Oral-History:Steward Flaschen

About Steward Flaschen

Steward Flaschen was born in Berwyn, Illinois in 1926. Through the GI Bill, he attended  the University of Illinois, Alma College and Miami University before receiving his Ph.D. in geology from the University of Colorado. He did postdoctoral research in geochemistry at Penn State University under Office of Naval Research auspices. He worked at Bell Labs, developing a hydrothermal synthesis of barium titanate, as well as working on low-melting glasses for semiconductor insulation. At Motorola, he developed at method of silicon passivation important for the plastic packaging of semiconductors. He oversaw research at ITT, pushing for innovations in such diverse fields as fiber optics and anti-skid braking in automobiles. When he retired in 1986, he became chairman of TranSwitch and was on the board of venture capital companies. In the interview, he also reflects on the importance of corporate leadership in producing new technologies and on the demise of central laboratories charged with conducting general research.

About the Interview

STEWARD FLASCHEN: An Interview Conducted by Frederik Nebeker, Center for the History of Electrical Engineering, 6 June 1996

Interview #269 for the Center for the History of Electrical Engineering, The Institute of Electrical and Electronics Engineers, Inc.

Copyright Statement

This manuscript is being made available for research purposes only. All literary rights in the manuscript, including the right to publish, are reserved to the IEEE History Center. No part of the manuscript may be quoted for publication without the written permission of the Director of IEEE History Center.

Request for permission to quote for publication should be addressed to the IEEE History Center Oral History Program, IEEE History Center at Stevens Institute of Technology, Castle Point on Hudson, Hoboken, NJ 07030 USA or ieee-history@ieee.org. It should include identification of the specific passages to be quoted, anticipated use of the passages, and identification of the user.

It is recommended that this oral history be cited as follows:

STEWARD FLASCHEN, an oral history conducted in 1996 by Frederik Nebeker, IEEE History Center, Hoboken, NJ, USA.

Interview

INTERVIEW: Steward Flaschen

INTERVIEWED BY: Frederik Nebeker

PLACE: New Canaan, Connecticut

DATE: 6 June 1996

[Note: Joyce Flaschen is also present at the interview.]

Family Background and Childhood

Nebeker:

Could I start by asking you where and when you were born and a little bit about your family?

Flaschen:

I was born May 28, 1926 in Berwyn, Illinois, a suburb of Chicago. My family were residents of Chicago, and their parents immigrated from the Austro-Hungarian empire. One of my grandmothers spoke Hungarian, and the other spoke German. That is my background as far as derivation of the family. My father was a pharmacist; he got his degree from the University of Illinois. My mother was a homemaker. I had one sister, and she is not a professional.

Nebeker:

Were you interested in science as a boy?

Flaschen:

I was, because my father, being a pharmacist, would take me to his drug store and I would see him making prescriptions. So from the very early time I became interested in pursuing a scientific career, whether it would be in following my father's footsteps or some other area of science. I was also interested in science generally.

GI Bill and Education

Nebeker:

You went to the University of Illinois?

Flaschen:

Yes. It was World War II when I graduated from high school, and I took a test because I loved taking tests. This test happened to be for the United States Navy-Air Force program. I passed that test and was sent by the Navy to a naval unit at Alma College, in Michigan. The program would go all year round. By 1946 the war was over and I had accumulated seven semesters in the Navy program. I was then offered an opportunity to go on to Navy flight school to get my commission or to be discharged. I chose to be discharged, but there I was with seven semesters of credit.

I applied to Carnegie Tech; for some reason I had a good image of it. I took some tests — the college entrance tests, I guess — that they asked me to take. I got back a form letter from them saying, "I'm sorry, you don't qualify for entrance into our freshman class." However, I was little concerned. At that time, they did ask for a religion on your application. I am Jewish, and I kind of had a feeling at that time, in the 1940s, there were quotas on admissions to good schools.

In any case, since I was an Illinois resident, the University of Illinois had to accept me as a war veteran. I went to the University of Illinois. Shortly after my first semester, they called me in and said, "How would you like to graduate?" I said, "I have only been here one semester." "Oh," they said, "you have accumulated more than enough hours to graduate." And I said, "Well, I don't have a specific major." I took just about everything in college — liberal arts and sciences — but didn't have enough for a specific major. They said, "That's all right. We have a degree for fellows like you. It is called a Bachelor of Science Degree, in the division of Specialized Services for War Veterans."

At that time I was living in a football stadium, as there were then no dormitories available. They had just cleared out the locker rooms in the football stadiums, and put us war veterans there. I thought, "Well, rather than continuing this, I will get my degree." Which I did.

I then went back to Miami University in Oxford, Ohio, which is where the Navy transferred me after Alma College. There I decided to major in chemistry, and they accepted me even although I didn't have some of the undergraduate chemistry courses. I got a master's degree at Miami University in both chemistry and geology. I was attracted to the geology department because the head of the department was one of the pioneers in the exploration of Antarctica with Admiral Byrd, and I found working for him and taking classes from him was quite good.

After I got my master's degree, they asked me to stay on and teach geology. I had never taken any of the undergraduate courses, just took some graduate courses as I was majoring chemistry. I remember Dr. Wade saying, "That's okay, I'll give you my notes for teaching. And you just follow my notes." Well, I found that fascinating; I would study his notes and then go give the course. But that's what happened right after World War II. There were so many returning veterans under the G.I. Bill. Everybody did what they could.

Well, in the process, I married the smartest one in my physical chemistry class — a graduate course. This was my wife, Joyce. After a year or so of teaching, I went on for a Ph.D. and my geology department suggested the University of Colorado, where a former Miami professor was teaching.

J. Flaschen:

Excuse me. You didn't do any more teaching. After we were married, we went out and you started on your Ph.D. in Colorado.

Flaschen:

That's right. After I finished a year of instructorship in the department of geology, I went to the University of Colorado to major in geology, because it was recommended by our department. They had some friends there. I have to tell you the truth: I was disappointed in that I felt they were living in the dark ages at that time.

