Ask the Scholar
Document scope · 1 page
Scholar
Ask about this object, its catalog metadata, its source description, or the page inventory.
For page-specific OCR and visual context, open one of the page chats.
Scholar Source Context
Document identity
localId
323153389
label
Cal Tech Commencement 6/14/91 [OA 8324] [2]
core
doc
dtoType
document
citationUrl
pageCount
1
Source metadata
id
323153389
contentType
document
title
Cal Tech Commencement 6/14/91 [OA 8324] [2]
citationUrl
identifierLocal
13760-006
collections
Records of the White House Office of Speechwriting (George H. W. Bush Administration)
Speech Backup Chronological Files
imageCount
1
hasImages
yes
source
import
hasTranscription
no
Source extras
naId
323153389
levelOfDescription
fileUnit
recordType
description
ocrSource
nara-archive
Single page context
seq
1
pageIndex
0
type
document
mediaId
b4c97d4dd4a29657
ocrText
Originally Processed With FOIA(s):
FOIA Number:
S
S
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the George Bush Presidential
Library Staff.
Record Group/Collection:
George H.W. Bush Presidential Records
Collection/Office of Origin:
Speechwriting, White House Office of
Series:
Speech File Backup Files
Subseries:
Chron File, 1989-1993
OA/ID Number:
13760
Folder ID Number:
13760-006
Folder Title:
Cal Tech Commencement 6/14/91 [OA 8324] [2]
Stack:
Row:
Section:
Shelf:
Position:
G
26
21
4
6
Cover Story
AT&T'S JOHNSON
EXAMINES THE
SUPERCONDUCTING
TAPE DEVELOPED
WITH TEAM
MEMBER BATLOGG
'OUR LIFE
HAS CHANGED'
THE LIGHTBULB, THE TRANSISTOR-NOW THE SUPERCONDUCTOR REVOLUTION
W
ith the poise of Harry Houdi-
cal revolution. Because it can conduct
tists compare the importance of these
ni. Bertram Batlogg reaches
electricity with no power losses to resis-
advances in superconductors to the in-
into his coat pocket. Slowly,
tance, the tape material promises to
vention of the transistor. But to Jack S.
he draws out a piece of flexible green
have an enormous technological-and
Kilby, co-inventor of the integrated cir-
tape and holds it aloft. There is silence.
economic-impact. Such so-called super-
cuit, that's an understatement. "This is
Then gasps and exclamations ripple
conductors could speed the way to a
much broader," he says. "It could im-
through the crowd. "I think our life has
quantum leap in both electrical and elec-
pact almost everything."
changed," says Batlogg, who heads sol-
tronic technology.
The normally staid physicists at the
id-state materials research at AT&T Bell
A torrent of developments is pointing
New York meeting apparently agreed.
Laboratories. The 3,500 physicists jam-
to applications ranging from superfast
Like rock music fans waiting to get into
ming the ballroom and surrounding hall-
computers to trains that float on mag-
a concert. the crowd began gathering
ways at the New York Hilton burst into
netic fields, from less costly power gen-
for what they dubbed the "Woodstock of
shouts and applause.
eration and transmission to fusion ener-
physics" 2½ hours ahead of time. When
The simple tape that Batlogg bran-
gy. Although it may take 20 years
the doors opened for a hastily scheduled
LAWRENCE BARNS
dished at the annual meeting of the
before the full potential of these labora-
7:30 p.m. session on superconductivity,
American Physical Society on Mar. 18
tory discoveries is realized, the economic
scientists shoved and jostled each other
was indeed the pennant of a technologi-
impact could be enormous. Some scien-
for the 1,150 seats. The rest craned to
BUSINESS WEEK/APRIL 6. 1987
COVER STORY
hear from the hallways or watched on
IBM Fellow, which frees the company's
video monitors outside. "I came to see
distinguished scientists to pursue proj-
history," declared one scientist as he el-
THE MERCURY
ects of their own choosing. With the
bowed his way to a seat. He wasn't dis-
appointed. More than 50 researchers re-
SOARS FOR
freedom to explore, Müller took a cue
from research in the U.S. and France to
ported brand-new experimental results.
SUPERCONDUCTORS
examine a little-known group of oxides
Several revealed information phoned in
containing copper and nickel. Normally
from their laboratories just hours earli-
insulators, the materials had displayed
er. With only five minutes allotted to
some intriguing metallic properties. So
each. the session ran until 3 a.m.
for nearly three years, Müller and his
The advances have been a long time
colleague, J. Georg Bednorz, mixed hun-
coming. In 1911, Dutch scientist Heike
dreds of compounds and tested them for
Onnes first observed that some metals
signs of superconductivity. In January,
became superconductive when cooled to
-28F (240K) Now numerous re-
1986, they measured superconductivity
almost absolute zero-the point at which
search groups report indica-
all motion of atoms ceases. That opened
tions of superconductivity at
at a record-breaking 30K in an oxide
temperatures a conventional
containing lanthanum, barium, and cop-
tantalizing prospects for huge markets.
freezer could achieve.
per. Müller, who expected a rise of sev-
But the only way to get near that ultra-
eral degrees at best, was incredulous.
cold temperature of -459F-or zero on
Bednorz, a former student of Müller's,
the Kelvin scale that scientists prefer-
was SO excited he wanted to report the
was cooling with costly liquid helium.
results immediately. But Müller refused.
CHASING THE GRAIL So the search began
The history of superconductor research
for materials that would exhibit super-
is littered with unsubstantiated claims
conductivity at warmer temperatures.
and the tarnished reputations of the sci-
The effort, however, was slow and dis-
entists who made them. Fearful that his
couraging. In 1941, scientists discovered
peers would denounce the results, he in-
alloys of niobium that became supercon-
sisted on additional tests. "I didn't want
ductive at 15K. By 1973 the best super-
to ridiculize myself," he recalls.
conductor operated at 23K-warm
Only after they had confirmed their
enough to make a few applications, such
findings did Müller and Bednorz publish
as magnets for medical imaging, eco-
a paper. And then many U.S. scientists
nomical. But this was far from the phys-
missed the paper when it was published
icists' Holy Grail of "room temperature"
-284F (98K) In February, 1987,
last April because Müller chose a Ger-
superconductors. Many despaired that
scientists at University of Hous-
man journal not widely read in the U.S.
such materials were even possible.
ton push the limit beyond the
Some who did read it doubted the find-
In just the last four months. however,
77K temperature at which
ings. "I just couldn't take the claims se-
researchers in the U.S., Europe. Japan.
semiconductors can be cooled
riously," says one physicist who now re-
and China churned out a stunning set of
by liquid nitrogen.
grets his skepticism.
discoveries. They created a group of ma-
THE COLD RUSH. By fall, however, a
terials that become superconductors at
handful of research teams was experi-
temperatures that can be achieved with
menting with Müller's compound. In De-
inexpensive liquid nitrogen. That made
cember. reports discussed at a Boston
frigid superconductors red-hot. "It's the
scientific meeting created a sensation.
most exciting development in physics for
Müller's work had been confirmed by a
decades." declares Neil W. Ashcroft. di-
-390F (39K) By the end of 1986,
Tokyo University research team led by
rector of the Laboratory of Atomic &
researchers have developed
Shoji Tanaka and another group at the
Solid State Physics at Cornell Universi-
oxides that push the tempera-
University of Houston headed by phys-
ty. "The pace of discoveries can hardly
ture up by 16F.
ics professor Ching-Wu "Paul" Chu. Im-
be matched." And the dream of room-
mediately, scientists at more than a doz-
temperature materials is no longer un-
406F (30K) In January, 1986,
en labs, including AT&T, Argonne
thinkable. "We've knocked down barri-
IBM scientists observe super-
National Laboratory, and the University
ers and removed our blinders about
conductivity in a copper oxide.
of California at Berkeley, began experi-
what's possible," says Paul A. Fleury,
ments on the substance.
director of the physical research lab at
419F (23K) Improvements in
It was easy to jump on the research
AT&T Bell Labs.
niobium alloys raised the tem-
bandwagon: The promising oxides can
No one. least of all K. Alex Müller. a
perature by only 14F by 1973.
be whipped up in the chemistry lab of
physicist from International Business
any junior college. Simply grind the
Machines Corp.'s Zurich research labora-
chemicals with a mortar and pestle and
tories. expected the barriers to higher-
433F (15K) Limited applica-
heat them in a furnace. Regrind the re-
temperature superconductors to tumble
tions become practical in 1941
with the discovery of a niobium
sult. press it into pellets, and heat it
so quickly. It was Müller who set off the
alloy that can be cooled with
again with oxygen. So by the end of
current research rush a little more than
liquid helium.
December, researchers at AT&T, the Uni-
a year ago with the discovery of a super-
versity of Tokyo, the Institute of Phys-
conducting oxide of copper. Hunched in
452F (410) In 1911 scientists
ics. Academia Sinica in Beijing, and the
a chair during a lull in the New York
observe superconductivity in
University of Houston announced they
meeting, the 59-year-old Müller seems ill
certain metals at nearly abso
had cooked up oxides that smashed
at ease with the attention he is getting.
lite zero.
Müller's record.
"It was so unexpected," he says quietly,
The scientists have been at it ever
stroking his beard.
the Ket
since. Chu and his close-knit team of six
Müller holds the prestigious post of
pushed the temperature of Müller's ox-
ROB DOYI
COVER STORY
BUSINESS WEEK/APRIL 6. 1987 95
Cover Story
look better," observes one physicist
At a press conference during the
meeting, Tanaka claimed the Japanese
were first to experiment on certain com-
pounds. Chu jumped up to add that his
lab, too, was working on the same com-
pounds at that date. Such incidents are
"just the tip of the iceberg," says Chu.
Although Chu and Tanaka used to com-
pare work, the communication stopped
once Chu began experiments on yttrium.
"It's frantic, mass hysteria," says
Paul M. Grant, manager of magnetism
and collective phenomena at IBM'S Alma-
den Research Center in San Jose, Calif.
"Everyone's exhausted." Grant, whose
weeks of midnight research sessions re-
sulted in the identification of the struc-
ture of one of the oxides, has the dark
circles under his eyes to prove it. And
the research is progressing so rapidly
that it has outstripped the usual chan-
nels of scientific communication. At
YOU'RE GETTING WARMER: THE UNIVERSITY OF HOUSTON'S CHU WITH SUPERCONDUCTOR
Physical Review Letters, the leading
physics journal, more than 50 supercon-
ide to 52.2K. "But I knew we wouldn't
ing still other elements such as calcium
ducting research papers await publica-
go higher unless we found a new materi-
and lutetium, they concocted a dozen dif-
tion. 'Recently' in this field now means
al," Chu says.
ferent oxides that become superconduc-
two days ago," says M. Brian Maple.
So he decided to substitute another
tors above 90K.
professor of physics at the University of
element. called yttrium, for the lantha-
With so many teams after the ulti-
California at San Diego.
num in Müller's oxide. Working with
mate superconductor and the prizes it
GETTING PRACTICAL The race to push su-
University of Alabama scientists under
might bring-perhaps even a Nobel-
perconducting materials out of the lab
Wu-Maw Kuen, the researchers soon re-
the tension among key researchers is
has barely begun, however. Just because
corded signs of superconductivity at a
becoming almost palpable. At the Physi-
a substance loses its electrical resistance
torrid 100K in that oxide. "But we came
cal Society meeting in New York, the
when it's dipped in a cold, liquefied gas
back the next day, and it had disap-
scientists assiduously noted the dates
does not mean it will be much good in
peared." recalls the 45-year-old Chu. The
when they observed high temperatures,
the real world. To be practical. supercon-
researchers began an intense cat-and-
developed compounds, or completed oth-
ductors have to be fashioned into wires.
mouse game with the material, trying to
er ground-breaking work. "Everyone is
cores of magnets, and the thin coatings
stabilize the superconducting properties
writing history to make themselves
that form the foundation of computer
at that high temperature.
circuits. And the materials, which are
The team tested dozens of recipes
basically ceramics, are brittle-and frag-
with little success, but Chu's optimism
ile. "It is a long road between discovery
never flagged. "He always looks on the
and use of the devices." says Robert J.
bright side," says Pei-Herng Hor. one of
Cava, a chemist at Bell Labs.
his Taiwanese-born colleagues. By early
But scientists already are pulling off
February the team scored: The research-
the basic developments that lay the
ers found a stable compound that was
foundation for commercial applications.
superconductive at 98K, well above the
One key finding is that the materials
temperature at which inexpensive liquid
may make possible the most powerful
nitrogen could be used for cooling.
electromagnets ever built. Tests at Wes-
'SCIENCE SUPERSTAR.' Chu kept mum for
tinghouse and AT&T indicate that the
two weeks. but rumors quickly lifted the
new superconductors can withstand
veil of secrecy. Researchers at IBM.
magnetic fields up to 10 times greater
AT&T, and the University of California at
than those possible with such materials
(10P) GROUP, (BOTTOM) WAI TER GALAHAN
Berkeley immediately set out to discover
as niobium. That could open the way to
the secret ingredient. "Chu ran the four-
such applications as tiny but extremely
minute mile in superconductivity," de-
powerful electrical motors and higher-
clares James E. Shirber, manager of sol-
resolution medical imaging machines.
id-state physics at Sandia National
By March, both IBM and Stanford Uni-
Laboratory. "He broke the barrier to liq-
versity had used techniques common in
uid nitrogen." When the news got out.
the semiconductor industry to produce a
Chu earned the nickname "Science Su-
superconducting thin film that could be
perstar" from his staff.
used in computers. At Stanford, Theo-
That could prove to be an elusive title.
dore H. Geballe, a professor of applied
Within weeks Tanaka, Z. X. Zhao from
physics, fashioned a film into a proto-
the Institute of Physics in Beijing, AT&T,
IBM'S K. ALEX MULLER: HIS DISCOVERIES
type device that might be an ultrahigh-
and IBM were pacing Chu. By substitut-
YEAR AGO KICKED OFF THE RESEARCH FRENZY
speed data pathway between computer
BUSINESS WEEK/APRIL 6. 1987
COVER STORY
chips. An AT&T team that included Ber-
tram Batlogg and ceramist David John-
son used ceramic processing technology
THE U.S. HAS THE ADVANCES,
to make its tape and small donut-shaped
BUT JAPAN MAY HAVE THE ADVANTAGE
magnets. Japan's Fujikura Ltd. and Su-
mitomo Electric Industries Ltd. have
W
hen a Houston laboratory
amount of the academic work is aimed
made prototype superconducting wires.
announced a major advance
at applications of the new knowledge,
The prospect of high-temperature su-
in superconductivity re-
such as thin superconducting films for
perconductors shooting out of the lab-
search in February, Japan Inc. wasted
computer chips.
oratory has scientists lusting nearly as
no time. Its Ministry of International
But not everyone is satisfied. Ching-
much after potential profits as scientific
Trade & Industry immediately began
Wu "Paul" Chu, the University of
prizes. Just as semiconductor technology
assembling a consortium of govern-
Houston physicist who is the leading
created Silicon Valley, the new supercon-
ment, industry, and university re-
U.S. superconductivity researcher at
ductors may well create an "Oxide Val-
searchers. A MITI official describes the
the moment, thinks more action is
ley." Already, some researchers are talk-
ministry's goal with missionary zeal: to
needed to meet the combined weight of
ing about starting companies. And
exploit the "fantastic world of future
Japan's governmental, financial, and
Henry Kolm. who left Massachusetts In-
industries" promised by new materials
industrial resources. "We cannot af-
sititute of Technology to found a compa-
that conduct electricity with virtually
ford not to move the same way as the
ny to develop superconductivity applica-
no loss of power.
Japanese," he says. "We really have
tions a decade ago, believes the new
Both leading U.S. universities and
to have a coordinated effort this
oxides will open the door to venture capi-
major industrial companies such as In-
time." In between those standing pat
tal. "People didn't consider helium prac-
ternational Business Machines Corp.
and the activists, there are a lot of
tical." he savs. Liquid nitrogen cooling,
and American Telephone & Telegraph
people just scratching their heads.
however. "is not far from frozen-food
Co. are playing a pioneering role in the
"Maybe," says one official half-joking-
technology."
spectacular scientific advances. But
ly, "what we ought to do is have some
But just who owns the rights to the
some experts fear that the Japanese
kind of conference to see what we
new technology promises to be a major
ability to organize their research into a
ought to do."
muddle. The U.S. Patent Office is al-
program with strong commercial goals
'FIRST WIDGET.' But one aggressive
ready sifting through dozens of applica-
could give them the edge in moving the
government science administrator is
tions on everything from the structure
research out of the laboratory.
not waiting. James A. Ionson, the as-
of oxides to manufacturing processes
At the moment. declaring a winner
trophysicist who heads the Office of
and devices. IBM and AT&T both contend
in the superconductivity race is prema-
Innovative Science & Technology for
they have claims for broad patent pro-
ture. But leaders of the nation's sci-
the Pentagon's Strategic Defense Ini-
tection. but "it may be some time before
ence Establishment marvel at the
tiative Organization. is already busy
we find out who has what rights." ad-
speed of MITI'S action. "I wouldn't call
forming his own consortium. He has
mits George Indig. a patent attorney at
what they have done ominous, but it
lined up an unnamed university, a fed-
AT&T. Observers are predicting messy
certainly is a sign of intensifying ag-
eral research laboratory, and a handful
shootouts in the courts.
gressiveness." savs Roland W.
of small companies. Ionson's consor-
The rush of discoveries also leaves
Schmitt. General Electric Co.'s chief
tium will have a specific target: vastly
physicists with some loose ends. For one
scientist and chairman of the National
improved space-based infrared sensors
thing. they can't fully explain why the
Science Board. Adds Carl H. Rosner.
for detecting enemy missiles. "My con-
oxides are such superior superconduc-
president of Intermagnetics General
cern is that if we don't pull the science
tors. "It may be several years before we
Corp.: "The Japanese have long recog-
into a technology fast. we're going to
know what's going on. but there may be
nized the tremendous potential of
be beaten to the punch." says Ionson.
no theoretical limit to how high the tem-
superconductivity. whereas the people
"I think we've got to build the first
perature can go.' says Robert
in this country have been very short-
widget."
Schreifer. a professor at the University
sighted."
Early proof that the science can be
of California at Santa Barbara who won
HEAD-SCRATCHING No one government
converted into a product might, as Ion-
a Nobel for developing a theory of su-
agency coordinates U.S. attempts to
son hopes, be enough to spur vigorous
perconductivity. Indeed. by the time the
exploit the new science. Nor does any-
development. But there are no guaran-
New York meeting broke up. labs in the
one know precisely how much the U.S.
tees. Even in the basic science, the in-
U.S. and Europe had reported signs of
spends on superconductivity research.
ternational competiton is fierce, and
superconductivity well above 100K.
But the National Science Foundation,
other nations are already scrambling
Such reports are spurring a frenzy of
which funded much of the recent U.S.
hard for products because the potential
activity in Chu's Houston laboratory.
research, estimates that federal agen-
payoffs appear to be so great. Further-
Shoes are scattered under desks. and
cies are funneling at least S8 million a
more, there are signs that the time
jackets and shirts are hung in corners.
year to universities.
from discovery to application may be
as the researchers work around the
American scientists and industrial-
exceptionally short.
clock. The full-sized refrigerator is
ists share the assumption that; as in
Superconductivity is likely to be a
crammed with Chinese take-out food.
the past, the U.S. system doesn't need
severe test of the highly individualistic
"When you are No. 1. you always have
a push from the government to bring
American system. Even as basic find-
to work to keep it." says Hor. "You
innovative technologies to market.
ings are still pouring out of the labora-
hardly sleep." And Chu has his sights
"The discoveries have been so spectac-
tories, the stark reality of the competi-
clearly on another record-125K. By
ular that the level of activity is enor-
tive marketplace looms. And Ionson's
mid-March rumors were circulating that
mous in every laboratory in the U.S.
embryonic consortium is no match for
he might be close. "Will history repeat
with any capability in superconductiv-
MITI'S directed Japanese effort. In this
itself? Who can tell." says Chu grinning.
ity," argues Schmitt. And Frank Press,
case, the U.S. may have to consider
By Emily T. Smith in New York. with
president of the National Academy of
imitating Japan for a change.
Jo Ellen Davis in Houston and bureau
Sciences, notes that a surprising
By Evert Clark in Washington
reports
COVER STORY
BUSINESS WEEK/APRIL 6. 1987 97
Cover Story
THE NEW WORLD
OF SUPERCONDUCTIVITY
Technologies and products once only dreamed of are suddenly coming within reach
nexhaustible, cheap energy from fu-
business, it will probably be 1990 before
water. And even with complicated and
sion, desktop computers as powerful
full-fledged products show up. For elec-
very expensive insulation systems, liquid
as today's number-crunchers, trains
trical utilities, it could take 10 to 20
helium escapes far more rapidly than
that fly above their rails at airplane
years before the revolutionary new su-
liquid nitrogen, which can be protected
speeds-all suddenly have taken a giant
perconductors make a meaningful im-
with simple plastic-foam insulation.
step closer to reality. But while scien-
pact on power distribution. The chal-
The idea that it may soon be economi-
tists developing a new breed of "warm"
lenge of scaling up lab results "could be
cally feasible to put superconductivity to
superconductors are planting the seeds
formidable," cautions Paul M. Grant,
work in myriad uses is sparking develop-
of an almost Utopian tomorrow, it will
manager of magnetics research for In-
ment projects at hundreds of companies
be up to engineers to reap the harvest.
ternational Business Machines Corp.
worldwide. The payoffs would be enor-
That won't happen overnight. The nov-
SCOTCH AND WATER. Until now, super-
mous. And if room-temperature super-
el materials that researchers are churn-
conductivity has been limited to a few
conductors are ultimately discovered.
ing out in laboratories still have to be
applications because the materials avail-
the world could be transformed. Such
transferred to the factory floor. Signifi-
able had to be cooled to extraordinarily
"hot" materials could provide new tools
cant hurdles must be cleared before an
frigid temperatures with expensive liq-
for every technology related to electric-
experimental circuit for a superconduct-
uid helium. "Liquid helium costs about
ity. But just the prospect of supercon-
ing computer can be turned into mass-
the same as Scotch," says Walter L.
ductivity at liquid-nitrogen temperatures
produced chips. A small sample of wire
Robb, senior vice-president for corporate
is enough to excite most industrial
is a long way from cables that will span
research and development at General
engineers.
the nation.
Electric Co. Liquid nitrogen is 10% as
Practical nitrogen-cooled superconduc-
Even in the fleet-footed electronics
costly-roughly on a par with bottled
tors could save the utilities billions-
FOUR TECHNOLOGIES THAT WILL BE
(LEFT 10 HGHT) /IMAGE BANK, SEI12. CHARI R/HI STAR
register
POWER SYSTEMS If electricity can be transmitted vast distances
ELECTRONICS Nothing since the transistor promises to overhaul
without loss, the country's electrical demands could be met by
computer iscience as drastically as superconductivity. The experi-
burning less fuel. As it is, copper wires waste enough power to
mental microcircuit above; produced by International Business Ma-
light up the West Coast. Power plants will become more efficient
chines Corp., heralds the dawn of a new age in electronics. Tomor-
by using generators made with superconducting electromagnets.
row's electronic systems will pack 100 or more times as much
And giant electromagnets could even be used to store electricity
information-crunching power in smaller boxes. With powerful mag-
for use during peak hours. Smaller and more powerful supercon-
nets and more sensitive detectors, inedical imaging systems will
ducting electric motors will cut industrial power bills.
give doctors dramatically sharper pictures
98 BUSINESS WEEK/APRIL 6, 1987
COVER STORY
and save enough energy to put 50 or
into cable that can stand up to high pow-
and transistors. Faris worked on super-
more power plants in mothballs. Copper
er loads and alternating current, 10 or 12
conducting microchip devices known as
wires may be the conductor of choice
"feeder" lines might be affordable.
Josephson junctions at IBM. When Big
now, but they lose a lot of power. The
Interest in using powerful supercon-
Blue decided in 1983, after 14 years of
copper soaks up 5% to 15% of the elec-
ducting magnets to build high-speed
work. that the technology was a no-go,
tricity flowing through long-haul trans-
trains that levitate above their tracks
Faris left and founded Hypres Inc. In
mission lines. and still more disappears
has also flagged in the U.S., because of
February, less than four years later,
in local distribution lines. For Pacific
high capital costs. That interest, too,
Hypres unveiled the first system based
Gas & Electric Co., these losses amount
could be reviving. But the eventual
on Josephson junctions. Now, Faris as-
to $200 million a year—"plenty of incen-
builders of these so-called maglev trains
serts that Hypres will be the first to
tive to use a new conductor." says
are more likely to be in either West Ger-
build chips using the new materials, be-
Virgil G. Rose, PG&E's vice-president for
many or Japan, which have continued to
cause "no one else in the world has a
operations.
fund serious research, or Canada, which
manufacturing line producing JJ chips."
With so much at stake, there has been
still supports a modest effort.
SUPERCHIPS. That distinction isn't likely
interest in developing transmission lines
William F. Hayes, a senior research
to last long. Major electronics compa-
and power generators even with existing
officer with Canada's National Research
nies. from IBM to Varian Associates, are
superconducting technology. Research
Council and a maglev believer, bubbles
racing to explore the new superconduc-
began in the late 1960s but eventually
over with anticipation. The new super-
tors. "Guys are working like maniacs."
ground to a halt as the energy crisis
conductors will have "a tremendous im-
says John K. Hulm, director of corpo-
faded and the cost of cooling with liquid
pact on maglev," says Hayes. "The ma-
rate research at Westinghouse Electric
helium stayed stubbornly high. One line
jor problems were refrigerating units
Corp. "I haven't seen anything like this
was actually built in the U.S., a 300-ft.-
and reliability. All that's eliminated
in years." Westinghouse wants to use
long test installation at Brookhaven Na-
now." And trains aren't the only vehicles
Josephson junctions, which are up to
tional Laboratory. It showed that the
that could benefit. Hayes predicts that
1.000 times faster than conventional sili-
technology could not compete with a
superconducting motors one-half to one-
con transistors, to build radar systems it
conventional system unless all the power
third the size of normal motors will one
believes would outperform any now
needs of a city were fed through one
day power ships. They could also help
available. At Varian. a leading maker of
line to minimize cooling costs. savs Carl
eliminate urban air pollution by making
equipment used in semiconductor fabri-
H. Rosner. president of Intermagnetics
electric cars practical.
cation. a crash effort is under way to
General Corp. But because of the inher-
America's best shot at exploiting the
verify the work on superconducting thin
ent unreliability of such a system. no
new technology is probably in electron-
films being done at nearby Stanford Uni-
city would dream of putting all of its
ics. There. superconductivity will usher
versity. Such films could be the starting
watts into one cable. If the new super-
in what Sadeg M. Faris calls "the third
point for tomorrow's superchips.
conducting carriers can be fashioned
age of electronics," after vacuum tubes
Health care is another area where su-
THE FIRST TO FEEL THE IMPACT
TRANSPORTATION "Flying" trains should get a big lift from inex
SCIENCE In their never-ending quest for knowledge, physicists
pensive and lightweight superconducting magnets and motors. So-
want to smash atomic particles into smaller smithereens or, con-
called magnetic levitation systems. such as the experimental Japa-
versely, to fuse atoms together and mimic the energy-generating
nese train above. use powerful magnetic fields to lift the entire
furnace inside the sun. To "bottle" an ultrahot fusion reaction in a
train off the track, so it floats on a cushion of air as it rushes along
so-called tokamak device such as this one at Princeton University,
at speeds of up to 300 mph. That's twice as fast as Japan's famous
magnets more powerful than any now available will be needed.
"bullet trains." Smaller, more efficient superconducting motors
Magnets made with the new materials could also boost the power
could power ships and electric cars.
of future atom-smashers.
BUSINESS WEEK/APRIL 6. 1987 99
perconductors could have an early im-
pact. Nuclear magnetic resonance (NMR)
Information Processing
scanners rely on powerful superconduct-
TELECOMMUNICATIONS
ing magnets to produce unprecedented
views of the body's organs. The new
materials promise magnets 10 times
more powerful than those now used.
And if NMR machines shed the cost and
bulk associated with their present cool-
ing systems for helium, the market for
CAN GTE KEEP
them could be a lot bigger. "You could
site NMRs in smaller hospitals, even clin-
FOILING THE RAIDERS?
ics," says Dr. Paul Winson, director of
business development at Britain's Ox-
It's retrenching, building defenses, and hunting for prey
ford Instruments Group PLC. the leading
supplier of NMR magnets. Diasonics Inc.,
which has sold more than 100 NMR scan-
ners. estimates that cooling with liquid
nitrogen might save $100,000 per year in
operating costs per machine.
The new superconducting materials
may also produce magnets that give the-
oretical physicists a closer look inside
atomic particles. Just eliminating the he-
lium needed to cool the 10.000 giant
magnets in the proposed superconduct-
ing supercollider would lop S160 million
off the projected $4.4 billion cost of the
atom smasher-plus cut energy usage
by 257. Researchers argue that waiting
for the ability to eliminate helium should
not hold back the project. which earned
a green light from the President early
this year. but they say the possibility of
replacing those magnets should be kept
open. "We could use them to upgrade
the energy of the instrument four or
fivefold." says Stanley G. Wojeicki. dep-
uty director of the project. "That would
CHAIRMAN BROPHY: ANALYSTS SAY GTE'S STOCK IS STILL UNDERVALUED
give you a tremendous increase in scien-
titic reach."
H
ow much restructuring is
leverage]. But I don't believe you're
Ultimately, physicists hope the new
enough? For Theodore F.
making any contribution to the future.
superconductors will hold the key to
Brophy, chairman and chief exec-
Brophy's problem is that while he
practical nuclear fusion. Such reactors
utive of GTE Corp.. sales or joint ven-
has hiked GTE's total stock-market worth
need powerful magnets to contain the
tures of operations accounting for 10%
to almost $14 billion. some Wall Street
intense heat of the reaction. which will
of annual revenues is plenty. But Wall
analysts say that is still barely half the
be even hotter than the sun. The U.S.
Street. which is still hunting for under-
company's breakup value. And just over
magnetic fusion effort has been trimmed
valued breakup candidates, is giving
the horizon are some fundamental
by 20 since 1985. to S345 million this
Brophy no respite. Despite a protective
changes in the phone business that could
year. and Princeton University's Plasma
thicket of regulators, asset-rich and un-
make a breakup more possible.
Physics Laboratory, the site of the ma-
derleveraged phone companies such as
CABLE EXPERIMENT. One is deregulation
jor U.S. fusion project. is being outspent
GTE are no longer immune. The Bell Sys-
Already 13 states have stopped regulat-
by rival projects in Europe and Japan.
tem breakup proved their pieces are
ing phone profits based on assets and
The new superconductors, hopes Robert
worth more than the whole. So, the
equity invested. Now they let companies
M. Hill. a senior scientist at SRI Interna-
steel-willed, patrician Brophy is being
earn whatever they can-so long as they
tional. could revive fusion's prospects.
challenged to boost shareholder values.
hold down rates and maintain good ser-
They may even boost Star Wars. The
That pressure escalated last fall, when
vice. Under previous "rate-base" regula-
Strategic Defense Initiative Organiza-
Canada's Belzberg family bought a less-
tion, a phone company buyer could earn
tion's Office of Innovative Science &
than-5% stake in S15 billion GTE and
money only on the depreciated historical
Technology has already marked $500.000
called for its partial breakup. Brophy
cost, or book value. of the assets ac-
for superconductor research this year
checked the threat by winning share-
quired. With deregulation, a buyer could
and plans to buck it to S2 million next
holder approval in December to stagger
pay more than book value and still reap
year. The interest is easy to fathom. Af-
the elections of directors and adopt an
a good return on equity if he could cut
ter all. space-borne systems built with
80% voting rule on takeovers. GTE also
costs or boost revenues.
superconductors wouldn't have to be
split its shares 3 for 2, boosted the divi-
A second factor is new technology. By
cooled: In space, "room temperature" is
dend 13%, and began a 3% stock buy-
the early 1990s, customers will have ac-
even colder than liquid nitrogen.
back. That pushed its shares up 23%, to
cess to a basketful of voice, video, and
By John W. Wilson in San Francisco
a less vulnerable $43. As for more re-
data services over telephone lines. Many
and Otis Port in New York, with bureau
structuring, says Brophy: "You can im-
of these will be unregulated. Whoever
reports
prove net income for a time [with more
owns the computerized phone network
100 BUSINESS WEEK/APRIL 6. :987
INFORMATION PROCESSING
COVER STORY
Ringing in the Future
by Changing the Past
SUMMARY: The video-fax-phone of "Back to the Future Part II" is from
ness in their portfolios, they could use their
2015. But its availability could be fewer years away - or so claim the
financial clout and economies of scale -
Bell telephone companies, which charge that regulations in the 1984
not to mention a telephone network that
AT&T breakup have prevented them from entering the future of
touches virtually every home in the nation
telecommunications. An appeal of the consent decree is being heard.
- to drive the industry back into the future.
