R&D

Searching for Skunkwork Spunk

Research is the launching pad for tech breakthroughs. Let’s look at how R&D has changed in the U.S. over the better part of a century and the whip-smart teams tasked with willing new ideas into reality. 

Start with the best name

“Skunk Works” comes from Lockheed Martin. The defense contractor gave this pseudonym to the elite, uber-secretive engineer squad that built the U.S.’ first operational fighter jet. Against the backdrop of World War II and Nazi Germany’s jet program, Lockheed and its client Uncle Sam drew from deep pockets to support Skunk Works.

But they also gave their team flexibility. Skunk Works chafed at bureaucracy and demanded significant autonomy to work on its own terms, which were “quick, quiet, quality.” Skunkworks eventually became synonymous with high-risk, high-reward R&D teams that: 

• Can be bootstrapped or have substantial institutional backing...
• ...but usually work according to their own rules and guard their advanced research like state secrets. 

U.S. agencies led the next wave

During the Cold War, the U.S. government led many R&D bets that were too large and risky for private sector enterprises. Since getting to space was basically a nationalized industry, Project Apollo brute-forced innovation on a galactic scale: 4.41% of the U.S. government’s 1966 budget went to NASA. 

Meanwhile, U.S. agencies with big checkbooks spearheaded groundbreaking research. They chased early-stage projects with signature skunkwork spunk.

• The National Science Foundation funded fellowships and university research (and still does). 
• DARPA, the Pentagon’s advanced tech lab, threw its weight behind research that led to the internet and GPS.

The rise of the corporate research lab

Uncle Sam eventually tightened the purse strings. Federal R&D spending peaked in 1964 at 1.8% of GDP. The private sector’s share started climbing and finally overtook federal spending in 1980. 

Many tech companies and telecoms have built ambitious, early-stage research teams that have made significant breakthroughs: 

• Bell Labs earned six Nobel prizes for its inventions since the late 20th century. 
• IBM Research also won six (and still has 12 labs spread across six continents).
• Xerox PARC researchers invented many parts of the modern computer and office technology. 

Now, everyone has an R&D, innovation, or moonshot lab

Top tech companies from Silicon Valley to Shenzhen are in the driver’s seat. Their vast R&D budgets mean lucrative salaries and perks on perks (which has led to university lab brain drain). 

• Many of these teams are researching emerging tech including robotics, brain-computer interfaces, quantum computing, and AR/VR—or their patron companies are M&A’ing someone who is.

Big picture 

After the Cold War, D.C.’s interest in bankrolling advanced R&D waned, partially because there weren't any crises to prompt spending surges. But basic science research spending has still been climbing up and to the right as companies, especially in the tech sector, are capturing a greater share of the R&D pie. 

But when the big spenders change, so do recipes for innovation. Profit-driven tech companies have less incentive to fund early-stage, high-risk research that can’t be commercialized quickly. For this reason, some say the U.S. government is abdicating its basic research responsibilities by letting companies take the mantle. 

And these conversations inevitably lead to China, where the government has earmarked hundreds of billions of dollars to support the buildout of a domestic, high-tech industrial base.

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BITS & BYTES

Stat: Apple plans to double AirPods Pro production (h/t Nikkei Asian Review). 

Vocab: “There’s prenicorn (a startup perceived to one day reach billion-dollar status), unicorn (a startup valued at $1B), decacorn (a startup valued at $10B), centicorn (a startup valued at $100B), and, of course, the unicorpse (a startup that has imploded, died, is no more)”—via fellow newsletter writer Polina Marinova at Term Sheet.

Reads: I’ve rounded up a bunch for you for the holiday weekend.

• Amid crossborder tech tensions and the trade war, the U.S.-based RISC-V Foundation, which sets global chip tech standards, will relocate to neutral territory. Seriously, it’s moving to Switzerland (Reuters).
• Related: The U.S. Commerce Department is proposing to dramatically step up reviews of security threats to U.S. wireless networks (WSJ).
• Google explained how its astrophotography works. Big dark mode vibes (Google AI Blog).
• Genomic Prediction, a New Jersey-based genetic testing startup, confirmed its first pregnancy via embryos screened for disease risk. This stuff’s controversial (MIT Tech Review).

GOING PHISHING

On Fridays, even on Black Friday, we go phishing. Three of the following stories are real; one is deepfaked. Can you spot the odd one out?

1. Ryan Reynolds bought a wireless carrier. 
2. Wellness influencers are posting 'grams about sunning their butts.
3. Some players created their own sci-fi game within Fortnite.
4. McDonald's put its logo on a Tesla Cybertruck and said it’s unveiling the McMobile.

THE TECHLARATION

The privacy-focused Mozilla Foundation put a fun spin on Black Friday. Its *privacy not included list evaluates 2019’s hottest tech gifts on a sliding scale of creepiness that looks like this: 

Which gadget finished with the most creepy vibes? Try to guess from the description: “Now they're asking people to drop a couple hundred dollars to put a device with an AI-powered smart camera capable of tracking your every move and an Alexa-powered, always listening microphone in your home.”

Enjoy the weekend, see you Monday—Ryan.

ANSWERS

Going Phishing: There is no LubMobile, but other brands have taken their shots at the Cybertruck.

The Techlaration: The gadget Mozilla Foundation was referring to was the Facebook Portal.