A basic premise of PET as indicated in the first section of Chapter One is that as knowledge growth continues, research problems become more and more difficult. In turn, the production of knowledge requires a more complex organizational arrangement. Already in the second stage of knowledge creation research departments in universities and industrial laboratories had emerged (see Table 1.2). Given the genius of an Edison or a Bell, why are industrial research laboratories necessary in the second stage of knowledge creation? In each of these examples, realizing the fruits of their genius required extended efforts by research teams.1 This is where Schumpeter's (1975 [1942]) emphasis on individual creativity is misplaced. He failed to recognize the importance of organizations during the second stage of knowledge creation. Let us consider as an example a history of the difficulties encountered in developing a filament for a higher- quality and cheaper incandescent lamp than the one Edison invented with his personal research team in the late 1870s (Hargadon 2003).

As Reich (1985: 75– 83) observes, General Electric (hereafter GE) began to work in earnest on developing a better filament after the institutionalization of a research department in 1903. Initially, this department comprised 19 scientists, 26 support staff, and a full- time director. The construction of new research equipment allowed Whitney, the director of the department, to use much higher temperatures based on a French design, which opened the way to experimenting with the heating of different metals and alloys. At higher temperatures, it became possible to change the molecular structure of the filament and eliminate impurities. With this research equipment, GE discovered an electric carbon lamp that was 50 percent more efficient than Edison’s. However, European competitors working with other metals soon began to threaten this market advantage.

Whitney then asked Weintraub and several lab chemists to examine the possibilities of using tungsten for the filament, because it has a higher melting temperature than other metals. He also asked other researchers to explore other metals. Meanwhile, in Europe, scientists were inventing entirely novel technologies for manufacturing filaments. Several scientists from the GE lab were sent to explore these technologies, and they recommended purchasing the patents for one of these identified processes (although they ignored another that later proved more important).