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ISBN: 9780470508923
In memory of my parents,
Dr. Fred Moskowitz (1919–1964) & Rose Surval Moskowitz (1925–2004)
Few areas of human endeavor play such a large role in the technological and economic activity of society today as the field of advanced materials. More scientists and engineers devote their professional lives in pursuit of them, more businessmen and government agencies have taken a serious interest in nurturing them, and more venture capitalist and financial firms have poured money into startups formed around them than ever before. And never before has the advanced materials arena extended so globally, with Europe and even more Asia playing an increasingly important part in this century's advanced material saga.
Certainly, advanced materials have been with us since man's earliest experiments in creating civilization. Whole eras in fact have been named for them, as our classifications of the “iron” age, “copper” age and “bronze” age attest. Historians of technology tell us of the great importance of advanced materials—especially the new steels coming out of the giant blast furnaces of England and the US—in the industrial revolution of the ninetieth and early 20th centuries. But today, in the first quarter of the 21st century, never has the potential of advanced materials seem so important, and indeed crucial to human existence. Mobile electronic technology, molecular and quantum computing, optical communications, alternative energy sources, the biotechnology revolution, robotics and automation, virtual reality and three dimensional printing, not to mention fundamental transformations in transportation, manufacturing and infrastructure all receive significant attention by the business, trade and general press because they are poised to fundamentally alter the nature of our lives in this century and beyond. All of these technologies and the changes they make in our world depend vitally on progress made within the advanced material landscape. At their core are increasingly powerful microchips, tiny lasers, energy-efficient batteries, smart textiles and metals, super strong and lightweight composites and alloys, superconducting materials, electronic displays, conducting polymers, all of which depend directly or indirectly on our ability to come up with new and more sophisticated materials and the processes to make them. In 2006, a study by the Rand Corporation called The Global Technology Revolution 2020 identified 16 major areas of innovation that would by 2020 “…enjoy a significant market demand…affecting multiple sectors (e.g., water, food, land population, governance, social structure, energy health, economic development, education, defense and conflict, and environment and pollution).”1 A full 75% of the innovations on the list depend directly on progress in advanced material technology. A recent White House report on innovation and industrial competitiveness reminds us of the critical importance of advanced materials technology for the present century:
…the development of advanced materials will fuel many of the emerging industries …Advanced materials are essential to economic security and human well-being, with applications in multiple industries, including those aimed at addressing challenges in clean energy, national security, and human welfare…Since the 1980s, technological change and economic progress have grown ever more dependent on new materials development.2
It should come as no surprise then that companies, governments, and investors should be scouting around for the next big thing in advanced materials. Many research initiatives are emerging from universities, others from corporate research and development departments and a few from government laboratories. The list is long and varied and includes such intriguing prospects as shape memory polymers, special ceramics for absorbing oxygen, architectural “smart” materials, power generating fibers, new films and coatings, fire-resistant paper, biorefined adhesives, and structural nanocomposites. One of the most fascinating possibilities is something which Caltech researchers call “3-Dimensional Architected Structural Meta-Materials.” These potential materials of the future will, if realized, allow planes, cars, bridges and other structures to be hundreds of times lighter than they currently are but with the same strength and superior operating characteristics.3
So what are we to make of this abundance of possibilities? Certainly, the sort of the aforementioned research holds great scientific interest. But so many of these projects never successfully leave the university, the company research department or government laboratory. In other words, they never are able to cross that “dead man's zone” separating promising science from real-world technology. This doesn't mean attempts aren't made. In many cases, such research leads to the creation of a startup, usually close by a major university. Patents are licensed out, investors pursued, personnel rounded up, and facilities and equipment secured. In some cases, a larger, established firm buys the technology and creates or makes use of an internal venture group with the aim of nurturing, developing and commercializing the product or process. Recently, for example, Bayer Chemical created a special group to commercialize nanotube technology. But despite these efforts, few of these well-intentioned ventures ever see the light of day in the marketplace. Bayer understands this all too well, for in 2014 it abandoned its nanotube venture. In other cases, the company that invents the new material often is not the one to market it, thus missing out on the fruits of its creation. While RCA, for instance, invented the first liquid crystal display, it never commercialized the most important liquid crystal technology, flat panel displays for TVs, nor, as it turns out, did any American firm. This honor went to the Japanese and South Koreans.