Nebeker:

This is the geology department at University of Colorado?

Flaschen:

Yes, in Boulder. I felt that they were living in the dark ages of scientific geology at that time. They were really an old school type. They didn't care about radioactive dating of sediments or igneous rocks to determine age. I did my languages there: German and Russian.

One day I saw on a bulletin board a notice about "Fellowships for Geochemistry at Pennsylvania State University." I applied for that and was accepted. It was an ONR (Office of Naval Research) fellowship. I have to tell you that my two years at Penn State was an extraordinary experience. I think Penn State's Materials Science laboratory was a first of its kind, and I had this tremendous sponsorship by ONR. We did some wonderful work there, and it is still being done there at Penn State.

Nebeker:

What professor did you work with?

Flaschen:

Dr. Osborn was the head of the department. He came out of Eastman Kodak research labs. He was offered the professorship to build the materials research program at Penn State. He just constructed it beautifully. I did my Ph.D. in the hydrothermal phase diagrams of the systems silica-iron oxide-water — high temperature, high pressure work.

Nebeker:

Experimental work?

Flaschen:

Yes, and that was published under the auspices of ONR. I also minored in chemistry, inorganic chemistry. I was quite pleased that the quality of education I got in the department of material sciences was so strong that I was the best student in the graduate chemistry courses. I would always score higher than the other pure chemistry majors, as a result of which the head of the department offered me a post-graduate fellowship in the chemistry department. The material science department also offered me a post-graduate there.

Bell Labs and Hydrothermal Synthesis

Flaschen:

Meanwhile Bell Telephone Laboratories had come to interview at our hydrothermal laboratory at Penn State. My wife was very smart, and she said, "Well, you can always go back to the University. Why don't you try corporate work, and give the Bell Labs opportunity a chance?" So I did go to Bell Labs in 1951.

Nebeker:

The listing has it as 1952.

Flaschen:

Yes, I graduated in 1952, but being married I never went to any of my graduations. I had to work. So as soon as I finished my oral dissertation, at the end of 1951, I left Penn State and went over to Bell Labs. Penn State wanted me to come back for graduation, because they said it was a rule; you had to go to graduation for your Ph.D. I was granted an exception, as Bell Labs wrote a nice note that allowed me not to have to go back.

Nebeker:

Was your Ph.D. in the geology department?

Flaschen:

It was in what was then the mineralogy department, which then became the department of material sciences after I left. Why did the Bell Labs recruiters come to the mineralogy department? Well, Bell Labs was doing hydrothermal synthesis of electronic-grade quartz crystals. During the war, the German submarines disrupted the import of electronic-grade quartz crystals from Brazil, which is where the whole world had obtained their quartz crystals. So Bell Labs started hydrothermally synthesizing quartz crystals, and they came to Penn State because they knew of our hydrothermal program. That is why I was hired to work on that project. But Bell Labs really was an extraordinary graduate school in itself, and being in the research department at Murray Hill, I was given the freedom really to work on whatever subjects I wanted to work on.

The first thing I did was to work on the hydrothermal synthesis of barium titanate, which was a piezoelectric material of interest to Bell at the time. It had been prepared by standard ceramic processes. I felt that it could be synthesized hydrothermally, and I just decided to do it. After two weeks at Bell Labs, I succeeded in forming barium titanate by a co-precipitation processes, which had never been done before. I submitted the paper for publication, but the head of the laboratories, a very fine guy named Bill Baker, turned it down as a publication by saying, "Well, look, you have only been here a few weeks. How could you possibly have a paper requiring a full publication?" He suggested a letter to the editor instead of full publication, which I did do. Of all the publications that I have had —thirty to forty publications—that letter to the editor received more response from the world for reprints than any other. Actually it was the foundation for what is called "the hydrosol" or the "hydro-gel method" of preparing ultra-pure electronic ceramic materials. That paper was the foundation. I give Bell Labs credit, I wanted to do it and I was allowed to do it.

Glassy Semiconductors

Nebeker:

So you were doing your own research projects?

Flaschen:

Yes, my own projects. Then because semiconductors were the thing at that time at Bell Labs, I got very interested in working with my friends over in the physics department. One of the problems was finding a lower cost way of packaging semiconductors, instead of the hermetically sealed ceramic package, which was very expensive. Besides, this was a high temperature seal, and it reduced the number of materials that you could use in the production of semiconductors. I became interested in low melting glasses. I found that in the system sulfur-selenium-arsenic, there were glasses that melted in the 300 to 400 degrees centigrade range, which would allow you to dip already leaded and bonded semiconductors into a glass melt and withdraw them. You would then have a totally glass-encapsulated seal around the semiconductor. That was quite bit of an adventure. And I did the phase diagrams of those systems of the metallic sulfur-selenium glass systems.

Jumping ahead, after I left Bell Labs the Nobel Prize was awarded to Phil Anderson, who developed the theory of electronic conduction in amorphous glassy semiconductors. I had discovered glassy semiconductors in parts of the phase diagrams that I did of the metallic sulfur-selenium systems.

Nebeker:

Was he drawing on your work?

Flaschen:

Yes. My glasses had both dielectric properties and conducting properties, depending upon the percentage of metal sulfide-selenide that was in the glass. Of course, I was interested in the dielectric properties of these glasses for encapsulation, and he was interested in the conducting properties of these glasses.

Nebeker:

Were these glasses used for the purpose that you intended?

Flaschen:

No, they were not. I guess it is an interesting story of why they were not. However, an outgrowth of that work was picked up by a fellow named Stanford Oshinsky, who formed the company called Ovonics. He drew upon that work to form a semiconductor switch based upon the fact that there was a transition between the glassy state, which was a dielectric insulator, and the crystalline state, which would be conducting. If you took a small sample of the glass and provided a pulse that heated it close to the melting point or slightly above it, and then let it cool "slowly" in terms of a decaying pulse of ten to twenty milliseconds duration, you would get crystallites formed. And those crystallites would be conducting. If the electrical pulse was turned off quickly, and it would revert to the glassy state insulation. Well this was a nice switch, a glassy-crystalline switch. He raised a lot of money and gained Philips as a customer. There was a lot work done on that.

