicks in — “Don’t be so ignorant!” — I click the link. Literally the ninth word is Trump. My brain: “Alright, that says it all.”

I scroll a bit — should I really read this? My brain: “No, let ChatGPT analyze it critically.” Conclusion: The same kind of simplistic linear causality is presented without substance — no sources, no data, no valid projections — uncritically carried through. Typical NPC-scripted “science,” representative of much of today’s “NPC academia.” It’s just a patchwork of general knowledge and some combinatorial creativity, pretending to be expertise, seriousness, and understanding — enumerated to suggest strange, subjective, unscientific, and mostly personal goals.

This exact kind of NPC-scripted “science” needs to be exposed and discredited as pseudo. If this is the so-called “defense” of science, then it deserves to be opposed. Simple as that.

PLEASE - for the love of god - spare me with this nonsense!

wosined• 9 months ago

So is gender research or feminist queer dance theory studies a part of basic or applied science?

gizzlon2• 9 months ago

feminist queer dance theory studies

I dunno, but how many % of research in terms of money and effort do you think is spent on that? 0,0001 % ?

dxdm• 9 months ago

So is gender research or feminist queer dance theory studies a part of basic or applied science?

People's ideas about how humans should live together can be beneficial for the wealth and well-being of whole societies and its members. Was Rousseau part of basic or applied science?

We can wonder about how useful certain efforts are, of course, especially in all their extent; but I don't know how wise it is to dismiss things _wholesale_, just because their application is not immediately apparent and the rejection fits into the political current. The unnecessary snark is just sad to see here.

ryandv2• 9 months ago

Was Rousseau part of basic or applied science?

This one is easy - neither. The term "science" has gone through semantic dilution in a manner similar to how everyone is now an engineer - software engineer, prompt engineer, sanitation engineer.

Falsifiability is one of the key distinguishing characteristics of a proper science, as famously propounded by Karl Popper.

"Gender identities" not only can not be falsified, they should not be falsified, because that would amount to transphobia; denying the existence of someone's felt and lived gender identity is the definition of transphobia.

Since they cannot be falsified, nor even directly observed, measured, nor quantified, they are not scientific notions.

The closest most well-studied analogue to the "gender identity" is the legacy religious notion of "the soul," to which you will see you can ascribe most, if not all, of the same attributes as ascribed to the "gender identity."

BobaFloutist2• 9 months ago

gender research

It depends, this could be medicine or it could be sociology or it could be psychology, there's a few different places it pops up.

feminist queer dance theory studies

This is very obviously performing arts or maybe something in English or Social Studies if the "dance" part is the specialization rather than the core. I doubt even the most died-in-the-wool woke-fessor or whatever would call it "science," which makes it pretty irrelevant to the current conversation, though just because something isn't STEM doesn't mean it's not important (though it might be significantly less lucrative).

Timsky• 9 months ago

Your article strongly consonated with the ideas I often try to communicate to those around me. I wish there were more open discussion about biases related to PhD qualifications and the growing influence of venture-capital-style practices in science. Many researchers dedicate themselves to exploring new and uncertain areas of knowledge, yet their work is sometimes undervalued by hiring managers and industrial professionals. I personally know HRs who consider the "PhD" tag in a CV a red flag.

There is also a tendency to overlook the fact that pursuing a PhD is a form of professional work, comparable in commitment and responsibility to other careers. Sometimes 699, sometimes 700. Academia can indeed be a challenging environment, and not everyone contributes in the same way—some may prioritize credentials over substance, and cases of research misconduct do exist. However, these examples definitely do not represent the academic community as a whole.

Regarding the venture-capital approach, in applied sciences, researchers are increasingly expected to present their ideas in short, pitch-style formats. At some point, this process itself becomes the goal of the work. I can imagine this encouraging concise communication. Still, it also shifts part of the management responsibilities—such as market analysis and outreach—onto scientists, which does not align with their core expertise or professional goals.

ethbr1• 9 months ago

As many gripes as there are about the competitive grant process, at least in the US it was formerly adjudicated by scientific experts. (Yes, subject to groupthink and overweighting en vogue topics, but still by experts)

t_mann• 9 months ago

I personally know HRs who consider the "PhD" tag in a CV a red flag.