What then determines whether or not a promising laboratory invention actually becomes a robust, fully formed market technology “with legs” and whether this transition from idea to working system can be accomplished in a timely manner? Certainly venture capitalists and corporate investors need to know where and when to place their bets; established firms looking to “buy into” new technology need to know what sort of startup it should purchase or what sort of partner it should do business with; For its part, the startup and small firm focused on that one technology and looking to share the risks with—and obtain more resources from—a corporate sponsor, need to know which company offers the best opportunity for its “baby” to grow into a fully mature and profitable adult; Academics and business scholars specializing in the innovation process need—or at least want—to know what factors are responsible for the rate, direction and timing of new technology; and government very much needs to know how to keep advanced materials innovation, so important for a nation's global competitiveness, flowing from the research laboratory to the production plant and market arena. In that same White House report quoted above, we also can read the importance the US government places in finding ways to keep new materials technologies pouring into the American economy:
…the time it takes to move a newly discovered advanced material from the laboratory to the commercial market place remains far too long. Accelerating this process could significantly improve U.S. global competitiveness and ensure that the Nation remains at the forefront of the advanced materials marketplace… [it is important that the US finds a way] to discover, develop, manufacture and deploy advanced materials in a more expeditions and economical way.4
And so I come to the reason for this book, which, simply put, hopes to find some of the answers to the questions posed above. The possible causes for success or failure, speed or sluggishness of innovation are well known and focus on such things as knowledge, capital, resources, organization, demand, skills, foresight, and risk-taking. It is not my intention to pit one or two of these against the others and declare these favorites to be the answer to the innovation question. Nor is it my aim to construct an all-encompassing “model of innovation” so much favored by academics and business scholars—and many business writers outside the Academy as well—or to attack as insufficient any such models that others have carefully and scrupulously developed from their specific case studies and data bases. My goal is much less ambitious. I simply want to narrate in as much detail as I can stories of important 20th and 21st century advanced material innovations and from these tales of technology creation—and failure—glean some common themes and conclusions that can help venture capitalists, established corporations, startups, government and even business scholars find some of the answers to why and how early and exciting research efforts manage—or mismanage—their way across the dreaded “valley of death”. Success in surviving the voyage often prove a boon to the companies that made it across and, in some cases, transform the world; those that fumble just as often drag the innovators down with them and are soon forgotten as just once great ideas that failed to launch. Whether then a promising material such as a graphene shakes up the world or is relegated to the dust bin of history will likely depend on whether its champions attend to the lessons that emerge from the case studies presented in the following pages.
But, if I am going to tell the stories of advanced materials innovation, which ones are to be selected for the spot light? So many of the most interesting ones—and the ones that receive so much attention in the press—are still in process, their outcomes uncertain. A case in point is graphene mentioned above. It has received so much publicity of late that it would seem to be a good candidate for a case study. But whether or not it actually becomes a major commercial product is still in question. Thus there is no way to know whether the history of this material—or any of the many other excellent advanced material prospects—as of this writing (2016) will lead to success, failure or just plain limbo (neither a clear success or failure) and so no way to make reasonable conclusions over what makes a company—or country—rise or fall in its quest for a particular new material technology. But what we do have is a record of technologies in the 20th and 21st centuries that have gone through all or most of their innovation cycles. These provide enough material to decide which companies make good on their early research and which falter, and why some flourish as others stumble. These then allow conclusions to be drawn as to the likely commercial success of current and future research and development efforts, where they are most likely to succeed and where to fail.