Nebeker:

The connection with your work was that this used the kind of glass that you were developing?

Flaschen:

These were the glasses for which I published the phase diagram showing the pure glassy state, showing where it went into a crystalline state, and the areas of interest for the semiconductor glass, the dielectric glass, and the glasses close to the transition between crystalline and glass phase.

Invitation from Motorola

Flaschen:

One of my friends, Dr. Les Hogan, who had been in the physics department at Bell Labs, went off to Harvard and became a professor there for a year, and then was hired by Motorola Semiconductor in Phoenix to build up their semiconductor division. In my sixth or seventh year at Bell Labs, he called up one of my friends, who did a lot of beautiful work in single crystal growth of garnets for magnetic applications. Litton Industries invited my friend from Bell Labs to come out to California to start up a research lab for Litton Industries. He invited me, saying, "Why don't you come out with me? We'll talk to them. We'll do it together."

I was very happy at Bell Labs. I had "umpteen" publications, I had fifteen or twenty patents in totally different areas, and I worked with a number of different departments — metallurgy department, ceramics department, and the physics department. It was a wonderful experience, and I was very happy at Bell Labs. But it was the middle of winter, and I said to myself, "Why not have a free trip to California?" So I went out to interview with him at Litton Industries, and they offered us the opportunity to build their research lab.

Just before we were leaving my friend got a call from Les Hogan, who was then down at Motorola, who had traced him to Los Angeles. Hogan said, "While you are on the West Coast, why don't you stop off in Phoenix? We would like to build our research capabilities at Motorola Semiconductor." Well, he asked if he could take a friend of his with him. Hogan said, "Oh, sure!" So we went to Phoenix on the way back. We were very impressed by Les Hogan.

Les is a guy you should interview, if you haven't already, because he built Motorola Semiconductor and then went on to Fairchild, building it up. Les made us both an offer on the spot. My friend turned it down, as he decided to stay at Bell Labs. But I decided that the opportunity was so good to work there that I left Bell Labs. My friend is still at Bell Labs.

Research Organization at Murray Hill

Nebeker:

Can I ask you a little more about Bell Labs? You were there from the end of 1951 —

Flaschen:

The end of 1951 to April of 1959.

Nebeker:

And in that time you were permitted to choose your own research projects?

Flaschen:

Yes.

Nebeker:

You have mentioned a number of people in other departments. Did you frequently interact with other Bell Labs researchers in the work there?

Flaschen:

Yes. You see, I was considered to be an expert in material synthesis and phenomena. Most all of the research work, other than the pure electronics, involved materials.

Nebeker:

So people would come to you with questions?

Flaschen:

And conversely, I would go to them. Because Bell Labs had a nice system of circulating write-ups — I forget what we called these memos. We would write up our investigations and circulate them throughout the research departments of Bell Labs: physics, metallurgy, physical chemistry, organic chemistry, electronics. When you saw a memo that was of interest, you would just go down the hall — it was a very long hall — and just sit down and talk with the guy.

Nebeker:

Which Bell Labs facility was it?

Flaschen:

Murray Hill, New Jersey. That was extraordinary. Murray Hill was a national resource. It is a tragedy that it no longer exists. It was a great loss to this country and to science as a whole. Nothing has taken its place. The range of science was extraordinary, with a network of experts unmatched in the world.

Nebeker:

How did you arrive at your topics? Did you have some director who would suggest topics?

Flaschen:

No. Well, I would say that the head of our department would have meetings where we would all discuss our work. If we had something that contributed to another person's work in our own department — we were the ceramics department or inorganic chemistry department, I forget the name of it — well, we would certainly pitch in and help. But as far as the head of the department was concerned, whatever we could bring to Bell Labs work as a whole was his mission. I did some projects in our own department and worked with Western Electric on commercializing them, particularly in barium titanate to transducers. But there was no pressure on us to select the commercial target that had a time line on it for completion. And the research department was purely about basic research.

Nebeker:

The idea was that each researcher could decide himself what he could best do? What was this transducer that you worked on?

Flaschen:

Well, this is barium titanate, which was used for oscillators. It is a common oscillator material then and now.

Semiconductor Material Research at Bell

Flaschen:

Another thing that I remembered doing that turned out to have commercial application was positive temperature coefficient resistors. That is, if you doped barium titanate — barium titanate is an insulator obviously, since it can be an oscillator, but if you doped it properly, just as you dope semiconductors, you can get semiconducting properties in barium titanate. It had the unusual property of having a positive coefficient of electrical resistance over room-temperature ranges, which you could control by doping. That was very interesting.

Nebeker:

The resistance went down as the temperature went up?

Flaschen:

No, the resistance went up substantial orders of magnitude. You would get three or four orders of magnitude increase of resistance over a thirty or forty degree temperature range increase, which could be controllable in the room temperature below or above range. That had some interesting applications. It was all really a spin-off from the doping of semiconductors of silicon and germanium. Here was a doping of ceramic materials to form interesting semiconducting ceramics that are in wide use today.

Nebeker:

Was Gordon Teal there at the time?

Flaschen:

Gordon Teal was there, yes. I think shortly after I joined he went off to Texas Instruments.

Nebeker:

Who are some other people that you recall at Bell Labs in the area of semiconductor materials?

Flaschen:

The metallurgy department, particularly. Pfann — I forget Pfann's first name — not a Ph.D. At the time Bell Labs was really able to choose the best and the brightest. How I got in, I really don't know. But they did very well choose the best and brightest of the Ph.D.s, so most of the members of technical staff were Ph.D.s, and those that didn't have Ph.D.s were associate members. But Pfann was so good that, even without a Ph.D., he was a member of the technical staff — he was awarded that distinction. He was the man who developed crystal growth for silicon and germanium. He was the one who grew the crystals that Shockley, Brattain and Bardeen used in their work — very high purity work.

