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Among the industries that owe their existence to technological innovation, voice communication by wire and by radio is an outstanding example. Professor Reich explains that during its first quarter century, however, the telephone enterprise developed a “business-technology mind-set” (he credits Reese Jenkins with the term) that held back further progress until after the thoroughgoing reorganization of American Telephone & Telegraph in 1907. Thereafter, an initial strong focus on applied science was gradually modified as the company sought to solve problems that stood in the way of important new services, such as long-distance telephony; to stay in the vanguard of major innovations, such as radio, that threatened the dominance of wired telephone systems; and to extend new capabilities into as many alternative techniques as necessary to “box the compass” of the patent laws. In the process, AT&T developed a highly structured research and development facility that pushed businessmen's respect for science and technology to new heights.
The conventional distinctions between “practical” and “scientific” research and development can be misleading. The experience of Thomas Midgley, Jr., at the General Motors Corporation in the three decades before World War II, and especially his critical role in the development of “antiknock” gasoline additives, freon refrigerant, and synthetic rubber, illustrate this fact. Dr. Leslie demonstrates that the management of corporate research and development, especially as that management affects uniquely talented individuals whose interests do not necessarily reflect the immediate needs of the company as seen by management, is basic to success. To solve such problems as they arose, Charles F. Kettering, himself a sympathetic scientist as well as distinguished inventor, worked closely with chief executive Alfred P. Sloan, whose genius for solving managerial problems matched the scientific genius of the most brilliant men in the General Motors laboratories.
Business enterprise in a market setting is the principal institutional artifact of capitalism, while capitalism itself is the creation of powerful evolutionary forces that were present in the culture of Europe. Those evolutionary forces continue their play into the present, working within the distinctive cultural context determined by an evolving capitalism. Every type and style of history dealing with European society and its offshoots must ultimately face and accommodate this central historical fact if it is to generalize its findings and acquire real intellectual weight and significance.