This book is interested in telling the stories of, quite simply, the most important advanced material innovations of the last few decades. Recent discussions on the distinctions between radical, breakthrough and disruptive technology, important as they are from a theoretical viewpoint, do not much concern us here. Suffice it to say, the innovations highlighted in this book are, arguably, the chief advanced material technologies in recent times. I have relied on the trade and business press and on historical opinion to tell me that, when it comes to advanced materials, these are “the essentials.” They are generally characterized as a “revolution” or “high water mark”—or some such expression—in the history of modern innovation. They mark a big leap in technological knowhow and generally have made a major impact on the market and even society. Of course, in any such list, a bone or two could be picked over a particular entry included, another left out. However, I believe that, on the whole, this list of innovation will stand the test of scrutiny.
Table P.1 presents the classification of the advanced materials (left column) and the specific major advanced material innovations that we will explore in this book.
Table P.1 Classification of the Major Advanced Materials Innovations
The narratives of these important advanced material technologies, while each interesting in and of itself, together paint a picture and expose a common pattern of how and why some companies succeed while others fail in creating and commercializing crucial advanced materials. But which ones are the likely winners in the innovation game is still in debate; each type of firm has its strengths and its shortcomings. It is a common belief that large established corporations are too bureaucratic and tied to their current product line to innovate while smaller firms are more nimble and more likely to take the risks to introduce radically new, truly groundbreaking technologies. However, these startups and small and medium-sized enterprises (SMEs) often lack the necessary resources available to the big organization and so often fail to achieve their ambitious goals. The idea of combining the large corporation and high-technology start up—to form what one book calls the “Start Up Corporation”—is very intriguing.5 A resource-rich organization possessing the flexibility and far-sightedness of a small firm is clearly an enticing prospect and certainly a very promising approach. But even in this hybrid situation, doubts arise, especially when the company faces financial pressures. In this case, with immediate problems with which to deal, it is likely not to care very much about its future technological position. Just as a drowning man is more likely to grab a life jacket rather than a volume of Shakespeare, so a company in trouble—needing all the resources it has to maintain a current market position—will abandon the incubator, innovation hub and other experiments in internal innovation and divert the men and money being devoted to them to more pressing needs of the moment, that is, existing customers willing to spend their money now on proven products and services. Moreover, what constitutes hardship varies from one organization to another depending on external conditions, such as the general economy and a company's customer base, and its internals, which is its management, culture and organization. In other words, many situations will exist that will provoke even the most technologically savvy start up corporation to slip into a deep conservatism in response to what it perceives to be a major and immanent threat to its very existence.
The creation and use of incubators, innovation hubs and other approaches to heighten the technological dynamism of an established company tell managers what they should do to remain competitive in the 21st century. But what these putative solutions do not address is the question of how to keep the innovation process moving forward when a company—or a venture group within that company—faces the reality of desperate times and senior management feels compelled—even against its better judgement—to dismantle the very structures that many believe keep innovation moving forward.
But, in fact, a close look at the course of innovation within our advanced material technology cases underscore a very important point about real-world innovation: it often takes place under quite difficult conditions. Thus, the company faces declining revenue, the initial reason for conducting an R&D project evaporates, no business unit can be found to support a project, valued customers demand a project terminated because the new product will directly compete in their markets, these are just some of the roadblocks put in the way of new material creation. Yet, in many of these cases the established company, even without the benefit of incubators, innovation hubs, and internal venturing groups ended up producing—and profiting from—a breakthrough advanced material technology, while many companies that did have these structures in place did not. What accounts for these strange, unexpected results and how can investors, companies and governments best direct their resources to optimize the chance of successfully creating important 21st century advanced materials and rapidly introducing them into the market? These are the questions that concern us throughout the remainder of this book.