Which should only tell us what a cancer HR departments are. Filtering someone from talking to the hiring department, for the crime of doing a PhD, and telling others about it - to me this sounds more likely like someone getting a kick out of wielding the bit of power they have over others than a useful contribution to society.

kjkjadksj2• 9 months ago

Fwiw everyone I knew in undergrad who ended up in HR that was basically their only option. They already got slammed in stem classes in HS or even first year or two in college so that was a nonstarter. They weren’t creative people so arts or humanities were out. They didn’t grasp business concepts so finance and other avenues in the business school were out. They landed an hr internship in their junior year then the rest is history.

It is bewildering to me that HR is responsible for hiring anyone outside the HR department.

vinorathna-r2• 9 months ago

Nice article, I completely agree that government funding is essential for America to sustain its technological advancement.. After reading it, we need to validate the following points:

1.The government should periodically review how many funded research projects are successfully completed and lead to tangible outcomes.

2. The government should ensure that research funding is properly utilized for the intended purposes, so that resources are used effectively and efficiently.

3. It is necessary to study how artificial intelligence can be leveraged to reduce the cost and duration of research while accelerating scientific experimentation.

croes• 9 months ago

Giant magnetoresistance was discovered in 1988, it became useful in HDDs in 1997.

If they had evaluated 1993 the discovery would be called useless and a waste of money.

vinorathna-r2• 9 months ago

I agree that basic research like the discovery of GMR often has an unpredictable timeline and shouldn't be judged too early..

However, I still believe that a light-touch monitoring system is important. It's not about evaluating the usefulness of the discovery in the short term, but rather ensuring that:

Funds are being used for the stated research goals (fiscal responsibility).

The project is making scientific progress as defined by its own milestones (accountability).

jleyank2• 9 months ago

How can statistically generated tokens help in basic research to find things outside the training set? This is where things are “inefficient” as it’s driven by extrapolated knowledge and often requires money to proceed. Sometimes in quantity. And things often fail.

As basic research transitions to engineering, things built from the current knowledge base, if suitably updated, should be useful. And work within the training set should go well.

runako8• 9 months ago

Another way of looking at it is:

- the current system works for the benefit of US industry, military, and the economy

- the current system has delivered real results over many decades

- nobody has proposed how an alternate solution would work ("use AI" is not an answer)

- much less an alternate that has been tested at all

- even much less an alternate that has shown any results

A sensible approach would be to do trials of other approaches before making changes that will ensure Americans are poorer for decades than they otherwise would be.

whywhywhywhy• 9 months ago

Just seems a very idealistic and almost simplistic view of how a thing should work best because it feels like it should work but the reality is academia gets completely outpaced by private companies. SpaceX, GPT4, Ozempic, list goes on.

gizzlon2• 9 months ago

academia gets completely outpaced by private companies

Outpaced? What does that even mean? The whole point is they have different roles and goals. And you need them all, if you cut basic research all the downstream stuff will suffer.

Ar-Curunir3• 9 months ago

All of those are based on basic academic science…

What you’re describing is at least partly engineering and product design, not pure science

runako8• 9 months ago

There is no SpaceX without the ability to build on the (public) advancements of NASA and the public willingness to pay SpaceX taxpayer dollars for speculative flights.

There is no Ozempic without federal funds for basic research to identify GLP-1. (Nordisk started their research downstream of the US taxpayer's contributions.)

GPT-4, as its builders would certainly admit, is a descendant of early work in the field. This work involves a significant amount of work funded by DoD.

None of this is to detract from these products. But there is no point in pretending that e.g. rocket research is not generally funded by militaries (governments), on which SpaceX built.

