(The following throwback article appeared in Research Management, precursor to our award-winning journal Research-Technology Management, in November 1982. This article was taken from testimony Rabinow gave as part of a panel of speakers before the U.S. Subcommittee on Investigations and Oversight, House Committee on Science and Technology, in 1981.)
Inventors are dying on the vine, not because we do not have the genes or the genius. We have. These do not change. But there is a climate in a country that either makes you play basketball of soccer. We play basketball. We do not play soccer. If you want a Pelé, you go to South America or Europe. If you want great tennis players, you give them awards. You’ve got to make them heros [sic]. This is what the invention and innovation programs are supposed to do. The importance of their effect on the country is not whether or not you get an award or I get a medal; the question is, does it create inventions?
We had a situation in this country after World War II where the colleges stopped teaching engineering. They taught physics because they decided that engineering would be taught later, by industry itself. We produced a whole generation or two of engineers who did not know how to design. Finally, the National Inventors Council had a week’s meeting at Woods Hole in 1965 and the question discussed was: Can you educate people to invent? We had people from many of the great colleges, speakers from industry, inventors, and so on. And the consensus was that you can educate people to invent. That does not mean you can make everyone invent. But if you teach creative science to thousands of people, you will get many inventors.
You have to realize that invention is an art form. To think only of making money from it, to expect that every decision has to be just right, that there should be a specific return from the program, and that for every 10,000 proposals we should get 1 good one, or 10, or 100, is like asking that all opera should support itself. It never supported itself. Most arts do not support themselves.
If you want culture in a city, you build a Kennedy Center. It loses money, but you invite great performers and you get a cultural center that suddenly changes the life of Washington [DC]. I came to Washington in 1938 and it was a hick town. At 8:00 p.m. they pulled in the sidewalks and rolled them up. There was no place to go except to a movie. Now Washington is a great cultural center. The old National Theater has good plays now. So does the Warner.
Create the Climate
If you want inventions, gentlemen, stop worrying about whether you are going to arrange things so that every inventor will make money. You have to create a climate where high school kids will want to be inventors. You have to create a climate where college students want to be inventors. You have to create a climate where people who invent will also teach. It is hard to get good engineering teachers now because my daughter gets more money as a computer programmer than most college professors get for teaching advanced engineering courses.
This morning I listened to all of the discussions about whether our Energy Inventions Program is good — that of the 16,000 inventions submitted we approved 1 percent. The National Inventors Council, of which I was a member, received 625,000. We approved less than one-half of 1 percent. We also heard that the National Science Foundation approves 10 percent. To me, all of this does not seem important. I would like to see inventors get more money, but I will be damned if I would suggest that we should approve every invention. We could have a rubber stamp that we would use for everyone who sends in an invention. It would say “Approved.” So 16,000 inventions would have gotten approval, and if anyone thinks that this would be good for the country, he is crazy. It is far better to reject perpetual motion and other such inventions.
I spend a great deal of time arguing with people who come to me with patents on perpetual motion machines. The Patent Office is overloaded, understaffed, and for reasons which I can’t describe, people get patents on perpetual motion machines. Then I have to sit with the inventor and say to him, “No, it won’t work,” and I tell them why. He says, “But the Department of Commerce, of which you are a part, gave me a patent.” And I say, “I am not responsible for what the Patent Office does.”
For my own amusement, I collect patents on perpetual motion machines, and I have a very large collection of other useless patents, such as on infinitely variable gear boxes which cannot be made, machines that use water, and such others. I do not publish stories about them because I respect the Patent Office.
Let me relate a typical incident. An inventor came to me and said, “I have a machine that uses water pressure but uses no water. You can put it at the bottom of the ocean and it will run. If you connect it to a faucet it will run but will use no water.” I said, “This I have to see; you have a model?” So we go into the lab. We connect his device to a water system and we turn on the faucet. The piston moves but the floor gets covered with water. I say, “What’s that?” and he says, “That’s leakage.” I say, “You fix the leakage and come back.” He never came back.
We spend a great deal of time with inventors. We go through the details of a particular invention over and over again. We often spend half-hours or hours on the telephone. And yet, in my opinion, all this is not really important.
The important thing is that the inventors feel that there is some place in the Government [sic] that does give a damn. They come to us and ask, where can I get help with my invention on cutting wood, or something like that, and we say, “It is not energy-related.” He says, “But my saw is better; it cuts a thinner cut.” And we say, “We are very sorry, there is no place in the Government where you can now go with that invention.” There really isn’t.
My point is that these programs are important, not because they reward some inventors. The amount of money is really quite trivial. It is important to have the proper climate in this country, a climate that, unfortunately, is turning sour. I would like to give you some evidence of this.
Foreign Patents are Growing
I have in front of me a piece of paper that was sent to me by our Patent Office last week. It has the following information: For the year for which we have total statistics, 1979, the Japanese patents issued were as follows — I will round off the numbers — “151,000 applications filed by the Japanese and 24,000 applications filed in Japan by foreigners.” “35,000 patents issued to Japanese, and 9,000 issued to foreigners.” So, here is Japan — with a population half of ours — filing 151,000 applications for patents.
The U.S. picture is as follows: “61,000 filed by U.S. residents; 40,000 filed by foreigners.” That is 40 percent, in round numbers, by foreigners — “31,000 issued to Americans and 18,000, roughly, issued to foreigners.”
Now we have a population about twice as large as Japan, and we filed one-third as many patents.
I have not missed an issue of the Patent Gazette in 30 years. This document is issued each week, and out of this publication one can get some very interesting information — not only what is new, and most of it, of course, is of minor improvements, but you find out who is doing what in what fields.