A decision favorable to the Bells may hang on whether the court sees
But other factors are also keeping the
the firms as having a First Amendment right to distribute information.
superphone on hold. Cost, for one, is hob-
bling the process of wholesale innovation,
teven Spielberg's latest box
but also that documents, letters and photos
not just in terms of affordability but in
S
office blockbuster, "Back to
could simultaneously be passed along by
terms of policy. It is virtually carved in
the Future Part II," proffers a
fax. It would be like handing papers
stone that universal service will be the guid-
high-tech vision of home life
through a mail slot. No waiting. No travel.
ing principle of the U.S. telephone indus-
in 2015. Dominating the
Contracts could be signed and validated in
try. "The problem for the phone compa-
tacky living room furnish-
video conferences by card-reading ma-
nies," says Kraemer, "is how you get every-
ings and looking like video
chines, similar to those in use today that
thing done in volume so that you can drive
wallpaper (which rolls up and out of sight
verify credit card transactions.
your unit cost down to get universality."
BASED ON PHOTOS BY RICHARD KOZAK AND JANICE RUBIN
like a window shade) is the telephone.
In effect, the phone would create an of-
There is an even larger question of
Apart from its striking video features, such
fice without walls, where contact and inter-
whether there will be a residential market
as caller identification (address, occupa-
action, the camaraderie of the workplace,
for such superphones. Industry watchers
tion, politics
), this telephone differs
could go on among workers in widely sep-
say the public has shown little enthusiasm
from the humble household instrument of
arated locations. The Tokyo and New York
the 1990s in that, along with voice, it si-
offices would share one "wall" or "win-
multaneously transmits facsimile. And in
dow," supplied by phone, through which
turn this combination - voice. video and
workers could look in on one another. Time
data (that's the fax) - leads from the future
and distance might not go away, but they
right back to the present.
certainly would be rendered transparent.
"What you see in the movie is really
For now, however, that future waits on
no big reach on today's telecommunica-
hold, at least according to some of the key
tions technology," says Joseph Kraemer,
players - the Bell operating companies
head of the international telecommunica-
that were born with the consent decree that
tions consulting group at the Big Six ac-
broke up the American Telephone & Tele-
counting firm Touche Ross. According to
graph Co. in 1984. The decree turned
him, video-fax-phones are right around the
AT&T into a long-distance company and
technology corner. "Even the security de-
created seven regional companies, known
vice portrayed in the movie of using your
as the Baby Bells, with 22 subsidiaries that
thumbprint to get in and out of the door is
handle local service. Since all calls, even
used today in industrial applications."
long distance, must begin and end locally,
Spielberg makes the future of telephony
the Baby Bells maintain a virtual monopoly
look like fun. But his cinematic creation
on local service.
manages to portray one subtle but very im-
To protect and promote competition
portant here-and-now truth about the ubiq-
from this monopoly, the decree banned the
uitous telephone: Today and in the future,
Bells from three lines of business: informa-
it will form the glue for a raft of services:
tion services (electronic shopping, for ex-
broadcast, cable and high-definition TV;
ample), manufacturing (video telephones,
facsimile, publishing. research. shopping,
say) and long distance. These restrictions,
marketing, polling: electronic directories
argue the Bell companies, keep them from
and mail; computing services; and so on.
providing the revolutionary services today's
The effect of being able to transmit all
humdrum telephone is capable of offering.
these services simultaneously will be to
While no one expects the Bell compa-
destroy time and distance, as H. G. Wells
nies to be allowed back into long-distance
might have put it. That means that relatives
service (at least until there is competition
or business acquaintances across the conti-
for local service), they have been scrab-
nent would not only appear on-screen when
bling to get into information services and
NON
reached by phone (if they want to, that is)
manufacturing. With these lines of busi-
Pearce: "Restrictions make no sense."
INSIGHT JANUARY 8. 1990
9
the Supreme Court. As it is, he is one
of the nation's preeminent judges.
His opinions are famous for detail
and clarity. He says his aim in this is
accessibility. "People should be able
to understand what the courts are say-
ing." He particularly avoids bureau-
cratese, which litters complicated is-
Also heating up the issue are personnel
sues like telecommunications.
shifts on the regulatory front that augur well
"I am just a simple District Court
for policy changes in Congress. The rocky
judge," he says. It is something he
relations during the Reagan years between
often points out. "I merely carry out
the Federal Communications Commission,
what the decree says. This has all been
the chief regulatory agency for the phone
affirmed by the Supreme Court." In
companies, and Congress are said to be on
this he is perhaps too humble.
firmer footing because of changes in lead-
Fundamental to Greene's reading
ership. A new chairman, Alfred C. Sikes,
of the consent decree is the notion that
has been installed at the FCC, and two new
only by regulating the Baby Bells'
commissioners have taken up three of the
monopoly of local telephone service
four vacant posts on the commission, with
can competition sprout up and flour-
the final appointment expected imminently
RICHARD
ish. The decree pronounces competi-
from the tardy Bush administration.
tion as the greater good on this issue
Over at the Commerce Department's
of communications. The irony for a
National Telecommunications and Infor-
Judge Harold H. Greene of the
great, unapologetic, liberal judge is
mation Administration, which advises the
U.S. District Court in Washington
that in supporting the line of business
executive on regulatory policy, a new ad-
may be the only truly historical figure
restrictions against the Bell compa-
ministrator, Janice Obuchowsky (former
in the current debate over the Bell
nies, he is enforcing what he sees as
administrator Sikes having moved to the
companies. Greene was in charge of
a conservative principle: the unhin-
FCC), has promised an important new pol-
writing the Civil Rights Act of 1964
dered promotion of competition.
icy report on the nation's telecommunica-
and the Voting Rights Act of 1965,
"Businessmen who tout the advan-
tions infrastructure by early January.
the most important civil rights legis-
tage of competition, which is the
These movements on the rules side,
lation of the era. He presided over the
whole capitalistic ethos, say, 'Well
coupled with wrangling in the courts and
consent decree that broke up the larg-
yeah, competition's not important in
pressure on Congress, have the financial
est company in U.S. history, AT&T.
telecommunication.' I ask why is it
community on alert. "The pressure is clear-
With a Democrat in the White House,
important in- department stores. and
ly there that you would look for something
he would have been a candidate for
not in communications?"
to break in the next 12 to 18 months," says
Touche Ross's Kraemer. By that he means
some change in the way the Bell companies
are regulated, with Congress possibly leg-
for the idea of high-tech telephony, as evi-
the so-called audio and videotex services.
islating policy away from the courts.
denced by the ho-hum reception for prod-
The National Cable Television Association
Kraemer's firm recently surveyed 500 of
ucts currently being ramped up by the tele-
and the National Association of Broadcast-
the top business executives in the United
phone companies - shopping services,
ers, both rich and powerful lobbies, side
States. Fully 86 percent favored turning the
caller identification, voice messaging. Says
with the publishers. They fear that changes
Bell companies loose from at least one
Tom Cohen, counsel to the Senate Com-
in phone regulations would let the Bell
antitrust constraint, that of information ser-
merce, Science and Transportation Com-
companies compete freely with (and to the
vices, allowing them to compete in televi-
mittee, "No one is banging down the door
disadvantage of) the TV industry.
sion and telephone - everything the news-
for changes in their telephone service."
Who wins the battle for this putatively
paper publishers and TV interests fear. The
Of course, the public wasn't clamoring
vast and lucrative market will be decided
firm gives the appellate court a better than
for Henry Ford in the days of the horse and
either in Congress or in the courts, where,
even chance of allowing the Bells to offer
buggy, either. And "in 1970 no one from
in recent months, a key court appeal and
such services.
the public was pounding on the door of the
factional changes on the Hill suggest new
FCC asking for cable television," says Alan
action on the telecommunications horizon.
omplicating everything
Pearce, then an economist at the Federal
In December the U.S. Court of Appeals for
C
are the raging economies
Communications Commission. "No one
the District of Columbia Circuit began
of the telephone busi-
was screaming, 'I want my MTV.'
hearing oral arguments on an appeal that
ness. In the United States
Already, powerful forces are contesting
could have a powerful effect on the consent
alone, the assets of the
for position in the prospective market. The
decree, freeing the Bells to provide in-
industry are valued at
American Newspaper Publishers Associa-
formation services such as electronic phone
$242.3 billion. The in-
tion, for one; opposes the Bell companies
directories.
dustry employs 680,000 people. In 1989 its
in their quest to publish information elec-
In January, as Congress reconvenes,
investment in new construction and equip-
tronically. The publishers fear the com-
telecommunications is said to be high on
ment totaled $20 billion. Revenues ex-
panies could use their monopolistic grasp
the agenda. Rep. Edward J. Markey, chair-
ceeded a mind-boggling $89 billion. With
over the local telephone network to the
man of the Commerce and Science Sub-
1.7 billion telephone conversations taking
detriment of the competition the publishers
committee on Telecommunications and Fi-
place each day, it is little wonder that the
want to provide - namely, newspapers
nance, is upbeat about the chance for new
industry is constantly chafing.
offering their own information services
legislation in the coming session. "It's go-
The fact is, there has never been a ma-
over phone lines. This would include sports
ing to be a very, very busy year," says the
jor overhaul of the Communications Act of
phones or electronic classified advertising,
Massachusetts Democrat.
1934, despite the revolution in technology
10
/ JANUARY 8, 1990
R.
more than 10,000 companies; stock market
updates; a job-search list; film and TV
reviews; a listing of day-care facilities;
senior citizen services; a special section for
French-language speakers; car clubs; infor-
mation on local contractors; and recipes
and wine information.
The terminal, which until December
was the only one of its kind in service by a
JANICE RUBIN FOR INSIGHT
Bell company, is essentially a domestic
version of the successful Minitel videotex
terminal, which has been in use in France
since 1986 and has more than 5 million
users. French phone subscribers can get the
terminals free on request. (Touche Ross, in
Videotex user LeMay says, "I like the horoscope, biorhythms, things like that."
its survey, found that many U.S. executives
felt that the French phone system outper-
that has produced satellites, personal com-
It is limited in that users cannot carry on
formed the U.S. system, which has long
puters, videocassette recorders, digital
telephone conversations while simulta-
been the unofficial international standard
technology, fiber-optic cable, high-defini-
neously sending faxes, but experiments
for quality.)
tion TV, cellular telephones, mass informa-
taking place elsewhere around the country
LeMay, who says she spends $10 to $15
tion storage and answering machines.
promise to remedy this.
a month on SourceLine, uses it primarily
A touchstone telecommunications re-
As of August, the SourceLine system
for games and entertainment, as do most
port published in 1988 by the telecommuni-
boasted 185 services for telephone users,
users. "I like the horoscope section," she
cations and information administration,
among them: new business legislation re-
says, "biorhythms, things like that." An
known as Telecom 2000, reflected this eco-
ports; career counseling services; a direct
avid newspaper reader, she does not bother
nomic energy and declared: "As America
line to the local Better Business Bureau,-
with the system's news service. Recently,
progresses toward the 21st Century, the
where a user may look up the records of
when she needed to consult a physician,
horizon offers vistas of matchless promise,
potential and opportunities. New technol-
ogies, embodied in commercial innovation
driven by the economic engine of competi-
telephone. "What I try to emphasize,"
tive enterprise, can help satisfy our nation's
he says, sounding very much the bu-
critical needs in new ways.
Today is
reaucrat, "is that we have to be
the 'Information Age,' and telecommunica-
flexible. Telecommunications is a
tions comprises its chief transport system."
highly dynamic sector. Today satel-
Bell Atlantic dittoed that optimism in a
lites provide us with much of our te-
crystal ball-gazing booklet, "Delivering the
lephony service. We've got multime-
Promise: A Vision of Tomorrow's Commu-
dia used in a variety of circumstances.
nications Consumer." The company fancied
We're in a period where we're rapidly
the telephone being transmuted into a video
increasing data speed, rapidly devel-
screen that "will be a combination of many
oping audio."
products and technologies: TV; radio; ste-
He is best known for the unusual
reo; video recorder and player; audio tape
notion with a commonplace ring:
recorder; computer; high-speed graphic
"video dial tone," a concept he pro-
printer; facsimile machine."
mulgated as chief of the National
Peggy LeMay, a 34-year-old bookkeep-
RICHARD KOZAK INSIGHT
Telecommunications and Information
er in Houston, is among the first in the
Administration. The idea is that
country to have a working view of the
someday the telephone and the televi-
Information Age as projected by the movie
sion will merge into a single medium.
industry, wished for by the Bell companies
Until now, however, video dial
and promised in the Telecom 2000 report.
tone has been just a buzzword. Sikes,
She has a video terminal similar to a com-
at NTIA, was constrained to merely
puter screen plugged into her telephone, a
The soft-spoken chairman of the
advocate his ideas (although at the
present-day precursor to the Spielbergian
Federal Communications Commis-
very highest levels). At the FCC,
video wallpaper.
sion, Alfred C. Sikes, is a technician
things are different. Sikes makes and
The little gray and black plastic unit
with the heart of a visionary. He notes
enforces the rules. If he can get along
supplied by Southwestern Bell Telephone,
with real pleasure, for instance, that
with Congress, he could have the
a wholly owned subsidiary of Southwestern
when his daughter registered for col-
power to direct the industry toward the
Bell Corp., does not yet carry live full-
lege recently, she was able to do so by
vision of video dial tone.
motion video pictures, but it allows a user
to send and receive data, even facsimiles.
INSIGHT JANUARY 8, 1990
11
INATIONAL GEOGRAPHIC SOCIETY
Jestination:
The Serengeti
PRODIGY.cm
UF SERVICE
Pineapple
Sauce
LOOK
Please type your and [RETURN]
hfdb84a
THE
[LUB:'
Place For Younger
Members
ETURN]
*******
4
6.02.04
Prodigy offers geographic data to young users - and home shopping for adults.
This isn't exactly good news to
tations. "Southwestern Bell is doing better
Southwestern Bell, but the company views
than most gateways because of its termi-
its Houston experience as merely a trial
nals," he says. The phone company gives
run. Company officials seem content with
terminals to users for a trial period of sev-
its 16,500 subscribers (more than eight
eral months before charging monthly fees.
JCPenney
times the size of any similar Bell company
That is when people begin signing off.
service), 70 percent of whom use the ter-
Arlen estimates that 400 customers a
minal provided by Southwestern Bell (oth-
month drop Southwestern's service, al-
ers use their home computers).
though he notes that at the same time it is
What distinguishes SourceLine from
growing at a not unpromising rate of 10
more established videotex services - such
percent a year.
as CompuServe (489,000 subscribers, plus
"The Bell company gateways would do
another 53,000 from its recent purchase of
better," Arlen says, "if they made a commit-
the Source), GEnie (135,654) and Delphi
ment to strong management. They don't
(about 60,000) - is that it is provided by
have the personnel, and they don't promote
Starts won
a Bell company through what is known as
a gateway. Gateways are often aptly com-
1
pared with shopping malls. They provide
I
I
the facilities for a variety of stores, in this
case, information providers. The Aca-
demic American Encyclopedia, for exam-
RECREPENS
RUBRIDNE
she was able to target one near her home
ple, is an information provider frequently
through the service. But, she complains,
found on gateway services such as Source-
"there were only four or five to choose
Line. A stay-at-home shopping service
from."
such as Comp-U-Store is another. The Bell
PREMON
A self-described computer fanatic,
companies do not actually provide the in-
LeMay thinks the system would be more
formation on their gateways; they are pro-
successful if users could get information on
hibited from doing so by the consent de-
the spur of the moment - a doctor, the
cree. To use the analogy, the Bell com-
day's horoscope. This is precisely what
panies may own the mall but not a store in
such services were conceived to do: to
the mall.
speed the user past the ballast of useless
The Directory of On-Line Databases,
information that clutters the workaday
which tracks such information services,
world. But such services are far from living
totes up 75 gateways in service around the
up to their promise. "The system is slow
country. Only seven (counting Nynex
and time-consuming," she says. "If I need
Corp.'s promised Boston gateway) belong
something fast, like where to go, what to
to Bell companies in the United States; they
do, what to see, I look elsewhere."
reach approximately 25,000 households.
In a Yankelovich Clancy Schulman poll,
Bell Canada counts 24,000 households on
1,206 adults were asked whether they
its gateway.
thought a terminal like the one used by
Gary H. Arlen, publisher of the au-
LeMay would be an attractive item to own.
thoritative communications industry news-
TELIC ALCATEL
Sixty-two percent replied no. There is a
letter Interactivity Report, says the Bells'
Luddite lurking in lots of people.
gateway services are not living up to expec-
French Minitel boasts of 5 million users.
12
INSIGHT / JANUARY 8, 1990
communications. Young, smart and
fast-tracked, the Wellesley College
graduate and onetime editor of The
Georgetown Law Journal is the stuff
Dewar's ads are made of, although
she is much too serious for that.
their products." An exception to the tenta-
The former executive director for
tive approach to gateways taken by the Bell
international affairs at the Nynex
companies is Prodigy Services of White
Corp. is concerned that the United
Plains, N.Y., a joint venture between Sears,
States remain an influential competi-
Roebuck and Co. and International Busi-
tor in the global communications mar-
ness Machines Corp. It has widely pro-
ket. Although she finds the word com-
moted its services and spent heavily on a
petitiveness worn, she preaches its
start-up that has been estimated to have cost
importance. A pragmatist, she told
an astronomical $250 million to $600 mil-
the Telecommunications Industry As-
lion. This, in the videotex industry, with
sociation in a speech in November
that "economic miracles must not be
total sales of only $113 million for all of
1988.
achieved through market manipu-
Prodigy is designed for use strictly on
lation, whether that manipulation
home computers, whose market is growing
comes in the form of dumping in the
The administrator of the National
at 20 percent a year. After a $49.95 sign-up
U.S. market or creating trade barriers
Telecommunications and Information
in domestic markets."
fee, which includes computer software and
Administration, Janice Obuchow-
three months of free usage, Prodigy
A middle-of-the-road Republican,
sky, serves as assistant secretary for
charges a monthly fee of $9.95.
Obuchowsky is still groping for her
communications and information at
Since its start-up in September 1988,
public sector style. Already she gives
the Commerce Department. Her ad-
Prodigy claims to have reached 160,000
signs of being a percentage player,
ministration allocates radio spectrum
one who fits well in the Bush admin-
households with more than 250,000 mem-
to the government and manages the
istration. She is long on the bromides
bers (having grown 60 percent during the
Institute for Telecommunications Sci-
of bureaucracy: "Our educational sys-
past three months). The service predicted
ences in Boulder, Colo., and provides
tem has seemingly lost its ability to
early last spring (Insight, May 1) that it
grants for the facilities of public tele-
consistently produce students with a
would be available in 20 markets by year's
vision.
sure grasp of basic knowledge," she
end; it had reached 22 by November. In the
Most important, however, she is
said in the same speech -hardly a
process, it has helped rescue the wheezing
the president's chief adviser on tele-
controversial view.
telebanking industry, signing on 13 finan-
cial services after institutions such as
Chemical Banking Corp. threw in the towel
on their own products.
Bell companies have simply sidestepped
SourceLine-style terminal, users could re-
Altogether, Prodigy offers a substantial
the business.
quest a list of only those plumbers who
list of 750 editorial features and 250 shop-
Ameritech, the Great Lakes regional
work in their neighborhood and are avail-
ping information opportunities (compared
Bell, shows little interest in the gateway
able for service 24 hours a day.
with 185 on SourceLine). The Wall Street
concept and says it prefers to take a wait-
With the addition of an up-to-date clas-
Journal's summer centennial issue named
and-see approach. Pacific Telesis, the West
sified advertising section, an electronic yel-
the Sears-IBM venture one of 66 com-
Coast regional, simply dumped its gateway
low pages would pose a real threat to news-
panies "for the future."
plans in October, complaining that court
papers ($12.5 billion, or 38 percent, of
"Where Prodigy may be running into
rulings were keeping it and its sister com-
advertising revenue comes from classi-
problems is with its advertisers," says Ar-
panies from providing the sort of smart,
fieds), because users would not have to
len. The service depends on advertisements
interactive product it thinks the public
scan narrow columns of agate type, circling
to make a profit, as well as to subsidize the
wants.
the items that interest them. They could
monthly user fee, which must be kept low
make requests and the system would re-
to make the service available to more users
t's all Kabuki," says Arlen, who
spond. When looking for a used car, for
and thus more attractive to the advertisers.
I
believes that the Bell companies
example, a user could request a listing of
"They're getting more advertisers," main-
are using theatrics to make a
all 1987 Oldsmobiles that have low mile-
tains Arlen, "but it took them a long time
point: namely, that given the
age, air-conditioning and a price below
to crawl through the 200-advertiser level."
right to sell information services,
$8,000.
He thinks advertising has once again pla-
to own the stores as well as the
The phone companies say the electronic
teaued. "The issue is how much business
mall, they could bring the mar-
use of directories would provide them with
the advertisers are doing. No one can prove
ketplace to life. Fundamental to the mall
the capital instrument necessary to install
that they're jumping for joy."
concept, say the Bell companies, is the
and subsidize the cost of terminals in every
Arlen's tempered optimism for gateway-
need for an "anchor" - a Macy's, Nord-
home. They cite the example of Minitel,
videotex stems from the product's discour-
strom or Neiman Marcus: one service that
which underwrites free distribution of its
aging history of flameouts. The Source, for
will attract customers to all the others.
terminals by substituting them for its print-
instance, one of the first and most success-
In Bell operating company parlance,
ed yellow and white pages. Although Mini-
ful information services offered to the
that means yellow pages. More specifi-
tel says it will begin charging (about $1.75
home computer audience, sputtered out in
TELIC ALCATEL
cally, electronic yellow pages, which allow
per month) for an upgraded generation of
the mid-1980s, losing 37 percent of its
for searches not only according to business
terminals now being installed, the advertis-
subscribers, and got swallowed by Compu-
- a plumber or electrician but by loca-
ing on the directory service has proved
Serve last June. So tough has the service
tion and special services. For example, by
profitable.
been to sell to the public that two regional
using an electronic yellow pages on a
While Minitel is structured like a Bell
INSIGHT JANUARY 8, 1990
13
RICHARD INSIGHT
company gateway (it provides the mall but
School. "That's not what they do. They
that has yearly operating revenues of $12.7
does not open competing shops, at least for
would be good at purchasing content, not
billion, as does Nynex, an entrepreneurial
the most part), it does own its profitable
producing it. They would do well as distrib-
start-up firm could easily be outmatched in
white pages and is part owner in the private
utors."
a long, drawn-out legal battle.
company that produces its yellow pages. To
Even so, they are limited on distribution
"The Bell companies would have every
that extent, at least, Minitel owns the mall
because of the monopoly they have on the
incentive to disadvantage their competi-
and one or two of the stores.
local telephone network. In essence, their
tion," says U.S. District Judge Harold H.
"This is why these restrictions on the
situation potentially allows them crippling
Greene, who, for the past six years, has
Baby Bells make no sense," says Pearce,
control over the competition. As a matter
administered the consent decree. "Two or
now with Bellcore, or Bell Communica-
of practice, for example, the Bell com-
three years ago, when the issue of loosen-
tions Research (AT&T's portion of what
panies automatically keep records of all
ing restrictions on information services was
had been Bell Laboratories before the
calls within their network - where they
first before me, the regional companies
breakup). "Those are purely artificial re-
begin and where they end. If, as in an
said, 'If you will just let us into the trans-
strictions that don't apply anywhere else in
example offered by the newspaper publish-
mission of information, we will bring about
the world. It is ironic that British Telecom
ers, a competitor offered its own informa-
new markets.' They said they weren't after
can offer information services in the U.S.,
tion service through a Bell gateway, the
information services. They told me that
but Nynex [the New England and New
Bell company could potentially determine
they could do everything they wanted if
York regional Bell] cannot, and British
who is calling the competing service, at
they were simply allowed into the transmis-
Telecom can use Nynex's facilities to do it."
what hours and from what parts of the
sion business. So I let them in. Now they
A curb on AT&T's entering information
phone company's calling area. The Bells
say, 'If only we had information services,
services was lifted last August. The com-
would thus have all the information they
we could do magnificent things.'
pany, too, had been restricted by the con-
need about their competition to begin
sent decree, but for only seven years. Early
poaching its customers.
reene, 66, says that as
speculation was that AT&T might enter the
This is, of course, a doomsday scenario
long as the issue is in his
market by forming partnerships or purchas-
that would not likely escape regulators at
hands - that means un-
ing an information provider like Dow Jones
the FCC, but it is also true that because the
til he seeks senior status
News Retrieval or Mead Data Central. To
Bell companies control the telephone net-
G
(semiretirement for fed-
date, it has done neither.
work, they could offer comparable services
eral judges) four or five
"There's no reason to assume that
at comparable times on better terms. Or
years from now or until
AT&T or the Bell companies will be suc-
they could see to it that their calls got
Congress takes the matter into its own
cessful if they enter information services,"
priority treatment over their competition
hands - he will not allow the phone com-
says Gerald R. Faulhaber, an associate pro-
through quicker and better connections.
panies to originate information. This, he
fessor of public policy and management at
Complaints to regulators would not likely
believes, will expedite competition with the
the University of Pennsylvania's Wharton
yield quick remedies. With a Bell company
monopolistic Bell operating companies.
14
JANUARY 8, 1990
"It is inappropriate for a federal court judge to be
making public policy in this critical area of
telecommunications," says Rep. Edward J. Markey.
"The only reason I would change my
want, simply by punching in a code on the
opinion about lifting the restrictions would
subsidize their costs to local customers as
remote control.
be if the Bell companies got enough com-
we do," says Markey. The Bell companies
With the ability to transmit full-motion
petition to end their monopoly over the
are bound to assure universal service, while
TV pictures over telephone lines a techno-
local exchanges," he says. The overwhelm-
independent boutique operations may cus-
logical breath away, an advanced switching
ing majority of calls, about 80 percent of
tom-tailor products strictly for the lucrative
device recently announced by GTE prom-
high-end business market.
the 1.7 billion local or long-distance calls
ises to allow video stores to be networked
made daily in the United States, originate,
"The major benefits from the new tech-
together. That means the stores could
nologies aren't directed at the home mar-
terminate or both with a Bell company.
transmit their films over the phone lines so
ket," notes Robert W. Crandall of the
It is the consent decree that keeps the
that any number of couch potatoes might
competition going, the judge contends.
Brookings Institution. "They're aimed at
call up any film they wished, even if 10 or
There are, however, indications at the mar-
businesses. In the U.S. today, nearly two-
more decided to watch "Back to the Fu-
thirds of all telecommunications is business
gins of competition that the Bell companies
ture" at the same moment.
oriented."
are beginning to feel pressured. Large cor-
David Markey, a top lobbyist for Bell-
porations, for example, are developing
For the residential consumer, competi-
South, the regional company that set up the
their own private networks. Rockwell In-
tion has produced lower prices for long-
nation's first Bell gateway in 1988, in At-
ternational, for one, can ring its offices the
distance calls, down nearly 40 percent
lanta, says competition from the indepen-
world over, without the local exchange ser-
since the consent decree. But by way of
dent companies is brisk. "In New York," he
innovations, apart from audio and videotex
vices of a Bell company.
says, "if an independent company got the
gateways, the phone companies have of-
About 1,400 independent telephone
right 100 buildings wired together, they'd
fered little, just the proverbial bells and
companies have sprung up since 1984.
have one helluva business."
However, most of the business is dominated
whistles, costing on average $2.20 for each
The point is that it is not necessary to
clang or tweet. Some of the latest such
by a handful of firms, five of which control
wire an entire nation together to take a
offerings: repeat call ($2 a month) auto-
about 95 percent of the independent net-
sizable financial bite out of the market.
matically redials a busy phone; return call
work. GTE is the largest, operating 9 per-
"The independent companies don't have to
($4) remembers the last incoming call and
cent of the nation's network.
In many cases, the "independents" have
proved to be more adventurous innovators
than their Bell counterparts. In part, this is
because of the restrictions imposed on the
Baby Bells. In fact, the Bell system has
traditionally been slow on the uptake, re-
luctant to introduce new services. In the
Talking Telecom
years before the breakup, AT&T was con-
tinually issuing warnings that such now-
Talking telecom is like talking
POP: Point of Presence. The phys-
commonplace items as the answering ma-
Prussian. It's not really a different lan-
ical connection at which the local tele-
chine would somehow play havoc with the
guage, but you have to be in the caste
phone company joins the long-dis-
phone network.
to know what it means.
tance carrier.
To that extent. being the only show in
Here is a current lexicon of
town has often worked to the Bell com-
telecom talk:
POTS: Plain Old Telephone Service.
panies' competitive disadvantage. They
Opposite of CLASS.
have not been forced to keep pace with
Busy Hour: Usually comes right
change. "The mentality of the Bell compa-
before happy hour. Prime time for the
Roaming Agreement: The
nies," says Arlen, "is to put the equipment
phone company. Any 60-minute pe-
in place and depreciate it. In 19761 wanted
terms struck by cellular phone com-
riod during the day when telecom-
panies among themselves to carry
call waiting for my home. They told me that
munication volume reaches maxi-
each other's calls.
it wouldn't be available in my area until
mum.
1988, in 12 years. Sure enough, in 1988, I
Twisted Pairs: Not a rock group.
got the form that told me call waiting was
CLASS: Custom Local Area Signal-
Not people to avoid. The oldest and
available. That was because in 1963 they
ing Service. The switch that allows for
still most common form of telephone
put in a switch in my neighborhood that had
call forwarding, caller ID. In this
wiring.
a 25-year depreciation span."
case, something you can buy.
Even today, the most advanced experi-
X.25: CCITT standard governing
ments with the phone system are being
ESP: Enhanced Service Provider. A
the interface between data terminals
spurred by the independents. In Cerritos,
business that sells CLASS.
Calif., about 10 miles southeast of Los
and data circuit termination equip-
ment for terminals operating the
Angeles, GTE is testing two futuristic
Group Access Bridge: Allows
packet mode on packet-switched data
transmission systems, one of which prom-
participants in a conference call to
network. At least that's what "A Quick
ises to offer viewers (only five at first) a
come and go as they please. Or as the
Guide to the New Telecom Lingo"
pay-per-view video jukebox. In theory, the
boss allows.
says.
jukebox allows household couch potatoes
to call up any film they wish, anytime they
INSIGHT JANUARY 8, 1990
15
hearings on related matters in 1989. "It is
inappropriate," says the congressman, "for
a federal court judge to be making public
policy in perpetuity in this critical area of
telecommunications.
The statement brings Markey in line
with his committee chairman, Michigan
RICHARD KOZAK INSIGHT
Democrat John D. Dingell, as well as Texas
Democrat Jack Brooks, the new chairman
of the Judiciary Committee and its Eco-
nomic and Commercial Law Subcommit-
tee. Brooks, who is still something of an
Arlen says the Bell company gateways are not meeting expectations.
unknown on the issues, could prove to be
a spoiler. He held hearings on the antitrust
redials a missed call; caller ID ($6.50)
Antitrust Division, worked on the govern-
issue before the subcommittee in August.
sho: the phone number of the caller.
ment's case. "The question isn't really
There, he expressed misgivings about the
Chesapeake & Potomac Telephone Co.
whether discrimination is possible," she
opening of information services to the Bell
in Washington, a Bell Atlantic company,
says. "It is whether the extent of the risk
companies. Nothing will emerge from the
offers all three for $11.18 a month, or
that anticompetitive conduct will actually
House without Judiciary Committee ap-
$134.16 a year. Nine other services, such
occur will cause an adverse effect on com-
proval. Brooks was ill for much of the fall
as speed calling, call forwarding and call
petition. We assessed that and the various
and unavailable for comment.
block. are also available. Phone companies
regulatory safeguards, and concluded that
In 1988 the House failed to consider a
believe that if subscribers unflinchingly pay
while there is possibility for discrimination,
communications bill, known as Swift-
$24 to $40 a month for cable TV plus
it would not impede competition."
Tauke (for sponsors Thomas J. Tauke, an
premium channels, then telephone users
No matter what the appellate court de-
Iowa Republican, and Al Swift, a Washing-
might be fair game for the extra charges of
cides, pressure on Congress is creating po-
their enhanced services.
litical realignments and the potential for
agreement, if not yet legislation.
ow much more it will
The Senate Commerce Committee's
H
cost for features like
Cohen sees little hope for a bill in 1990 that
video wallpaper is
will free the Bell companies from the con-
anybody's guess. For
sent decree. "If the Congress thought the
now, the battle is over
court was out of line, you would have seen
who gets the right to
legislation by now," he says.
offer the service. The
More to the point, Cohen cites as miss-
big contenders are the Bell companies, the
ing any sort of ground swell of public opin-
cable television companies, the indepen-
ion that might move Congress to legislate.
dents or some upstart entrepreneur.
He quotes former House Speaker Thomas
The first inkling of an answer may come
P. O'Neill Jr.: "All politics is local."
from the District of Columbia Circuit. The
"The thing that really matters," Cohen
court is hearing an appeal on Greene's rul-
adds, "is whether my bosses' constituents
ing that the Bell companies should not be
are complaining. You only hear from them
allowed into information services. Richard
on pocketbook issues. That's why there's
Levine. who helped draft the consent de-
so much talk now about reregulating cable
cree and now is associate national director
television. What the public cares about is
for telecommunications regulatory services
cost and quality.
at Touche Ross, thinks an answer might
Before Congress recessed in December,
come in six to nine months.
