Basic research is research that generally had no immediate application to a product or a company effort but sought fundamental knowledge regarding the deeper nature of things, such as the behavior or electrons.
Applied research was defined as the kind of investigation which was done with a specific product or goal in mind.

The line is not always distinct. Sometimes applied research yields basic scientific insights, too.

Generally, it was believed that Basic Research precedes Applied Research which precedes Development which precedes Manufacture.

Basic -> Applied -> Development -> Manufacture

pg. 27
"These young scientists were encouraged to ... look beyond the day-to-day concerns that shaped the work of their fellow engineers (to think five or ten years ahead was admirable) and focus on how fundamental questions of physics or chemistry might someday affect communications. Scientific research was a leap into the unknown, in other words."

"inventions are a valuable part, but invention is not to be scheduled or coerced."

"a free environment for the operation of genius." -Arnold

What is an Industrial Lab?

pg.32
Frank Jewett: "An industrial lab is merely an organization of intelligent men, presumably of creative capacity, specially trained in a knowledge of the things and methods of science, and provided with the faculties to study and develop the particular industry with which they are associated."

Apply science to common affairs of everyday life.

capable of avoiding many of the mistakes of a blind cut-and-try experimentation.

Incentives

Paying well is important.

As Andy Matuschak points out, our over-built industry provides astronomical salaries, making it hard to incentivize doing applied research or basic research.

pg. 37: "A good salary likely mattered more than [famous person's] notoriety."

"$3000 a year was just fantastic!"

On the Importance of Vision

Vision drives a desire to improve, to build, to solve all of the problems. The desire to solve problems begets innovation and invention, in service of the vision.

"investigating anything remotely related to human communications"

pg. 44: "Our job, essentially, is to devise and develop facilities which will enable two human beings anywhere in the world to talk to each other as clearly as if they were face to face and to do this economically as well as efficiently."
pg. 45: "the task at hand was immense"
"Phone service not only had to get better and bigger. It had to get cheaper."

Culture

of Kelly "as events would show, he would lead regardless of his rank or station."

"A certain fearlessness characterized the recruits."

Tinkerers!
pg. 38: "The young Bell Labs recruits had almost all grown up with a peculiar desire to know more about the stars or the telephone lines or (most often) the radio, and especially their makeshift home wireless sets. Almost all of them had put one together themselves, and in turn had discovered how sound could be pulled from the air."

Collaborative

Interdisciplinary

Study Groups, Colloquium, Academia

pages 43-44
"'What had happened, I think, is that these young Ph.D.'s were introducing what is essentially an academic concept into this industrial laboratory.'

"In the 1920's, a one-hour colloquium was set up at 5 p.m. on Mondays so that outside scholars like Robert Millikan and Enrico Fermi or inside scholars like Davisson, Darrow, and Shockley could lecture members of the Bell Labs technical staff on recent scientific developments."

"Some of the Labs' newest arrivals after the Depression had decided to further educate themselves through study groups where they would make their way through scientific textbooks, one chapter a week, and take turns lecturing one another on the newest advances..."

"met on Thursday afternoons"

"The material was a challenge for everyone in the group except Shockley"

"By outward appearances, the study group were merely comprised of telephone men who were intent on learning new ideas."

Innovation is Process

pages 108-109
In his view, innovation was not a simple action by a "total process" of interrelated parts. "It's not just the discovery of new phenomena, nor the development of a new product or manufacturing technique, nor the creation of a new market," he later wrote. "Rather, the process is all these things acting together in a integrated way toward a common industrial goal." One of Morton's disciples, a Bell Labs development scientist named Eugene Gordon, points out there were two corrolaries to Morton's view of innovation: The first is that if you haven't manufactured the new thing in substantial quantities, you have not innovated; the second is that if you haven't found a market to sell the product, you have not innovated."

The Idea Factory Bell Labs and the Great Age of American Innovation

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