As we noted in the preceding chapters, the expansion of the American economy during the late nineteenth and early twentieth centuries combined with innovations in transportation, communications, and production technologies to yield manufacturing operations of unprecedented scale. The materials-analysis and quality-control laboratories that were established within many of these factories were among the first industrial employers of scientists and research personnel. Over time, these plant-level laboratories expanded and were supplemented by the foundation of central laboratories devoted to longer-term research. Although the development of much of the original testing and materials-analysis research was a response to changes in the structure of production, the expansion and elaboration of these activities reflect changes in the organizational structure of the firm. The development of these research facilities was associated with changes in the structure of the parent firm that expanded and diversified its activities and products and substituted intrafirm control of these activities for market control.

These developments transformed the processes of invention and innovation within American manufacturing during the early twentieth century. Formerly carried out largely by inspired individuals, the process of innovation increasingly took place in research facilities under the control of manufacturing firms. Schumpeter argued that “innovation is being reduced to routine. Technological progress is increasingly becoming the business of teams of trained specialists who turn out what is required and make it work in predictable ways. The romance of earlier commercial adventure is rapidly wearing away” (1954, p. 132).