Cohen's boss, Sen. Ernest F. Hollings, a
A quick ruling hinges on whether the
South Carolina Democrat, introduced leg-
court sees the Bell companies as having the
islation to allow the Bells into manufactur-
same First Amendment rights to distribute
ing, citing a need to jump start U.S. com-
information as newspaper publishers. Says
petitiveness.
Levine, "There's a 60 percent or better
"Politicians are problem solvers," Co-
chance that something will come out of the
hen continues. "They get credit for that.
appeal that will increase the Bell com-
Russell Long said, 'Don't ask me to come
panies' ability to provide information ser-
in and deal with something speculative,
vices."
something the public doesn't see as a prob-
The Justice Department, which negoti-
lem. There's no credit in it, and if I screw
ated the consent decree, is wading into the
up I get the blame.'
appeal on the side of the Bell companies.
Cohen says the Senate is waiting for the
Nancy Garrison, assistant chief of the com-
House to take the lead. All eyes are on
Laying cable in Cerritos, where GTE is
munications and finance section of the
Markey's subcommittee, which held seven
testing its video jukebox system
16
8, 1990
strictions on manufacturing and infor-
mation services established during the
breakup of AT&T. The trade press,
perhaps overly optimistic, is expect-
ing a "Free the BOCs" bill for the Bell
operating companies from him before
January is out.
ton Democrat), which aimed to free the
Questioned directly about such a
Bell companies from business restrictions.
bill, the Massachusetts Democrat ap-
Swift-Tauke Part 2, the bill's sequel, failed
again to attract support in 1989.
pears to go grabbing for his prepared
talking points.
Gary Arlen reports that Markey will
The question I have," he begins,
introduce a bill of his own in early January
is, what should the structure and reg-
to allow the Bell companies into informa-
ulation of the telecommunications in-
tion services. "One goal of Markey's bill
dustry be in order that there will be
will be to limit the scope of Judiciary Com-
long-term benefits to the consumers
mittee involvement," Arlen wrote in the
through the promotion of competi-
December Interactivity Report.
tion?"
"The question that I have made the
To answer that question, Markey
centerpiece of our discussion this year,"
must first produce the legislation nec-
says Rep. Markey, "has been which pow-
The Bush administration is waiting
essary to get the matter away from the
ers, and in what time frame and in what
for Congress to make the first move
courts. He has been discussing that for
regulatory framework, we could create leg-
on telecommunications policy. In
nearly a year. Ultimately he will have
islation that would provide the maximum
Congress, the Senate is waiting on the
to contend with Alfred C. Sikes and
benefit to consumers through the promo-
House, where the Judiciary Commit-
the FCC, because it is they who will
tion of competition." What he means is
tee is keeping a close eye on the Tele-
have to guarantee those "long-term
open to debate, but aides in Congress say
communications and Finance Sub-
benefits" to consumers.
he wants to free the Bell companies while
committee. There, all eyes are on the
Markey sees himself helping to
finding a regulatory framework that will
subcommittee chairman, Edward J.
shape this large and critical industry.
also protect competition.
Markey.
To do so, however, he will have to
Markey's cake-and-eat-it commitment
He is giving clear signals that he
begin making some difficult deci-
may be politic, but it is not out of the realm
thinks he might be able to find a way
sions. Those will probably have to
of the possible, particularly because of
to free the Bell companies from re-
wait until after the 1990 election.
changes in the FCC. During the Reagan
years, Congress criticized the commission
for playing fast and loose with deregu-
lation. Two former chairmen, Mark Fowler
try with such substantial revenues - and
is no policy for now," she says. "We're
and Dennis Patrick after him, challenged
growing profits - the level (and extent) of
trying to keep our powder dry until the issue
the Hill on such issues as the fairness doc-
innovation seems remarkably small."
resurfaces as a legislative proposal."
trine, which was favored by Congress and
Narrowing his sights on the Bell com-
She seems to be champing at the bit,
opposed by the FCC. The commission said
panies, he made clear that instead of put-
however, convinced that competition can be
it cheated broadcasters of their First
ting their money into innovation, they were
protected through regulation. "The reality,"
Amendment rights. The doctrine required
using it to carve up established markets.
she says, "is that the regulatory process has
equal time over the airwaves for contrasting
"Many of the Bell companies in recent
been revolutionized since divestiture, and
political views.
years have spent huge sums purchasing cel-
there is a smart, seasoned, centrist team at
The new commission chairman, Sikes,
lular mobile telephone properties, amounts
the FCC that can carry out those rules.
is better liked on the Hill. "I have had a
that dwarf their expenditures on network
"There's also competition," she adds,
working relationship with Al Sikes for most
innovations and experiments."
"and while it's not strong enough to dis-
of the 1980s," says Markey of the former
Asked if he thought allowing the Baby
cipline the Bell companies in the market-
administrator of the National Telecom-
Bells into information services would
place, it's not a bunch of naive babes in the
munications and Information Administra-
change that, he demurs. "I've seen them
woods, either. Most of them are capable of
tion. "He has a pragmatic approach to tele-
become more competitive, in part because
policing the Baby Bells and reporting a
communications policy which makes legis-
of domestic competition. I think more
grievance that slips through the regulators'
lation possible."
competition will force them to be more
net."
Sikes, who favors allowing the Bell
entrepreneurial."
The choice of who gets to sell the con-
companies into information services and
Missing in action on the issues is the
sumer video wallpaper hinges on whether
manufacturing, expresses confidence that
Bush administration. The National Tele-
allowing the Bell companies entry into in-
regulation can replace the consent decree
communications and Information Admin-
formation services will stimulate competi-
while still protecting competition. "We
istration, the president's policy adviser, is
tion or stifle it. There is agreement that the
have to make certain that information en-
busy with new studies but still awaiting a
process will be one of inclusion rather than
trepreneurs will be able to take advantage
signal from the Economic Policy Council
exclusion. But there is no mandate as yet
of the public network, because they're the
on the administration position. "Histori-
to set opinions herding around one particu-
ones who are going to keep the Bell operat-
cally," says Administrator Obuchowsky,
lar point of view, and the challenge of doing
ing companies alert."
"we have been opposed to the restrictions
so is at least as great as trying to get hippos
Sikes has sharply pointed up the tele-
on information services. With the advent of
to perform ballet. "Back to the Future Part
phone industry's shortcomings. In an Octo-
the Bush administration, we decided to step
II" may have successfully portrayed the
ber speech to the United States Telephone
back and take a fresh look at where we're
telephone of tomorrow, but the next few
Association, a powerful lobby supporting
going." She admits that the administration
months will explain how we get there.
the Bell companies, he said, "For an indus-
is waiting for others to take the lead. "There
Jeff Shear
INSIGHT 8, 1990
17
BATTLING
THE TELCOS
In the fiber-optic nightmare of publishers and
broadcasters, Americans will soon be getting their
news from editors at the phone company.
For most of us, the telephone change the role of the telephone
is simply a device for calling Aunt
system, enabling it to deliver,
Sally or driving our new fax ma-
among other things, high-defini-
chine. But the telephone lines tion television signals. Informa-
that enter homes in
tion is a hot commod-
America have far
ity. The potential con-
greater potential to
sumers are as numer-
serve and entertain
ous as telephone
us. Already, using
users, and the stakes
existing copper lines,
are in the billions. The
telephones can deliver
CHUCK O'REAR/WOODFIN CAMP
fight is on.
instant news to video-
How will informa-
display screens and
tion be delivered in
provide a broad array
the future and who
of related information
will control the means
services ranging from access to of delivering it? Because the pre-
the local library to data bases sent telephone network has the
worldwide. But that's only the
potential to be the chief informa-
RAY DRIVER
beginning.
tion carrier, access to the single
In the not-so-distant future,
wire attached to the telephone is
fiber optics will dramatically the prize. The blistering fight for
BY JEROME AUMENTE
May 1990
21
control pits the newspaper publishing.
ple who invent this technology think
such things as traffic reports to cellular
broadcasting and cable television indus-
that anybody can run around being a
car phones or wire service news sum-
tries against the seven Regional Bell
journalist. But it's a profession, and
maries, he says. "We don't want to be
Operating Companies (known as
either they are going to have to get into
the only information provider. In fact,
RBOCs or telcos), which control 80 per-
the journalism business and hire jour-
we don't even want to provide the ma-
cent of all local phone service in the
nalists or they are going to have to
jority of it. We just want to be one
United States.
work with the people who are journal-
among many."
What the seven telcos want is noth-
ists already.
Gunter says arguments that the
ing less than permission to produce and
"The public is very smart. They
Bell companies will stifle diversity is a
sell news and information in voice,
don't want someone whom AT&T hired
"hollow" one and that news media oppo-
video and text formats over their own
writing about Bush's speech last night.
nents are motivated more by business
lines-not just carry other
concerns. As to fears that
people's messages. U.S. Dis-
they control the single wire
trict Court Judge Harold
into the home that someday
Greene, who has presided
might carry the bulk of
over the break-up of AT&T
video, voice and text serv-
for a decade, had barred the
ices, Gunter says existing leg-
RBOCs from getting into
The issue, say the
islative and regulatory safe-
the information business in
Regional Bell
guards will prevent monop-
1987. His rationale: As
oly abuses.
proprietors of a single-line,
Operating Companies,
And, he adds wryly, no-
they would have an unfair
where in the Constitution is
monopoly on the opportu-
nity to sell other services.
is free speech. The
there a clause saying, "You
have the right to free speech
With a $21 million war
chest to help get their mes-
problem, say the
unless you are a telephone
company."
sage across to Congress and
broadcasters and
the public, the RBOCs have
mounted a vigorous legis-
lative campaign in Congress
publishers, is control
and in the courts to elimi-
of information.
Fiber Optics
nate those restrictions. On
April 3 a three-judge panel
Are Coming
at the U.S. Court of Appeals
One thing is certain:
in Washington handed the
The inevitable replacement
RBOCs a crucial victory,
of copper telephone wires by
overturning a key portion of
fiber optics-the communica-
Greene's '87 ruling. The
tions equivalent of replacing
court sent the case back to
a small stream with Niagara
Greene, directing him to use
Falls. Quantity is the ob-
different criteria in deter-
vious advantage of fiber op-
mining whether to lift the
tics over the copper wires
restrictions on information
used for POTS (Plain Old
services.
Telephone Service). Instead
The issue, say the
of one wire, laser impulses
RBOCs, is free speech. The
are transmitted through—
problem, say the broadcast-
potentially-thousands of
ers and publishers, is con-
thin glass strands, each a
trol of information. But no-
channel for voice, data, text
body is denying that the
and video services.
communications landscape
How the contest be-
will change dramatically if
tween the telcos and the tra-
the phone companies can
ditional information indus-
bring television and radio
tries is resolved could very
programs, text information,
well determine how quickly
online services, and voice services, in-
They want a journalist who knows how
the United States will move toward
cluding audiotex and voice mail, to indi-
to ask the questions that need to be
creation of a nationwide fiber-optic net-
vidual consumers. If the telcos were
asked. Can AT&T really get into the
work to replace the copper wires.
also the owners and producers of that
journalism business? It is not their area
"Fiber is going to come," says John
information, the change would have an
of expertise. It is just like me wanting
D. Abel, executive vice president of
even greater impact-possibly changing
to go around and run a phone com-
operations at the National Association
the nature of the information received.
pany."
of Broadcasters (NAB). "There are a lot
And that the broadcasters and pub-
Vowing a fight all the way to the
of reasons why it should come, and it's
lishers find unacceptable.
U.S. Supreme Court, BellSouth Vice
NAB's view that it is good for America.
"I think it's silly," says Nancy
President John R. Gunter says, "We are
It is a very powerful thing to have such
Woodhull, president of Gannett News
not a news-gathering agency and don't
unlimited broad-band capability. It is
Service. "The credibility of the informa-
intend to become one." But the company
like building the new interstate trans-
tion is extremely important. Some peo-
would like the opportunity to provide
portation system for America-only this
22
WASHINGTON JOURNALISM REVIEW
is a communication system."
revenues from basic service are strictly
With five billion phones worldwide,
limited to providing that service and
he says, the day will come when a user
are not allowed to be used to seed other
can dial up "every product of human
money-making ventures.
endeavor, all books that have ever been
W. Terry Maguire, senior vice pres-
produced, all journal articles and maga-
ident of the American Newspaper Pub-
zines, all newspapers, all television pro-
lishers Association (ANPA), helped
grams, all movies, photographs of fa-
guide the tactical moves in the long
mous art works-anything that you can
fight with the telephone industry. He
put in a digital storage device. We can
says ANPA steadfastly opposes the
give you a menu at home that you can
RBOCs getting into the information busi-
access that includes all television sta-
ness in their own service areas: "It is
tions, all radio stations."
fairly simple-the fact that there is
Making that happen will require
only one telephone line in town. There
construction of a local fiber network
are no other alternatives, including
with an optical switch to let electrical
cable, capable of doing what a telephone
WASHINGTON
and optical signals interact, as well as
can do to move information. It is the
WEEK
sufficient storage capacity to handle
only medium in town, and our concern
content. Most experts predict the hur-
is that if the phone company owns or
IN REVIEW:
dles can be overcome.
controls some information, it is going to
have the incentive to favor the informa-
Exploring
tion in which it has an ownership inter-
est to the detriment of information
the issues
Monster
where it does not have control or finan-
cial interest."
that shape
Monopolies?
our times
Abel insists the Bells must keep
out of the information-ownership busi-
In The Courts
Each week, noted jour-
ness "to prevent a monster being cre-
nalists analyze the
ated like the cable industry, which has
Last summer Judge Greene allowed
events that affect our
ownership of the distribution facilities
a seven-year ban to elapse on AT&T's
lives on "Washington
and ownership of the content for
ability to enter into electronic publish-
multichannel capability."
ing. His reasoning: There was sufficient
Week in Review," public
With a virtual monopoly in most
competition in the long-distance area-
television's longest-
areas, cables have enormous powers-
a move ANPA supported. Now, with the
running public affairs
including the ability to determine what
Appeals Court ruling, Greene has to
signals are carried and what signals are
reconsider letting the Bell companies
program.
not carried. Disputes such as these can
get into the information business.
Now in its 23rd year,
make for strange bedfellows. Broadcast-
He has already allowed the RBOCs
"Washington Week in
ers, who resent the advantages of the
to initiate videotex and gateways (in-
Review" provides a prob-
cable industry, want to see it re-
formation-service clearinghouse lines) to
regulated-made to carry its broadcast-
be used by other information providers
ing in-depth look at what
ing signals and ordered to pay for over-
to do billing, handle voice mail, mes-
is happening in the
air broadcast programs it now provides
sage storage and forwarding. But all
nation and the world.
to its subscribers. To that end, they
are "content-neutral"-the telcos cannot
have been discussing with the phone
change or enhance the information.
Ford Motor Company,
industry what role a fiber network
Newspapers feel the RBOCs
in its 11th consecutive
would offer as an alternative to cable.
should be kept out of the field of infor-
year, is proudly joined
These discussions give NAB an interest-
mation ownership. They see their posi-
ing bargaining chip and a pressure
tion vis-a-vis the RBOCs as somewhat
by Ford Aerospace in
point in the cable controversy.
unique. Certainly entry of the Bell com-
underwriting this
Still, the NAB adamantly objects
panies into the information field would
informative program.
to any content origination by the Bell
represent competition that would likely
"Washington Week in
companies, and any joint ventures or
erode newspaper readership and adver-
ownership of information originators.
tising revenue. But the ANPA's Ma-
Review" is produced by
NAB also vehemently opposes moves by
guire also feels newspapers have a spe-
WETA in Washington,
the telcos to purchase cable interests
cial function-that of unifying readers
D.C. Consult your local
anywhere, calling them backdoor at-
in an information market already frag-
listings for day and time
tempts to get into the information busi-
mented by special interests. He sees the
ness.
newspaper as an anchor-with the
in your community.
The NAB's Abel reflects concerns,
phone being able to deliver complemen-
shared by publishers and cablecasters,
tary services.
that the telcos would engage in preda-
Newspapers already use phone
tory pricing. NAB fears the telcos would
lines for certain distributive services-
Ford
use telephone revenues to subsidize new
audiotex, videotex and fax-to provide
information services and displace tradi-
on-demand news and information, pro-
tional media operations. At present.
mote full reports in the next day's paper
May 1990
23
and generate new revenues through
companies own the lines and run them.
lumber yard, for example, but provide
voice and online computer services.
"They have a bottleneck monopoly," he
that day's plywood prices-all with a
ANPA's Telecommunications De-
said, "and now they want to get into the
single phone call. Someday, he predicts,
partment reports that more than 20
publishing business on their own. The
there will be video supplements to the
newspapers run interactive audiotex,
RBOCs already control the medium,
voice and paper products.
mostly ad-supported, with readers using
and now they want to control the mes-
Just as video-cassette recorder
touch-tone phones for news and infor-
sage. That is not a level playing field. It
sales took off when movie rentals gener-
mation. Some papers have pay-per-call
is not even just a home-field advantage.
ated buyer interest, the videotex field
ventures to access classified ads. News-
It is like asking their competitors to
needs to be jump-started, Gunter says.
papers are on every RBOC gateway,
play ball in a swamp."
He believes electronic yellow pages
and at least five papers now use fax
Johnson further claimed that many
could be the "anchor tenant in the
delivery of news and informa-
electronic mall" to attract a
tion-called faxpapers.
mass of average household-
The publishers do not
ers to dial-up computer-
oppose the RBOCs going
based services. He points to
into information services out-
the thriving government-
side their service areas,
supported videotex system
where they would not have
Newspapers take the
in France, which has 11,500
a monopoly advantage or ac-
electronic publishing
information providers and
cess to crucial marketing
nearly a million users. The
data on phone use.
revenue potential
French have found the elec-
Several congressional
tronic phone directory,
committees are considering
seriously.
The field
which garners 20 percent of
legislation that would let
all inquiries, the largest sin-
the RBOCs into the elec-
tronic information business.
has an annual growth
gle draw.
There are already
Bell companies do provide
rate of 17.9 percent
nearly 5 million miles of
gateway lines, but the key is
fiber in long-distance and
open access.
David E. Easterly, presi-
and employs 1.2
switching-station connectors
in the United States, and
dent of Cox Newspapers,
told the House Subcommit-
million people.
Gunter says a local phone-
fiber network is inevitable.
tee on Telecommunications
Predictions vary as to when
and Finance that Bell compa-
the cross-over point will
nies publishing on their own
occur when fiber becomes
lines could hurt competitors
more economical to install
by "being slow in handling
than copper wire. Some fore-
service problems; drag their
cast it as early as 1992-
feet in sharing market data,
1995; conservative esti-
and in subtle ways, deploy
mates put it 10 years away.
their own advanced technol-
ogy to favor their own serv-
ices." He said that happened
in Atlanta and West Palm
Cable
Beach where a Cox newspa-
per could not get a special-
access number to start a
Company
voice mailbox service-only
Fears
to find BellSouth later start-
ing its own.
The National Cable Televi-
Newspapers take the
sion Association (NCTA), fac-
electronic publishing reve-
ing major competition from
nue potential seriously. East-
a phone-fiber network, says
erly testified the field has
RBOCs are trying to slip
an annual growth rate of
into the television business
17.9 percent and employs 1.2 million
of the RBOCs "have resisted fully devel-
because they need the revenues it would
people in the information-services indus-
oping the gateways in the hopes of
generate to justify a fiber network.
try. He counted 1.6 million videotex
dismantling Judge Greene's restriction
NCTA claims the conversion would cost
service customers and an expected 45
on them and entering the information
anywhere from $450 billion to $900
percent growth rate. Electronic data-
market with an inherent advantage."
billion.
base services generated $6.2 billion in
BellSouth's Gunter says the indi-
Gunter says the fiber network esti-
1988, had 1.5 million customers and
vidual RBOCs differ as to how much
mates are "wild numbers" incorrectly
forecast a $15 billion annual business
they want to get into information con-
projected by extrapolating prototype lab
by 1992.
tent, but BellSouth has a keen interest
costs. He says normal replacement of
Although electronic information
in it. It wants to protect its lucrative
copper-wire systems and installation in
services are flourishing, Newsday Pub-
directory business, and as it moves
new construction of homes and offices
lisher Robert M. Johnson testified be-
toward electronic delivery, offer audio-
by BellSouth will cover a significant
fore Congress that the Bell operating
tex supplements-not only locate the
part of its fiber installation.
24
WASHINGTON JOURNALISM REVIEW
Paul Rogoski, public relations di-
miles. "Fiber can do it more effectively.
rector for the United States Telephone
It is not affected by weather. It has
Association (USTA), the trade associa-
great security and high quality. Fiber is
tion for most of the nation's local carri-
definitely a superior medium, and
ers, says a local fiber network will cost
switched broadband facilities are the
DAVIS,
about $220 billion and notes the phone
ultimate in what can be done on a
companies spend $21 billion a year now
terrestrial basis," he says.
GRAHAM &
to upgrade lines so that the cost would
In the meantime, small, local
be covered over a 10-year period.
phone companies, not affected by the
STUBBS
But arguments over installation
ban on content control which limits the
costs mask the real concerns of the
larger RBOCs, are experimenting with
cable companies. John Wolfe, spokes-
full fiber-to-the-home services. And
Alice Neff Lucan, Esq.
man for NCTA, says the cable compa-
Bellcore, the research arm of the Bell
is providing newsroom
nies have faced decades of "anticom-
companies, is testing fiber in 12 cities to
petitive conduct" from the telcos, who
deliver television signals from the net-
legal advice in
unsuccessfully fought to keep cable off
works to local television affiliates.
the areas of:
telephone poles. "Since divestiture, our
Everyone is waiting to see what
Forced Disclosure of
concern is with the incredible monopoly
AT&T will do with its newfound free-
Information
and power granted to the local ex-
dom to get into the electronic informa-
change carriers," he says. "The phone
tion business. But like a giant ocean-
Access to Government
companies talk about a one-wire world
liner, it takes time to shift direction.
Records
where there is one wire, their wire,
AT&T is fibered, but it must wait for
going into every home and they also
the local carriers-the bottlenecks-to
Prepublication Counseling
control the content going over that
fiber up and open the full range of
Access to Court Records
wire-and in terms of the diversity-of-
delivery possibilities.
Copyright Protection
voices argument, that is deadly.
While AT&T says officially it has
USTA's Rogoski counters that it is
nothing to report, insiders say the cor-
in the telco's interest to encourage max-
poration is talking with Nintendo. The
1200 19th Street, N.W.
imum use to generate revenues-not
video-game powerhouse may be the open-
Suite 500
stifle it. He said the competing in-
ing wedge into a general home-con-
dustries, consumer groups, the FCC and
sumer market for electronic services.
Washington, D.C. 20036
state regulatory agencies will provide
Sources at Bell Laboratories say they
(202) 822-1033
adequate oversight to prevent abuses.
are conducting various electronic pub-
Meanwhile, the NCTA's Wolfe says
lishing experiments, including one with
the cable industry is active in Congress
the Japanese.
"trying to blow away the smokescreen
In reality, AT&T was so focused on
the phone companies have laid out.
reorganization after divestiture that
[The telcos] are trying to create the
some say it actually used the ban
Give Yourself
impression that unless they are able to
against getting into information serv-
get into TV content, they can't possibly
ices as a breather until it got its new
The WJR
bring America the promise of fiber."
house in order. After a shaky start with
Wolfe says that if the telcos "are
computers, it has hit its mark in net-
Advantage
successful in wiring the entire country
working services. Now its various busi-
for fiber, you wouldn't need broadcast
ness and consumer entities are looking
television anymore." When pressed, he
at a range of enhanced information
It's easy to reference past arti-
also concedes the same would apply to
services to sell via phone links.
cles when you have a complete
cable television. There is no doubt that
What should not be forgotten is
set of WJR issues from months
fiber-delivered television would have a
that in the early 1980s AT&T partici-
and years gone by.
profound impact on viewers. NAB's Abel
pated in a variety of joint ventures with
says the end of the over-air broadcast-
newspapers and broadcasters who were
Just send $2.95 plus $1.50 for
ing would be bad for America because it
trying videotex experiments. Its Ven-
would end free television access. He
ture One activities with CBS and IBM
postage and handling to Back
notes that even today, with 58 percent
actually formed the prototype for Prod-
Issues, WJR, 2233 Wisconsin
of the households subscribing to cable,
igy, a growing national videotex service.
Avenue, N.W., Suite 442,
62 percent of all TV sets are not actu-
Owned by IBM and Sears, Prodigy grew
Washington, D.C. 20007.
ally hooked into cable, which means
out of Venture One research.
only 38 percent get a wired signal. Wire
Now AT&T has the green light
Do it today and give yourself
delivery might have similar limitations.
from the courts and Judge Greene to
the advantage of a complete
If fiber does come, Abel says broad-
harvest its own electronic publishing
collection of WJR issues.
casters could use its higher band capac-
crops. With the recent reversal of
ity for high-definition television, while
Greene's ruling, broadcasters and pub-
still offering conventional TV for over-
lishers worry that the telcos may not be
Washington
air signals. Fiber could also help ease
far behind.
Review
interconnection service problems for tel-
evision networks that feed local affili-
Bulk rates (10 or more copies)
ates. He says it is silly to send a signal
Professor Jerome Aumente is director of
available upon request.
22,300 miles into space and bounce it
the Journalism Resources Institute at
back when it is only going 35 land
Rutgers University in New Jersey.
May 1990
25
Factory of the future
A survey
The
Economist
FACTORY OF THE FUTURE
The challenge
into an idea best expressed as "economy of
variety".
The chart on the next page shows where
The factory is being reinvented from scratch. Traditional
this technological push is leading-into a
production lines are being ripped apart to make room for
magic kingdom where elements of the
mass-production of Henry Ford and the
flexible "make-anything" machinery. Nicholas Valéry com-
craftsmanship of Peter Fabergé co-exist.
ments on the coming battle for competitiveness between
More than anything attempted so far, more
than any amount of retooling, more than all
manufacturers East and West
the brave efforts to solve manufacturing
problems by hurling raw technology at
Imagine, if you will. an engineer sitting at
lines with men crawling all over them-a
them-this finally is what the ephemeral
computer terminal punching in data for the
feature of manufacturing everywhere since
factory of the future is really all about.
design of a new product and sketching
the early days of the carmaking dynasties—
High-tech manufacturing is America's
freely with a lightpen on the screen before
are being ripped apart and replaced with
answer to all the onslaughts on its markets
him. Happy with the design. he presses a
clusters of all-purpose machines huddled in
made this past decade by aggressive com-
button and the details are passed electroni-
cells run by computers and served by
petitors from East Asia. Midwife at the
cally to another computer running software
nimble-fingered robots. The whole shape of
birth of this brand new form of automation
that checks to see whether the design's
the industrial landscape is changing in the
has been the Pentagon, concerned that yet
stresses and strains are within prescribed
process.
more of its contractors might be bruised by
limits. The information then zips along to a
The name of the game in manufacturing
near-bankruptcy as Lockheed and Chrysler
third computer which generates instruc-
has become, not simply quality or low cost,
were, and that tanks tomorrow may have to
tions that command the tools in the work-
but "flexibility"-the quest to give the
be bought from Toyota instead.
shop to machine. assemble and store the
customer his or her own personalised de-
The catch-all title for the set of technol-
engineer's product ready for distribution-
sign, but with the cheapness and availabil-
ogies involved is CIM (computer-integrated
all done automatically, without hassle, de-
ity of mass-produced items. Savile Row at
manufacturing). Popularisers portray CIM
lay or hefty manhandling, and all before the
High Street prices. In short, nothing less
as a plant that pools all its data-whether
morning's coffee break. One more satisfied
than a whole new style of manufacturing is
from manufacturing, marketing, planning,
customer.
in the process of being defined. As firms
personnel and finance departments-so
Welcome to the "factory of the future".
seek to add extra value by customising their
that the factory's machine tools may be
For the first time in three-quarters of a
products. while managing somehow still to
reprogrammed instantly, and as often as
century, the factory is being reinvented
make them at affordable prices, the concept
necessary, in order to make whatever cus-
from scratch. Long, narrow production
of "economy of scale" is being transformed
tomers demand or the business forecasts
THE ECONOMIST MAY 30 1987
4 SURVEY FACTORY OF THE FUTURE
suggest. Want a new left-handed double-
trappings of an industrial crusade, CIM (or
home electronics, appliances, clothing, and
threaded widget in pink plastic? Whiz-
something much like it) is the big stick
so on) there are nowadays at least half a
bang, you've got one. This is how the
America is going to be wielding in the
dozen leading brand names, each with a big
factory of the future is supposed to
coming battle for global competitiveness.
investment in shiny new production equip-
function.
At stake, says the Department of Com-
ment that requires a market share of any-
Actually, a few heroic attempts come
merce in Washington, is nothing less than
thing from 25% to 40% to get its money
pretty close. All told, there are now 30 or so
the future of the country's manufacturing
back. With that kind of overcapacity, the
factories working in the United States that
base, worth $300 billion a year and employ-
manufacturers need markets twice as large
exploit CIM extensively; many of them (like
ing 20m Americans. Determined not to be
as they have just to break even. Such a level
LTV's Vought plant that produces the B-1B
left too far behind are the Europeans, with
of demand is not around-neither at home
bomber) are veiled heavily in secrecy. In
27m people employed in a manufacturing
nor in the now soft-currency markets
Europe, perhaps half that number are in
sector that contributes $240 billion to the
abroad. So ritual seppuku in boardrooms
operation. And in Japan, almost none.
Community's economy. And then there are
across Japan as famous firms go bust or
None? Few Japanese manufacturers have
the Japanese, possessors of the most pro-
withdraw from the business?
as yet anything like enough software savvy
ductive manufacturing industry of all,
Don't you believe it. In image-conscious
to crunch the numbers for a CIM plant. And
where 15m workers generate $350 billion a
Japan, to admit defeat would mean un-
that may be a blessing in disguise. For, as
year. With a wholly different perspective on
speakable loss of corporate face. Besides,
many an American firm has found, the
manufacturing, the Japanese have their
many of Japan's leading manufacturers
factory of the future can be as disaster-
own ideas about how to build a factory of
belong to big diversified groups, so most
prone as anything conjured up by Charlie
the future. Who, then, is the most likely to
can (just about) afford to stay in the game
Chaplin or Fritz Lang. Even so, CIM has
survive in these difficult, promising, chal-
for the time being and meanwhile raise the
become a kind of holy grail. With all the
lenging, modern times?
stakes. This means launching the next
generation of products long before the
factories for making the present ones have
When markets go into
moved out of the red. At the same time,
each competitor is being forced to put up
overdrive
even more money for the next cycle of
investment, in an urgent attempt to capture
the market share needed the next time
Product cycles are shortening dramatically. Car models, once in production
round.
for 12 years or more, are now being replaced every six years. Electronic
Product-life cycles are therefore being
gadgets no longer remain in production for three years, but three months.
shortened, in some cases to months instead
Factories are having to become more responsive, more flexible and capable
of years. Retailers reckon that the average
of making anything
life of an electronic gizmo on the streets of
Tokyo today is indeed no more than three
The personal tape-players made for last
The "me now" generation has arrived with
months.
winter's market were bright pastel shades—
a vengeance in Japan.
easier to spot when dropped on the snowy
But it is not all demand pull. Many
What would
slopes. This spring, customers want them
manufacturers searching for a way out of
waterproofed as well-for use by the pool
the recession marched their troops blindly
Henry think?
or on the beach when the warm weather
into the same market niches. Big Japanese
The need for greater responsiveness to
comes. Back then to the drawing-board so
manufacturers have been arguably among
consumer tastes means becoming more
that yet another new design can be on the
the blindest-and certainly the quickest to
flexible in terms of what you,can make and
shelves in three months' time.
cannabalise their own businesses.
how. That, in turn, means achieving a
In the early 1980s, the product life of
So much so that in Japan's leading
better balance between the cost of building
most manufactured goods was still averag-
manufacturing industries (semiconductors,
new plants on the one hand and the unit
ing around six years. Big-ticket items
cost of the goods produced by them
like cars stayed in production (with
Best of both worlds
on the other.
minor face lifts) far longer-even a
This is age-old dilemma. It has
dozen years or more. Domestic ap-
1,000
bothered every factory planner since
pliances such as refrigerators and
Adam Smith. A pragmatist ever,
washing machines lasted typically
"Magic kingdom
Henry Ford deemed flexibility im-
for five years. Four years separated
100
successive generations of microchips.
Even in consumer electronics, pro-
Transfer line
Productivity
possible (correct at the time) and
plumped instead for the most inflexi-
ble manufacturing process ever de-
duct life-cycles rarely dipped below
vised-which came to be known as
three years.