I remember another guy in the metallurgy department who went on to become president of New Jersey Bell and then vice chairman of AT&T, a very good scientist who worked in magnetic materials. Dr. Morry Tanenbaum

I worked with the people in the physics department, particularly a man who went on to do some beautiful work in superconducting. He was in the materials side of the physics department. He synthesized materials and studied the superconducting properties of it. He made a good name for himself and then went on to the University of California in San Diego, which was a hotbed of superconducting work. His name will come back to me; he was Swiss-German, actually. Another Swiss-German in the physics department did some very fine work on dielectric materials; I remember working with him.

Leaving Bell Labs

Nebeker:

So you were very happy those seven or eight years at Bell Labs?

Flaschen:

That was a post-graduate experience of unexcelled professional and personal joy. It was an extraordinary place. I would say that the people who spun out of Bell Labs really brought so much talent to the companies that they went to and the universities they went to. Bell Labs did not discourage their people from doing that. Although I have to say that when I said I was leaving, the head of Bell Labs called me in and said, "You know, you are taking a big risk. During the Depression we didn't lay off any people at Bell Labs; everybody kept their job. We would work maybe four days a week, but everybody kept their job. You know you are married, you have children. You have to consider that if there is a depression and you are working in industry, suddenly the job might not be there."

It is interesting to think that for the people who lived through it, the Depression had a very big impact on their outlook, from the fact that so many people were out of work, scientists and engineers.

When I left, I was asked to give a presentation of my work on low-melting glass as encapsulate for semiconductors to the people in the semiconductor parts of the company (who wanted to use it for diodes), I told them, "Look, I think it is a very interesting area of materials, but I think it is not right for commercial application. Nobody in their right mind would want to introduce a sulfur-selenium compound into a central telephone office. Even though these substances are inert, they do have a measurable vapor pressure. All materials have a measurable vapor pressure, and over a period of time — whether it is ten years or fifteen years — you are going to have sulfur-selenium corrosion of your metallic contacts in the central office." You see, this was the time of relays, electromechanical relays. And I said, "You don't want to take that chance, right? I wouldn't do it."

Motorola Research Department

Nebeker:

So in 1959 you moved to Motorola?

Flaschen:

Motorola, yes. I had the research department there. Les Hogan wanted me to work on low-melting glasses for Motorola. I told Les, "Les, it doesn't make sense." Motorola Semiconductor at that time was in the two to three million dollar sales per year range. We had a big celebration when it hit four million dollars a year.

Nebeker:

How large was the research department?

Flaschen:

Oh, we must have had five or six people. Les, being a research man himself, believed in that. And out of that Motorola group came some people that really went off, building their own companies. Jerry Sanders was a salesman at the time for Motorola. Jerry founded AMD (Advanced Micro Devices) and was chairman there. Wilf Corrigan was in the materials department of Motorola at the time. He worked on epitaxial growth, and he went on to found LSI Logic. He is the chairman and founder of LSI Logic. I am sure that there is other — lots of guys. Motorola at that time was quite a hotbed. It was under Bob Galvin, and he was very, very strong on innovation and R&D. He always encouraged it. So I spent five very good years at Motorola, working on low temperature oxidation, surface oxidation for passivation of silicon, ambients for control of gain for germanium transistors.

Passivation of Silicon & Plastic Packaging

Flaschen:

I left out a little bit about Bell Labs — an interesting side-line. I would give some papers at technical societies, among other things on low-melting glasses. I remember an Electrochemical Society meeting up in Boston, probably in 1957 or 1958. I gave a paper there, and three guys from a start-up company, Fairchild Semiconductor, grabbed me after the meeting. They were Bob Noyce, Gordon Moore, and Dick Gingige. They said, "Look, we're just a new company, we're very small, we just got started, and we are very interesting in doing silicon passivation . Can you give us more information about your low temperature glasses?" I told them at the time that I thought a better bet for passivation was work that John Attala was doing at Bell Labs, which was oxidation of silicon to form an in-situ silicon dioxide layer to act as a barrier for moistures. Use that for passivation. At the time, one of my good colleagues at Bell Labs was John Attala in the physics department. He was pursuing the high-temperature oxidation of silicon to form passivated layers so that you could use lower cost for packaging. I was pursuing the low-temperature glass method, and we knew each other. I liked what John was doing and I told the Fairchild guys about John's work. Of course, then Fairchild later went on to do the silicon oxidation planar process, which is really not so much for the passivation but for the formation of a barrier layer for the differential doping of a semiconductor.

Well, when I was at Motorola Semiconductor, I said to myself, "Well, if you have to process high temperature oxidation, you are talking 800 to 900 degrees centigrade." I thought if you have to go process it at 800 to 900 degrees centigrade to get your oxidation layer, that will give you trouble in forming some of your contacts, which will diffuse and won't stand up under those temperatures. There ought to be a lower temperature way of forming passivation. So being a material scientist, I looked at the melting points. SiO₂, you know, is a 1,600 degrees centigrade melting material. It is a very slow-forming, high-temperature forming material, if you are thinking about a surface diffusion process. But if you make additions to SiO₂, you can get lower melting glasses, for example adding lead oxide. Lead oxide silicate glasses are mobile diffusers in the 300 to 400 degrees centigrade range. You can form some very nice glass. So what I did was put the silicon wafers into an oxidizing environment and introduce a lead oxide vapor. A lead oxide vapor reacting with the surface of the silicon formed a lead silicate glass and formed it at 300 to 400 degrees centigrade.

This opened up many other ways of forming contacts of silicon without thermally destroying them. Motorola then went on to commercialize that, because now having the lead silicate glass passivation, we no longer needed a hermetic seal. Therefore we went through plastic sealing, plastic dip-coating of our transistor, first our Zener diodes and then our straight diodes. And that was the start of today's plastic packaging of semiconductors.

Nebeker:

This was at Motorola that you are doing this?

