Competition Between Companies

The precursor to full fledged research and development enterprises, which involved the cooperation of industrial and university scientists with inventors, designers, and engineers to develop new technologies, were science-based industries that emerged in the mid- to late-nineteenth century. It is widely considered that the first science-based industry to arise was that of dye manufacture. In 1856 William Perkin accidentally discovered a purple dye when searching for useful applications for the byproduct of the coal industry, Coke. He then established a dye factory in Great Britain, and the demands of the textile industry for more dyes with different properties supported the establishment of more dye factories in England, then other countries including France and Germany. By 1867, Germany had established five large chemical companies: Bayer, Hoechst, Badische, Analin- & Soda-Fabrik, and Aktien-Gesellchaft für Anilkinfabrik, and Casella, and soon after dominated the worldwide synthetic chemical industry. These sites of production relied on the work of chemists to synthesize the dyes, but also to develop new ones. Chemists in universities with close ties to the industry deciphered the chemical structures of the compounds and planned schemes of preparation. Dye companies and more specifically, their chemists, competed to produce new synthetic dyes using strategy of known structures and deliberate reaction schemes. Thus, the chemical synthetic dye industry was an early example of the collaboration between industrial scientists, academic scientists, and corporate interests that grew out of a fiercely competitive market.

Other early industrial laboratories were established in the electrical field. The leaders in this area were the United States and Germany. In the U.S., George Westinghouse’s firm and General Electric combined corporate consolidation and research-driven patent strategies to support commercially driven, science-based invention. Large firms such as General Electric, AT&T, and DuPont, as Thomas J. Misa pointed out in Leonardo to the Internet: Technology and Culture from the Renaissance to the Present, gained competitive advantage using industrial research (150). Mounting well-funded research efforts afforded companies technical, legal, and patent advantages that squeezed independent inventors, lacking the means for such large-scale research endeavours, out of the market. Indeed, those independent inventors often went to work for those large science based firms. Missa also pointed out that, in the case of du Pont, their heavy investment in industrial research during the 1920s was largely inspired by a desire to acquire competitors. It was uncovered that between 1920 and 1950, ten out of twenty of DuPont’s major product and process innovations were from acquiring outside inventions or companies, rather than its own research. Nevertheless, it is also clear that du Pont used its claim of research to attract and maintain customers. For example, Du Pont Blasters' Handbook: Describing the Practical Methods of Using Explosives for Various Purposes, published in 1923, stated that:

"du Pont Service is the result of a sincere effort on the part of the du Pont Company...to pass pass on to the users of its products, in a practical way, the results of its 120 years of experience and research in the manufacture and use of explosives"(3)

From the above excerpt, it is evident that du Pont deliberately advertised its balance between practical, or applied, science and research to develop quality explosives that its users could trust. Thus, competition between corporate innovators and independent inventors helped motivate the former to mature their practices of research and development.