Volume, '000 units a year (log scale)
10
the transfer line. The production
That has all changed-for which
Dedicated
automation
notions forged in Detroit over the
blame consumers as well as manufac-
Flexibility
past three-quarters of a century have
turers. Since the last recession, many
1.0
been adopted around the world, and
of the young with jobs now have
not just in motor manufacturing.
better-paying jobs; and the wealth
Flexible manufacturing
system
Today, the sound is the same every-
has spread to new markets-in East
0.1
where as production lines rumble
Asia particularly. With it has gone
Manufacturing
cell
along to the clank and roar of dedi-
the voracious consumption habits of
cated tools cranking out a single
young westerners. Rich, cocky and
NN C machine tools)
0-01
model in vast numbers.
acquisitive, teenagers in Tokyo are
10
100
1,000
demanding instant gratification, too.
Vanety, number of products (log scale)
Manufacturers nowadays refer to
this as "hard automation", meaning
THE ECONOMIST MAY 30 1987
FACTORY OF THE FUTURE SURVEY 7
it cannot be reprogrammed but must be
That day is still a long way off. Outside a
ume/high-variety end of the manufacturing
ripped out and scrapped whenever a new
few craft industries, no one (not even
spectrum. At the same time, they are trying
model is to be made. The motor industry is
Toyota) has yet managed to "build to
to turn FMS into a competitor to the transfer
still the biggest fritterer on such dedicated
order"; everyone else "builds for stock". A
line used in high-volume/low-variety fac-
automation. Carmakers get little change
few charmed suppliers (mainly in the food
tories around the world.
out of S300m when rejigging a plant to
business) manufacture for the next day or
Their ultimate ambition, of course, is to
produce a new model. Whatever they may
two's demand. Though their orders may be
develop flexible manufacturing processes
say, they are still hostage to the twin
firm, they are nevertheless forecasts based
that offer the best of both worlds-the
tyrannies of conventional manufacturing:
on statistical guesswork. The impact of
customisation possible with CNC machines.
economies of scale and standardised
"build to order" on carmakers-let alone
but with the unit costs that today can be
products.
on firms producing more personalised
achieved only on dedicated transfer lines.
Not so firms nearer the other end of the
items like clothing, consumer gadgets or
The first major experiment, costing an
manufacturing spectrum-in the batch-
even publications-would shake up such
estimated $130m over the next five years,
production business. Every week, a com-
businesses dramatically.
has been started on ways of manufacturing
pany making, say, roller bearings may need
That, however, would be nothing com-
in this magic kingdom. Predictably it is
to produce hundreds turned to half a dozen
pared with the impact of an innovation that
being carried out by MITI, the industry-
leading machine tool makers are trying to
sponsoring ministry in Japan. It is the
accomplish. They are looking for way of
ultimate expression of a concept of factory
pushing flexible machining systems (FMS)
automation that began with the first crude
more into the domain of the simple but even
attempt 25 years ago to get a machine to do
more adaptable CNC tools at the low-vol-
a job the way a man does.
March of the iron men
The new tools moving on to the factory floor are nimbler, more dextrous, even
talkative-and a good deal cleverer all round
Iron men have been on the march for more
like the subtlety of a human. But their
than a quarter of a century now. Since the
sensors at least let them pick up misplaced
first industrial robot joined the production
parts or make adjustments for inaccuracies
line at General Motors in 1961, American
in the objects they handle. For the first
manufacturers have recruited 20,000 steel-
time, they can start doing rudimentary
collar workers, replacing many times that
inspection jobs.
number of blue-collar equivalents. In Wes-
Another first for the new breed of clever
tern Europe, the robot population has pro-
robots is an ability to tackle manipulative
pagated even more-to an estimated 28,000
tasks that are not supposed to arise on
units today. But where western manufac-
carefully laid-out production lines, but do
turers seem to prefer their robots sprinkled
so in the messy human world where com-
lightly through their workforces (around
ponents come higgledy-piggledy together
different diameters, thousands of a more
six per 10,000 industrial workers), Japanese
before being assembled. Such jobs include
popular size. and just a handful of special
firms have embraced them (36 robots per
peering into, say, a bin of assorted elec-
ones for particular customers. Here the use
10,000 industrial workers). In modern Ja-
tronic bits and picking out the correct
of a flexible machining centre (FMC) or
pan, more than 80,000 industrial robots are
resistor or diode from the jumbled pile,
tools with computerised numerical control
flexing their muscles around the clock.
then inserting its leads into tiny holes in a
(CNC) are a far better choice than any
Building robots has become a $1 billion
printed-circuit board.
dedicated transfer line (TL).
business. Until recently, the biggest cus-
All this technological wizardry has really
There is a snag, of course. The unit costs
tomers for them were the motor manufac-
been conjured up in order to endow robots
of parts produced in a flexible plant are
turers, who have used robots mainly for
with the priceless, most human-like capaci-
substantially higher than those of a produc-
spot-welding and spraying paint. Now the
ty of all: the ability to communicate with
tion line running flat out. Against that, the
electrical and electronics industries, espe-
other members of their tribe. Chattering
investment is far less. More to the point,
cially in Japan, are the biggest buyers. In
among themselves, the robots and machin-
flexible tooling allows additional models to
the process, the way robots are being used is
ery used in a flexible factory can now report
be added to the company's product range at
becoming more complex. Carmakers were
the minutest of details about things like
only marginal cost.
happy to have them wielding tools (such as
deterioration of their cutting edges or back-
Flexibility also confers a curious bonus-
spray guns) and working on parts clamped
lash building up in their bearings. That
one which, if ever exploited to the full,
to an assembly line; electronics firms want
allows the computerised supervisors to
could have a remarkable impact on manu-
robots to be able to pick up fiddly bits (like
make automatic compensations for such
facturing economics. This concerns the way
microchips and circuit boards) and join
errors, thereby keeping the products being
a flexible factory's output can be more
them together. Robots are therefore gra-
manufactured within even tighter toler-
easily tuned to meet demand on a daily,
duating to the far trickier tasks involved in
ances.
weekly or seasonal basis. The implication is
light assembly.
As well as arms and fingers, eyes and
that a highly flexible plant, operated in a
To do so, they need to be a good deal
ears, a tongue to talk with and a rudimenta-
CIM-like manner. would be able to take
smarter than their "senseless" predeces-
ry brain, it would be handy if some
customers' orders direct from a show-
sors. The second-generation robots now
members of the robot brigade were also
room's terminals and use them to drive the
joining production lines are being equipped
endowed with feet-better still, a set of
machine tools-the customer, so to speak,
with such senses as touch and sight. They
wheels. This is what the mobile cousin of
as manufacturer.
cannot, of course, see or feel with anything
the smart robot has been given. The AGV
THE ECONOMIST MAY 30 1987
8 SURVEY FACTORY OF THE FUTURE
Even so, FMS units-costing anything from
Making it with microchips
1990: $38.9bn*
$5m to $20m to install-are the building
World market for industrial automation
10%
blocks out of which the factories of the
future are constructed. And the number of
1985: $11-3bn
39%
4%
them being installed around the world is
Computerised
Automatic testing 12%
manufactures 30%
5%
doubling every two years.
NC machine tools
Designer tools
12%
5%
Having intelligent machines capable of
Material
making anything is one thing. Getting a
transport
6%
picture into their mind's eye of what to
equipment 9%
Programmable
make-and a recipe for how to produce it-
2%
Process
controls 8%
is quite another. To accomplish this, im-
1%
controllers 21%
Robots 5%
provements have to be made in the process
Manufacturing information
by which components are designed. So start
systems 2%
first in the drawing office.
CNC machine tools 1%
28%
Walk into any design shop and if you see
Source: International Data Corporation
dozens of draftsmen at drawing-boards, the
*Industrial forecasts
company has yet to join the CAD/CAM
(automated guided vehicle) is a little un-
one product which is turned out in this way,
generation. Computer-aided design/com-
manned truck that follows a cable buried
the higher the overall cost.
puter-aided manufacturing started life
beneath the gangway to ferry components
In more sophisticated cells, the metal-
more than a decade ago, mainly as an
throughout a plant. The significant point is
cutting is done on a machining centre-a
ambitious first attempt to provide some of
that, without AGVS trundling around the
kind of universal CNC machine capable of
the benefits of CIM. At the heart of a
factory floor, the whole concept of "just-in-
carrying out most workshop tasks (includ-
CAD/CAM work-station is a powerful desk-
time" delivery would never have got out of
ing drilling, milling, boring, tapping and
top computer that can manipulate complex
the storeroom door.
threading) without having to change its
geometrical shapes rather than the simple
grip on the workpiece. The trade-off with
numbers and words handled by the more
Islands of automation
such a flexible machining cell is the loss of a
common personal computers seen around
Using fleets of little robot trucks to fetch
little of CNC's instant adaptability in return
offices today. The designer makes sketches
and carry parts from the warehouse in
for a bit more efficiency in manufacturing.
either on the terminal's screen with a
small batches, even in single units at a time,
The full- power of this approach comes,
"lightpen" or traces out shapes by steering
puts an end to the pallets and binloads of
however, only when AGVS and smart robots
a marker around the screen using a tiny
half-finished widgets littering the factory
are allowed to join in-linking cells organi-
"mouse". The wiggly lines produced man-
floor. Thus, with machine tools fed just-in-
cally into a collection of machine tools
ually are straightened automatically by the
time, components are not allowed to stack
under the supervision of a computer.
computer.
up anywhere around the plant, wasting
This is big boys' stuff: it is what produc-
Inside the work-station's memory are
time and clocking up interest charges while
tion engineers mean when they refer to FMS
details of dozens of standard shapes waiting
nothing is happening to them. With just-in-
(flexible manufacturing systems). As FMS
to be whistled up at the press of a button.
time delivery inside the plant itself (tradi-
equipment clusters into cells around the
Rectangles are drawn simply by specifying
tionally it has been used to schedule deliver-
factory, "islands of automation" arise like
three corners, circles by their centres and
ies from outside suppliers), big savings can
volcanic eruptions from the shopfloor. This
radii; the computer fills in the rest. And
then be made to what manufacturers call
is still a far cry from full-blooded CIM;
laborious chores like altering sizes, perspec-
work-in-progress-half-finished compon-
before it can qualify as such, the "islands"
tives or cross-sectional views are all done in
ents winding their way through the various
have to be linked together into a computer-
a trice by the software.
manufacturing stages. For the company,
ised archipelago of machining centres, all
Graphics equipment like this is not
economies here have a direct effect on the
communicating with one another and with
cheap. Work-stations from firms such as
bottom line; for customers, they mean
computers in other departments of the firm.
Pixar, Silicon Graphics, Dana Computer
much faster deliveries.
Nor is this all. Just-in-time allows engi-
neers to start clustering their flexible ma-
chine tools into compact "cells" where all
the tools needed to make a particular
product lie within easy reach. Once a
component arrives at a manufacturing cell,
157
all the machining operations happen to it
0
on the spot-so no time is wasted moving it
to the next machine tool, adding to its
work-in-progress bill.
At its simplest, a cell may contain just a
single CNC (computerised numerical con-
trol) machine tool. This offers the greatest
flexibility of all, allowing a manufacturer to
make as many differen: types of compon-
ents as he has programs for driving his CNC
machine. Inevitably. though, there is a
catch: CNC machines are not the cheapest
way of making things: and the more of any
THE ECONOMIST MAY 30 1987
10 SURVEY FACTORY OF THE FUTURE
Favourites in the factory stakes
Gross fixed investment, 1984
C
$on
200
400
600
800
1,000
1.200
1,400
1.600
Total OECD
United States
Number of flexible manufacturing systems in use by 1990
Japan
Japan
220
United States
Machines &
Other
West Germany
150
equipment
West Germany
70
France
France
of which:
45
Britain
metal processing
machines
Britain
35
Italy
Italy
30
Source COMAU-Studi
and Stellar, which draw in 3-D and living
ually usher in the factory of the future.
MAP, so too have the big users of machine
colour. cost anything from $50,000 to
The task itself is not difficult; indeed,
tools in other industries. All told, more
$125.000 apiece. Apollo, Sun Microsys-
many communications networks have been
than 1,000 manufacturers have rallied to
tems. Hewlett-Packard and Digital Equip-
installed in factories around the world.
the MAP crusade.
ment sell simpler versions that produce
Their one snag is that, so far, they have
General Motors has a lot riding on MAP.
engineering drawings on monochrome
been proprietary systems that let just indivi-
Over the past eight years, it has spent $40
screens in 2-D for around $20,000. Even a
dual brands of equipment talk among them-
billion on new manufacturing equipment
modest design office might need a couple of
selves. Manufacturers want to be able to
and factories in an effort to turn itself into
dozen work-stations, setting the firm back
hook all their machines together, irrespec-
the cheapest carmaker in America. But the
$500.000 or more.
tive of who supplied them, into a single
company has gobbled up so much new
Fortunately, graphics technology is
gossiping network. And they want to be
technology in a hurry that it has left itself
changing fast. In March, Apple Computer
able to wire up their factories just like
suffering from indigestion. Its factories are
announced a beefed-up version of its little
telephone companies wire up office
stuffed with some 200,000 programmable
Macintosh home computer which. for
blocks-with standardised cables, sockets
tools waiting to be hooked up to a commu-
$7.000. will now perform many of the
and switchboards, installed if necessary by
nications network. In desperation, GM
CAD/CAM design jobs currently done on
bought Electronic Data Systems (EDS), pay-
work-stations costing three times as much.
ing $2.6 billion for the Texas firm and later
So can one of IBM'S latest personal comput-
stumping up a further $740m to buy out
ers. Not surprisingly, Sun has recently
EDS's critical founder, Mr Ross Perot. and
slashed the price of the most popular work-
his associates.
station. Any number of powerful little
General Motors knows that time is run-
engineering work-stations will soon be
ning out; that without MAP many of the
available at affordable prices.
benefits of factory automation will be
If all CAD/CAM had ever done was to
6
squandered. All its clever high-tech tools
telescope design tasks that took weeks or
will remain deaf and dumb-capable of
months with pencil and T-square down to
doing an honest day's work, but unable to
8
just several days in front of a computer
use their time intelligently. A year ago, GM
terminal. it would have earned its keep. But
started wiring up its first factory, a truck-
CAD/CAM does much more. The software
assembly plant in Pontiac, Michigan, con-
used can turn the geometrical data about
taining 21 types of machines from 13
the widget's shape and function into com-
different suppliers. Since then, it has con-
puterised instructions for driving the ma-
a host of different suppliers, but all con-
nected up machines in several more fac-
chine tools that will make it. So designs
forming to one international convention.
tories to its computers, and has set a
whipped up by the firm's engineers to meet,
Noble aims, but tricky.
deadline of 1990 for having all its new
say. a customer's order or a modification to
Tired of waiting for the International
flexible manufacturing plants communicat-
an existing product can be down in the
Standards Organisation to come up with a
ing via MAP to the corporate-planning and
workshop being made within days instead
common lingo, the world's biggest user of
marketing departments.
of the weeks or months it took when
computerised machine tools, General Mo-
To help it achieve this, GM has forged a
everything had to be drawn,by hand.
tors of Detroit, has imposed its own "manu-
strategic alliance with Boeing. While keep-
facturing automation protocol" (known
ing tabs on the 30,000 nuts, bolts, bits and
Common lingo
simply as MAP) on the rest of the industry.
pieces that go into a modern motor car is
One thing is missing: a means for communi-
All MAP is is a set of rules that govern how,
difficult enough, the problems involved in
cating instructions to the machines on the
in an ideal world, machines of any make
tracking the 3.5m individual parts used in
factory floor from, say, the design office
should communicate with one another.
building an airliner are horrendous. Like
and scheduling department. Equally impor-
Nevertheless. such rules, backed by GM's
GM in the motor industry. Boeing has been
tant. the "islands of automation" need to be
clout in the marketplace. have brought a
forced within the aircraft industry to take
able to communicate with one another if
margin of sanity to the business. Not only
the initiative, too.
the flexible machining centres are to be
have firms making industrial communica-
But unlike a carmaker that cranks out
allowed to graduate into CIM and so event-
tions and computers begun to embrace
vehicles at a rate of one or more a minute.
THE ECONOMIST MAY 30 1987
12 SURVEY FACTORY OF THE FUTURE
building big civil jets involves almost as
reason. Boeing calls its communications
rough list of orders, materials and time slots
much painstaking inspection as construc-
standard TOP (technical and office
on various machines. The manufacturer
tion. with a production rate that rarely
protocol).
then spends most of his week on the
exceeds half a dozen aircraft a month. Not
Because of their different approaches,
telephone tracking down supplies, while
surprisingly, where GM's approach is to get
MAP and TOP turn out to be complementary
trying to keep his machines running and
its "islands of automation" to talk to one
rather than competitive. Engineers from
new orders flowing in. It is the way that
another. Boeing's is to build bridges
the two firms have spent the past three
"job shops"} have functioned everywhere
between the "islands of information" that
years pooling efforts to make the two
for ages. But job shops live on more vigor-
spring up wherever computers are used to
protocols compatible. They are now five-
ously in Japan than anywhere in America
automate the flow of documents. For that
sevenths of the way there.
or Europe (save perhaps Italy). And inside
every Matsushita or Toshiba, despite their
Where the slow lane is quicker
modern flexible factories, reigns a long and
honoured tradition of jobbing. too.
Unlike their counterparts in America or
Japan is lagging behind in building factories of the future, but it is streets
Europe, most firms in Japan are not bound
ahead in using the flexible machine tools that will one day go into them
by fixed ideas about the rules of mass
production. Without the strong "Ford-
Japan may have few. if any, factories of the
ism" traditions of America and (by imita-
future. but it is a bigger user of flexible
tion) Europe, Japanese production manag-
machine tools than any other manufactur-
ers view the challenge of flexible
ing nation. Since the early 1980s. Japan has
manufacturing more as a matter of simply
been spending twice as much as America or
automating a job shop-rather than trying
Europe on factory automation. More than
vainly to make a rigid transfer line some-
half the equipment it has bought have been
how become flexible. And they have
computerised numerically controlled (CNC)
learned to appreciate the value of making
machine tools-one of the essential ingredi-
frequent incremental improvements to their
ents for flexible manufacturing. The result
processes rather than the occasional giant
today is that 40% of the world's nifty
leaps favoured by American firms.
"make-anything" machines are busy bea-
The differences are enormous. For a
vering away in Japan. More to the point,
start, a Japanese firm converting to FMS
two out of three of them are in small- to
tooling will spend roughly a third more
medium-sized firms.
money doing so than is common among
That is not all. Japanese manufacturers
competitors elsewhere. The extra cash goes
are getting more out of their computerised
on equipment to make the changing of dies
tools than firms in the West. Mr Ramchan-
and cutting edges quicker, the handling of
dran Jaikumar, a researcher at Harvard
materials easier, warehouse operations
Business School, reports* that two out of
slicker, and additional robots visibly every-
five workers in Japanese factories using
where to ensure that, if necessary, the plant
computerised tools are engineering gradu-
can be run unattended. The extra cost is
ates who have been trained to use such
more than paid for by these benefits alone.
equipment at university. Similar firms in
All the other advantages of unmanned
America have one college-trained engineer
manufacturing-including even higher
for every dozen workers. Compared with
quality and still lower inventories-are
American plants, Mr Jaikumar says,
chines had come grinding to a halt. More
thrown in free.
Japanese factories have an average of 2.5 times
important still, the machines themselves
as many CNC machines, five times as many
had been built stronger than comparable
engineers and four times as many people
Toyota-ism means
units elsewhere.
trained to use the machines.
How is it that Japanese firms have em-
war on waste
Moreover, their utilisation rate (the percen-
braced the FMS part of flexible manufactur-
"Ford-ism" had its day-though to a lesser
tage of time the machines are actually
ing more readily-and more pragmatical-
extent-in Japan, too. But it is "Toyota-
cutting metal) is 84%, compared with 52%
ly-than rivals in the West, and yet have
ism" that is propelling Japanese firms into
in the United States. The difference, be-
largely failed where American companies
the new era of flexible manufacturing. The
lieves Mr Jaikumar, can be summed up in a
have succeeded in mastering the intricacies
reasons go far deeper than the attractions of
single word: reliability.
of CIM? Certainly, the shortage of software
the fashionable kanban method for order-
Reliability is crucial if you want to run a
skills in Japan has had some effect, though
ing supplies when-and only when-they
workshop with no men around and the
this is not the problem today that it was a
are needed. Important, yes, but Japanese
lights turned out. And most Japanese man-
decade ago. The answer may be as much
managers have been able to see at first hand
ufacturers want to do precisely that. In one
historical as cultural.
just what a modest role kanban has played
recent survey, no fewer than 18 out of a
Forget for a moment the well-oiled hum
in Toyota's overall success.
sample of 60 FMS installations in Japan were
of production lines at big companies like
Essentially. kanban (which translates lit-
found to be running unattended throughout
Matsushita. Toshiba. Toyota or Nissan.
erally as "shop sign") is the same as the
the night. To do this. their designers had
Much of manufacturing in Japan takes
American "chit" system for arranging just-
anticipated the more obvious glitches, solv-
place amid the clatter of uncovered ma-
in-time deliveries of components. Both are
ing production problems long before ma-
chinery in back-street workshops, where
ideally suited for repetitive mass produc-
the ways of organising production have not
tion jobs, where cars, television sets or
"Postindustrial manufacturing" by Ramchan-
changed since the days of the Shogun.
washing machines are made in large vo-
dran Jaikumar. Harvard Business Review, Nov-
Locals refer to it as the seiban system.
lumes but with little variety. However,
ember-December 1986.
What passes for scheduling here is just a
when it comes to the flexible factory,
THE ECONOMIST MAY 30 1987
FACTORY OF THE FUTURE SURVEY 13
neither is actually as useful as the American
Here, again. Toyota's approach has been
technique known as MRP (manufacturing
characteristically creative. Its engineers re-
resources planning). The only problem with
designed the dies so all of them now have
MRP today is that it has become embedded
standard fittings and the same height-
in cumbersome computer programs.
hence no calibration is needed when they
For all their problems, the attraction of
are being installed in a press. They then
just-in-time methods for ordering parts is
redesigned the presses, so that today the old
that they dispense with a good deal of the
dies are slid out while the new ones are slid
paperwork. No magic is needed, just a card
in. Finally, they invented various quick-
or chit which travels with a container of
release fasteners to save operators from
thingummies. When the last gets used up,
having to tighten dozens of nuts and bolts.
the card is returned to the thingummy
Mr Hartley reports cases of dies being
supplier where it simply becomes a docu-
changed on 1,000-ton presses at Toyota in
ment authorising the release of yet another
ten minutes, compared with at least four to
batch of thingummies, which are de-
six hours elsewhere. On one particular
spatched to the customer along with the
forge for making bolts, Toyota cut the time
same (or identical) card.
taken to change the dies from eight hours to
Two things happen as a result. First,
Rule two emerged from studies of the
less than one minute.
manufacturers quickly learn that the fewer
time material spent gathering dust-appar-
Imagine the implications of such a pro-
the number of cards in circulation, the less
ently 60% or more of its total duration in
duction process. The amount of stock car-
likely are thingummies to pile up at ma-
the workshop. Make savings here, said
ried internally gets slashed from (typically)
chining stations, gumming up the works
Toyota, of hours or days (say, by using
30,000 sets of pressings, forgings or die-
and clocking up inventory charges. Second,
kanban internally to abolish storerooms)
castings to 1,000 of each at most. Practical-
the battle to reduce the number of cards
instead of trying to save seconds by speed-
ly all the parts that go to make the finished
encourages shopfloor managers to be espe-
ing up individual production processes.
product (the model of car in Toyota's case)
cially vigilant, hunting down and removing
Rule three concerned ways of getting a
are themselves now manufactured on the
production bottlenecks in their depart-
greater variety of parts, quicker, from exist-
same day that the product itself is assem-
ments. All of which translates into less time
ing machinery-in short, by reducing the
bled and moved out of the factory.
and money spent making thingummies.
batch size. The biggest problem with most
For Toyota, that means no more financ-
But one of the bigger mistakes outsiders
machine tools is setting them up (getting
ing of large batches of finished vehicles of
make is to believe that mastering the mys-
their shaping surfaces or cutting-edges
different shapes, sizes and colours to meet
teries of kanban is all there is to Toyota's
mounted and adjusted) ready to start work-
its dealers' requests. Instead, it holds a
wizardry on the shopfloor. Nothing could
ing on a particular batch of jobs. Because
small assortment but with a variety wide
be further from the truth. Mr John Hartley,
changing dies (the "male" and "female"
enough to meet all but the finickiest of
an industrial commentator based in Tokyo,
shapes used to press sheets of metal into
tastes-and, for the rare exceptions, the
likens it to the tip of an iceberg*:
contoured parts) can take up to a day to
factory can turn out a car of the buyer's
Kanban represents only about 10% of the
complete, press shops have traditionally
own choosing and deliver it to him within
whole [Toyota] system, and companies that
been run to provide a month's worth of
five days rather than five weeks.
omit to do anything about the other 90% of
components for the production lines. The
With that kind of service, few customers
their processes are doomed to fail.
same goes for die-casting machines and
have the time-let alone the inclination-to
In developing their production system,
forges. Obvious answer: lick the problem of
change their minds and go elsewhere. The
Toyota's engineers went on the warpath
set-up time. Then dies can be changed
way Toyota does it, flexible manufacturing
against waste. Apart from scrap and over-
hourly instead of monthly, batch sizes
is a far cry from any CIM-based factory of
production, everything else that did not add
brought down to dozens instead of thou-
the future-but, for all that, it is an awe-
value to a product was considered waste-
sands, and variety mixed in along the way.
some competitive weapon.
from unprocessed material waiting to be
machined to components that had been
made too soon. Above all, idle operators
Back to earth with a bump
were singled out as especially wasteful.
With equipment depreciated over time and
The "moon-shot" approach to flexible manufacturing gets results-but at a
labour a fixed overhead, idle men were
price few of even America's richest companies can afford to repeat
clearly far more expensive to have around
than idle machines. Toyota estimated that
The biggest names in American manufac-
decades earlier putting a man on the moon.
the cost ratio of men to machines was three-
turing have all been captivated by CIM-
The biggest of the spenders has been
to-one and rising.
and all have been burned to some extent by
General Motors (GM), starting with the
So. rule one at Toyota: don't bother
it. With a wave of the wand, computer-
$500m Hamtramck factory it built on a 77-
"balancing" the machines in a production
integrated manufacturing promised a way
acre bulldozed site on Detroit's east side.
line (getting them all to complete their tasks
of turning out an array of new products
The plant contains the largest standing
within the time taken by the slowest), but
using the same manufacturing plant, at a
army of robots to be seen anywhere-some
focus instead on how workers spend their
pace the salesmen were demanding, a qua-
260 articulated contraptions for welding,
time. Nowadays, the machines in Toyota's
lity that was high and yet affordable, and all
painting and assembling motor cars, 50
factories are arranged so that operators can
to the individualised whim of the custom-
mobile robots for fetching parts from
handle several at once, even if it means
er-a way, in short, to roll back the all-
stores, and everywhere computers reaching
leaving one or two idle while the man
conquering Japanese. During the heady
in and checking the quality of the work-
moves among them.
years from 1981 to 1986, American firms
manship. Hamtramck is a technological
spent nearly $50 billion installing the tools
tour de force, a "factory for the day-after-
"Fighting the recession in manufacture", by
of flexible manufacturing-almost as
tomorrow".
John Hartley. IFS/McGraw-Hill. 1986.
much, in real terms, as NASA spent two
Hamtramck's only problem is that it
THE ECONOMIST MAY 30 1987
14 SURVEY FACTORY OF THE FUTURE
ponents that are only 15 minutes old rather
away at computer-integrated manufactur-
than 90 days; are so reliable that they need
ing without committing themselves to over-
servicing roughly once every four years
ly ambitious projects. As a rule, they have
instead of annually; and cost $1,000 less
tended first to computerise their machine
than the Selectric models they replace. Dr
tools, creating "islands of automation".
David Ellerman, IBM'S automation expert
Next, they have streamlined their schedul-
on the Lexington project, says the plant is
ing departments, slimming down the
so flexible "it could build a couple of
wadges of bumph they produce. Only then
hundred IBM product lines-even video
have they linked the two departments to-
recorders, microwave ovens, cameras, at-
gether, so the machines receive their in-
taché cases."
structions and materials precisely when,
Of course, IBM has no intention of mus-
and only when, they are needed.
cling into home appliances or consumer
Past master at this step-by-step approach
gadgets. Nevertheless, it is having trouble
is Hewlett-Packard (HP). Within its own
barely matches the quality and productivity
finding enough things to keep Lexington
business of making test equipment, instru-
of an aging GM plant at Fremont in Califor-
busy. Critics say that IBM over-automated;
ments and computers for the engineering
nia, where the world's largest motor manu-
that the plant is nowhere near as flexible as
community, HP has a broad diversified mix
facturer has a joint venture with Toyota
claimed; and that the computer company
of products, many being made in small
stamping out copies of compact Japanese
got nothing like enough manufacturing
numbers-a natural case, if ever there was
cars for the American market. Fremont
bang for its buck. IBM admits that, if it had
one, for CIM. Since 1983, HP has been
does it all without fancy automation, just a
to do it all over again, it would do it
lot of painstaking Toyota-style manage-
differently.
ment.
And it has-on several occasions. The
Buick City at Flint in Michigan has also
flexible factories that IBM has started sprin-
been a bit of a disappointment for the gurus
kling across America and Europe attempt
of high-tech manufacturing at GM. The
to be nothing like as clever as its Lexington
$400m factory has all the ingredients for
showcase. Moreover, to ensure that they
success-including flexible tooling that
always have plenty to do, the new automat-
needs only a third the inventory of a
ed plants in Texas, Florida, California,
conventional assembly plant. Yet it has
Scotland and Hampshire tend to make
taken twice as long to get cars rolling off the
whole families of products-such as print-
line, and many of its touted benefits are
ed-circuit boards, personal computers and
beginning to look somewhat illusory.
information-storage devices.
All of which has brought GM up short. It
America's largest dozen or so firms that
consolidating its manufacturing into a
is now having serious doubts about how
have embarked on costly CIM-like adven-
handful of highly flexible plants specialising
much technology to use in its Saturn pro-
tures have learned that the "moon shot"
either in a group of related products (print-
ject, a bold $3.5 billion attempt at Spring
approach certainly gets results and pro-
ed-circuit cards, for example) or a particu-
Hill, Tennessee, to rewrite the rules of
vides useful experience, but at a price that
lar type of technology (surface-mounting of
making motor cars. Meanwhile, the firm
few, if any, of them can afford to repeat.
components).
has started laying off middle managers and
For a few brief years, America's brave high-
The interesting thing is that improved
engineers, and has been cancelling con-
tech form of manufacturing flared brilliant-
competitiveness at HP has come not just
tracts with equipment suppliers. It has even
ly across the headlines. Lately, however, it
through eliminating duplication and waste.
axed $88m-worth of orders for new robots
has fizzled back to earth-and the big guns
In consolidating its business, the firm has
from GMF Robotics, the 50-50 firm it estab-
of manufacturing in the United States are a
been forced to scrutinise its own manufac-
lished in 1982 with Fanuc of Japan to
good deal wiser for it.
turing processes in the minutest of details.
supply its factories with the latest carmak-
"We found there were lot of informal
ing automation.
It helps being poor
procedures which were not supposed to be
Much the same tale is whispered at
Other American firms, lacking the re-
there," says Mr William Boller of HP's
General Electric (GE), which spent $600m
sources of a GM or IBM, have kept their feet
manufacturing-systems group. "There's a
on a pioneering CIM plant in St Louis for
more firmly on the ground. Allen-Bradley,
lot of 'fixing' done by people on the line
making dishwashers. Its factory of the
Caterpillar, John Deere and a couple of
which never gets shown on any organisa-
future raised productivity by nearly a third,
dozen more have built successful CIM plants
tional chart." It is those kinds of "unoffi-
cut warranty calls by a half and boosted
without the heartache or crippling expense.
cial" processes that have to be replicated if
GE's share of the dishwasher market in
Despite its limited resources, Chrysler is
CIM is to work effectively.
America from 31% to 43%. But many GE
believed to be the best of Detroit's big three
Hewlett-Packard advises companies
managers believe the price was far too high.
at flexible manufacturing. No mention is
wanting to go the CIM route first to learn
On the drawing-board at GE are blueprints
made of how much it has really spent on its
how their factories actually function, not
for a further six flexible appliance factories
Sterling Heights factory, but it carried out
how they are supposed to. The next job—
costing a total of $1 billion. They are
900,000 man-hours of training before open-
long before placing any orders for robots,
unlikely to use anything like as much
ing the CIM plant in 1984. The result today
flexible tools or fancy computers-is to
automation as GE's pride and joy in St
is that Chrysler can produce two new
simplify all the procedures down to their
Louis.
models a year instead of one every four
bare essentials, concentrating on just those
Even IBM has had its trying experience.
years.
processes that add value to the business.
At its new S350m typewriter factory in
A characteristic of these American man-
The firm then needs to ask itself what is the
Lexington, Kentucky, some 2,000 people
ufacturers of more modest means is that
minimum amount of information the value-
can now turn out 1.4m units a year, where
they are neither "visionaries" nor "ostrich-
adders (whether men or machines) need to
6,000 used to make only half that number.
es". People in the trade call them "evolu-
accomplish their tasks. "The root of all
The new typewriters are made from com-
tionists". All of them have been nibbling
evil," says Mr Boller, "is complexity."