Flaschen:

Yes. We weren't, however, smart enough to patent it. But at Motorola we were pioneers, we were the innovators in the plastic packaging field. It was Wright-Patterson Air Force Base, in Dayton, Ohio, who provided the funding. We submitted a proposal to Wright-Patterson to explore plastic packaging of semiconductors and Wright-Patterson funded this substantially over the years. I give them credit for providing the seed money that allowed us to move fairly fast.

Nebeker:

Was that important in avionics, particularly?

Flaschen:

No, I would say, again, they were given a lot of freedom to invest in advancing the state of technology of the semiconductor industry as a whole. You would want to keep ceramic packaging in military applications. Why should you take the risk of going to plastic? The cost is not that much of a factor. Nevertheless, Wright-Patterson funded it, and it was very helpful to us.

Now one part of the development of the plastic package was that I realized that if you had contamination in your plastic, particularly of sodium — you are dealing in the higher ranges of application of 100 degrees or 110 degrees, and the military specifications may be even higher than that, 140 degrees — you had the danger of migration of sodium in your plastic into the silica and eventually into the junction. So I worked with the plastic suppliers. At the time the plastic was epoxy, and the supplier was General Chemical Company, which took an interest in this market. General Chemical has become the company Allied Chemical in New Jersey. They worked on purification of plastics and polymers to reduce the sodium to a fraction of a part per million. That was the basis for the high-purity plastic encapsulation that is now used throughout industry.

Another project I initiated at Motorola — I give Motorola credit for this — to our military division. That was also near Scottsdale. It had a research lab, and for some reason or another, they were working on deposition of SiO₂ by the reaction of silicon and oxygen. Of course, there was no immediate application for military equipment, and they came over to me and said, "Can we do anything with this?" Well, it was obvious to me that this was a method for deposition rather than in-situ oxidation of the silicon. This was a method, by lead-oxide or high temperature oxidation, for laying down layers of SiO₂ on the surface of silicon, both for masking purposes and passivation. So I started a program there at Motorola on silicon, on oxidation of silicon, and deposition upon the silicon wafers. And that was the forerunner of chemical vapor deposition CV semiconductor equipment industry.

Nebeker:

Did you patent the process?

Flaschen:

No. I vaguely recall my friends from the Motorola military mentioning that maybe Philips Eindhoven had published something on silicon oxidation to deposit SiO₂. I never found the publication, though I have looked for it.

Nebeker:

Did you publish on it?

[Beginning of Side 2]

Flaschen:

We built our own equipment, but we were not in the equipment business. So later, as we were not in the equipment business, we did not want to sell the equipment but wanted to use it for our own purposes later on. Of course, several companies were formed just for the purpose of providing the silicon thermal reaction equipment to the industry.

Publication and Patents

Nebeker:

May I ask about the publication policy at Motorola? Was part of the idea that, once something was published, another company could not patent it?

Flaschen:

Well, since Les Hogan was head of Motorola — coming out of academia and Bell Labs and being himself a Ph.D. physicist — there was a very open publication policy. A lot of our work was sponsored by the Air Force, and we were obligated to publish this work as a matter of policy. Before we published, the patent lawyer would go through it, but he would take his guess from Hogan , and I never had any problems in publishing at Motorola.

Nebeker:

So anything that you felt should be published was published?

Flaschen:

Yes. I'd run it past them and they would publish it. You see, in the early days of a new technology, you don't foresee the broad scale application that it has. You tend to be where I tended to be, somewhat limited in my focus. I was focused on the specific product and how to improve the process for that specific product. We were very much focused on our production and applying our research to those problems, and we didn't take the bigger view. We did a lot of work on the equipment for molding our plastic packages, but didn't patent that. Later on, T.I. was smart enough to patent some very obvious things on plastic molding processes, which we had had in production for quite awhile, and they received a lot of royalties on that. All the more power to T.I.

Nebeker:

I had a director of a company tell me once that they patented not so much to make any money on the patents as to protect themselves from others doing that kind of thing. I was just wondered that if the publication policy might serve the same purpose?

Flaschen:

That is a good point; once published it can't be patented with someone else.

Nebeker:

But that wasn't the explicit policy at Motorola?

Flaschen:

It was not. At that time in the 1950s, there was not the emphasis on patentability. Bell Labs had most of the patents, and Bell Labs had a open licensing policy. They were never allowed to charge much for their patents by the government. So almost all of our licenses would come from Bell Labs with little or no cost. We didn't think of the competition patenting at that time.

Organization of Research Group

Nebeker:

Could you tell me a little bit more about the research group there? How large a part did Les Hogan play himself in research?

Flaschen:

Well, Les was so immersed in the business of the business that he let us do our thing.

Nebeker:

So he wasn't himself doing any research?

Flaschen:

He recognized that although his first love was the science, his first responsibility was the business. He would devote his total time to the business and would very rarely come into the laboratory to interact. He would just be working 150% of the time on the business of the business of a fast growing company.

Nebeker:

And how did you select the projects that you worked on?

Flaschen:

By my own initiative, seeing what was being produced and seeing where some obvious technology could help reduce costs or improve yields.

Nebeker:

So you were very much in touch with the production lines. And how, in retrospect, would you judge the research that you did?

Flaschen:

It was very productive. It was a hotbed of very good people there in the early days of Motorola, who were getting spun off, forming their own companies.

Nebeker:

Did you think of doing that?

Flaschen:

No, I did not. I'm not an entrepreneur at heart. I think your genes determine that. Subsequently I have started up companies, but I have done so as a chairman of the board, not as the operating person. But at the time I enjoyed working in corporate America, because then corporate America had a free policy for innovation among its scientists. We were not directed, we were able to pretty much — even at Motorola — freely choose what we wanted to work on.

Nebeker:

And that was true with a lot of companies?

Flaschen:

Well, it was true at Motorola, and obviously at Bell Labs. I think it was true with the big companies during that time period. For the start-up companies it was not true; they were totally focused on a market idea and in executing that specific idea. But the bigger corporations, in their tradition of their research labs, had people doing what they wanted to do.