Take, for example, reading machines (also called Optical Character Recognition — OCR). My first such machine is at the Smithsonian. Nearly all of the patents in OCR are now issued to the Japanese. Record players — Japanese. Textiles — Swiss. Casting of metal, continuous casting — European. Optical devices are almost all Japanese. The Germans admit the Japanese make better lenses.
The foreign patents are not only on minor improvements. They are now on basic stuff. Devices that make electric motors run without brushes — Japanese — and the patents on automobile engines are almost all Japanese, about 80 or 90 percent. The Patent Office compiles these figures — who gets what patents in what field. While the foreigners are getting 40 percent of U.S. patents, in important fields it is often 90 percent, and rising.
It bothers me that all of the record players where the cartridge moves in a straight line, are made by nine companies now, because my patent expired last year. All nine are outside the United States — Denmark, Switzerland, Spain, and the rest in Japan — Sony, Panasonic, Mitsubishi, etc. Not a single American company makes such a phonograph.
And the reason: Harman-Kardon had a license from me. Harman-Kardon was eventually owned by Beatrice Foods. Beatrice Foods owns 500 companies, and they manage them with 200 people. At one time I asked the president of Harman-Kardon, “Did you ever meet the top management?” He said, “No.”
We now have tremendous conglomerates where a single company can have hundreds of subsidiaries. RCA owns Hertz, a publishing house, a food company, a bank, and incidentally a radio company. You have a situation where, because of the size of the business, they cannot bother with individual little companies. Harman-Kardon did not make good record players, it probably had other problems; so it was sold to the Japanese. Only the name remains. Everything is designed in Japan and sold under the Harman-Kardon name.
Keeping Large Companies Competitive
When the Zenith R&D staff was disbanded, I talked to the ex-research director and he said, “I have a wonderful job — more money than I had at Zenith.” I said, “What about the other engineers?” He said, “They have jobs.” And I asked, “What are we going to do if there’s a war on and we need radio engineers as we did in the last war, and we again have to build guided missiles and all sorts of electronic stuff?” He said, “We will have to import the engineers from Taiwan.”
Big joke. And this, gentlemen, is what I would like to close with. The large companies have a primary interest in making money. They are so large that the management simply cannot be technically expert in the things they build. There is no way for Beatrice Foods’ management to technically handle the 500 companies they run.
What they must do is that they become bankers. They become “business managers.” This they do very well, and they sell and buy companies like I buy a car. I think I spend more time on buying a car and I use it longer than they do a company. If it loses money, the Government pays half the loss. If it makes money, they keep it.
The result of all this will be that small companies will have great trouble staying alive. Sometimes they will be bought by large companies, as my company was by Control Data. It’s the most money I ever made.
What is going to happen is that innovation will die because big companies do not like innovation. It is risky, it is expensive and it is very difficult for a large company to innovate. When I was at Control Data, it was much harder to be an inventor than when I was at Rabinow Engineering.
The large companies no longer compete with each other. This I learned from my friends at Brookings. If I control half the industry and you control the other half, we would be stupid to compete with each other on price. We would both lose.
I am not accusing the large companies of getting together in smoke-filled rooms. I am not accusing them of collusion. I am just saying that when you are very large, you do not compete on price. It makes good economic sense to keep the price up.
At one time there was an “IBM umbrella” over the whole computer industry. I imagine that IBM knew that if they lowered the price, the others would follow, and they would both lose. I believe that IBM hoped that the others would make money also, because of the antitrust considerations. The best evidence today is that at the end of the present century, between 20 and 50 companies will control 90 percent of the world’s business. This will destroy the capitalist system. I’m quite sure that if capitalism goes this will also destroy personal freedom. That much concentration of wealth changes the economic, social and political life of a country.
There are basic and important reasons for keeping small companies alive. I do not think small companies will save the country as regards our export trade. Let’s not kid each other. While they are important — half the gross national product is produced by small companies, and while most of the technical innovations are in the small companies, the export business is in the hands of the large companies.
Unless the large companies are needled by the little guys, unless the large companies are forced to compete with guys like me, the large companies will not compete with each other.
This is the important thing. We have to keep inventors inventing. We have to keep small companies innovative. And we don’t have to worry about how much money the Government spends in this effort, whether it is $6 or $7 million. This is peanuts. One cannot expect the large companies to support them. Most large corporations have a mild contempt for the little guys.
The question was raised yesterday: Why don’t large companies support small companies as does Control Data? The reason is they don’t like them. They are of no use to them. If they support a small independent company, the invention it may produce may be of no use to the big company. It may be useful to somebody else. This is like education; when you educate me and spend money on my education, what I may produce as a result of that may not help you at all. It may help your competitor.
Big companies do not particularly like patents. The chemical companies do. The automobile people do not. The computer people do not. The electrical companies do not. That is what the vice presidents of two of the largest companies in America told me: “To us patents are a nuisance.” Don’t expect them to support the patent system.
At the present time, the Patent Office is in terrible shape. Patents are missing from the files, and no one in Congress seems to give a damn about this. I do, and so do all inventors. Patent procedures take too long and I could tell you terrible tales about interferences.
All I can say is let’s support the small inventor, not because he’s going to save the country, but because he will keep the big guys honest. And sometimes their inventions may be absorbed and get into the mainstream of our technology and culture.
Unless we get the big companies to change their attitudes — and I can only hope that this is possible — unless we watch what conglomerates do with their money, I think we shall have real trouble.
Reference: Rabinow, J. (1982). “We Have To Keep Inventors Inventing.” Research Management, Vol. 25, No. 6 (November-December), pp. 7-9.