THE ECONOMIST MAY 30 1987
FACTORY OF THE FUTURE SURVEY 15
Honest self-analysis like this can save
information that is absolutely essential.
with some form or other of flexible manu-
piles of cash. Often. it results in very little
At a stroke, all those middle managers
facturing cannot be more than 50. Japan,
automation going into the workshop itself.
(purchasers, specifiers, expediters, and so
with half the population, is now installing
Instead, the heavyweight procedures like
on) are no longer needed. And the biggest
that number of FMS units annually.
MRP (manufacturing resources planning)
1-
single source of overhead costs in most
Like computer companies in America
for specifying parts, purchasing materials
western factories (rarely less than 40%)
e
and Japan, Britain's ICL is gearing up to sell
and scheduling the work get ruthlessly
shrinks dramatically. In America at least.
manufacturers some of the software pack-
pruned. The only tasks that are then auto-
the lights are being turned out faster in the
ages that will help make CIM a reality. It is
mated are just those clerical jobs generating
office than in the factory.
looking at a market, not of today, but of five
years down the road. It wants to see the
Too little too late?
various flexible manufacturing techniques
settle down first, so it can develop programs
that will appeal to at least 80% of all
1
Many European firms seem to look on factories of the future as intellectual
industrial users. A failure of nerve? Maybe.
curiosities best left for researchers to study with taxpayers' cash
But no more so than the lack of imagination
among the mainstream of Europe's manu-
Europeans seem to enjoy the intellectual
has turned a workshop making the crucial
facturers.
challenge of re-inventing the wheel. They
disc components that prevent jet engines
$
Despite having one of the most original
are pursuing something similar to CIM but
from falling apart into a vision of the
research programmes on CIM anywhere,
prefer to call it AMT (advanced manufactur-
unmanned future. The $6m investment.
Britain's biggest engineering group, Gen-
ing technology). Where a decade ago the
which paid for itself in 12 months, boosted
eral Electric Company (GEC), reflects the
Pentagon played midwife to CIM in the
productivity by 40%, slashed work-in-pro-
current mood of scepticism among manu-
United States, Community officials in Brus-
gress by two-thirds, and reduced the time
facturers in Europe. By all means start
sels are now hoping to play wet nurse to
taken between receipt of an order and
developing a strategy for computer-inte-
flexible automation in Europe. They are
delivery from six months to six weeks.
grated manufacturing, GEC's head office
spending millions trying to prevent indus-
That said, there are only a dozen or so
tells its managers; even recruit some of the
try's response to this vital new technology
installations in Britain that can be classed
right kind of people. But GEC would prefer
from being once again too little too late.
as even flexible manufacturing systems
its subsidiaries not to splash out on flexible
Under its Esprit programme on informa-
(FMS). None is equivalent to any of the
manufacturing for the time being. In Eu- 1
tion technology, the EEC has spent $120m of
"lights-out" type of CIM plants seen increas-
rope, such thinking is not unusual. Little,
public money since 1982 developing ideas
ingly in the United States. Estimates vary,
wonder that Japanese firms think their'
for the factory of the future, and is now
but the total number of factories in Europe
European rivals have given up the fight.
getting down to serious business with a
proposal for CIM research totalling $1.3
billion over the next five years. On top of
If it ain't broke, don't fix it
this, the Community plans to pour more
than $900m into communications research
Many manufacturers making a living today are understandably leery about
under its Race programme, and $140m has
splashing out on high-tech factories for tomorrow. There are good reasons
been allocated to its Brite programme on
why they should hold back-and better ones why they can't afford to delay
industrial technologies. Then there are the
national efforts on computer-integrated
The showcase factories of the future have
marketplace. Such questions cause heated
manufacturing run by individual European
attracted their share of notoriety because of
boardroom arguments.
governments. Britain's, for instance, comes
the cost and trouble involved in getting
Companies also need to be ready to head
under the government's $450m Alvey
them up and running. In reality, however,
off countless little turf wars. When imple-
programme.
firms need not spend more than $5m or so
mented properly, CIM requires all depart-
Doubtless, all this laboratory research is
to gain many of the benefits of switching a
ments to rely on, and contribute to, the
contributing mightily to the store of useful
factory over to CIM-based production.
same database of information. Bulldozing
knowledge about CIM. But. perversely, it
Sheer inertia is probably the main reason
its way across office and workshop boun-
seems also to be distracting European man-
why mainstream manufacturers, in Europe
daries, CIM has an immediate impact on the
ufacturers from getting on with it. Few
especially, have not embraced the flexible
way people do their jobs, even on the titles
firms in Europe outside the defence indus-
factory with quite the same gusto as their
they give themselves. Nasty little booby
try are making anything like the enthusias-
Japanese and (increasingly) American
traps here for the unwary manager.
tic commitment to flexible manufacturing
competitors.
Firms also face the frustrations of trying
that is now so evident throughout Japan
Certainly, CIM is something not to be
to get the various pieces of CIM equipment
and increasingly so in regions of the United
entered into lightly. To start with. nothing
to communicate with one another. There
States.
short of a total overhaul of the company's
are simply not enough communications
There are, to be sure, flexible manufac-
strategy has first to be undertaken, involv-
engineers, not even at General Motors,
turing plants in Europe which are as ad-
ing many man-years of managerial effort.
Ford, Boeing and IBM, with the experience
vanced as anything to be found in America
The rule, learned painfully over the past
of installing MAP networks and getting
or Japan. Olivetti's factory at Scarmagno in
seven years, is "plan from the top down and
them humming sweetly. Meanwhile, the
northern Italy produces a varied range of
implement from the bottom up". This
computer software that makes MAP tick
personal computers at a rate of one every 15
requires managers to ask themselves
continues to evolve. Manufacturers are cur-
seconds. The firm's Zincocelere plant,
searching questions about what products
rently working with version 2.1, but will
equipped with the latest CIM-like tools,
they expect to be making in five years' time,
have to upgrade to version 3.0 in little over
makes a variety of printed-circuit boards as
which technologies will they be using, who
a year's time.
cheap as anywhere in Asia.
will be their competitors, how fast and at
It is hardly surprising, then, that smaller
At Rolls-Royce's aero-engine plant at
what price will their fancy new flexible
firms who have taken a look at MAP gasp,
Derby in Britain, flexible manufacturing
plants be able to respond to signals from the
not just at its cost (twice as much per
THE ECONOMIST MAY 30 1987
16 SURVEY FACTORY OF THE FUTURE
connection compared with local area net-
shiba have been cramming the latest pieces
in New York in September 1985. Japanese
works used to hook computers together),
of intelligent automation into their factories
companies were declaring paper losses (well
but at its complexity, too. There have been
at home so they will be able to carry on
before the impact of the rising yen had even
requests (loudest in Britain) for a simpler,
exporting profitably when the yen is as high
begun to feed through to their balance
stripped-down version capable of serving
as at Y130 to the dollar-or higher.
sheets) as they hurriedly wrote off existing
most of the needs for the majority of users.
Western manufacturers who think the
plants and hustled forward plans for a new
Yet others complain that MAP is not
rising yen has given them a break are in for
generation of "lights out" automation.
powerful enough. Certainly, it is incapable
a surprise. Within six months of the meet-
Those flexible factories are now being
of telling a smart robot (one with eyes, ears
ing of the Group of Five at the Plaza Hotel
switched on all over Japan.
and a sense of touch) to take immediate
corrective action should an overhead crane
accidentally drop a workpiece on a machine
tool being served. The cables MAP uses, and
Upside-down accounting
the electronic beeps coursing through them,
Factories need a new brand of book-keeping if the real costs and benefits of
are not up to the job of conveying visual
flexible automation are to be tracked properly
pictures in "real time".
Nor are the communications problems
The first mistake managers tend to make
acts of hope and sheer imagination.
restricted to the shopfloor. Design engi-
when planning a factory of the future is to
And so CIM exists uncomfortably in an
neers using CAD/CAM work-stations are
think of the number of jobs they can save.
environment where 80% of the accounting
having trouble sending their clever geomet-
Then comes the unpleasant surprise: invest-
effort goes on tracking 20% of the activity;
ric patterns from one maker's screen to
ing in flexible automation may eliminate
where all efforts are geared to cutting costs
another's. Some of the bigger users of
grunt jobs on the factory floor, but it
rather than boosting revenues. How to find
CAD/CAM have been trying to bang heads
usually requires more skilled workers-and
a more rational way of gauging the costs
costlier ones at that.
and benefits of CIM? Try taking a leaf out of
S
The mistake is to look just at the direct
Mr Michael Skidmore's book.
costs. When everything is added up proper-
Mr Skidmore is boss of Altek Auto-
ly, labour accounts for between 5% and
mation, a small firm making CIM equip-
15% of manufacturing costs, no more.
ment in Britain. He admits* it is hard to
There is little point in tearing up an existing
justify using smart automation like robots
factory to build a costly new one if the sole
to replace unskilled people doing light-
objective is to knock a few percentage
assembly jobs, especially in low-wage Bri-
points off the payroll bill. Justifying an
tain where rates for such work run to no
investment in CIM requires a careful scruti-
more than £3 ($4.85) an hour. Given a
ny of overheads and a look at some of the
payroll tax of 9%, absenteeism of typically
intangible benefits that can accrue.
5% and a reject rate of another 5%, wages
The trouble is that book-keeping meth-
this low make it difficult to justify installing
ods have not kept pace with the times. For
a $50,000 piece of automation when tradi-
years. cost accountants in manufacturing
tional accounting methods are used.
together among suppliers, hoping to get
dealt with mature products based on stable
The reason is because only marginal
them to adopt a universal language, any
technologies. Their rules worked well in
costs are considered. Certainly no account
language, even the plagued IGES (initial
old-fashioned factories where mass-produc-
is taken of the robot's flexibility-its "re-
graphics exchange specification) promoted
tion was the order of the day. But in a CIM
configurability". Automation like this can
by the National Bureau of Standards near
plant-where the crucial factors are qua-
assemble a variety of products in one
Washington.
lity, variety, response and speed of delivery,
configuration, and then be reprogrammed
The French have, at least, managed to
and how best to use costly equipment-
at little extra cost to handle a quite different
get their own graphics protocol called SET
these rules are as out of place as a sledge-
set of goods.
(standard d'exchange et de transfert) adopt-
hammer in a microchip works.
So get the sales department to calculate
ed by Airbus partners to swap design
Over the generations. accountants have
by how much the product's price would
information between aerospace plants in
forced managers to focus single-mindedly
have to fall if its market share were to be
France, West Germany, Britain and Spain.
on means of minimising direct variables like
doubled. Then, from the new (higher) level
And the German motor industry is slowly
labour, materials and energy. They get it
of output-and ignoring for the moment
getting its own CAD/CAM language, VDA-FS,
upside-down when they do the same for the
the number of extra employees needed—
accepted among components manufac-
flexible factory. Here it is fixed costs like
work out a fresh (lower) figure for the gross
turers around Europe.
plant and equipment, not variable costs,
profit margin. Finally, estimate the manu-
With so many technical problems still to
which are now the dominant feature. Dr
facturing cost from the existing labour cost
be resolved, the wait-and-see attitude
Alfred Mirani of IBM'S European CIM cen-
plus the cost of the robots needed to make
towards CIM among smaller manufacturers
tre in Munich reckons that fixed costs
up the difference between the old and the
is easy to appreciate. One other reason-the
account for nearly 70% of a flexible manu-
new levels of output.
soaraway yen-is a good deal harder to
facturer's total bill.
The best thing about doing factory eco-
understand. It is common knowledge that
Nor have cost accountants come up with
nomics this way is that it forces people in
even when the yen was languishing at 225-
ideas of how to put cash values on indirect
marketing, design and production depart-
250 to the dollar back in the early 1980s,
benefits-such as better product quality, or
ments to come up with numbers that allow
Japanese exporters had taken the precau-
the flexibility to plunge into a market
senior managers to undertake (perhaps for
tions of tuning their factories so they would
swiftly and then manoeuvre adroitly to
the first time) a genuine analysis of the
be able to export profitably at Y180 to the
snatch opportunities and fend off threats.
company's real costs. This is a lesson that
dollar. With the exchange rate around
Lacking anything more rigorous, compa-
Y140 to the dollar, the likes of Toyota,
nies getting into CIM have tended to make
"How robots can earn their daily bread", The
Matsushita, Hitachi, NEC, Sony and To-
their investment decisions on leaps of faith,
Engineer, August 21-28, 1986.
THE ECONOMIST MAY 30 1987
FACTORY OF THE FUTURE SURVEY 17
Japanese manufacturers have long since
existing workforce. The rest of the indus-
learned. By using this kind of approach.
trial world still tends to view such invest-
Workshop wizards
they have no difficulty in justifying invest-
ment as a way of axing jobs in order to
Trade balance in manufacturing
150
ments in intelligent automation like robots,
reduce costs. Is it mere coincidence that
Son
CNC machines or even FMS installations. In
many Japanese manufacturers have been
Japan
100
fact. it becomes a way of life-a means for
expanding, while the majority of western
maximising market share, and hence the
firms struggle to hang on to their place in
50
revenue that can be earned from a firm's
the global market?
West Germany
0
Plan, don't run
Britain
United States
50
The future belongs to manufacturers who learn to plan their new flexible
factories. With wholly different approaches, Japanese and American firms
100
are learning fast. European firms seem to think they can wait and see
150
How, then, to reduce the pain of creating a
the actual performance of products.
1970
72
74
76
78
80
82
84
86
factory of the future? Manufacturers who
All of which adds up to more for less.
Source: OECD
have done so swear that the longer the
The product's higher quality in terms of its
gestation the better. They talk of "birth-
fit, finish and performance actually comes
so much time trying to solve routine prob-
ing", the mental and physical preparation
at a lower price. The savings accrue from
lems concerning quality and delivery that
that reduces the agony by removing the
reductions in the amount of scrap, rework,
they scarcely have any time to think about
mystery and uncertainty. Above all, they
service calls and warranty schemes that
how to improve the production process
say, have a strategy-know precisely, and
formerly went into making up for shoddy
itself.
in the simplest of terms, what it is you want
workmanship.
And it shows. Mr Jaikumar's research on
to do. Meanwhile, train, train and train
In cases where CIM has backfired, the
global competitiveness points to alarming
everyone again-none more so than the
company has usually been in too much of a
trends in American manufacturing-and.
middle managers who have most to lose,
rush to get its new flexible factory up and
by inference, in Europe as well. In a recent
most to fear, and are most likely otherwise
running. And disasters have proved to be
issue of Harvard Business Review, Mr Jai-
to go round sticking spanners in the works.
not so much a matter of too much techno-
kumar wrote:
The most common mistake is to think of
logy, but rather too little of the right sort.
With few exceptions, the flexible manufactur-
CIM as a set of tools, an off-the-shelf solu-
Integrating different types of computers
ing systems installed in the United States show
tion to solve what is really (though rarely
and machine tools is the easy part; integrat-
astonishing lack of flexibility. In many cases,
admitted) a problem of poor management.
ing workers with differing skills and back-
they perform worse than the conventional
Forget all the consultants' hype, CIM is
grounds is far harder. Psychologists are
technology they replace. The technology itself
nothing more than an attitude of mind, a
only just beginning to understand the social
is not too blame; it is the management that
dedication to a few worthwhile principles—
technologies involved.
makes the difference.
like simplicity, collaboration, quality and
When CIM comes in, out go whole offices
Compared with Japanese FMS cells, those in
zero-defects. In IBM'S view, "the objective
of people who formerly spent their lives
American plants produce only a tenth the
[of CIM] is not total automation, but run-
ordering parts and materials and schedul-
range of different parts. European plants, at
ning a profitable business."
ing the workload of various machines. Even
their present stage of evolution, are no
Manufacturers who take pains to imple-
in Japan, where overheads are typically
better.
ment their CIM equipment carefully embark
only half as much as in Europe or the
Firms on both sides of the Atlantic are in
on a virtuous cycle. The first thing to go is
United States, medium-sized firms switch-
the process of catching up with competitive
waste. Firms get a nasty shock when, for
ing to flexible manufacturing say the num-
manufacturing. Mostly, they are still striv-
the first time, they start getting proper
ber of people in the engineering department
ing for higher quality, while their Japanese
information from a computerised network
is halved (from, say, 35 or so to around 16),
rivals-having licked the excellence issue-
on the amount of scrap they are producing
but clerical grades in the production de-
have moved on to other problems in search
(aircraft manufacturers are notorious scrap
partment get slashed by about 90% (from
of a new competitive edge. Manufacturers
merchants) along with the cost of all the
60-plus to fewer than six). This means
in Japan worry instead about how to live
rework incurred. This concentrates the
engineers begin to outnumber production
with endaka (the 70% stronger yen) by
mind of production engineers remarkably.
workers-in many cases, by three to one.
lowering prices further and bringing out
The next thing to be abolished is sloppi-
The main preoccupation of the business
new models faster and more frequently-in
ness-in engineering tolerances as much as
then becomes, not running the plant, but
short, by manufacturing more flexibly in
management control. With up-to-the-min-
planning it.
order to carry on shipping goods abroad
ute information on how tools in the ma-
when the yen has hit 130 or fewer to the
chine shop are wearing as they grind away
Automate or liquidate
dollar.
at making parts, the firm's designers can
Japan has a competitive advantage here. It
But the Japanese are not ten feet tall. The
start specifying tighter fits for the compon-
graduates annually twice as many engineers
strength of Japanese manufacturers today is
ents-confident that worn cutting-edges
per 1m people as America. nearly three
rooted in their traditional seiban approach
will be replaced automatically and whenev-
times as many as Britain or France. In
to running a job shop. Up till now, its
er necessary, rather than perhaps at the end
company after company in Japan, says Mr
limitations have, ironically, been a blessing.
of a shift or during maintenance at night.
Ramchandran Jaikumar of Harvard Busi-
Scheduling of materials and machines is
With this, a level of ultra-precision machin-
ness School. systems engineers with a thor-
done in the production manager's office on
ing-known once only to lens grinders and
ough knowledge of several disciplines have
pieces of foolscap pinned to the wall. No
watchmakers-is becoming available on
been decisive in bringing flexible manufac-
reams here of printout spewed from MRP-II
the factory floor. In turn, ultra-precision is
turing to fruition. Contrast that with fac-
programs running through the night on big
eliminating yet more waste and improving
tories in the West, where managers spend
mainframe computers.
THE ECONOMIST MAY 30 1987
18 SURVEY FACTORY OF THE FUTURE
Cleaner than a hospital
Tidier than a workshop
Lacking the software, Japanese firms
that helped transform the country's defence
warehouses in the form of excess stocks and
have been forced in the past to think more
contractors into the most flexible manufac-
as work-in-progress on its factory floors.
creatively, to be more elegant, to reduce
turers anywhere are now busy selling their
British industry alone is reckoned to have
their scheduling requirements to the bare
expertise to the rest of American manufac-
the equivalent of $25 billion tied up in
essentials. But there are limits to how far
turing. Hewlett-Packard reckons that
inventories. If only a quarter of that were
the seiban form of production control can
96,000 factories in the United States are
released through just-in-time scheduling,
be pushed. Already CIM is revealing glaring
currently in the process of installing CIM in
British firms could buy all the CIM equip-
inadequacies in the one-side-of-foolscap ap-
one form or another. In a year or two's
ment they need for the next couple of years.
proach. Meanwhile, American firms at the
time, many of them will become global
When implemented correctly, just-in-
leading edge of manufacturing technology
forces to be reckoned with: some will no
time scheduling slashes inventories by. not
are learning a trick or two about getting
doubt conquer the foreign competition and
25%. but more like 75%. Japanese manu-
computers to produce just the essential
become the new market leaders.
facturers realised that sooner than most.
elements. rather than their present over-
Sadly, Europe has nothing to compare.
American firms have been getting the mes-
whelming volumes of information for their
Carmakers in West Germany, France, Swe-
sage for four or five years now, and are
planning processes. Hewlett-Packard
den, Italy and Britain have their "islands of
moving on from mere flexible forms of
preaches the gospel: "Learn first to do what
automation". So does Europe's handful of
production to fully computer-integrated
the Japanese do, then automate it."
world-class aerospace and computer firms.
manufacturing. Meanwhile, the choice for
And never discount the genius of the
But lacking the imagination of Japanese
the majority of mainstream manufacturers
defence industry in the United States. Put
manufacturers or the resources of Ameri-
in Europe is becoming chillingly clear:
aside $500 hammers, $1,200 toilet seats,
can rivals, European firms tend to put their
either they automate using the flexible new
fiascos like the $4.5 billion spent on the
faith more in the Community's multi-bil-
tools that lead to CIM, or many will be left
Divad gun. even faulty O-rings that brought
lion research programmes like Esprit, Race
with little choice but to liquidate.
the Challenger shuttle low, as Junacies
and Brite. Even Fiat, the Italian motor
tolerated or (worse) mandated by govern-
manufacturer that pioneered some of the
ment agencies. If the rest of manufacturing
world's most advanced carmaking automa-
in the United States had enjoyed the benefit
tion, is currently lobbying Brussels for a
of, say. the American Air Force's "Get
similar "catch-up" programme in CIM re-
Price" or "Competition Advocacy" pro-
search. Throughout Europe, the loudest
grammes and learned to work to much the
call to be heard from the manufacturers is
same overall levels of quality assurance.
for research handouts.
performance. delivery and (yes) even price.
Yet nowhere else in the world could CIM
the world today would be watching televi-
have such an immediate-and more readily
sion on sets made by Sylvania. Zenith and
justifiable-impact on manufacturing. Nor
RCA. surrounded by appliances from Frigi-
are government bribes necessary. European
daire. GE and Westinghouse, and Detroit
industry is sitting on all the cash it needs to
would be exporting cars to Japan.
implement the latest in flexible manufactur-
America's high-tech automation firms
ing. Where? Gathering dust on shelves in its
THE ECONOMIST MAY 30 1987
LIE NORTH'S $100,000 WEEKENDS . EARTHQUAKES: WHY THEY HAPPEN
may use this periodical in the library
BRUARY 1989
WHITE HOUSE AND LIBRAR
THE 2000 WE
RE EARCH
THE white HOUSE
washington
Japanese Shine sun
Himawari
ABC or NBC nightly
3-8-91
SCIENCE
COMPUTING
The Next Great Leap in Speed
the high-speed multi-use devices in
traditional serial systems.
The Pasadena behemoth uses a
variation on this design, whereby
"Massively Parallel' Systems May Meet a Pressing Technological Need
each processor can follow several
sets of instructions on several data
sets. Built by Intel and funded by a
COMPUTER
By Curt Suplee
consortium including the Defense
BREAKS THE PROBLEMS INTO PARTS AND SOLVES THEM
Washington Post Staff Writer
Advanced Research Projects Agen-
cy, Touchstone will start small,
ONE AT A TIME ON ONE MICROCHIP PROCESSOR
Z
ext month in Pasadena, tech-
with an array of 528 processors.
nicians will throw the switch
Even so, it is expected to beat the
THIS
IS
THE
PROBLEM.
on what will be-for a while,
cybernetic socks off the latest Jap-
at least-the fastest computer ever
anese dreadnought, NEC's SX-3,
built. If the new machine works as
peak-rated at a mere 22 billion
advertised, it will set a world record
"floating-point" operations per sec-
Photocopy-Preservation
for peak speed: 32 billion operations
ond. In the trade this is known as
per second. That's more than 10
22 gigaflops.
times the number of heartbeats in
Intel expects Touchstone to be a
an average human life, compressed
teraflops-capable of a trillion float-
into the time it takes to sneeze.
THE
ing-point operations-contender
PROBLEM
IS
SOLVED
Yet even at its stupendous best,
eventually, though no one is quite
the $27.5 million Touchstone Delta
sure what that might require. Some
System to be unveiled May 31 at
scientists believe it could take as
PARALLEL
COMPUTER
California Institute of Technology
many as a million processors. But
BREAKS THE PROBLEMS INTO PARTS AND SOLVES THEM
will be sluggish by the increasingly
Hillis, whose firm has contracted
SIMULTANEOUSLY ON SEPARATE MICROCHIP PROCESSORS.
demanding standards of modern
with DARPA to develop a teraflops
science. It is, however, the latest
SANDIA NATIONAL LABORATORIES
stage in a national initiative to boost
An example of a simulation of electron beam propagation produced by using a
machine by the mid-1990s, thinks it
massively parallel version of a Sandia National Laboratories computer code.
may be accomplished with as few as
computing speeds by a factor of
65,536 processors-the number
THIS
IS
1,000 within five years by exploit-
THE
PROBLEM
surfaces of varying shapes. These
used now on the company's massively
ing a design called "massively par-
Champaign. "And the only possible
parallel Connection Machine.
allel processing," or MPP.
experiments, formerly conducted
architecture is massively parallel."
This is a system by which hun-
on models in wind tunnels at huge
Every computer operation in-
Seeking Synchronicity
dreds or thousands of microproces-
cost, can be done very accurately
volves identifying a unit of data and
sor chips perform separate opera-
on existing computers. But they
then doing something to it: For ex-
"The biggest obstacle is not get-
tions simultaneously. In most con-
require hundreds or thousands of
ample, a program might ask a com-
ting the sheer computation power,"
ventional computers, just one mi-
hours of running time. On a com-
puter to find every letter "g" in this
Hillis said, "but getting the proces-
croprocessor does all the work, one
puter a thousand times more pow-
article and then make it "gg."
sors to communicate and coordi-
step at time.
erful, however, "a complete numer-
In a traditional "serial" computer,
nate." Because those devices have
As recently as 1987, MPP was
ical simulation of an aircraft in flight
this would be done by one central
to exchange information constantly
considered downright radical. Even
could be performed in a matter of
processor or master chip, which
in perfect synchronization, he said,
THE
PROBLEM
IS
would call up one word at a time, in
a teraflops machine "will require
SOLVED
18 months ago skeptics were prepon-
hours," computer scientists Peter
derant. "But we've gone through this
Denning and Walter Tichy wrote in
series, out of the computer's mem-
more communications connections
credibility transition in the last year,"
Science last winter.
ory. The chip would examine each
than there are in the entire U.S.
said Danny Hillis, founder of Think-
Similar difficulties plague re-
word for the presence of a "g," dou-
phone system put together."
ing Machines Corp., an MPP pioneer.
search on better fuels. More than
ble the letter if it found one, and
Moreover, MPP requires re-
COMPUTING'S 'GRAND CHALLENGES'
"Now, finally, people have understood
400 chemical processes occur in
then store the result in its memory.
searchers to re-conceptualize their-
how to use it.'
internal combustion engines, yet
before fetching the next word. Con-
problems for parallel architectures.
For many researchers, that can't
today's computers can handle no
ventional supercomputers speed
And programmers have to translate
happen too soon. Repeatedly in the
more than 10 in simulations if they
that process by cutting the time
those ideas into software. Until re-
history of science, the grand march
are to do the job in a few hours.
between operations, using several
cently these problems seemed prac-,
Massively parallel computers are needed, scientists say, to under-
stand various phenomena by modeling:
of inquiry has been stalled until new
processors and devising super-
tically insoluble; but that has
technologies-from telescopes and
A Teraflops Contender
cooled or superconducting connec-
changed. New MPP companies are
tions; but basically they employ the
springing up, and venerable firms
The atmosphere, land and water in enough detail to forecast the
microscopes to X-rays and semicon-
Years ago, the federal High Per-
ductors-arose to make new vi-
one-item-at-a-time principle.
are switching over: Supercomputer
weather more accurately.
formance Computing and Commu-
If, instead, the "g-doubling" task
market leader Cray Research and
sions possible. Computer power is
nications Program, a multi-agency
were conducted on an MPP system,
Digital Equipment Co. have begun
Larger-scale phenomena to predict global climate change.
now at just such an obstructional
task force, identified these prob-
each of the 1,100 or so words would
work on MPP systems. In Febru-
juncture.
The behavior of particles in a turbulent flow to predict the dis-
lems and other "grand challenges"
be assigned to its own processor.
ary, Sandia National Laboratories in
In a dozen fields-including cli-
as "critical to national needs," and
persion of pollutants and understand combustion.
Each chip would receive the same
New Mexico, a world leader in MPP
mate modeling, genetic research,
determined that computers capable
instruction from the software, and
research, announced it was con-
How electrons and other subatomic particles behave in semicon-
aerospace-vehicle design and pro-
of 1 trillion operations per second
all the words would be examined
verting its key programs to mas-
ductors and superconductors.
tein synthesis-computer simula-
would be required to solve them.
and processed at the same time.
sively parallel form.
tions have grown so accurate that
"Then they had to look around for
How the brain integrates input from the eyes to create an image.
Ideally, such a device would per-
Meanwhile, a growing number of
they can replace much of the te-
the design that was going to be able
form the task 1,100 times faster
experts now agree with Denning
The interactions of molecules in cells that perform various func-
dious and costly process of exper-
to deliver that," said Larry Smarr,
than traditional machines. It might
and Tichy that "the new breed of
tions of life and disease.
imenting with real objects. For ex-
director of the National Center for
also cost less, because the proces-
massively parallel machines will, in
ample, designing an airplane in-
Supercomputing Applications at the
sors can be simple and relatively
the long run, have an impact as pro-
volves plotting the airflow around
University of Illinois at Urbana-
slow (as individuals) compared to
found as microcomputers."
William Raspberry
A Simpler Life
WPOST
3-10-91
Americans are either in the throes
and persuasive advertising have com-
more time with their families; wives
downward mobility-declining real
spending time with their families,
of a materialistic orgy in which "ac-
bined with the rise of dual-income
are abandoning careers to take up
income-for most American families.
percent wanted more time for pers
quiring possessions has become an
families to produce a culture in which
homemaking. Consumer credit fell by
But it's possible to doubt Castro's
al interests and hobbies, while only
end in itself" or else we are witness-
adequacy no longer suffices: not accu-
0.6 percent-$342 million-in De-
"humble makings of a revolution in
percent rated it important to keep
ing the beginning of a return to the
rate watches, attractively serviceable
cember, and a whopping $2.4 billion
progress" while at the same time
with fashions and trends.
simple, values-driven life.
raincoats or reliable cars with decent
in January. Domestic beer, mixed-
hoping she's right. Rampant material-
Maybe the trend she cites is I
It depends on which magazine you
gas mileage, but Rolexes, Burberrys
ism, as Baldwin notes, has costs be-
breed dogs, family reunions and vol-
but Baldwin's description seems c
read.
and Mercedes Benzes.
yond the erosion of bank accounts.
untarism, says Castro, are replacing
er-uncomfortably so-to home,
Bruce Baldwin, a psychologist writ-
"It can seriously affect an individual
We talk "quality," but like the
look-at-me spending. The '90s may
a lot of couples I know (including
ing in the April issue of the USAir
and a couple's ability to live a happy
inner-city kid whose absurdly expen-
come to be known as the "We De-
at the address on my tax retu
magazine, sees an America in which
and healthy life together.
In many
sive sneakers and starter jackets have
could do worse than take his advic
our "wants" and "needs" have become
cade."
distressed marriages and dysfunction-
us shaking our heads in dismay, we
"Begin a series of discussions 1
confused, things substitute for sound-
Cynics might tell you that our
al families, couples have a myriad of
buy things as much to let our peers
your spouse. Ask yourself questi
Photocopy-Preservation
er values, and possessions define
down-shifting has other, less noble,
'things.' What they do not have for
see how well we're doing as for the
self-esteem.
one another, nor for the children, is
and then answer them. For exam
Time Magazine's Janice Castro, on
efficiency, beauty and durability of
causes, including a recession that has
people either out of work or else
time to enjoy life together, to talk and
'Why are we living like this? What
the other hand, sees us as emerging
the things themselves.
to share interesting experiences."
we really want out of our life tog
But Castro says we're doing it less.
nervous about their job security. Part
Castro says it's all changing. She cites
er? How are we going to get the
from "a ten-year bender of gaudy
dreams and godless consumerism"
Signs of a revolt against crass con-
of the trend Castro sees may be pure
a Time-CNN poll that found 69 per-
What is really fulfilling in this sl
and, at last, "thinking hard about what
sumerism constitute a pattern "as
fad, as empty of deeper meaning as
cent of the respondents wanting to
life we have?' I'd be surprised if
matters" in our lives: family, friends,
genuine as Grandma's quilt," she re-
earlier shifts to jogging, oat bran and
"slow down and live a more relaxed
psychic and spiritual welfare of
rest, recreation and spirituality.
ports.
lite beer. Maybe we're finally starting
life." A majority complained that earn-
children didn't figure prominently
So which is the real America? May-
Successful men and women are
to recognize subliminally a fact that
ing a living takes so much effort that
the answers, or if the couples faile
be both. There can be no doubting
leaving their high-powered, well-paid
seems to have escaped our conscious-
it's hard to find time to enjoy life. And
discover a mutual interest in li
Baldwin's contention that easy credit
jobs for humbler work that gives them
ness: that the 1980s were a period of
89 percent cited the importance of
simpler pleasures.
Check Westinghouse STS Book
- Kurzuriler on blina
- Cae Tech grads winning
pull westinghouse
Library - centuries diff rail,etc.