Nebeker:

One might think that that is very good, the right way, in a new field when there are many new techniques and new products. Maybe in a mature field it's wiser for a company to have more directed research. Things have changed, I gather.

Flaschen:

Things have totally changed in corporate America. There are no premier research laboratories left in corporate America. Almost everyone now has focused research, which you would not call basic research. But we were able to do basic research. Now with more focused research and more advanced development, it's coupled very closely to the profits and loss part of the business. There are pluses to that and there are minuses to that. Pluses include that you might get innovation into your products faster. The minus is that you are not going to uncover the new phenomena that lead to new markets ten to fifteen years down the road. That part of it is gone. I think it has moved to biochemistry. I think the DNA research is a beautiful example of the power of the basic research leading to totally new markets fifteen years after the fundamental work is done. I don't see that happening in electronics anymore, while it is happening in the biochemistry and biophysics now.

Nebeker:

The openness of the research was partly due to Bell Labs setting the style?

Flaschen:

Research was totally open. In fact, Bell Labs I think had to set the style. I think corporate America did interact, publish, and give talks. It was a very open society.

Move to ITT

Nebeker:

So you were are at Motorola for five years, from 1959 to 1964?

Flaschen:

Yes. I was very happy there. One day I got a call from a management recruiter asking if I was interested in exploring a position with ITT Corporation as the head of their corporate-wide components technology. I didn't pay much attention to it because I was happy at Motorola. Actually, with the encouragement of Bob Galvin, we were asked to participate in the community affairs, so I was elected to the board of education of the Phoenix-Scottsdale schools system. I published a weekly column in the Phoenix newspaper on science, which I later turned into a book — it was easy after fifty weeks of columns. I was very happy in my work and outside activities. My wife said, "Look, there's nothing to lose. Why don't you just go see ITT?" Well, it turned out that it was a very good offer and the chairman of ITT, a really extraordinary man named Harold Geneen, really gave me a good sales pitch on it.

I decided to take the job. It was a major increase in responsibility for a world-wide corporation and a lot more money — and I had a growing family. It turned out that the job first had been offered to Les Hogan, who was head of the Motorola Semiconductor, and Les was very interested in it. When he went back to talk to Bob Galvin about this opportunity for ITT, Bob Galvin wanted to hold on to Les and made him vice-president of the corporation and put him on the board of directors. So when I went in to Les and I had to tell him — the recruiter had told me at the time I took the job that Les Hogan was aware of the position — "Les, you know the job that you turned down. It was too attractive for me. I am going to take it." So that is when I left and went to ITT.

Nebeker:

What did Geneen tell you that made ITT attractive?

Flaschen:

Although Geneen is a financial man, a controller, he was extraordinarily interested in science and technology all the time I knew him. He's a brilliant person. If you knew what you were talking about, he would pick up on it within twenty minutes and then would be two or three steps ahead of you. So he related very strongly to what challenge and experience I had. He wanted me to bring that to the ITT components business, which was a worldwide business of $12 billion, to advise and assist the laboratories of the companies in their R&D. Here again I was to be given a free hand, but would have influence in a much, much bigger sphere.

Nebeker:

So these are separate companies, part of the ITT system conglomerate?

Flaschen:

We had about 250 companies worldwide, in about ninety countries.

Nebeker:

How many were producing components?

Flaschen:

I would say we had at that time about thirty or forty.

Nebeker:

Many of these had R&D laboratories?

Flaschen:

Yes, and very good laboratories. We had some basic research labs modeled after Bell Labs, in England called STL, Standard Telephone Laboratories, which did some very innovative work. This is where the innovation of fiber-optics came from, which is not a well-known story.

Acquiring Shockley-Clevite Semiconductors

Nebeker:

Before getting that on tape, could I ask what some of the larger of these ITT companies were?

Flaschen:

ITT Canon, which was a leader in electrical connectors. It had wire and cable companies, submarine wire and cable. In submarine cable, it was second only to AT&T. This was out of our English company. There is a very big submarine-cable business. We had semiconductor companies. We bought the old Shockley Laboratories from Clevite. Bill Shockley left Bell Labs and formed Shockley-Clevite semiconductors, and originally recruited Noyce and Gordon Moore from MIT; he was so dominant in his management style that these guys didn't stay there too long. When Clevite decided to get out of the semiconductor business, they sold the Shockley Labs. And Shockley Labs had a diode plant, a germanium-diode plant, in Massachusetts. They had International Semiconductors in Freiling, Germany, and they had Shockley's own personal laboratory in Palo Alto.

So I was sent out by Geneen when I got to ITT to evaluate whether ITT should acquire that semiconductor business. ITT already had a small semiconductor business out of our German company, Standard Electric Lorenz (SEL), but it was too small to be a critical mass. So Geneen was interested when Shockley-Clevite was for sale. He sent me out to meet with Shockley and people. I went there maybe a month after I got to ITT. I was impressed by what they had in innovation and their other companies. I came back and told Geneen, "I approve. I recommend acquiring it." And I added, "You have to move fast." I knew this because while I was there a phone call had interrupted Shockley; it was T.I., and they were going to ask for approval for a follow-up visit, when there were going to send forty people out there. I said that a company doesn't bring forty people out unless they are really ready to move. So I said, "Mr. Geneen, if you want to buy this company, you really have to act fast." He acted fast. He bought it immediately.

I then found myself in an unenviable position. Shockley wanted to stay on as a consultant. He was also a professor at Stanford. Well, obviously the people back in New York, where ITT was, would like to have had Shockley as the consultant, but I had the unenviable responsibility of saying, "No, you really don't want to have him as a consultant." Because at that time Bill Shockley was very strong in his views on racial differences. I think it was professor named Jensen at Stanford, in the psychology department, who published on the I.Q. inferiority of the black race. Shockley spent half of the time at dinner with me in propounding that hypothesis. I said to myself, "God, this guy, with his reputation, is going to get a lot of visibility in the press, and he is going to talk about these things in the press, and ITT just simply cannot afford to have its name associated with a theory that postulates that there are innately inferior people in this world." I told ITT headquarters, "As good as Bill Shockley is, it is going to cause more problems for this corporation. We could hire him on a project basis when we need professional help, later on, but to have him as a full-time consultant — in the media he would be associated with the company — doesn't make good sense." Then they agreed with me, and it broke my heart to take that position, but I think a month or two later it did come out in the New York Times, Bill Shockley and Jensen having this position on the inferiority of the black race. It was a terrible position.