Organizing a book such as this poses some unique difficulties. One obvious organizational approach is to proceed chronologically. But the types of material technologies that would be included in any reasonable time period seemed to be somewhat chaotic as they encompass such wildly different products as, say polymers and steel. It would also be difficult to find conceptual ideas that might link different sorts of materials over time. It would be convenient, for example, to show how the earlier innovations came out of large corporate R&D while, as time went on, the university-based startup took over advanced material innovation. While there is some truth to this in that many startups and smaller firms attempted new technology over the course of the last century, we still find very important instances of large corporate R&D coming out with breakthroughs, such as Union Carbide's revolution in the polyolefins and metallocene polymers fairly late, that is in the 1980s and 1990s. An alternative, and more profitable, organizational approach is by type of advanced material technology. While there are different ways this can be done, it seemed most economical to divide the major sections or parts of the book into the three main product groups—structural, functional and hybrid—and the chapters themselves into the key processes used to create these products.
This book arranges the vast universe of advanced materials into three major categories: structural, functional, and hybrids. The first refers to metals, plastics and composites that are generally used in making parts and components for cars, planes, buildings, bridges, roads as well as for such biomedical applications as synthetic bones, muscles, tissues and organs. Functional materials are those semiconductor technologies that power solid state electronic devices such as transistors, microchips and solid state lasers. The third category—the hybrids—highlight the new forms of matter that have multiple uses. These materials enjoy applications that span both the structural and functional spaces. Nanotubes, for example, can be used to make the so-called nanocomposites (structural) as well as advanced microchips (functional).
The advanced materials sector subsumes a wildly varied group of products to the extent that it is at first difficult to see how they can be studied in any coherent way at all. Yet, on closer study, we see that they can be grouped and categorized according to a relatively few common processes, or ways in which they are made. The chapters within each of the three sections of the book then are focused on such important process technologies as high-pressure catalysis, fluidization, low-temperature polymerization and so forth. It is important to stress that the advanced materials produced by a single process can be very different with respect to their applications and markets but can all be linked together by that common mode of production. For example, high pressure technology has produced structural materials as different as synthetic ammonia, nylon and nanotubes. Understanding that our material of interest, as important as it may be, is actually just one in a series of products turned out by a particular underlying process over time affords us a much deeper perspective on where our material came from, what went into its making, and how and why it itself spawns future breakthroughs. Take nylon for example. Contrary to popular belief, its story did not begin when Wallace Carothers began his experiments on a new type of polymer fiber. Because, as we shall see later on, the fundamental process behind nylon is high-pressure technology, we can only begin to understand DuPont's success in fibers by considering its earlier work in synthetic ammonia and organic chemicals, which made the company the world leader in high-pressure production and provided it with the essential knowledge, skills and technology to move into the first miracle fiber. In the same way, DuPont's ability to quickly build its famous Hanford plutonium plant for the Manhattan Project during World War II rested in no small measure on the high-pressure work it had perfected for nylon a few years earlier. Similarly, we cannot fully appreciate how Intel came up with its most important invention, the microprocessor, without grasping the company's earlier success in working out and applying the silicon gate process; this is the core method that first gave Intel the edge in semiconductor memories and only after learning how to accomplish this, allowed it to take on, a few years later, even bigger game, the microprocessor itself.
This more profound understanding of breakthrough innovation provided by a consideration of fundamental processes also, and very crucially, allows us to have a much better sense of the patterns of success and failure at the firm level. For example, both DuPont's triumphs (e.g., nylon) and its disappointments (e.g., polyethylene) depended a great deal on its attachment to its high pressure process. In a like manner, the legendary accomplishments of Intel and its total annihilation of its nearest and very capable competitor, Mostek, comes down to one simple fact: Intel held the secret to the silicon gate process (and thus to the microprocessor) while Mostek did not. Accordingly, each chapter shines the spotlight on a major process technology, its origins and its evolution as it creates different but technically related materials within a given product grouping (structural vs. functional), as displayed in Table P.1 above. The story then of each breakthrough material (e.g., polysilicones) will be told within the context of its associated process (e.g., fluidization).