Ed-space
-first of everything
-frontiers
- -sci/tech books
- date books
CALTECH
- any STS award winners
- student projects - humane
-
-jokes
- -famous alumni; Nobels, etc.
- popular activities
- - facilities on campus
THE WHITE house
WASHINGTON
Bus week
Spectrum cover article
Furtune
early this year
- trens to come -
electronic future
THE WHITE house
WASHINGTON
Gilder - Beyond Television
let
Policy set initive net take forees. advant ge: selecury we have i
1) give Highper in budget corp intreeigent cars gout waves rector now
[lookin well spectrum funning bill Manttion to in take off to griv.
800 undergrade
Feinman
800 grad students
really famous C.C.T.
"Feinman Lectures
small
on Physics"
Linnaun Pauling
Rose Bowe stunts
Milliken-founding
Physiciat;
Library namea for him
teron throd
pronen ingen. enginering
(Human genome
Project (?))
KOMPUTERS
LIVING INSIDE YOUR PC
should be 1,000 times more powerful
crease in speed is four factors of 10.
than it is now. The progress doesn't end
Kay is an "Apple Fellow," a re-
n 1975 the world's first modern per-
with silicon, though. Engineers are also
searcher working for Apple Computer
sonal computer, the Altair 8800,
working with gallium arsenide, which
on long-term projects chosen according
came on the market. The machine was
operates even faster, and the Josephson
to his own whim, as if he were an aca-
hopelessly primitive by today's stan-
junction, a transistor made of super-
demic. In the early 1970s he was one
dards. It arrived in pieces, to be assem-
conducting materials.
of the computer scientists working on
bled by the user. It had no keyboard
Meanwhile computer scientists are
the Xerox Palo Alto Research Center
and no display-hackers had to pro-
finding more efficient "architectures,"
project. Trying to imagine how com-
gram it by flipping toggle switches on
or ways to arrange the basic elements
puters could be designed so that any-
the front panel, and they read the re-
of the computer. One technique is to
one could use one, the Xerox team
sults in binary form via flashing lights.
make computers able to divide tasks
came up with some basic concepts so
It had 256 bytes of memory (today's
into separate parts and take care of
powerful they're now known to every
garden-variety IBM PC clone has
them simultaneously, instead of one af-
computer user: the window, a way of
640,000), no word processing or
ter another. Another approach is to
looking into several documents or pro-
spreadsheets. Popular Electronics sug-
eliminate the barriers between process-
grams on a single screen; the menu, a
gested that the Altair could be used to
ing (computing) chips and memory
list of options for what to do next; and
control a ham radio or a digital clock.
chips, barriers established at a time
the mouse, the tabletop device used for
Considering how the personal com-
when processors were made of vacuum
pointing on the screen. Having helped
puter has changed in the 13 years since
tubes and memory was made of little
shape the first computer revolution,
then, it seems reasonable to assume
magnetic donuts. Since they are now
he's a good person to talk to about the
that the device will be all but unrecog-
both made of silicon, they can be
next one.
nizable by the turn of the century, 13
moved physically closer together. That
One thing Kay predicts is that with
years from now. Some experts talk of
lets electronic signals travel shorter dis-
all this power, instead of simply storing
wristwatch-size computers that under-
tances, which means faster computing.
and retrieving data, we'll be able to
stand ordinary human speech, elec-
If any one of these ideas becomes com-
mold that information into a working
tronic books that contain entire librar-
mercially available by 2001, we can add
model of some aspect of the world and
ies in digital form yet are the size of one
another factor of 10 to the expected in-
test ideas by varying the assumptions
slim volume of poetry. Others predict
crease in computing power.
of the model. "For instance," he says,
that the amount of information accessi-
Data-storage capacities are keeping
"most corporate executives, although
ble through home computers-irom
apace. Already, as much information
they've never really thought about it,
telephone links and from disks with
can be stored on one optical compact
would much prefer to have a model of
thousands of times the memory of
disc as on 2,000 magnetic floppies or
their company that they can actually pit
present-day floppies-will be so formi-
130 books of 300 pages each. This
against different situations," rather
dable that we will use artificially intelli-
makes it possible for computers to take
than rely on personnel records to see
gent electronic assistants to plow
on new, specialized purposes. Interac-
how changes in organization would af-
through it and find the material we
tive video movies, where the user can
fect the company's productivity.
really need.
play a role and influence the outcome
This sort of simulation is already
The reason for such confidence is
of the story, are just one example.
done on supercomputers; climatolo-
that there's no reason for the rapid pro-
But it's a lot easier to talk about com-
gists use models of the atmosphere to
gress in computer hardware to slow
puters' future quantitative power than
test the greenhouse effect, and engi-
down anytime soon. Since the transis-
it is to translate that power into the
neers simulate airplane wings in wind
tor was invented in 1947 and first com-
qualitative changes that will affect the
to test aerodynamic designs without
mercialized around 1960, hordes of en-
ordinary person. Computer scientist
going to the trouble of building physi-
gineers have been refining it, learning
Alan Kay, widely regarded as one of the
cal models. But since every user is in-
to make smaller, more complex, and
true visionaries of personal computing,
terested in a different simulation, each
more efficient circuits out of silicon.
offers a way to think about it: "View a
has to create his own programming.
Since 1975, personal-computing
series of pictures at two frames a sec-
Even if the personal computer at the
power-measured by the number of
ond," he says, "and then view them at
turn of the century is as powerful as to-
calculations per second-has increased
twenty frames a second. In one case
day's supercomputers, most of us
by a factor of 10,000. But engineers are
you have a series of still images, and in
won't be ready to do that.
still far from exhausting silicon's inher-
the other case you have animation."
It will be necessary to find a way to
ent possibilities. Their exponential rate
Something about the nervous system
make such programming accessible to
of progress is expected to continue until
seems to respond to changes of that
everyone. Kay is trying to do just that
the theoretical limits of the material are
magnitude by drastically shifting the
in his current project for Apple, the Vi-
reached, which will happen in the mid-
way it interprets the input. And that's
varium, which he conjured up with
1990s. By then each computer chip
just a factor of 10; a 10,000-fold in-
Ann Marion, the project director. Tak-
DISCOVER
NOVEMBER
1988
ing a cue from the old Xerox days, Vi-
varium's staff tests its ideas with chil-
dren, first through sixth graders at a
Los Angeles school. The project is both
an experiment in education and an at-
tempt to create a new model for com-
puter interaction.
When Vivarium's students study
fish, they use a Macintosh computer to
make pictures of fish and sea plants and
then animate them. To make it a proper
simulation, though, the computer fish
have to act on their own, as real fish
would. A group of graduate students at
MIT has already done this-"the hard
way," as Kay puts it-with conven-
tional programming techniques and in-
tellectual brute force. Now Kay and the
MIT group are trying to discover the
easy way-a way that the schoolchil-
dren will be able to master. If that
doesn't sound possible. consider that
Kay has already taught ten-year-olds to
write programs that do three-dimen-
sional graphics. If the project is success-
ful, it could provide the basis for a
programming environment in which
anyone can create almost any simula-
tion he wants.
Another decisive shift Kay forecasts
in the relation of user to computer is a
"change from being on the outside of
the computer to being on the inside."
This will happen, he says, through the
development of a "computer display
you can put on your head." A screen
will be mounted in a heimet, along with
gadgets-aiready available-that can
measure head movements with great
accuracy. Thus, what appears on the
Computer whiz Alan Kay predicts keyboards and bulky monitors are on the way out.
screen will depend quite realistically on
where you're looking, giving you the
network of microwave transponders,
how people might one day relate to
sensation that you're not just looking
much like the cellular phone network.
them. But the Dynabook is now turning
at a simulation-you're completely
Wherever we go, we'll have wireless ac-
into a practical idea. Commonly used
surrounded by it.
cess to a Niagara of data through a port-
laptop computers are now as small as
We'll be moving inside the computer
able computer. "We're going to be liv-
6.5 pounds. Even smaller, if less practi-
in a more figurative sense as well: the
ing inside our computer network," pre-
cal, machines are available on the
computer will become part of our envi-
dicts Kay,
gadget frontier. This is the natural out-
ronment rather than a tool for a few
At the same time, he adds, "what we
growth of the continuing minia-
specialized uses. We'll be surrounded
have to carry around with us to interact
turization of computer chips, com-
by data sources. The number of sources
with the network is going to get smaller
bined with the liquid crystal technology
of electronic information available by
and smaller." Back in 1968 Kay pro-
being used in pocket TVs.
modem over phone lines is already
posed the concept of the Dynabook, or
Now that the electronics have been
enormous. and it will continue to grow.
notebook-size computer. The Dy-
shrunk and the screens flattened, the
Soon these sources will carry sound
nabook was intended as a sort of
next challenge is to eliminate the key-
and pictures as well as text. and they
thought experiment, a spur to imagin-
board, which is awkward both to carry
will gradually become available from a
ing what computers might become and
around and to use. In the Toshiba 1000
DISCOVER
NOVEMBER
1988
65
1967
Hsuniverdicy
H5"
Garden
; Isu.
3
1914.
Huang.
Chinese
1971.
3
Hua.
laptop, for example, the keyboard is re-
heard and the sound
sponsible for about 50 percent of the to-
as intended by the
tal surface bulk.
speaker. It does this by
One way to get rid of the keyboard
first determining all the
is to make the computer able to read
sounds that might possi-
handwriting. The user could write
bly have been intended and
his input directly onto the screen
then picking the one most
using a stylus. This is just
likely to form a word. Lee com-
becoming possible today.
bined the Hidden Markov method with
Sensing the position of a stylus on
a system for guessing which word is
the screen is not difficult, and com-
most likely to appear in the context,
puters can use artificial intelligence to
and he reached 75 percent accuracy.
identify letters. Systems that read
Several more refinements upped that to
printed type are already commonplace,
could become a fairly robust, useful
96 percent. Lee's method takes into ac-
and new ones that can deal with hand-
technology in five years."
count stress and intonation, and it al-
writing are appearing. These require
Present-day speech-recognition ma-
ways considers sounds in groups of
that the letters be written separately
chines work fairly well with a limited
three, rather than one at a time. An-
and in a style known to the computer.
vocabulary if they are limited to one
other improvement Lee is working on
They also require a fair amount of error
person's voice; it's much easier to
will give the program the ability to
correction by the user. But the accuracy
memorize one person's pronunciation
gradually adapt to a particular
of these machines will improve, and
than to understand the elusive sound
speaker's idiosyncrasies, just as people
they will soon learn to deal with cursive
patterns common to all speakers. These
do. This hasn't paid off yet, but Lee
writing.
machines also usually require careful
considers it very promising.
And even a stylus pad takes up
and separate enunciation of each word.
None of this, however, is the same as
space. To overcome the bulk of a com-
This makes speech-recognition systems
making a computer continuously un-
puter completely, you'd want to make
inconvenient at best. Hence they are
derstand speech, and that will be neces-
it capable of recognizing ordinary
used only for assembly-line control and
sary for truly conversational, spontane-
speech. This has been the Holy Grail to
other specialized purposes. "So long as
ous talk with a computer. As Alan Kay
hundreds of computer scientists for a
you have a cooperative speaker who's
says, "In order for a computer to be hu-
long time. By 2001 increased comput-
highly motivated, you're fine," says
manlike, it will have to live in our
ing power may bring it within reach.
Reddy.
world." And that will require artificial
"When you have a thousandfold im-
One of Reddy's graduate students,
intelligence of a far more sophisticated
provement, the results are just not pre-
Kai-Fu Lee, has recently made a break-
sort.
dictable," says Raj Reddy, a longtime
through in extending those limits. Lee's
Many computer scientists have come
speech-recognition maven at Carnegie-
experimental program, SPHINX, can
to the conclusion that most of intelli-
Mellon University. Reddy believes that
understand any speaker, without
gence is really wisdom, that is, the ap-
it may take 10 to 30 or more years to
pauses between words; it works with a
plication of the correct bit of knowl-
realize the ideal. Just how long depends
fairly complex, though specialized,
edge. Understanding speech is no ex-
on the answer to yet-unresolved theo-
subject matter (naval ship move-
ception. When we listen, we don't have
retical questions and on the degree of
ments), and it has a vocabulary of 997
to painstakingly identify each word be-
commitment to the project. The basic
words.
cause we already have a good idea what
elements of the problem have been
SPHINX is based on the Hidden
a person is talking about-we're apply-
ILLUSTRATION IAN PHOTOGRAPH PRESS
identified, he says, and "they're all
Markov method, a well-established
ing what we already know about lan-
doable. The technology is all here. If
technique for bridging the inevitable
guage and about the subject at hand.
someone started a crash effort today, it
gap between the sound as actually
Computers will have to learn to do the
66
DISCOVER
NOVEMBER
1988
mpce Poetry: An Anthology.
1
77
111
18 Kong: Dragonfly Books.
1
11th
244 12
an
12%
Toe 8.7
BEL
19.
i
in Contemporary
ak
12%
3
BANK
¡Lano Morals in China. April
$1
a
31
Primary Role of
LUY
44
112
"
$38
35%
260
3235 167 any the 14 6% an "
Pocket-size computers will give wireless access to information from hospitals, libraries, and banks.
same. The trouble is, that means pro-
late to computers as assistants, or
cles you read carefully, it can keep up-
viding them with a lot of background
"agents," that people manage. Most of
to-date on what you like to read. Next
information-a "knowledge base"
-the work of computing will be done by
it lays the stories out, sets headlines in
similar to our own.
the computer itself. A few very simple
sizes that reflect their importance to
Language comprehension is hardly
agents are here already, and more so-
you, adds photos, and waits for you to
the only aspect of artificial intelligence
phisticated ones will be around by
read it.
that's likely to be useful for ordinary
2001.
In fact, it's likely to know your inter-
people. True intelligence is certainly far
One example is NewsPeek, a system
ests better than you do. And since
in the future-further than 13 years.
developed at MIT by Kay and by Walter
NewsPeek can also take messages for
But artificial intelligence and personal
Bender. NewsPeek edits a personalized
you, you might wake up to find that the
computing will grow up together. Kay
newspaper just for you, every morning.
banner headline, reflecting the most
projects that one aspect of this develop-
It logs onto news-service data bases at
important story of the day, reads some-
ment will be a gradual change from
night and looks for stories that match
thing like HAPPY BIRTHDAY. Now that's
computers as tools that people manipu-
your interests. By noticing which arti-
a personal computer. -Tom Waters
THE ROBOT REALITY
from the sunken RMS Titanic.
But the age of the science fiction ro-
A
Ithough we might wish otherwise,
bot is getting closer, and by 2001 we
robots like the anthropomorphic,
may finally have personal robots in our
butlerlike C-3PO and his garbage-can-
homes; they won't be quite as resource-
size. hemisphere-headed buddy, R2-
ful or clever as the Star Wars team, but
D2, are still pure fantasy. Robots exist,
they may be up to watering the
but they're mostly giant mechanical
plants, feeding the pets, washing
arms that do a few narrow tasks, not
the car-maybe even grab-
talking, thinking, independent entities.
bing us a beer, chips,
In the automobile industry, for ex-
and some guacamole
ample. robot arms staff entire assembly
from the refrigerator.
lines. Some have electrode "fingers"
More significant,
that weld parts together. Others are
however, will be the
programmed to spray-paint cars more
robot's expanded
thoroughly and evenly than a human
use for mundane
could. Still others are material handlers
commercial and ser-
that pick up parts and place them on
vice jobs. Robots will be more
assembly lines or load and unload pal-
commonplace as fruit pickers
lets. In its large-appliance division in
and hospital attendants. They
Louisville, Kentucky, General Electric
will be used for such environ-
has optic-sensor-equipped robots that
mentally dangerous tasks as
"see" refrigerator compressors, pick
cleaning up nuclear power
them up. and move them from one con-
plant accidents, mining coal,
veyor to another. And then there are
and repairing space-station
the robot explorers: last summer the
components in the cold
French Institute for the Research and
airlessness of Earth orbit.
Exploitation of the Sea used a robotic-
Most impressive of all is
armed submarine to snatch treasures
that some robots will be do-
"I see a more direct realization of the R2-D2 concept of robotics."
ing these iobs autonomously. Nearly all
camera-control systems, a bump detec-
terns. It is an attempt to model the way
today's robots have to rely on either di-
tor (which looked like the rubber sides
neurons interact in the brain. Informa-
rect or preprogrammed instructions
of an amusement-park bumper car),
tion is represented in a neural network
from humans. The 1979 Three Mile Is-
and wheels. The project was a crude at-
by the strengths of the connection be-
land disaster. for example. is still being
tempt to create a robot that could move
tween the processors. The more useful
cleaned up by a six-wheeled, one-
from room to room without charging
the information, the stronger the con-
armed robot named Rover, but Rover
into the children or the china cabinet.
nection becomes; useless or incorrect
is controlled at all times by human op-
Shakey was far too primitive for ac-
information leads to weaker connec-
erators. A robotic arm at Memorial
tual consumer use. But its designers
tions. Other contemporary robots still
Medical Center in Long Beach, Califor-
were already anticipating one of the
operate by more conventional pro-
nia. can precisely locate a tumor in a
two major lines of inquiry pursued to-
grammed approaches to artificial intel-
patient's brain-but it has to be pro-
day: the development of true artificial
ligence. But Kuperstein's robot-called
grammed with the tumor's coordinates,
intelligence-robotic brains able to rea-
INFANT (Interacting Networks Form-
based on a brain scan, in advance.
son, make decisions, and learn-and
ing Adaptive Neural Topographies)-is
An autonomous robot, by contrast,
sophisticated dexterity, so that robots
told what to do in a certain environ-
will be able to evaluate situations as it
can manipulate their environment.
ment and through trial and error learns
encounters them and react accordingly.
At the forefront of robotics research
to do it.
It's a convenient capability for a nu-
is Michael Kuperstein of Neurogen Cor-
In the first phase of the learning
clear plant cleaner or a coal miner. But
poration in Brookline, Massachusetts.
process Kuperstein gives the robot ob-
it's absolutely essential for a robot oper-
He has developed an integrated robotic
jects to hold; a ball, for example. "The
ating beyond the reach of human con-
system: two cameras that act as eyes
machine explores its space by moving
trollers-on Mars, say. or in the deepest
and an industrial, jointed arm with a
its arm randomly and forming images
parts of the sea.
clincher hand. He has also incorporated
of its arm and the ball," he says. "At
Researchers have been working on
the supercomputing power of an image
each position the system takes a view
robot autonomy for decades. In 1969
processor.
of the arm and of the ball, and the im-
SRI International developed a bulky ro-
Kuperstein programmed the image
ages are transformed into a neural rep-
bot, appropriately named Shakey, pro-
processor to simulate the functioning of
resentation." That phase lasts about
grammed to maneuver itself around a
a neural network, which is composed
two hours. In the second phase Kuper-
controlled environment. It had a televi-
of a set of identical processing elements
stein places the ball arbitrarily in the ro-
sion camera. huge onboard logic and
that work together to recognize pat-
bot's environment and instructs the ro-
By 2001 robots may
finally do o range of
household chores.
bot to pick it up. INFANT can't
devoted exclusively to health-
yet do that on its first try,
care robotics, is far less cau-
though it comes close. In the
tious. His company recently in-
third phase the robot observes
troduced a voice-activated com-
its attempts to grab the ball and
puter and robot designed
learns by remembering those
specifically for the handi-
positions that bring it closer to
capped, and he is convinced
the ball and ruling out those
that improvements in robotic
that don't.
technology will be rapid.
"In the final phase, after fail-
"This system can give handi-
ing to grasp the object several
capped people complete access
times," says Kuperstein, "it
to all telephone services, con-
uses what it's learned to adjust
nection with remote data banks
itself until it gets a completely
anywhere in the world. That
accurate performance. In
opens up a brand new world for
other words, it picks up the
them: they can now enter busi-
ball. During phase one the trial-
nesses such as computer pro-
and-error cycle is repeated
gramming, accounting, engi-
2,000 to 4,000 times; that is, as
neering, architecture and other
many as 4,000 different pos-
design operations, publishing-
tures are calculated and com-
the list goes on." The robot half
pared. Phase three takes an-
of the device, controlled by
other ten cycles or so. Over the
voice through the computer
course of these associations the
half, is a mechanical arm with
difference between the com-
a two-fingered hand that can in-
puted arm position and the ac-
sert and remove floppy disks
tual arm position gets smaller
and even hand the user a glass
and smaller; thus, the com-
of soda or an orange. The arm
puter learns by comparison.
Michael Kuperstein's robot, INFANT, has developed the
is crude, however; it can't peel
This may seem long and tedi-
ability to learn through old-fashioned trial and error.
the orange.
ous for just one simple task, but
But, says Weisel, "that's just
it's a maior step in connecting neuro-
Stephen Jacobsen of the University of
a matter of gathering all our technolo-
biology to robotics.
Utah is one of those trying hard to im-
gies and integrating them. It's a matter
It is quite similar to the way a baby
prove robot dexterity; he predicts that
of getting specific people working on
learns to grasp objects. Think about a
robotic limbs will certainly have gotten
mobility, vision, sensing; and others
human infant in her crib. She has eyes
far more adroit and sensitive by 2001,
developing and perfecting dexterous
that see her arms and fingers move, and
but he's cautious about forecasting
arms and fingers." Sounds simple
she begins to realize her control over
huge leaps in either dexterity or artifi-
enough, but remember that it still takes
them. She moves an arm and grasps a
cial intelligence within just 13 years.
Kuperstein's INFANT hours just to fig-
stuffed animal and realizes she can pull
"New computing comes along daily,
ure out how to pick up an object. It also
it toward her. Then she grasps a railing
so machine complexity will be chipped
took years of research to create com-
and realizes she can't pull that toward
away considerably in ten to fifteen
puter systems powerful enough and
her. She's learned the difference be-
years," Jacobsen says. "But you have
programs accurate enough to guide
tween two objects in her environment,
to realize, a hand is an enormously
industrial robots with enough savvy to
and her behavior has been modified.
complex thing in itself, with ten times
pick up one car part, weld it to another
This is how Kuperstein's image proces-
the amount of actuators that even a car
part, and move the finished piece on
sor, cameras. and arms work. He began
has.
down the line.
his project using the Swiss psychologist
"I just don't think we know enough
Still, Weisel predicts remarkable
Jean Piaget's concept of circular reac-
yet to make machines that can function
progress over the next 13 years. "What
tion in human learning: that a child ex-
in environments in which they don't al-
I see is a more direct realization of the
plores the world through movements.
ready know what's going to happen.
R2-D2 concept of robotics," he says. "I
perceives the consequences, and then
And I think it would be stretching it a
feel we'll have commercially packaged
makes an association.
bit to say this will be possible ten years
systems that can walk or roll, with on-
All the intelligence in the world
from now."
board telemetry to send information to
won't make much difference, however,
Walt Weisel, president of Prab Com-
the robot's 'master'-wherever he or
if a robot can't manipulate its environ-
mand, a Kalamazoo, Michigan, robot-
she may be. Think about it. With a cel-
ment based on what it's learned.
ics company that has created a division
lular telephone and a computer you
DISCOVER
NOVEMBER
1988
69
DVER55%
ONTASCO
TELESCOPE!
tasco
50mm
Objective
Lens!
DISCOVER UNSEEN
EARTHLY WONDERS!
Bring Your World Closer with this
precision Tabletop Telescope from
Tasco. Actually a high-quality zoom
At Memorial Medical Center in Long Beach, California, a robotic arm guides the
refractor model for terrestrial use, it takes
surgeon to a brain tumor's precise location, within .002 inch.
you 4 times beyond the power of hand-
held binoculars. As a result, you get
crystal-clear close-ups! Use it for skyline
will call up your home robot from any-
of each muscle and joint in the limb.
scanning. as a target spotting scope, for
where and tell it to water the plants or
"This," he says, "is just a first step in
watching birds. wildlife, people, etc. Best
of all, you'll love our LOW price. Order
wash the car." Joe Engelberger, chair-
understanding the relationship be-
yours today!
man of Transitions Research Corpora-
tween intelligent systems and graceful
Fully Coated Optics for Best Clarity
tion and sometimes called the father of
movements.
and Precise Magnification.
industrial robots, also firmly believes
"But limbs are really extraordinarily
15X to 45X Variable Zoom Focusing.
home systems will be a staple by the
primitive systems," Pellionisz adds.
50mm Achromatic Objective Lens.
Dependable Rack and Pinion Focusing.
turn of the century: "We did a survey,
"By the year 2001, they'll be mere toys.
Rotates 360 Degrees. Panhead Lever.
and the number one thing that women
The difference between systems of to-
Foldable 9½" Metal Tripod.
want is a robot that will clean their
day and systems of tomorrow will not
Top-Mounted Sight Mechanism.
bathrooms."
Black.
be their strength or their human quali-
Lifetime Limited Mfr.'s Warranty.
To do so, a robot will need not just
ties-it will be their intelligence. The
intelligence and dexterity, but a way of
real goal is not just robotic arms that
Mfr. List
$119.95
connecting the two. That's the specialty
can do something, but robotic systems
$49
of Andras Pellionisz, a biophysicist at
that can recognize a situation, make a
Liquidation
New York University Medical Center.
decision, and then do something."
Price
Pellionisz is best known for his studies
Just how much machines like Kuper-
Item H-4036-7414-899
Shipping, handling: $6.50 ea.
of the cerebellum, that part of the brain
stein's INFANT will be able to do in the
that coordinates limb movements. He
near future depends a lot on how fast
Credit card customers can order by
has devised a theory of how the cere-
they can mature into responsible adult
phone, 24 hours a day, 7 days a week.
bellum integrates two distinct coordi-
robots. By 2001, Kuperstein predicts,
Toll-Free: 1-800-328-0609
nate systems-that of the sensing or-
INFANT and its contemporaries may
gans and that of the muscles-to per-
have reached adolescence. Perhaps
SEND TO:
form such complex tasks as grasping
they will have learned enough to per-
COMB
Authorized Liquidator
and walking. And there is no reason the
form simple housecleaning tasks, or
1405 Xenium Lane N/Minneapolis, MN 55441-4494
Send Tasco Telescope(s) Item H-4036-7414-899 at
theory can't be adapted to robots.
even pick oranges off trees. But to do
$49 each, plus $6.50 each for shipping and handling
(Minnesota residents add 570 sales tax. Virginia residents
In his cluttered university office Pel-
more than that may take some teenage
add 4.5% sales tax. Sorry. no C.O.D. orders.)
lionisz demonstrates just how convinc-
rebellion.
= My check or money order IS enclosed. (No delays
in processing orders paid by check)
ing his ideas are. He points to the
"The more flexible and skilled you
PLEASE
screen of a Macintosh computer on
want robots to become," says Kuper-
CHECK:
which he has created an image of a cat's
stein, "the more independent from
Acct. No.
Exp
leg. The leg is animated according to
their human designers they have to be-
PLEASE PRINT CLEARLY
his theories of movement-and indeed,
come. It's difficult to constrain the
its movement on the screen looks re-
kinds of mistakes these things are going
Name
markably lifelike. Pellionisz issues a
to make. You want your child to learn
Address
Apt. #
command to the Mac, and the leg
from its mistakes; well, these machines
speeds up and slows down realistically.
have to make their own mistakes and
City
State
Then he points to a graph at the side
learn from their own experiences."
PHOTOGRAPH BY AERO/SIPA PRESS
ZIP
Phone
1
of the picture that shows the movement
-Mark Kemp
Sign Here
70
DISCOVER
NOVEMBER
1988
U.S.
TECHNOLOGY POLICY
THE
3 SAA AND UNITED POLICY SCIENCE BIRLY OFFICE OF OF
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF SCIENCE AND TECHNOLOGY POLICY
WASHINGTON, D.C.
SEPTEMBER 26, 1990
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF SCIENCE AND TECHNOLOGY POLICY
WASHINGTON, D.C. 20506
September 26, 1990
Dear Messrs. Chairmen:
I am pleased to transmit to you a statement of the Administration's technology
policy. This paper brings together the many facets of technology policy, describes
what they are, and shows how they fit into a comprehensive framework. It consists of
the goal and strategy of this policy and the program implementation proposed in the
Administration's Fiscal Year 1991 budget submittal to Congress. It is also intended
to serve as a baseline for future dialogue and discussion of technology issues, both
inside and outside of the government. Areas associated with classified national
security technologies are not included.
The issues involved in technology policy are varied and complex. Nonetheless,
the underlying theme is that all sectors of our society have important roles to play in
achieving the goal of this policy. There are formidable challenges facing us, but by
working together and capitalizing on our strengths, we can ensure continued U.S.
economic and industrial competitiveness.
Sincerely,
Danan Rowley
D. Allan Bromley
Director
The Honorable Robert C. Byrd
The Honorable Jamie L. Whitten
Chairman
Chairman
Appropriations Committee
Appropriations Committee
U.S. Senate
U.S. House of Representatives
Washington, DC 20510
Washington, DC 20515
U.S.
TECHNOLOGY POLICY
THE SPRESIDENT
3 34 ANY & CUTIVE UNITED POLICY SCIENCE BILL OFFICE 30 OF
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF SCIENCE AND TECHNOLOGY POLICY
WASHINGTON, D.C.
SEPTEMBER 26, 1990
U.S. TECHNOLOGY POLICY
A nation's technology policy is based on the broad principles that govern the
allocation of its technological resources. Competitive market forces determine, for the
most part, an optimal allocation of U.S. technological resources. Government can
nonetheless play an important role by supplementing and complementing those forces.
Technology policy is not something that, once set in place, remains immutable. Broad
principles exist, but effective technology policy requires sufficient flexibility to permit
response to changing national and international situations. We are in an era marked
by increased international economic interdependency and increasingly stronger
technological capabilities in other industrial nations. These factors pose competitive
challenges for U.S. firms as well as opportunities. In formulating a national
technology policy, consideration must be given to a nation's traditions, its strengths
and weaknesses, and the international environment in which it exists.
In almost all respects the U.S. science and technology base remains the world's
strongest. The Nation's research universities and the ability of its people to innovate
remain the envy of the world. Nonetheless, industrial competitiveness depends on
many factors besides technology. Our strengths in technology and innovation have
not prevented an erosion in market shares of U.S. companies in many industries. As
new products mature, the advantage quickly shifts from the innovator to the efficient
producer. We have also seen the importance of high rates of capital investment for
the industrial competitiveness of Japan, Europe, and the Pacific Rim countries.
The competitive challenges American firms face are multifaceted and complex. There
will be no facile, short-term solutions. We, in this Administration, believe it is
essential that we recognize and use the strengths of our economic system more
effectively to help U.S. firms remain competitive. In order to do so, all elements of
our society must recognize that while we possess many strengths and assets, problems
do exist, and that we can mobilize our resources and solve them. At the same time,
we need to refrain from actions that might distort our basic system of free enterprise
-- the Nation's ultimate strength.
In order to build on its strengths, U.S. society needs to focus on ensuring:
0
a quality workforce that is educated, trained, and flexible in adapting to
technological and competitive change;
0
a financial environment that is conducive to longer-term investment in
technology;
0
the translation of technology into timely, cost competitive, high quality
manufactured products;
0
an efficient technological infrastructure, especially in the transfer of
information; and
0
a legal and regulatory environment that provides stability for innovation and
does not contain unnecessary barriers to private investments in R&D and
domestic production.
In addition, the Federal Government, industry, and academia need to take advantage
of opportunities for:
o
technology transfer and research cooperation, particularly involving small and
mid-sized companies;
o
building upon state and regional technology initiatives; and
mutually beneficial international cooperation in science and technology.
With its proven human resources and successful tradition of manufacturing, U.S.
industry can assert the leadership required to meet the competitive challenges and to
capitalize on its opportunities. The principal role of the Federal Government will be
to provide an environment conducive to long-term economic vitality, and not allow
special interests to divert attention or resources from this goal.
The following sections provide more detail on the Administration's goals and strategy
to implement its technology policy, and then highlight some of the steps that it has
already taken to improve the economic and technological competitiveness of U.S.
industry.
Goal of Technology Policy
The goal of U.S. technology policy is to make the best use of technology in achieving
the national goals of improved quality of life for all Americans, continued economic
growth, and national security.
Strategy to Implement U. S. Technology Policy
The goal of U.S. technology policy is to be achieved by maintaining a strong science
and technology base, a healthy economic environment conducive to innovation and
diffusion of new technologies, and by developing mutually beneficial international
science and technology relationships. Implementation of the policy must recognize
that all parts of the economy - the Federal Government, state and local governments,
industry, and academia -- have roles to play. The education system provides the
essential flow of well-trained, innovative manpower. Researchers in academia, the
2
Federal laboratories, and industry all contribute to the science and technology base.
Industry makes the investments necessary to turn this knowledge base into
commercial products and processes. Federal, state, and local governments support
research both directly when they fund specific R&D projects, and indirectly through
tax and other incentives for private sector R&D investment. The Federal Government
also sets the overall macroeconomic and legal environment in which industry's
decisions about product and process development and commercialization take place.