Henri Busignies & the Million Dollar License

Flaschen:

Another thing that happened me right away at ITT. My boss, who was the senior vice-president and technical director of the company, was Henri Busignies, who emigrated from France when World War II broke out. He was the inventor of high-frequency detection of submarines: the sending out of high-frequency pulses and getting back a reflection from a surfaced sub. This was used during the war very effectively to counter the German submarine attacks. He came to the United States and formed the military division for ITT. He was my boss, and he became technical director of the corporation.

He said that he would like me to look into a license that they had taken on a semiconductor switch. Philips had taken the license for Europe for telecom applications. We would have liked to have that at ITT, but we were not able to get it in time. So we took the license for the United States. He shows me these papers. When I read them I thought, "Oh, my God!" It was my friend, Stan Oshinksy, who was selling licenses to use low-melting glasses as solid-state switches for applications. He sold licenses for the telecom market and the automotive market. About a week later, after I let enough time go by, I had to write a memo to my boss, saying this does not make sense, this project will not succeed. I even said, "I think we should sue to get our money back, because the property belongs to Bell Labs. I published it at Bell Labs. He's taken in with his licensing something that doesn't belong to him." To my embarrassment, although Busignies never told me that, his secretary came back and told me, "It is a very difficult thing for Busignies to do because he recommended it to Harold Geneen that we spent a million dollars for the license." At that time a million dollars was a lot of money. So Busignies told me after my memos, "Well, sort of let it die a natural death." So I just let the man pursue the project, and I oversaw the project. I just let it die slowly, not renewing it. Isn't a small world?

Charlie Kao and Fiber Optics

Flaschen:

Another one of my first tasks at ITT was to tour our laboratories worldwide. Our leading laboratory was STL, in Harlow, England, which where pulse code modulation originated in the 1930s. Of course it was then too soon. We got the patent for pulse code modulation, which, of course, is the basis for all digital transmission today. But the patent expired before there were many applications. Too soon, too soon, too soon, too late.

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But STL was a very great laboratory. At the end of my tour they took me into a dark room, a subbasement, where I was introduced to a young Chinese fellow named Charlie Kao — Dr. Kao. He was working on high purity silica glass for long-distance transmission of signals. His reasoning showed that, in theory, if you reduce the transition metal elements in silica glass, you could have a long distance transmission of a signal without absorption or dissipation. You could have repeaters at ten times the distance that is required for microwave repeaters. His beautiful materials worked, and he published on it.

When I came back to that lab about nine months or a year later, obviously I wanted to go down and see Charlie Kao. And the lab director said, "Sorry, he isn't here anymore." I asked, "What happened to the project?" He said, "Well, we stopped it. We stopped the fiber optics transmission project." This was in 1966.

Nebeker:

The work started in 1966?

Flaschen:

I think so. He said, "We stopped it because we went to the British post office and told them about this work. We asked if they would be interested in funding it. We could have funded it ourselves, but they would be the customers of this." The British post office said, "Look, we have enough coaxial cable in the ground (it was then 1966) to last us well beyond the year of 2000. We don't need any higher capacity transmission system than we already have." As a result ITT-STL stopped the fiber optic project and did not patent Charlie Kao's fundamental work, though publications went out. To make a long story short, five years later Corning got into it and patented their follow up glass fiber work. The U.S. military became interested because this allowed them to use very sensitive acoustic detectors throughout the Pacific Ocean for the Russian submarines. This has the advantage that no electromagnetic radiation is given off, so it can't be detected.

Nebeker:

That is, submarine optic-cable?

Flaschen:

Yes. An acoustic network of sound transducers underlying the whole Atlantic and Pacific oceans, connected by fiber optic cables.

Nebeker:

Which could not be detected.

Flaschen:

Right. So the military was interested. They came to ITT and asked if we would bid on some projects. ITT said we would love to bid on these products, in our military division. So we sent out a search for Charlie Kao.

Nebeker:

Was he still at STL?

Flaschen:

No, he had left because they canceled his project. We asked STL, "Where is this guy?" They said, "We don't know where he is." We hired an ex-FBI agent and finally found Charlie Kao in Hong Kong, at Hong Kong University. We brought Charlie Kao to the United States, and he headed up ITT's fiber optic program. But ITT and everybody else had to pay a license fee to Corning, who was smart enough to patent their work on high-purity fiber optic cable. They could get a patent on how to produce a high-purity cable. We could have gotten an underlying patent on producing a glass fiber cable with the properties that would allow the transmission of data over long distance without repeaters. We could have patented the underlying fundamental application, but we didn't. So everybody ended up paying Corning instead of ITT.

Here we might pursue for a bit the topic of innovation in companies. Charlie was chief engineer of our Roanoke, Virginia electro-optical division. After three or four years, the head of the personnel department came to me and said, "The division wants to fire Charlie Kao. He is a research scientist. He is just not practical enough for us in our company down here." They wanted to fire him. I said, "You can't dismiss this guy; he is the father of fiber optics." So I hired him for my corporate technical staff and made him a senior scientist of the corporation, letting him work on whatever he wanted to work on, and so saved this man who was going to be fired because he was not practical enough for the division.

Nebeker:

Was there some central research facility?

Flaschen:

Only in England. Our central scientific facility was in England. Our laboratories in the U.S. were primarily laboratories of support to our big U.S. companies. Rayonier Labs for chemical cellulose, a laboratory for military research, but not a materials and components lab. We did not have one in the States.

Nebeker:

Where did you use Charlie?