But how should the narratives of these materials be structured? Because we are talking about an evolution from idea to product, chronologically makes the most sense. However, rather than the units being days, months and years, we will follow each innovation project in units comprised of the “phases” of the innovation lifecycle. And so the case history narrative for each new material innovation discussed within its respective chapter follows the same general pattern. This “innovation cycle” extends from project initiation to production and first entrance into the market. The concept of “Research and Development” is a fairly wooly one. It is often used to mean conducting scientific investigations and turning the results into marketable products. But this is far from the case. In fact, conducting “R&D” gets us only half the way to that goal. The full innovation cycle consists of “Research,” “Development,” “Scale-Up,” and “Commercialization.” Accordingly, the story of innovation for each advanced material encompasses all four of these phases (or “RDS&C”). First exploring why and how a company began researching that particular advanced material technology, the story moves through the “research phase”, ending with creation of a working laboratory model, such as a reactor or device, demonstrating nothing less (or more) than feasibility of concept. A discussion of the “development phase” follows, which takes that laboratory model and works it up into a functioning prototype potentially capable of being expanded into a commercial unit. This prototype generally looks and behaves very differently from the crude laboratory model. The development phase can be viewed as the transition stage from laboratory science to real-world technology and, as such, often involves scientists and engineers working closely together. The “scaling up” phase follows and closes in on the all-critical transformation of the promising exemplar into a fully realized commercial technology, generally consisting of a working production unit making an advanced material (e.g., nylon, ultrathin Steel) or advanced material device (e.g., microprocessor, liquid crystal display). The “commercialization phase” completes the innovation lifecycle. It is concerned with the final formulation of a business model for the new technology, which is closely linked with a company's cultural make up and strategic outlook. Commercialization is generally an activity that is solidified and carried out just prior to entering the market. Certainly, while management—and even researchers—may begin thinking about and even developing portions of a business model as early as the research phase, they often have to alter their strategic vision for the technology over the course of the innovation sequence. During development and even scale up, for example, as they learn more about the nature of the technology and its place within the company's product portfolio, project champions and their superiors may change the type of markets to be approached or the position the technology ought to have on the relevant value chain. They may even decide against making the material or device after all, possibly sitting on its patents and preventing competitors from pursuing it. Whatever the case, only after (or possibly during) the building of a commercial plant will the corporate powers pin down the precise commercial strategy to be pursued; it is this latest iteration as the company first enters the market that defines the final phase of our innovation cycle.
Tracking these four phases of the innovation cycle for each of our major advanced material case studies is the best way to appreciate the various and changing difficulties that are placed in the way of success as a company struggles to bring a new and promising material to commercial existence. The difficulties and thus risks involved are unique across the different phases; the barriers encountered in conducting research are not at all the same as those facing the development team nor those challenging the engineers in charge of scaling a manufacturing facility. The different set of problems encountered along the road to market requires different talents and even personalities. Appreciating this reality as we study the rise (and often fall) of the innovative effort, allows us to see how the more agile firms manage to successfully negotiate the various difficulties they are forced to encounter throughout the cycle and, for those less nimble companies, to identify where such efforts tend to falter and why such failures happen.
This book ranges widely over the advanced materials landscape and so relies on many types of sources. Industry sources from my network of contacts in the field supplied important insights into the technical and economic aspects of both current and emerging materials. It has also benefitted immensely from the published work of others, especially those that are deeply researched and touch directly on areas crucial to our case studies. These include full-scale books, company histories and personal memoirs. Articles too contribute greatly to this work, including those that appear in the trade and business press. Primary material also comes into play throughout the book as do unpublished interviews of the major participants. For obvious reasons, these latter have supplied some of the most valuable details and insights, especially for those technologies that have not been given very much attention by scholars in the past. They are invaluable in coming to grips with the motivations and thinking of scientists, engineers, managers and businessmen who witnessed—and actively took part in—the innovation process first hand. These are vital in forcefully drawing attention to how the forces of risk, process and championship creatively interacted to introduce into the world new and groundbreaking advanced materials technology.