In that context, the Administration's strategy to implement U.S. technology policy
includes the following major elements:
Role of the Private Sector
While the government plays a critical role in establishing an economic environment to
encourage innovation, the private sector has the principal role in identifying and
utilizing technologies for commercial products and processes. In particular, the
private sector has the responsibility to:
-
conduct research and development to advance industry-related knowledge and
technology;
- identify and aggressively pursue potential commercial applications for technologies
developed by its own laboratories as well as by universities, Federal laboratories,
and foreign sources;
- increase quality, output, and productivity by undertaking necessary investments in
physical capital;
-
improve the skills and abilities of its workforce to meet its specific needs; and
- participate cooperatively in improving the quality of U.S. education.
Government policies can help establish a favorable environment for private industry
to conduct these activities but cannot substitute for aggressive private sector action.
Government Incentives for the Private Sector
0
Create an environment conducive to technological competitiveness by ensuring that
technology policy concerns are factored into the formulation of related policies (e.g.
fiscal, monetary, trade, environmental, etc.) with the overall objective of enhancing
U.S. economic growth.
0
Encourage private technology-related investment through Federal monetary and
fiscal policies. For example, reducing the capital gains tax differential and making
permanent as well as enhancing the tax credit for research and experimentation
will provide incentives for added investment. Incentives can also be provided
through appropriate tax policies.
3
0
Provide an appropriate legal environment at the Federal level that removes
unnecessary obstacles to innovation. Reducing the uncertainties about antitrust
enforcement related to inter-firm cooperation in research and technology
development encourages the pooling of limited resources and a rapid diffusion of
results while still protecting against anticompetitive practices. Reducing the
antitrust uncertainties about joint production ventures will also enable firms to
cooperate in the development and introduction of new products.
0
Revise Federal procurement regulations and practices to permit greater integration
of government and commercial production at the factory level, as well as encourage
greater innovation and efficiency in development and production. Also encourage
the use of commercial products, to the extent feasible, for defense, space, and other
government applications.
Improve opportunities for companies to commercialize technologies and computer
software developed during the performance of government contracts by allowing the
contractors to retain rights in technical data and by protecting their trade secrets.
o
Provide a stable regulatory environment in order to decrease risk for private
investment.
Seek greater harmonization of regulations and standards for products and
processes with our major trading partners.
Encourage increased U.S. participation in multi-lateral international
standardization efforts through the standards activities of the National Institute of
Standards and Technology.
o
Seek better international protection of intellectual property to allow more benefits
to be recovered from R&D investments.
Education and Training
o
Revitalize education at all levels including not only the training of scientists,
engineers, and the technical workforce, but also educating our population to be
sufficiently literate in science and technology to deal with the social issues arising
from rapid scientific and technical change. Achieving such a goal will require a
broad-based approach involving business, academia, and educational organizations,
as well as Federal, state, and local governments.
0
Develop a framework for Federal interagency coordination and collaboration in
mathematics, science, engineering, and technology education. The goal is to define
an effective and appropriate role for the Federal government in support of the
states, localities, and universities as they improve science and technology education
to build human capital in the U.S.
4
0 Encourage continuing education and training, recognizing that, particularly in
scientific and technological fields, education must be a lifelong activity.
Federal R&D Responsibilities
0 Increase Federal investment in support of basic research. Private industry does
not invest- heavily in-basic-research-because the payoffs-are so unpredictable and
diffuse that individual firms cannot be confident of fully recovering their
investments. However, the long-term potential benefits of this research are SO large
that society cannot afford not to make the investment, especially in university
research which, in addition to new knowledge, also produces trained scientists and
engineers of the future.
0
Participate with the private sector in precompetitive research on generic, enabling
technologies that have the potential to contribute to a broad range of government
and commercial applications. In many cases these technologies have evolved from
government-funded basic research, but technical uncertainties are not sufficiently
reduced to permit assessment of full commercial potential. In pre-competitive
research, which occurs prior to the development of application-specific commercial
prototypes, research results can be shared among potential competitors without
reducing the financial incentives for individual firms to develop and market
commercial products and processes based upon the results.
0
Continue the Federal government's development of products and processes for
which it is the sole or major consumer, such as national defense, provided that no
commercially available products can be substituted. The government, in such
cases, must rely principally on the private sector to undertake the development
process. Revise current Federal procurement regulations to strengthen the abilities
of companies involved in developing and demonstrating these products to use the
same research results and technologies for commercial purposes.
0 Maintain a strong Defense technology base to provide options for future weapons
systems development and to help avoid technological surprises by potential
adversaries. Special emphasis needs to be placed on shortening the time required
for transferring R&D results to production and on using commercial products.
0
Streamline Federal decision-making structures and mechanisms to eliminate
unnecessary and cumbersome regulations and practices that inhibit industrial
competitiveness.
0
Encourage international cooperation in science and technology, where mutually
beneficial, and inform U.S. researchers of opportunities to participate in R&D
initiatives outside the U.S.
5
Transfer of Federally Funded Technology
Improve the transfer of Federal laboratories' R&D results to the private sector.
Where appropriate, these laboratories should give greater consideration to potential
commercial applications in the planning and conduct of R&D, and these efforts
should be guided by input from potential users. To achieve this goal, there must
be a closer-working-relationship among ese-laboratories, industry, and
universities. Defense-related laboratories can make major contributions while still
providing adequate safeguards for classified information.
0
Promote increased industry-Federal laboratory-university collaboration, including
personnel exchanges, to help convert Federally-supported R&D into new
technologies that the private sector can then turn into commercial products and
processes.
0
Promote and encourage access by U.S. industry to Federal laboratories within the
guidelines established by the Federal Technology Transfer Act of 1986 (P.L. 99-
502), other existing legislation, and Executive Order 12591.
o
Expedite the diffusion of the results of Federally-conducted R&D to industry,
including licensing of inventions and removal of barriers to commercialization of
Federally developed computer software.
Encourage direct laboratory-industry interaction within broad, flexible Federal
guidelines, since effective technology transfer occurs at the operational level.
Federal-State Activities
Recognize the importance of decentralization, and encourage states to develop
programs that take into account the individual characteristics of each state.
Federal programs in such areas as education, training, the national infrastructure,
and regional generic technology centers, should build upon state initiatives.
Programs To Implement U.S. Technology Policy
The Administration has undertaken a broad range of programs and initiatives
aimed at translating the technology policy into action. These programs and their
associated budget levels requested for Fiscal Year 1991, where applicable, are
summarized here.
6
Incentives for the Private Sector
The Administration has proposed improvements in incentives for private sector
innovation by:
0
Reducing the tax rate on capital gains permanently to spur entrepreneurial
activity.
The Administration has proposed restoring a capital gains tax differential such
as existed before the Tax Reform Act of 1986. A lower tax rate on capital gains
will encourage investors and entrepreneurs to make the investments necessary to
be competitive.
0
Making the research and experimentation (R&E) tax credit permanent to reduce
uncertainty.
Under current law, the R&E tax credit is scheduled to expire on December 31,
1990. The Administration proposal to make the credit permanent would permit
businesses to establish and expand research facilities without fearing that the tax
laws will suddenly change.
o
Protecting intellectual property through international negotiations.
The Administration is aggressively pursuing improved international protection of
intellectual property. The current negotiations in the Uruguay Round of the
General Agreement on Tariffs and Trade (GATT) are an important forum for
developing better international rules. Negotiations on intellectual property rights
are also being conducted in the World Intellectual Property Organization and in
trilateral talks with the European Community and Japan. In addition, the U.S.
is pursuing bilateral negotiations on intellectual property rights under the
provisions of the 1988 Omnibus Trade and Competitiveness Act.
o
Liberalizing export controls to enhance high technology product exports.
Dramatic changes in the Eastern European security environment have permitted
an Administration re-evaluation of U.S. export controls, and paved the way for an
expanded trade potential for U.S. high technology industries.
0 Reforming product liability laws to restore balance to the tort system.
The Administration supports the adoption of uniform product liability standards
across the 50 states based on three principles of fairness: the right of an
innocent person to fair compensation for actual damages; liability based on
responsibility for harm and not ability to pay; and encouragement of alternatives
to costly litigation. The proposed changes to product liability laws would
7
maintain incentives to produce safe products, but would restore balance to the
tort system and reduce uncertainty - particularly for new products.
0 Reforming the Federal procurement process.
The Administration supports continued efforts to streamline the procurement
process, reduce its complexity and paperwork burden, and provide contractors
with incentives-to-innovate and reduce costs. -The Administration has proposed
changes in legislation and regulations to foster commercial style competitive
procedures for the acquisition of commercial products. A revision of the
Federal Acquisition Regulations is being drafted that will allow contractors to
retain commercial rights in technical data developed under Federal contracts.
The Administration is also developing a policy mandating increased agency use of
performance based contracting that gives contractors more freedom and incentive
to innovate.
o Removing barriers to research, innovation, and development.
The Administration supports continued elimination of unwarranted regulation.
Deregulation can spur innovation as well as lower prices. It also requires a
continuous reexamination of existing regulatory policies to avoid unnecessary
stifling of new products and processes. The Administration has proposed
antitrust legislation that would reduce the legal uncertainties for companies to
enter joint production ventures while still protecting against anticompetitive
practices. Challengers would be required to prove that such ventures would
harm competition. The legislation would also eliminate punitive treble-damage
awards under certain circumstances.
Education and Training
In addition to the President's broad initiatives on education, there are a number
of programs directed at improving education in mathematics and science and at
training of the technical workforce. These include:
o National Science Foundation: $463 million plus research assistantships proposed
in Fiscal Year 1991
The National Science Foundation has a broad range of programs dealing with
mathematics and science education and human resources at all levels. Major
programs are:
- Research career development (graduate research fellowships and enrichment
activities for talented high school students).
- Teaching materials development and informal science education (aimed primarily
at the pre-college level).
8
- Teacher preparation and enhancement (upgrading quality of faculty, providing
Presidential Awards for Excellence in Science and Mathematics Teaching, and
developing model programs for women, minorities, and the handicapped).
- Undergraduate science, engineering, and mathematics education (includes
instrumentation grants, curriculum development, faculty revitalization,
comprehensive-regional centers for-minorities,-and research experiences for
undergraduates).
In addition, almost 16,000 graduate students are supported by research
assistantships through regular research grants to universities.
0 Department of Education: $333 million proposed in Fiscal Year 1991
- Eisenhower mathematics and science program (provides funds to help State and
local educational agencies carry out programs to train teachers and improve
instruction in mathematics and science).
- Adult education program (aimed at skills needed to cope with new technologies
and providing for workplace literacy).
0 National Institutes of Health: $292 million plus research assistantships proposed
in Fiscal Year 1991
- Almost 12,000 graduate students receive training grants.
- Tens of thousands of graduate students are supported by research assistantships
through the $4.4 billion in extramural research grants.
o National Aeronautics and Space Administration: $51 million proposed in Fiscal
Year 1991
Program activities cover informal K-12 science education, mobile presentations on
space to elementary and secondary schools, teacher workshops and internships at
NASA research centers, grants for undergraduate and graduate students, and
programs for minorities in science and engineering education.
0 Department of Energy: $25 million plus research assistantships proposed in
Fiscal Year 1991
- Programs include science and mathematics exposure for middle and high school
students, research training of undergraduates, and graduate fellowships in science
and engineering.
- An estimated 4,000-4,500 graduate students are supported by research
assistantships through research grants to universities.
9
0 Department of Defense: $364 million projected for Fiscal Year 1991 for
non-military personnel
- Pre-college programs (summer programs for minorities).
- Undergraduate programs (primarily ROTC scholarships in technical fields).
- Graduate fellowships and research assistantships.
- Post-doctoral and faculty research appointments.
0 Department of Agriculture: $125 million proposed in Fiscal Year 1991
- Challenge grants to strengthen undergraduate education.
- Capacity building grants to strengthen teaching and research programs in the
"1890 Land Grant" institutions.
- National needs fellowships to recruit and train scientists in the most critically
deficient areas.
- Graduate assistantships associated with research grants projects. About 13,000
graduate students are supported for graduate studies.
- Ag-In-The-Classroom to support science strengthening in K-12 programs.
- Research apprenticeships to bring high school students into university and
government laboratories to stimulate interest in science.
- School enrichment program to function as a catalyst between schools and
community to strengthen science programs.
- Postdoctoral program in Agricultural Research Service and Animal and Plant
Health Inspection Service laboratories.
Federal R&D Responsibilities
The Fiscal Year 1991 budget proposes to allocate about $71 billion for research
and development. This is an increase of $4.5 billion, or 7 percent, over 1990 enacted
levels. Civilian R&D will increase by 12 percent, while defense-related R&D will
increase by 4 percent. Within this total, $12 billion will be allocated for basic
research, an increase of $1 billion or about 8 percent over 1990. The budget contains
a number of new and expanded programs that will contribute to the Nation's R&D
enterprise and competitive posture. These include:
10
0 A 13 percent increase in the National Science Foundation's budget request for
research and facilities, which account for over 75 percent of the NSF budget.
Support for basic science and engineering is the foundation on which U.S.
technology is built. Within the overall increases there are emphases on Science
and Technology Centers, networking and communications, Engineering Research
Centers, and major research equipment for universities.
0 Developing-advanced technologies-to-meet Defense- and-civilian.-agency-needs
Based on the results of a special survey of the support for selected advanced
technologies that are funded by more than one Federal agency, the budget
proposals are:
- Robotics - The budget provides $192 million to six Federal agencies for support
of robotics R&D. The focus of this R&D is on the development of systems that
are more autonomous and capable of interacting with changing and uncertain
environments.
- High Performance Computing - The budget provides $469 million for Federal
support of R&D focused on high performance computing. This activity
includes the full range of advanced computing technologies as well as systems
and applications software, networking, and underlying research and human
resource infrastructure.
- Semiconductors - The budget provides $537 million for research on
semiconductor materials, development and application of semiconductor
materials to meet agency mission needs, and support of R&D on semiconductor
manufacturing processes. The largest single Federal program is DOD funding
of $100 million per year for SEMATECH, a semiconductor industry R&D
consortium.
- Superconductivity - The budget provides $215 million for superconductivity
R&D. Programs in five Federal agencies deal with both high temperature and
low temperature superconducting phenomena and materials.
- Advanced Imaging Technologies - The budget provides $118 million for
advanced imaging R&D. Advanced imaging systems include interactive
graphics, high definition displays, advanced signal processing, and advanced
digital switching technologies.
0 Improving productivity and the quality of life through biotechnology. The budget
proposes $3.6 billion for biotechnology R&D. In pharmaceuticals, foods,
agriculture, waste management, and energy, biotechnical advances offer the
possibility of improvements that will make a real difference in people's lives.
0 Developing technologies for improved transportation. The budget proposes
funding for transportation R&D of $1,527 million. This R&D is aimed at
maintaining a modern, efficient transportation infrastructure, an essential factor
11
in being industrially competitive. Federal programs are focused on aeronautics,
highways, mass transit, railroads, maritime, water, aviation, and other
transportation areas.
Promoting alternate sources of energy. For conduct of energy R&D programs in
the Department of Energy, the budget proposes total funding of $2,450 million.
The R&D is aimed at maintaining abundant, reliable, and economic sources of
energy. Federal programs cover-a-broad spectrum of-energy technologies
including solar, renewable, conservation, nuclear fission, nuclear fusion, and fossil
energy, and supporting energy sciences.
0 Enhancing industrial productivity and development of standards. The budget
proposes $198 million for the National Institute of Standards and Technology.
R&D in fundamental measurements and standards provides the foundation for
U.S. industry, commerce, and science to achieve levels of accuracy and
compatibility required to support technological development, efficient processing,
process control, and quality assurance. Special activities include R&D on
advanced manufacturing technologies. In addition, the Advanced Technology
Program provides grants to industry-led ventures to support research on pre-
competitive generic technologies.
Transfer of Federally Funded Technology
Many important steps have been taken, pursuant to the Federal Technology
Transfer Act and other legislation, to increase the degree to which Federal
laboratories collaborate with private industry in commercializing the results of
Federally-funded research and development. These activities include:
o
Establishment of over 200 active cooperative research and development
agreements between Federal laboratories and private companies.
0
Creation of the Precision Manufacturing Technology Program by the Department
of Energy to provide U.S. industry greater access to the extensive manufacturing
technology, expertise, and facilities available within the Department's Defense
Programs weapons complex.
0
Formation of the Biotechnology Research and Development Consortium, a joint
research effort between the Department of Agriculture's Northern Regional
Research Center, the University of Illinois, the State of Illinois, and six U.S.
companies.
0
Formation of a joint venture in high temperature superconducting materials and
applications by Du Pont, Hewlett-Packard, and Los Alamos National Laboratory.
0
Establishment of Regional Manufacturing Technology Centers. The budget
provides $5 million for this program. The approach is to reduce the barriers
12
faced by small- and medium-sized manufacturers in adopting new technology by
creating awareness and providing up-to-date, practical information and expertise
on manufacturing technologies and practices.
Federal-State Activities
Federal-programs-have-already-been-initiated to -build upon the advantages offered
by decentralized programs operating at the state and local level. These programs
include:
0
Department of Commerce Clearinghouse for State and Local Initiatives on
Productivity, Technology and Innovation:
The Clearinghouse gathers and analyzes information on the many technology
development centers at the state and local level. It will help to develop a
network of contacts among state and local officials and staff.
0
Small Business Development Centers:
Each Small Business Development Center (SBDC) serves as a one-stop assistance
center for businesses and provides services ranging from pre-business start-up
counseling to technical advice for existing businesses. The centers have a
legislative mandate to assist in technology transfer, make use of Federal
laboratories and equipment, and coordinate and conduct research they deem
worthwhile.
0 University Centers Program:
This program provides funds to involve the resources of universities in economic
development within the community.
0 NASA Industrial Applications Centers Program:
The centers offer clients access to a national data bank that includes over 100
million documents of accumulated technical knowledge, along with their expertise
in retrieving information and applying it in support of clients' needs. The
centers are backed by state-sponsored business or technical centers that provide
access to the technology transfer network.
0
Trade Adjustment Assistance Centers Program:
The centers provide trade-impacted small and medium-sized manufacturers
with in-depth technical assistance.
13
The IMAGINATION of NATURE CALTECH at 100
On the cover:
Nearly the entire sky,
as seen in infrared
wavelengths and pro-
jected at one-half
degree resolution, is
shown in this image,
assembled from six
months of data from
the Infrared Astro-
nomical Satellite (IRAS).
The bright horizontal
band is the plane of
the Milky Way, with
the center of the
galaxy located at the
center of the picture.
On the facing page:
A mechanosensory
projection interneuron
stained in an adult
grasshopper by intra-
cellular iontophoresis
of cobalt hexamine.
The diameter of the
soma (lower right)
is about 20 µm.
Photo: G. Laurent
Th
he imagination of nature is far, far greater than
the imagination of man.
The same thrill, the same
awe and mystery, come again and again when we look
at any problem deeply enough. With more knowledge
comes deeper, more wonderful mystery, luring one
on to penetrate deeper still. Never concerned that the
answer may prove disappointing, but with pleasure
and confidence we turn over each new stone to find
unimagined strangeness leading on to more wonderful
questions and mysteries — certainly a grand adventure!
Richard P. Feynman
Nobel Laureate
Caltech Faculty Member, 1950-88
Richard Chace Tolman Professor
of Theoretical Physics, 1959-88
A COMMUNITY of DISCOVERY The PEOPLE of CALTECH
2
C
altech is a century old an instant of time in the history of humankind. Yet in that instant,
Caltech has made substantial scientific, engineering, and technological con-
tributions. These achievements have been acknowledged with the 21 Nobel
Prizes, 29 National Medals of Science, and 2 National Medals of Technology
awarded to Caltech faculty and alumni. At present, Caltech has on its faculty
one of the highest percentages of members of the National Academies of
Sciences and Engineering of any university in the nation.
The explanation
for this amazing record lies in the very nature of the Caltech community.
Caltech has brought together a small group of outstanding people and
placed no barriers between them. Students and faculty work side by side,
often beyond the bounds of traditional academic disciplines. Professional
divisions have been minimized so that people and ideas may move more
freely. In this environment of trust and integrity, people confront exciting
and difficult problems; they explore new areas, instead of colonizing the
old. In so doing, they have established an impressive tradition of
intellectual daring.
Intellectual pursuits have gone hand-in-hand with
practical applications. Early work in Caltech's high-voltage laboratory, for
example, contributed to the development of the power industry in southern
California. Its wind tunnels helped give birth to the aviation industry, its
wartime rocket program to modern spaceflight. Its geologists and engineers
have helped bring water to Los Angeles and keep buildings standing during
earthquakes. And Caltech's electrical engineering and materials science
research has produced innovations in the design of computers and
integrated circuits.
Achievements and contributions-these are not relics
of the Institute's past. Rather, they are milestones along a remarkable path
of discovery, one that reaches into the future just as surely as it grows out
of the past. Highlighted in the following pages are examples of research
produced during the first century of Caltech's history. They by no means
encompass all that Caltech does, but taken together they suggest Caltech's
significance to our collective past, present, and future. The next section
provides a brief outline of what it will cost to preserve this path of discovery
into the Institute's second century.
The examples presented in this book
provide only a sampling of the many contributions made to science, tech-
nology, and engineering by generations of Caltech students, alumni, and
faculty. The people of Caltech-they are the reason our institution exists
and why it deserves the highest levels of support.
Homas { Everhare
Ruben 7. mettler
Thomas E. Everhart
Ruben F. Mettler
President
Chairman of the Board
3
FOUNDATIONS of LIFE and MIND
Caltech's researchers look for answers to the rid-
Two of Morgan's recruits, physi-
dles of life, growth, and disease at the
cist-turned-biologist Max Delbrück
most fundamental level-that of genes
and biologist George Beadle, revolu-
and the proteins they determine.
tionized our understanding of the
Thomas Hunt Morgan, the first
nature and function of the gene. A
contemporary of theirs, chemist Linus
chairman of the Division of Biology,
Pauling, helped confirm that genes
identified the gene as a specific entity
with a fixed location on a chromosome
direct the synthesis of enzymes,
which then control the manufacture
-an insight central to all subsequent
of the cell's proteins.
work in genetics. He also recognized
that life is fundamentally chemical.
By working across disciplines,
Thus, Morgan was instrumental in
these faculty members and their col-
bringing to Caltech chemists, bio-
leagues helped lay the foundation for
chemists, and physicists to seek defin-
Caltech's current work at the frontiers
itive answers to such questions as
of neuroscience, biochemistry, and
how a complex organism can develop
molecular biology. The following
from a single fertilized egg, how the
examples provide a glimpse at some
body recognizes minute invaders
of the significant projects currently
Thomas Hunt
it has never encountered before, and
in progress on campus.
Morgan, Pamela
how the brain functions to make us
Bjorkman, Leroy
Seymour Benzer (a former post-
thinking, feeling creatures.
Hood, Peter Dervan,
doctoral fellow under Delbrück) is
and Seymour Benzer
probing how genes control the devel-
4
opment and function of the nervous
Biologist Seymour
system. His work has yielded valuable
Benzer's studies of the
insights, including the identification
fruit fly Drosophila
probe the foundations
of the brain cells that selectively de-
of life and mind - how
generate in patients suffering from
does a single cell
Alzheimer's disease.
develop into a com-
plex organism whose
Peter Dervan is designing mole-
cells are exquisitely
specialized? This
cules that bind to specific sites on DNA.
micrograph of a lar-
These molecules may one day help
val Drosophila brain
make it possible to map the spot where
shows the axons of
developing retinal
any given gene is encoded among the
nerve cells (stained
three billion chemical units that make
with a fluorescent
up the blueprint of human heredity.
marker) fanning out
toward the brain's
Using x-ray crystallography,
visual center as the
vene at the molecular level to enhance
brain wires itself up.
Pamela Bjorkman is deciphering the
three-dimensional structure of pro-
the immune response, or prevent it
teins crucial to the immune response.
from making mistakes, as in some
These so-called histocompatibility
forms of arthritis and diabetes.
molecules bind to infected cells and
Motivated by his research on
signal the body's defenses to attack
families of genes related to the immune
them. Knowing the proteins' structures
response, Leroy Hood has developed
may one day allow scientists to inter-
instruments to sequence and synthesize
DNA and proteins. These instruments
already have dramatically increased
the productivity of biochemical
research. In a single day biologists
and chemists can now determine the
chemical structure of complex mole-
cules previously requiring teams of
researchers many months.
5
INFORMATICS and COMPLEX SYSTEMS
Information technology already drives a $750
billion industry worldwide; yet, sur-
prisingly, this technology is still in its
infancy. Through advances at every
level of computing, from the design
of integrated circuit chips to software
This retina chip, devel-
that mimics human cognition, to large
oped by Carver Mead
and Misha Mahowald,
integrated systems, Caltech faculty are
is a first attempt to
hastening a new relationship between
mimic in silicon-based
this technology and its users. The
hardware that which
nature does so well in
computer will no longer be a mere
carbon-based "wet-
implement but rather an assistant-and
ware." A housefly
perhaps even an advisor-in our work.
avoiding a swatter
is solving a complex
At the center of these revolution-
visual and kinematic
ary developments is the silicon chip.
Mead and a group of Caltech gradu-
problem with a speed
and economy of
Carver Mead predicted that chips could
ate students created a program for
effort that computer
hold millions of computing elements;
designing specialized chips from sym-
designers can only
he then devised a way to design such
bolic descriptions-the silicon com-
dream of. Biologically
successful design
chips. His approach became the
piler. Forbes magazine has predicted
principles, honed over
industry standard. He also built the
that this development may revitalize
millions of years of
first gallium arsenide MESFET tran-
the American chip industry by speed-
evolution, have much
to offer the next gen-
sistor, opening the way for a faster
ing innovation. Important leaders of
eration of computers.
nonsilicon-based technology. Finally,
today's most advanced entrepreneurial
ventures in chip design, and of large
corporations developing information-
based systems, have come from Caltech.
The Institute's path-breaking
work in large-scale chips is comple-
mented by the development of innova-
tive computing systems and software-
areas offering enormous potential
gains in computing speed and produc-
tivity. In 1985, Charles Seitz and his
BB
6
Carver Mead, Christof
Koch, John Hopfield,
and Charles Seitz
students developed the highly concur-
as did the integrated circuit, and
rent Cosmic Cube message-passing
their ability to learn is being advanced
multicomputer, a novel approach to
by Caltech faculty. Mead has also
high-speed computing that has helped
developed a rudimentary retinal chip,
create a new segment of the computer
while Christof Koch is searching for
industry. The latest products of his
the computational principles that
research are ultrafast message-rout-
govern visual pattern recognition.
ing chips and software for distribut-
As Caltech faculty begin to translate
ing parts of computing problems to
this knowledge into silicon, they
ensembles of small, fast computers.
take a step toward producing a truly
These are being incorporated into
intelligent machine.
the next generation of concurrent
As computers evolve, they change
supercomputers.
the way scientists work. Computer
Future computers may be
simulations of complex phenomena
modeled on biological systems. Mead
generate data that would be difficult
and John Hopfield are part of a group
to obtain in the laboratory. For exam-
that designs specialized chips and
ple, Anthony Leonard is developing
systems of chips, called neural nets,
techniques to simulate unsteady-flow
that process information (such as
separation-e.g., the turbulent air
sight and sound) in a way more like
caused by a spinning helicopter rotor - -
the brain does than do traditional
in three dimensions.
computers. Such neural nets promise
to advance computing as dramatically
7
MOLECULES, MATERIALS, and MICRODEVICES
Plastic wires capable of conducting current,
Duwez went on to discover a
electronic devices no more than a
new class of materials, metallic glasses,
few atoms wide, solar cells that might
endowed with unusual electronic
someday mimic photosynthesis: these
and magnetic properties, including
technological marvels are taking shape
resistance to radiation and corrosion.
at Caltech and elsewhere because scien-
A group of Caltech researchers,
tists now design not only machines but
including Thad Vreeland, William
the materials of which they are com-
Johnson, and Brent Fultz, along with
posed.
both undergraduate and graduate
students, has devised a method for
Caltech's early materials scien-
fabricating these materials in bulk,
tists were driven by practical prob-
a precondition to studying many
lems. Just before World War II, Pol
of their exotic properties.
Duwez investigated what happens to
metals subjected to sudden and
The microchip revolution has
intense shocks (explosions, for
motivated a quest for more efficient
example). From Duwez's lab notes,
conducting materials to make pos-
aerodynamics expert Theodore von
sible supersmall, superfast electronic
Kármán derived the complete theory
devices. William Goddard III, through
of plastic-wave propagation, a major
his pioneering computer models of
step in our understanding of how
how bonds form between atoms and
materials respond to stress.
molecules in chemical reactions, is
hastening the chemist's ability to
design more complex molecules.
Harry Gray, Kerry
Vahala, Robert Grubbs,
and Pol Duwez
8
Robert Grubbs has perfected a new
process for making polymers with
properties that can be varied by mole-
cular design. His group may eventually
be able to create superlattices and com-
posite materials containing different
layers that are only a few atoms thick.
Will electronics, a field that was
revolutionized by the invention of the
transistor, eventually produce devices
as small as a few atoms and capable
of operating at the speed of light?
Amnon Yariv has made a laser only
20 atoms thick that operates on virtu-
ally no current. A group led by Kerry
Such electronic devices will still
While most research-
Vahala has produced bumps of gallium
need energy to run them. Harry Gray's
ers seek new ways
to put molecules and
arsenide a few hundred atoms thick
research into the processes whereby
materials together,
with the capacity to emit light when
electrons move in metal-containing
Ares Rosakis studies
stimulated by electrons.
proteins such as chlorophyll could
what happens when
they come apart. This
lead to a chemical system that harvests
supercomputer simu-
energy from sunlight the way that
lation of a steel plate
green plants do.
breaking shows
stresses ranging from
low (blue) to high (red).
The crack is traveling
from left to right. The
yellow spike is the
crack tip, where break-
ing bonds relieve local
stress. Rosakis's group
has developed high-
speed methods to
measure the stresses
and temperatures
surrounding a moving
crack, which travels
faster than a mile
a second.
The UNIVERSE
From the farthest reaches of the cosmos to the
tured a major branch of modern physics
innermost workings of the atomic
called quantum electrodynamics.
nucleus, Caltech scientists probe the
Murray Gell-Mann developed a theory
origin, evolution, and destiny of the
describing the building blocks of
universe.
matter, which he dubbed quarks;
their existence was later demonstrated
During Robert Millikan's tenure
by experiment. His discovery opened
as administrative head of the Institute
up new avenues of research in sub-
(1921-45), Caltech became a world-
atomic physics, clarified the nature of
class center for the study of physics
the "strong force" that holds protons
and astronomy. Millikan illuminated
and neutrons together in the atomic
a basic constituent of matter, the
nucleus, and pointed the way to a
electron. A former student of his,
better understanding of what occurred
Carl Anderson, deepened our under-
in the first instants of the big bang,
standing of the universe and matter
the explosion that gave birth to
by discovering the first antimatter
the universe.
particle, the positron.
Since those early years, Institute
Following in the tradition of
the great astronomer George Ellery
faculty members have continued to
Hale, Caltech physicists, astronomers,
ask the most searching questions
and astrophysicists have built sophis-
about the nature of physical reality.
ticated instruments to explore our
Richard Feynman completely restruc-
dynamic universe. With them, Insti-
tute scientists have discovered the
Gerald Wasserburg,
Kenneth Libbrecht,
Murray Gell-Mann,
and Robert Millikan
10
universe's oldest and most distant
objects, identified nearby stars that
may be forming their own solar sys-
tems, and explored the planets. Closer
to home, Kenneth Libbrecht has com-
piled research data that provide a
surprisingly complex picture of the
internal dynamics of the sun.
Caltech geologists, too, are
looking outward to answer basic ques-
tions. Clues to the origin of our solar
system are scattered across billions
of miles. Gerald Wasserburg has been
comparing isotopes in moon rocks
and interplanetary debris in an attempt
to describe the early chemical and
physical evolution of the solar system.
HL Tauri is a nearby
sunlike star that is
younger than our
own. This image, made
by Steven Beckwith
and Anneila Sargent
with the millimeter-
wave interferometer
at Caltech's Owens
Valley Radio Obser-
vatory, shows the gas
cloud orbiting HL
Tauri that may even-
tually condense into
planets. Although no
planets have yet been
detected outside our
own solar system,
astronomers believe
that planetary for-
mation is a common
process throughout
the universe.
11
EARTH and ENVIRONMENT
Throughout Caltech's history, its scientists and
engineers have studied the environ-
ment in the broadest possible context,
expanding our awareness of the
forces that shape it, and of our
Antarctic ice moves
impact upon it.
toward the sea with
glacial slowness -
Caltech has pioneered far-
perhaps a dozen feet
reaching investigations and innova-
per year. "Ice streams"
tions in earthquake science. In the
tens of miles wide,
however, move sev-
1930s, Charles F. Richter joined with
eral feet per day - as
Beno Gutenberg to devise the first
much as 100 times
instrumental method for measuring
faster than the ice
sheet around it. A
the energy of earthquakes-the Richter
stream is marked
scale. In so doing, they helped develop
from the air by the
modern seismology. Today, geologist
jumbled, churned-up
belt of ice along either
Kerry Sieh is adding to our under-
Preparing for earthquakes and
margin (a cloud shadow
standing of earthquakes through the
finding ways to minimize their poten-
crosses the stream in
precise dating of recent great earth-
tial danger to life and property inter-
the middle distance).
quakes along the San Andreas Fault.
ests earthquake engineers at Caltech.