In general, if you a citing something with a brand name and a trademark, you are talking about something that is not basic research. Basic research in the US is overwhelmingly government-funded for the simple reason that companies do not invest on the time horizons required and in general cannot take on the amount of risk entailed.

ktosobcy• 9 months ago

Hush hush... the startups that aim to "disrupt" running on burning VC funds will definitelly improve our lives! Pinky promise! /s

mindscrawler• 9 months ago

The race for quick profits is eating away our future innovations.

DarkNova6• 9 months ago

*The race for quick profits is eating away our future.

AfterHIA3• 9 months ago

https://en.wikipedia.org/wiki/JCR_Licklider

https://www.theatlantic.com/magazine/archive/1945/07/as-we-m...

https://en.wikipedia.org/wiki/Mike_Mansfield

If you know; you know. #ARPA

ricksunny2• 9 months ago

I remain perpetually perplexed why people who invoke Mansfield's name almost universally shrink from describing why they feel it is relevant to invoke Mansfield's name.

Yes, there was a Mansfield amendment and a would-be 'nother Mansfield amendment. It had some (waves hands) ever-unarticulated effect on defense funding of research. Motivations of Mansfield are never articulated. Seems so self-defeating to not describe.

AfterHIA3• 9 months ago

Going into the specifics of what motivated Mike Mansfield requires going beyond the conversation we're having about R&D into the domain of politics and ideology. I want to stick to relevant realities related to people in technology:

1) This killed research in the United States. This killed the program that paid for Alan Kay and Douglas Engelbart's PhDs. This has led to or is at least heavily correlated with the decline in technology and science innovation that has occurred since the beginning of the neoliberal assault. In 1961 we get SketchPad at the University of Utah. In 1968 we get the Mother Of All Demos. What's been developed since with the same kind of impact? I'd argue, "not a whole lot."

2) This has inevitably led to a decline in the public's enthusiasm for technical innovation. I remember the early 1990's World Wide Web. I remember the feeling that a non-marginally better future was, "months away." Now the government and Google collude to spy on me and my family. Now I have a short-form video feed that is paid to deliver content meant to extremize me as a young adult.

The Mansfield Amendment is the technical glitch that may have cancelled a better future for technologists and especially technology literate young adults. It's difficult to say and we may never know. My feeling is that some day some country might achieve a level of social democracy where-in, "we get back to that." Time will tell. The irony is that it's the Adam Smith Societies pushing the hyper, "privatize everything agenda" that reifies the problem. Adam Smith actually advocated for strong public institutions- especially educational institutions.

https://www.nature.com/articles/s41586-022-05543-x

https://knowledge.essec.edu/en/innovation/the-worrisome-decl...

https://www.insidehighered.com/news/2021/12/03/survey-shows-...

https://static1.squarespace.com/static/56eddde762cd9413e151a...

runako8• 9 months ago

Great post. I would love to see someone connect the long-term increase in Americans' wealth with our ability to develop and harness new technologies. And conversely, how much poorer we can expect Americans to become if that cycle is slowed/stopped.

I've seen similar articles about trade & the UK (and now the US). I'm sure someone has done or is working on similar analysis for science & engineering.

joseangel_sc• 9 months ago

what kills me specially about the buybacks

is that i’m sure even the CEOs would rather live in a world with anesthesia, MRIs, wifi, gps, etc

yet they greedily prefer to personally gain money because they cannot see that they would be richer in a world with { what would be discovered if we had science }

it’s just that you cannot miss what you already don’t have, if they could only see what would be possible, what we could achieve, the would go nuts about how slow we are moving

MichaelAO• 9 months ago

Reading The Economics Laws of Scientific Laws rocked my world on this topic. Tldr is that the basic to applied science pipeline proposed by Francis Bacon and now assumed as physical law is a fiction that legitimizes the state, wastes taxpayer money, and retards science.

More science will happen with less government funding (see crowding out effect). This is why it's important to look not just at the intention of a policy, but at the actual outcome.

This author has the tail wagging the dog. I'd rephrase it... more startups, more science.

No science, no startups: The innovation engine we're switching off

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