Many of the unpublished interviews of scientists, engineers, managers, and corporate executives—as well as the papers of the nanomaterials pioneer and Nobel Laureate Richard Smalley—that have played an important part of this book belong to the Othmer Library and the Oral History Program of the Chemical Heritage Foundation (CHF, Philadelphia, Pennsylvania). The Foundation, as always, has been very helpful to me in accessing this material. I want to especially thank David J. Caruso, Director, The Center for Oral History, CHF, for his help in obtaining interview transcripts. DuPont's Hagley Library has also been of great help to me over the years in examining archival documents related to the chemical industry and technology, a number of which I have incorporated into this book. I want to also thank Melanie J. Mueller, Acting Director, Niels Bohr Library and Archives, American Institute of Physics (College Park, Maryland), for permission to use excerpts from their oral history of Eugene Gordon and Robert Colburn, Research Coordinator, IEEE History Center (Hoboken, New Jersey), for permission to quote from their oral history of Richard Petritz.
This book has made extensive use of published research when such materials have proven useful to the overall narrative of advanced materials. I need to particularly acknowledge the contributions of four very helpful works: David A. Hounshell and John Kenly Smith whose exhaustive study of DuPont R&D in their book Science and Corporate Strategy: DuPont R&D, 1902–1980 (Cambridge University Press, 1988) proved so useful to me in the chapters devoted to polymers within the section on “Structural Materials”; Ross Knox Bassett whose book To the Digital Age: Research Labs, Start-up Companies, and the Rise of MOS Technology (Johns Hopkins University Press, 2002) added so much to my discussion of semiconductor technology in the chapters related to “Functional Materials”; Jeff Hecht and his story of fiber optics as told in The City of Light: The Story of Fiber Optics (Oxford University Press, 1999) made an important contribution to my narrative of the semiconductor laser and its role in fiber optics technology; and Bob Johnstone and his excellent account of how Asia became important competitors in advanced electronics in his book We Were Burning: Japanese Entrepreneurs and the Forging of the Electronic Age (Basic Books, 1999), a work that guided me in analyzing the rise and global development of liquid crystal device technology in the section of “Hybrids and New Forms of Matter.”
I also want to especially acknowledge the help of Robert Burgelman, Edmund W. Littlefield Professor of Management and Director of the Stanford Executive Program at Stanford University, during the writing of this book. Professor Burgelman was kind enough to review parts of my manuscript and to offer important insight that led especially to the structure and content of the final chapter. He has also been very helpful in directing me to extremely useful articles that have added considerably to the quality of the book.
The school where I teach, St. John's University and the College of St. Benedict (Collegeville, Minnesota), has helped me in many ways during the writing of this book. Through university grants, it provided me funds for research travel. Its interlibrary loan program under the coordination of Janine Lortz has proven invaluable in securing for me crucial articles and books I needed in a most timely and efficient manner. Its teaching assistants—and particularly Mattie Lueck—helped me design a number of tables and figures that I have used in this book. And its faculty and my colleagues have, as always, been totally supportive. I need to particularly single out Economics Professor Louis Johnston and Global Business Professor Lisa Lindgren for leading me to important documents and ideas and concepts that have greatly enriched my discussions and been of enormous help to me in forming my conclusions.
My editor for the book at John Wiley, Dr. Arza Seidel, has, as always, been supportive and very patient. While it has taken me longer than expected to finish this book, she has stood by it from the very beginning. She has, as with my first book, offered wise counsel, support, and encouragement throughput this project. I am most appreciative. Finally, I would like to thank my wife Becky for her sage advice and patient understanding during my writing of the book. As her mentor Pearl S. Buck wrote of her in For Spacious Skies: Journey in Dialogue, “Give us a hundred Beckys.”