Geologist Barclay
Kamb's studies may
The new dates he has established
George Housner, known as the "father
show if the Antarctic
present an intriguing pattern cluster
of earthquake engineering," has devel-
ice sheet is breaking
of two or three major shocks within
oped with other Caltech faculty the
up, a possible con-
sequence of climatic
a century or so, separated by two to
design recommendations that have
change.
three centuries of quiet.
resulted in some of the first earth-
quake building codes based on modern
engineering principles. Housner headed
the California commission investigat-
ing the collapse of the Nimitz Freeway
during the 1989 Loma Prieta Earth-
quake, which struck the San Francisco
Bay area.
12
In the late 1940s, Arie Haagen-
Her approach makes use of naturally
John Seinfeld,
Smit conducted basic research that
occurring bacteria that are capable of
George Housner,
Mary Lidstrom,
first identified the components of
consuming chlorinated hydrocarbons,
Kerry Sieh, and
smog. His discoveries provided the
a major class of groundwater pollu-
Charles Richter
groundwork for Caltech's current
tants. She and her students are using
work in the chemistry and physics of
advanced microbiological techniques
air pollution. John Seinfeld has devel-
to identify the genetic roots of this
oped detailed mathematical models of
capability. Her goal is to make it pos-
pollutant behavior in the atmosphere.
sible to apply these and similar organ-
Now part of the Federal Clean Air Act
isms to some of our most serious pol-
and in use by the state of California
lution problems, thereby tapping
and the Environmental Protection
nature's own potential for self-renewal.
Agency, these models make it possible
to examine the hypothetical conse-
quences of reducing levels of emissions.
Real solutions to environmental
problems must undo damage without
creating further disturbances. A poten-
tial path to this necessary condition
is being explored by Mary Lidstrom.
13
HUMAN VALUES and INSTITUTIONS
From its early days, Caltech has placed scientific
arly expertise to their Caltech stu-
and technical education in the context
dents and their professional peers.
of other human activities. In 1921, the
Historian Eleanor Searle has brought
trustees established the requirement-
a new understanding to the Norman
unique in any engineering college at
period with the research she pub-
that time- - of four consecutive years
lished in her book Predatory Kinship
of study in the humanities for all
and the Creation of Norman Power,
undergraduates. Historian and politi-
850-1066. Literature professor John
cal scientist William Munro, who
Sutherland studies publishing and
joined the faculty in 1927, played an
printing in Britain and America from
especially important role in the devel-
the inception of printing to the
opment of this program, securing
present day.
endowment for the humanities and
Classroom studies are further
reshaping the undergraduate humanities
enriched by Caltech's program in Sci-
curriculum. Today, Caltech under-
ence, Ethics, and Public Policy. The
graduates spend 20 percent of their
program introduces students, faculty,
course time studying the humanities
and staff to informed thinking on
and social sciences.
issues related to the development of
Munro's vision has been care-
science and its engineering applica-
fully guarded over the years and has,
tions, in a socioeconomic and political
in fact, been strengthened by the
context; the ways science and technol-
appointment of outstanding faculty
ogy shape, and are shaped by, public
members who contribute their schol-
policy and bureaucratic practice; and
the moral and ethical issues related
to the uses of science and technology.
Daniel Kevles,
Eleanor Searle,
William Munro,
Thomas Palfrey,
and Charles Plott
14
The program was developed by Daniel
Kevles, who is now collaborating with
Caltech biologists to examine the
moral implications of modern biotech-
ENIT
ADPEVENE
blC E
nology and its potential applications.
Investigators led by Charles Plott,
working in Caltech's Laboratory for
Experimental Economics and Political
Science, have pioneered innovative
techniques that have made it possible
to examine the validity of various
political and economic theories under
the effects of futures markets and
"The Duke's vessel
controlled laboratory conditions. Stud-
insider trading on asset price volatil-
lands at Pevensey"
is part of the famed
ies that Plott and his colleagues have
ity, to a comparative study of different
Bayeux tapestry,
carried out over the last 15 years have
procedures for eliciting voluntary
embroidered in the
had a direct impact on policy making
contributions. He has also been study-
Middle Ages as a
record of the Norman
in the public and private sectors in
ing the theoretical foundations for
conquest of England.
such areas as interstate commerce
the design of incentive schemes, with
Recent studies by his-
and transportation.
applications to cartel behavior, voting
torian Eleanor Searle
indicate that the
Thomas Palfrey has been using
rules, auctions, and multilateral
medieval Norman
contracting.
similar experimental techniques to-
state was built on a
complicated network
gether with theoretical models to
of kinship alliances.
study a wide range of problems, from
Kin loyalty was added
to the more fragile
bonds of chosen lead-
ership, resulting in a
group of cousins-by-
marriage that could
not only defend itself
against French threats,
but could (and did)
see to it that no other,
unallied group flour-
ished in Normandy.
15
The PRICE of DISCOVERY | The FUTURE of CALTECH
16
T
he achievements presented here were made in an intimate, unfettered community of dis-
covery. Over the decades, this Caltech community has required significant
resources to maintain such a high level of productivity. With the increasing
competition for public funds, the urgent question arises: who will step
forward to assure that the most daring work in engineering and science can
continue, the kind of work upon which our competitive future as a nation
depends?
Government support for fundamental scientific research has
increased significantly in the past half-century. That commitment, as well as
support for engineering and education, has fluctuated with policy objectives.
The excellence of Caltech's work has earned it a generous share of such
support, but such success may prove to be a mixed blessing. Grants from
public sources are becoming smaller, their duration shorter, their stipulations
and constraints more cumbersome. Less and less do they allow for the fluid,
farseeing exploration that is Caltech's hallmark, or for the costly process
of training tomorrow's innovators to think in the Caltech way.
The key
issue remains the price of innovation and the cost of its neglect. If narrow
notions of cost-benefit limit our best minds to doing only what they have
successfully done before, then true innovation may cease and the greatest
advances might well elude us. Caltech's leadership in innovation represents
a practical and an intellectual resource that the nation cannot afford to
lose.
Such a loss is unthinkable to those who value Caltech. They under-
stand that money invested in Caltech is venture capital for the highest-quality
work in science and engineering. Thus private donors have helped underwrite
the construction of Caltech's buildings, supported Caltech students with
scholarships and fellowships, and sponsored a range of research projects.
Many of Caltech's most ambitious current enterprises, including the
construction of the world's largest optical telescope and of an institute
dedicated to developing new technologies to spur discovery in biology and
chemistry, were made possible by significant commitments from private
sources.
Tomorrow's bold scientific achievements will depend on equally
bold philanthropic commitments. At Caltech, the two go together, for trust
and conviction motivate the philanthropic investment-trust - in the power
of human intelligence and conviction that ideas can transform our lives for
the better. A century of achievement at Caltech is powerful evidence that
donors with this trust and conviction are the most farseeing and astute
of investors.
17
UNDERGRADUATE EDUCATION
Caltech's 800 undergraduate students are among
Institute's primary goals is to make
the most gifted and talented in the
similar opportunities available to more
country. As Caltech students, they
Caltech students. Finally, Caltech
benefit from a student/professor ratio
admits students without regard to
of 3:1, perhaps the nation's lowest.
their financial means, then works with
They learn science and engineering
them and their families to meet their
by working in labs with outstanding
demonstrated need.
faculty. In the process they also
Given the cost of such
experience the excitement of being at
commitments, can Caltech remain
My four-year expe-
the intellectual cutting edge of their
affordable and accessible? Several
rience at Caltech
chosen fields. Their accomplishments
revolutionized the
factors threaten those qualities.
in this environment are impressive,
way I thought about
from the discovery of a distant super-
At Caltech, as elsewhere, the
science, society,
scientific endeavors,
nova to the development of techniques
cost of education has been rising
and myself. Although
for fabricating new industrial materials.
steadily. That rise has been fueled
one might argue that
As graduates, they become leaders in
by a number of factors, including
any rational person
would react that way
science, engineering, business, and
changes in teaching and research
to the "college expe-
medicine. Indeed, they make it a matter
technologies and the need to mod-
rience" in whatever
of national interest that the academic
ernize old facilities, from student
setting, I would argue
that my conclusions
community of Caltech be maintained.
houses to labs. Increased costs have
were different from
The task requires considerable
been partially reflected in increased
those I would have
tuition. Yet in the last decade, federal
drawn from attending
financial commitment. First, to
any other university.
support for student financial assistance
preserve the low student/professor
After I left Caltech,
has steadily decreased. Two-thirds of
ratio, Caltech has resisted income-
I found that my ap-
Caltech's undergraduates currently
proach to problems,
generating increases in enrollments,
receive need-based financial aid,
my standards and
just as it has resisted dependence
expectations, cer-
and the Institute funds an increasing
on graduate students for much of its
tainly set me apart
percentage of the cost. If Caltech
from a good many of
instruction. Second, Caltech provides
cannot maintain this level of support,
my fellow graduate
extensive opportunities for conduct-
students. In short,
it may not be able to accept many
ing independent research under the
whenever anyone
excellent students.
asks me, "Where did
supervision of faculty. To take but one
you go to college?"
example, Caltech has expanded its
In a sense, any private gift that
I am always tempted
highly successful program of Summer
reduces the educational cost to the
to say, "I didn't, I went
Undergraduate Research Fellowships
to Caltech."
student- no matter how indirectly-
(SURFs) from an original 18 to more
will help preserve the character and
Madeline A. Shea (B.S. '77)
than 100 students annually at a cost
educational effectiveness of Caltech.
Presidential Young
Investigator
exceeding $600,000. One of the
In four areas, however, private support
Assistant Professor,
Biochemistry
can have a direct impact: financial
University of Iowa
assistance to students, undergraduate
research opportunities, the upgrading
of student housing, and the expansion
18
Two-thirds of Caltech's
undergraduates re-
ceive need-based
financial aid. Caltech
admits students on
the basis of talent
and their interest
in science and engi-
neering, without
regard to their ability
to meet the full costs
of attendance.
If
of athletic facilities. Without private
The small student-to-
support, Caltech will eventually be
professor ratio (3:1)
provides many oppor-
forced to choose between those areas.
tunities to interact
Students discouraged from coming to
with faculty, in the
Caltech because their financial needs
classroom and lab.
cannot be met or because facilities are
outmoded represent potential that may
go unfulfilled at a time when the nation
needs high achievement in science
and engineering. America's best and
brightest deserve the opportunity to
excel; private support can guarantee
them that chance.
19
GRADUATE EDUCATION
If the United States is to maintain its international
They are treated as colleagues and
leadership in science and its competi-
members of a team. When they graduate,
tiveness in advanced technology, if
they are prepared to make a difference
it is to meet the challenge of human
rapidly, and their record of achieve-
NORMAN CHURCH
health and assure clean air and water,
ment speaks for itself. Caltech doctoral
it must encourage potential graduate
graduates occupy leadership positions
students to enter degree programs in
in academia, industry, and government.
the sciences and engineering. More-
Because of Caltech's importance
over, it must challenge them to ask
When I began my
in training the next generation of
courses at Caltech,
new and penetrating questions and
scientific and engineering leaders, it
I thought I had made
assume intellectual as well as profes-
is essential that the Institute recruit
a terrible mistake.
sional leadership. Caltech has created
I had thought my
and support the most outstanding
study of science was
an environment for graduate study in
graduate students. As with its under-
behind me and what
which such challenges are central.
I needed was to
graduates, Caltech must meet keen
become expert at
At Caltech, graduate students
competition to maintain the caliber of
applying science to
can concentrate on the primary goal
its graduate student body. Because a
the design of real-life
of their education establishing them-
graduate student's choice of schools
electrical equipment.
My eyes were opened
selves as independent investigators.
is strongly influenced by economic
to a whole new con-
The total Caltech faculty-which
factors, first-year fellowships are
cept of how to pre-
includes postdoctoral fellows as well
critical to Caltech's ability to attract
pare for a career in
the application of
as professorial, research, and visiting
the very best science and engineering
science
Innovative
faculty-nearly equals the number of
students. Graduate students are fre-
engineering consists
graduate students. Thus, these students
quently supported by federal research
in part in inventing
new ways to put well-
are certain to be working closely with
grants, a funding pattern that leaves
established principles
outstanding scientists and engineers.
many good students-particularly those
to work. But a large
The most important dimension
with special needs or in areas under-
part of what engi-
neering is about,
of graduate education at Caltech,
funded by the federal government-
I came to see, is the
however, is intellectual responsibility.
in need of private support.
exploiting of new
Graduate students are essential to the
knowledge as soon
The Institute's continued ability
as possible after it is
research conducted by Caltech faculty.
to attract and support outstanding
uncovered. It's like the
graduate students therefore depends
difference between
learning how to pump
on adding to the current endowment
oil ever more efficient-
for graduate fellowship support.
ly from an existing
well and finding new
oil deposits. Caltech
taught me how to
make discoveries.
Simon Ramo (Ph.D. '36)
Caltech Life Trustee
Co-Founder and Director
Emeritus, TRW Inc.
20
Working as indepen-
dent investigators,
Caltech graduate
students prepare
themselves for future
leadership positions
in academia, industry,
and government.
Graduate students
have the opportunity
to do their research
at such off-campus
facilities as Palomar
Observatory.
21
POSTDOCTORAL STUDY
Caltech's contributions to science and engineering
The cost of maintaining this
depend on protecting and nurturing
element of the Caltech community is
its community of scholars, one in
anywhere from $28,000 to $40,000
which faculty, undergraduate and
per fellow per year, as well as a large
graduate students, and postdoctoral
amount to maintain the facilities in
fellows all play a vital role.
which postdocs work. Some of that
money comes from private contribu-
With the increasing pace and
tions, but at present the bulk of it
complexity of research, postdoctoral
derives from public sources, usually
When you put a lot
fellows have become especially impor-
federal grants.
of powerful intellects
tant members of the research commu-
together in one place,
nity in many fields of inquiry. They
Federal funding for postdoctoral
the chances are almost
perform a vital function as mentors to
fellows varies greatly from field to
nil that they will con-
sistently agree with
both graduate and undergraduate
field and, as with faculty and students,
each other. Caltech is
student researchers. They are, at the
the best individuals are in great
small enough, and the
same time, a key means by which the
demand. Endowed funds to support
people here know and
respect each other
range of research and intellectual
postdoctoral fellowships will ensure
well enough, that they
activity on campus is extended.
that the Institute can continue to
feel free to disagree.
That generates a tre-
In return for these critical contri-
attract and support outstanding
mendous amount of
fellows in many important fields.
butions, Caltech faculty guide postdocs
intellectual energy.
When I first arrived on
through the crucial final stage of their
the Caltech campus,
scientific training, the final prepara-
I saw Albert Einstein
tion for their careers as research
and Robert Millikan
heatedly debating on
scientists and engineers. Many post-
the steps of Throop
docs do their most creative, "break-
Hall. I said to myself,
through" work during this period,
"This is where I belong."
before they take on the additional
William A. Fowler (Ph.D. 36)
responsibilities of teaching and
Nobel Laureate
administration that come with
Caltech Faculty Member,
1936-
professorial appointments.
Institute Professor of
Physics, Emeritus, 1982-
22
Postdoctoral fellows
and their faculty advi
sors establish a resear
environment in which
new ideas are devel-
oped and explored.
Together, they are
the leaders of re-
search projects that
also include graduat
and undergraduate
students.
Endowed postdoctoral
fellowships permit
outstanding young
scientists and engi-
neers to conduct
advanced research
projects at Caltech.
23
RESEARCH
Over the history of the Institute, Caltech scientists
In addition to funds for capital
and engineers have extended human-
projects, Caltech also needs direct pri-
kind's field of vision and capacity to
vate investment in research programs.
alter the world for the better. They
Several factors make that need urgent.
promise to extend both even further
Currently, almost 60 percent of Caltech's
in the decades ahead as they design
operating budget is supported by the
computers that are orders of magni-
federal government. Grants from such
tude faster, probe the heavens with
agencies as the National Science Founda-
the world's largest optical telescope,
tion help defray the costs of salaries,
Caltech has been
and design robots that can "see."
equipment, support staff, and main-
and remains the most
A major impediment to these
tenance. Because of the quality of
exciting center in the
world for science and
Caltech's work, the level of federal
breakthroughs would be the loss of
its closely associated
support is unusually high. Thus,
technologies. One rea-
scientific independence. As a private
Caltech's very success has made it
son is that the Institute
institution, Caltech exists to foster
itself is small, even
vulnerable to cutbacks and changes
that independence. The freedom to
while it operates the
in federal funding policies.
giant engineering
pursue ideas wherever they lead has
activities at the Jet
made Caltech one of the world's premier
The more research Caltech is able
Propulsion Laboratory.
academic institutions. But guarantee-
to support from its own and private
The preeminent qual-
ing that intellectual independence is
sources, the greater will be its freedom
ity of its students, its
faculty, and of the
costly. It cannot be done without
from the effects of federal budgetary
research program
significant private support.
fluctuations. More important, increased
at Caltech assures a
continuation of the
The federal government does
direct private support will also guar-
Institute's long record
antee Caltech's ability to set its own
not fund the creation of research
of Nobel Prize winners,
research agenda: to expand its research
of widening the
infrastructure on university campuses.
facilities, purchase and develop new
frontiers of science,
At Caltech that infrastructure-pri-
of creating new tech-
equipment, assist new faculty with
marily buildings has been created
nologies and even
start-up funds for their laboratories,
entire new industries.
almost entirely from private contribu-
and launch promising projects.
It is indeed at the
tions. Major gifts have demonstrated
same time a national
that no intellectual challenge is too
Most important, private support
resource and a world
daunting when met with the resources
will enable Caltech faculty to follow
treasure.
of private philanthropy. Yet, apart from
the path of imagination rather than
Harold Brown
those initiatives, Caltech still faces
that of conformity. That path is often
Caltech Trustee
Caltech President, 1969-77
significant capital needs to support
complicated, and its payoffs are never
Secretary of Defense,
research. These range from completely
guaranteed, but as we look back on
1977-81
new facilities to renovated laboratories.
Caltech's contributions from a world
greatly altered by them, we recognize
that path as ultimately the most
efficient and productive possible.
24
Sophisticated com-
puter technology
enables researchers
to design experi-
ments that may
unlock the secrets
of human heredity.
SiliconGraphics
Summer Under-
graduate Research
Fellowships (SURFs)
are granted to more
than 100 undergradu-
ates, who devise their
own research projects.
25
A GRAND ADVENTURE | 100 YEARS of CALTECH
26
In 1891, Amos G. Throop, a Pasadena
In the 1920s, the Seismological
The California
businessman, founded the modest
Laboratory was established. This was
Institute of Tech-
school of arts and crafts Throop
part of the development of seismology
nology educates
approximately 800
University - that later would become
into the international science of
undergraduate
Caltech. An important step in this
detecting, measuring, and studying
and 1,000 graduate
transformation was made shortly after
earthquakes. In the 1930s, Charles F.
students each year.
Nearly 1,000 faculty
the turn of the century by Throop
Richter and Beno Gutenberg invented
members are in resi-
trustee and noted astronomer George
the Richter Scale for measuring quake
dence, including 280
Ellery Hale, who changed the focus
energy. Today, the Seismological Lab-
professorial faculty,
380 research faculty
of the school to the training of out-
oratory continues to be one of the
(including 290 post-
standing scientists and engineers.
premier centers for earthquake study.
doctoral fellows), and
In the 1960s, modern earthquake
300 visiting and other
faculty. Many of the
engineering also emerged as a field at
Institute's 17,000
"Father" Amos G.
Caltech. George Housner and his co-
living alumni have
Throop, founder of
Throop University.
workers developed methods that have
achieved positions of
helped in creating codes for earth-
leadership in science,
engineering, busi-
quake-resistant tall buildings, in
ness, government,
Los Angeles and other seismically
and industry. The
active areas.
campus is situated
Throop was renamed the
on 124 acres and
includes among its
California Institute of Technology in
100 structures some
1920. The next year, the distinguished
Charles Richter by
40 laboratory and
the Seismological
physicist Robert A. Millikan (who had
research buildings
Lab's recording
drums in 1970.
equipped with the
been persuaded by Hale and chemist
latest scientific
Arthur Amos Noyes to come to Pasa-
instrumentation. The
dena in 1917) became the Institute's
newest and largest
research facility is the
first administrative head. This event
In 1926, Caltech established
Beckman Institute,
initiated one of the most rapid rises to
whose unique mission
prominence of any institution in the
the Guggenheim Graduate School
is to accelerate dis-
country. Two years after his appoint-
of Aeronautics (now known as the
coveries in biology,
Graduate Aeronautical Laboratories,
chemistry, and
ment, Millikan was awarded the Nobel
related sciences by
Prize for his work determining the
or GALCIT), and in 1929, built the
developing and apply-
lab associated with it. In 1930,
charge on the electron.
ing inventions of
Theodore von Kármán joined the
methods, materials,
and instrumentation.
Caltech faculty. Under his direction,
researchers at GALCIT developed
27
Carl
Anderson
principles of flight that helped launch
the aircraft industry in California. In
1962, von Kármán was awarded the
first National Medal of Science for his
outstanding contributions to the
development of science and engineer-
In the 1930s, Caltech became
a world center for the study of
Theodore von
Kármán receiving
physics, a position it continues to
his award from
President Kennedy.
hold. During those early years, Albert
Einstein was a visitor on the Caltech
campus, and Robert Oppenheimer
served as a faculty member. In 1934,
Carl Anderson discovered the anti-
ing. Since then, 28 more Caltech
electron, or positron, the first empirical
faculty and alumni have received this
proof for the existence of antimatter.
highest national award for scientific
He was awarded the Nobel Prize in
achievement.
1936. Richard Feynman joined the
The work of Caltech engineers
impacted the growth of California in
other ways. In the 1930s, 1940s, and
Richard
Feynman
1950s, they played a crucial role in
the design and construction of high-
voltage transmission systems and of
major irrigation projects in California.
They established the High Voltage
Laboratory and the Pump Laboratory
Caltech faculty in 1950, after com-
and helped develop the pumping
pleting his revolutionary work in
systems, aqueducts, and electrical
quantum electrodynamics, work that
components to bring water and power
earned him the Nobel Prize in 1965.
to Los Angeles.
At Caltech he expanded on these
discoveries over a career of nearly 40
years, during which time he completely
revised the teaching of undergraduate
physics. Feynman was a key member
of the Presidential Commission that
investigated the 1986 explosion of
the space shuttle Challenger.
28
In the early 1960s, as problems
greatly expanded our understanding
developed with the accepted explana-
of the function of the gene; his discov-
tions of nuclear phenomena, Caltech
eries included the pivotal notion that
physicists Murray Gell-Mann and
genes direct the formation of enzymes.
Caltech also operates
George Zweig determined that protons
He was awarded the Nobel Prize in
the Jet Propulsion
and neutrons, long considered the
1958. Max Delbrück revolutionized
Laboratory for the
undamental building blocks of matter,
the study of biology by bringing to
National Aeronautics
were made up of even smaller parti-
and Space Admin-
it the techniques and perspectives
istration. The world's
cles, which Gell-Mann called quarks.
of physics; his work earned him the
leader in unmanned
Their theory was confirmed five years
Nobel Prize in 1969. Among the post-
planetary explora-
ater, opening a new chapter on our
doctoral fellows during the 1930s was
tion, JPL grew out of
work initially done by
knowledge of the atom. In 1969, Gell-
Jacques Monod, who had come to
Caltech faculty and
Mann was awarded the Nobel Prize
Caltech to study molecular biology.
graduate students;
for this and other seminal discoveries.
He was awarded a Nobel Prize
the collaboration
between the campus
In 1984, John Schwarz and Michael
in 1965.
and JPL continues to
Green proposed the "superstring"
be very active and
heory, which may prove to be the
highly productive.
ingle unifying theory of elementary
Linus
Other off-campus
Pauling
facilities include the
barticles and forces that has long been
Palomar Observatory,
sought by physicists.
with its 200-inch Hale
Telescope; the Owens
Caltech displayed its determina-
Valley Radio Obser-
ion to focus on "frontier" disciplines
vatory; the Big Bear
Solar Observatory;
y bringing together a group of scien-
One of the most important dis-
and the William G.
ists who helped usher in molecular
coveries in the history of chemistry
Kerckhoff Marine Bio-
biology in the 1930s and 1940s.
was made at Caltech in the 1930s by
logical Laboratory, all
in California; and the
Thomas Hunt Morgan, who established
Linus Pauling, who determined the
W.M. Keck Observa-
the links between heredity and genes,
nature of the chemical bond-how
tory, which will house
won the Nobel Prize in 1933. George
atoms link up to form molecules in
the world's largest
Beadle, who arrived at Caltech in
optical telescope,
both living and nonliving systems.
and the Submillimeter
1935, made a group of discoveries that
Major advances in chemistry and
Observatory, both on
molecular biology, and the creation of
Mauna Kea, Hawaii.
hundreds of synthetic products, had
George
their roots in this single discovery.
Beadle
Pauling won the Nobel Prize twice:
for chemistry, in 1954, and for peace,
in 1962.
Pictured above:
Owens Valley
Radio Observatory
29
In 1989, Caltech dedicated the
Arnold Beckman
Beckman Institute, the largest building
and James
on campus. Work undertaken there
McCullough in a
Caltech laboratory,
will focus on the invention of instru-
ca. 1933.
mentation, methods, and materials
that hold the promise of opening new
avenues for fundamental research in
chemistry, biology, and related sciences.
In 1934, chemist Arnold Beckman
invented the pH meter, effectively
launching a new era in the develop-
The Beckman
ment of sophisticated scientific instru-
Institute
mentation. In the 1950s, John Roberts
demonstrated the power of new
instrumental techniques by using the
first commercial nuclear magnetic
At the end of the 1940s, Arie
resonance (NMR) spectrometer on a
Haagen-Smit first identified the con-
stituents of smog. His research openec
the way for other Caltech researchers
Design for the
Fig 3
acidimeter, later
to elucidate the role of various emis-
called the pH meter.
sions in the degradation of air quality.
Later, geochemist Clair Patterson's
demonstration that lead pollution
from automobile exhaust had reached
college campus to perform a series of
dangerously high levels was one of
experiments that altered our under-
the factors in the federal government's
standing of reactivity in organic
decision to establish pollution con-
molecules. The tradition of bringing
trols within the auto industry. In the
new instruments to bear on scientific
1950s and early 1960s, Patterson's
questions was continued in the 1970s
studies of the decay rate of lead
by Leroy Hood and his group, who
isotopes were instrumental in deter-
developed a prototype DNA synthesis
mining that the earth has existed for
machine that has become an essen-
4.6 billion years.
tial tool in genetic engineering and
biotechnology.
Arie
Haagen-Smit
30
NOBEL LAUREATES
1923 Robert A. Millikan*
Physics
1933 Thomas Hunt Morgan*
Physiology or Medicine
systems in the 1980s. In 1985, Charles
1936 Carl D. Anderson*
Roger
BS 27, PhD '30
Sperry
Seitz and his students developed
Physics
the Cosmic Cube, a revolutionary,
1951 Edwin M. McMillan
BS '28, MS 29
message-passing multicomputer that
Chemistry
signaled a new approach to high-
1954 Linus C. Pauling*
PhD '25
speed computing and helped create a
Chemistry
1956 William B. Shockley
new segment of the computer industry.
BS '32
In the late 1960s and early
Physics
1958 George W. Beadle*
1970s, working at the forefront of the
Early days at the
Physiology or Medicine
emerging discipline of neuroscience,
Jet Propulsion
1960 Donald A. Glaser
Laboratory.
PhD '50
Roger Sperry discovered that the left
Physics
and right hemispheres of the brain
1961 Rudolf Mössbauer*
Physics
are specialized for different capaci-
1962 Linus C. Pauling*
ties: the left for verbal thinking and
PhD 25
In 1944, off-campus work by
Peace
language, the right for spatial-visual
1964 Charles H. Townes
Caltech faculty and graduate students
PhD '39
thought. Sperry was awarded the
Physics
led to the establishment of the Jet
Nobel Prize in 1981. In 1986, under
1965 Richard P. Feynman*
Propulsion Laboratory, which later
Physics
the leadership of chemist/biologist
became the premier research and
1969 Murray Gell-Mann*
John Hopfield and computer scientist
Physics
design center for the American un-
1969 Max Delbrück
Carver Mead, Caltech established the
manned space program, including
Physiology or Medicine
first interdisciplinary doctoral pro-
1975 Leo James Rainwater
flight missions to the moon and all
BS '39
gram to study problems arising at
Physics
the interface between neurobiology,
the planets except Pluto. In 1989,
1975
Howard M. Temin
electrical engineering, computer
Voyager 2 completed its grand tour
PhD '60
Physiology or Medicine
science, and physics.
of the outer planets, after being
1976 William N. Lipscomb
launched some 12 years before.
PhD '46
Chemistry
Carver Mead also pioneered
Having flown by Jupiter, Saturn,
1978 Robert W. Wilson
design techniques for VLSI (Very
PhD '62
and Uranus, the spacecraft sent back
Physics
Large Scale Integration), techniques
picture-postcard photos of Neptune-
1981 Roger W. Sperry*
which proved to be powerful tools for
Physiology or Medicine
nearly 4 billion miles distant along
1982 Kenneth G. Wilson
the creation of complex electronic cir-
PhD '61
Physics
cuits on single semiconductor chips.
1983 William A. Fowler*
Mead's work was a basis for revolu-
view of
PhD '36
Neptune's two rings,
Physics
tionary developments in electronic
as recorded by
Voyager 2.
CRAFOORD LAUREATES
+
1986 Gerald J. Wasserburg*
Geochemistry
*indicates those individuals
who were members of the
Caltech faculty when they
received the award.
31
NATIONAL MEDAL
OF SCIENCE
1962 Theodore von Kármán*
1963 John R. Pierce*
BS '33, MS '34, PhD '36
1967 Alfred H. Sturtevant*
Voyager's route- revealing an
1969 Wolfgang K.H. Panofsky
extraordinary variety of terrains,
PhD '42
William Fowler,
1970 Allan Sandage
some unlike any that had been seen
after winning the
Nobel Prize.
PhD '53
elsewhere in the solar system.
1970 Saul Winstein
ALCHEMIST
PhD '38
1973 Arie J. Haagen-Smit*
1974 William A. Fowler*
The 200-inch
PhD '36
Hale Telescope
1974 Linus C. Pauling*
at its dedication
In the coming decades, Caltech
PhD 25
in 1948.
scientists will continue their work
1974 Kenneth S. Pitzer
BS '35
with the help of a new instrument,
1975 Sterling B. Hendricks
PhD '26
the W.M. Keck Telescope at Mauna
1975 William H. Pickering*
Kea, Hawaii, the world's largest opti-
BS '32, MS '33, PhD '36
When Caltech astronomers
cal telescope. The partially completed
1975 E. Bright Wilson, Jr.
PhD '33
put the 200-inch Hale Telescope on
telescope will see "first light" in 1990.
1979 Richard P. Feynman*
Palomar Mountain into operation in
When completed in 1991, it will have
1979 Simon Ramo
PhD '36
1948, it was the largest and most
the capacity to look deeper into space
1979 Donald E. Knuth
- and hence further back in time-
PhD '63
powerful device in the world for
1983 Seymour Benzer*
viewing the heavens. Caltech faculty
than has ever been possible before.
1983 Charles H. Townes
subsequently undertook such ambi-
PhD '39
1986 Harry B. Gray*
tious projects as the search for distant
The W.M. Keck
1986 Hans W. Liepmann*
objects at the edge of the universe.
Observatory
1986 H. Richard Crane
In 1964, Maarten Schmidt determined
atop the extinct
BS '30, PhD '34
Mauna Kea volcano
1986 Bernard M. Oliver
that quasars-energy-emitting sources
in Hawaii.
MS '36, PhD '40
in deep space-are the brightest and
1988 George W. Housner*
MS '34, PhD '41
most distant objects in the universe.
1989 Arnold O. Beckman
His discovery provided a new vision
PhD '28
1989 Rudolph A. Marcus*
of the universe at an early period
1989 Harden M. McConnell
of its history. In 1983, William Fowler
PhD '51
was awarded the Nobel Prize for his
1989 Eugene N. Parker
PhD '51
studies of the nuclear reactions, deep
1989 Robert P. Sharp*
within stars, that formed the chemical
BS '34, MS '35
1989 Roger W. Sperry*
elements of the universe.
NATIONAL MEDAL
OF TECHNOLOGY
1988 Arnold O. Beckman
PhD '28
1989 Alvin V. Tollestrup
PhD '50
*indicates those individuals
who were members of the
Caltech faculty when they
received the award.
32
In times like these, there need to be a few
places that look ahead and still dare to do the
most ambitious things that human beings can
accomplish. Caltech still has that ambition
and that daring.
President Thomas E. Everhart
Inaugural Address
April 12, 1988
LOGA 1991 1891 LIFORNIA CALIFORNIA TECHNOLOGY 10 INSTITUTE
Office of the President
California Institute of Technology
Pasadena, California 91125