Thursday, January 22, 2009

The Worst of Both Worlds

Today's Dilbert strip (click here to read it) really hits home for those of us who worked in Corporate America. In the story leading up to this strip, Dilbert's been given no work to do (because there's no budget), and so fritters his time away creating a profitable internet business. Then the pointy-haired boss fires him for "misusing company resources." And in today's panel, the company seizes the profitable business because it was created on company time. Dilbert, as always, gets the shaft. As usual, Scott Adams captures the essence of Corporate America: the Corporation takes everything and promises nothing. Dilbert has no job security, but anything he creates is property of the company.

It was not always that way. Back when I was still more or less starting out in the technology field, when the USA was still the world's unchallenged leader in technological innovation, a friend and I left the company where we'd helped make the cell phone a commercial product, and went off in search of new challenges (and more money, of course). We took two very different paths.

My friend went to Silicon Valley and became something of an entrepreneur. He worked for several companies, most of which paid in stock options rather than cash. If he had a brilliant idea that made the company enormously profitable, he'd end up filthy rich off his options. On the other hand, if the company went bust (which most of the Silicon Valley start-ups did), he'd find himself with no job and no money. High risk, but also the possibility of high reward. It was a fair bargain, as the success of such companies as Apple, Intel, etc., goes to show.

I, on the other hand, took a job with the Bell System. At the time, the Bell System was a huge, regulated monopoly, and the employment contract was best described as socialist. Maybe even Marxist, in the sense of "from each according to his abilities, to each according to his needs." The contract explicitly said that anything I invented while employed at the company (and this could be read to include anything I invented on my own time) was licensed to the company. If I invented something that made a billion dollars for the company, that billion would go into the company's pocket, not mine. (In fact, I did invent something that I'm told generated a billion or so for the company, though in all fairness it took close to a hundred people to actually build the thing.) In return for giving up the right to become rich, the unwritten part of the contract pretty much guaranteed lifetime job security. There was good health care and a real pension plan, so barring some major gaffe like parking in the executive's office, I wouldn't have to worry about food, clothing and shelter for the rest of my life. Low reward, but close to zero risk. In my experience, this too was a good environment for innovation.

But Dilbert's company--like most American companies, including those that formed from the splinters of the Bell System after the 1985 breakup--wants to Have It All: they claim ownership of what the employees invent, but promise nothing in return beyond this week's paycheck. I suspect this corporate attitude is a big part of the reason the good old U.S. of A. is no longer the world's leader in technological innovation (don't believe me? Check out this Tom Friedman column in the New York Times). After all, why take the risk of innovating when somebody else gets all the benefits? I don't have any good answer (yet), but I don't think this country's going to return to it's global leadership position until this problem gets resolved. "High risk, no reward" is no formula for promoting innovation.

By the way, my friend never did get rich from developing technology. But he also invested in Silicon Valley real estate on the side, and this made him enough that he was able to retire in his 40s, move to Northern California and become an environmental philanthropist. Not a bad outcome.

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