Flaschen:

I had him in New York. He interfaced with our companies worldwide on the application of fiber optics to equipment and the development of new properties for these cables. He published widely, and he brought a lot of credit to the company. He won almost every prize except the Nobel Prize.

Nebeker:

How did ITT do in the fiber optics business?

Flaschen:

We did nicely. We got a lot of business making fiber optics cable, and we still make it. We got a lot of business using the cable in equipment. But this is an interesting story of two steps forward, one step back: how innovation is and how innovators are received in corporate America and corporate worldwide. The innovators tend to be very early, before the corporation has any vision of the power and the potential of their ideas.

Nebeker:

There is also the matter of chance. If Charlie Kao had been at some —

Flaschen:

Yes, if he had been at a glass company, if he had worked for Schott in Germany or Pinkelton in England or Corning, he would have been in the mainstream of the corporation and he would have continued his work. Or if the British post office had been farsighted enough to know that, despite having all the coaxial in the ground, if we can have a line for which repeaters can be spaced ten times further, we are going to save money by investing in fiber. Forget the old technology, write it off.

Organization of Research at ITT

Nebeker:

Or the British military might have had an interest in it. Can you give me a little better picture of your work there at ITT? Your job was to oversee research?

Flaschen:

Yes. ITT had a very powerful concept for supported research that I don't think any other corporation has. Every company in the corporation was taxed between a half of one percent to three percent of their revenues for the support of long-term new product development and research. That money, which was several hundreds of millions of dollars, would come to me in New York. I progressed up the corporate ladder to become the chief technical officer and senior vice-president. So all the money would come to me in my department in New York. Reports of the research would come to me in New York. We would send that money back to the laboratories (and the companies based upon them) that submitted to us projects for long-term new product, new market development.

This was for fundamental research in our laboratories in fields that were of interest to the corporation as a whole. Since we were in everything, that could cover a broad range. I would have a staff of experts in the major technology areas of the corporation. They would review these programs, meet with the investigators, and would either approve, disapprove, or the send them back for modification. You see, a company manager is held to very strong P&L (profit and loss) requirements, quarterly and annually, so he is reluctant to spend money on longer-term programs unless the competitors are killing him. At ITT part of his funds was taken out of his hands and devoted to the firm's long-term success. His company would only get it back if his people submitted to us projects that were longer-term projects of new product development.

Nebeker:

Were there a lot more projects proposed than could be funded, so that there was real competition?

Flaschen:

There was competition for the money. Some companies got back more than they had contributed, because we felt that they were innovative and had market opportunities to be innovative. A lot of this was promoted by Harold Geneen, the CEO, when we would have our annual business plans. Our companies would come in — we do five year plans — and say, "Our five year plan is to be a $75 million company in five years." Geneen would say, "That's great. I support you. But what it would take to be a $150 million company in five years?" Well, that would get them to thinking, and of course it would engender some of the thinking involving new products and new markets. They would then come back to us, and we would fund them from the corporation's R and D. Of course that part of the money was subsidizing then our laboratories as well. Now that was a very powerful concept.

Nebeker:

So there was a lot of money to put into a promising new idea?

Flaschen:

Yes.

Nebeker:

You and your staff would make the selection?

Flaschen:

Yes, from what was submitted to us. What was submitted to us had to be signed off on not only by the chief engineer but also by the head of marketing and the head of the company. We wanted to be sure that the company was behind this project, that it would not just be engineering to support the engineering manpower.

Anti-Skid Braking Project

Nebeker:

Was there any effort to do retrospectives on these R&D projects in later years?

Flaschen:

Each project would be up for renewal every year, and we would do a case study as to the progress and decide whether it was still meritorious to pursue it. Let me give you one very powerful example. We had at ITT a leading brake manufacturing company in Germany called Alfred Teves. Alfred Teves was a prime supplier to Mercedes Benz, Volkswagen, Volvo, the European car companies; they were the leader in brake innovation. Their chief engineer, a very forward-looking man, started back in the early 1960s working on what we called "anti-skid braking.

Oldsmobile in the United States had an unfortunate experience with an early model of "anti-skid braking." Oldsmobile introduced an early model that Bendix had made, which was electromechanical. It got a lousy reception in the marketplace, and they killed it.

Now the marketing man in charge of our worldwide automotive marketing said, "Hey, anti-skid breaking does not have any future; Detroit turned it down. Why are you guys spending this money on it Teves?" Every year he tried to kill the projects, and one year in the 1960s the general manager had a lot of profit pressure on him, and he said, "I have got to kill this project. I don't see any opportunity for it. The marketing people say it is not going to go." At the business plan presentation before the corporate management for North America and Europe, they said they were going to stop the project. I said, "You can't stop the project. You cannot be identified as a leading brake manufacturer in Europe if you are not going to be developing electronic, anti-skid braking. You cannot do it. You are going to lose faith with your customers. We believe a good product can be made at the cost targets that will make it feasible."

So I had to fight with the P&L management. Since I had money, I said, "I'll make a deal with you. Because we in the corporate technical department believe in it, we will fund half of this program. You fund the other half." It was a deal too good to turn down. Fortunately Geneen came into the room at that time, because the P&L guys were still arguing with me. Geneen asked, "What's the arguing about?" I said, "Well, the argument is either we continue or we don't continue anti-skid braking." The P&L guy says, "We don't see this coming into the marketplace for at least five years." I said that I was certain it was going to come in the five-to ten-year time frame. Geneen said, "Do it."

Leadership and Research

Flaschen:

One thing that I have learned in business is that a company reflects its leader. I don't care how good the people are in an organization, or how innovative they are under the leader. If the leader is creative and innovative and has long-term vision, then the organization will too. If the leader is a financial engineer, his focus totally on sustaining his position in the investment community on the basis of the annual account, then the whole organization is going to be in that image and you are not going to have innovation succeeding. It's the leader of the organization like the Hewletts and the Packards and the Galvins — these kinds of leaders — the Bob Noyces and the Moores. These are the guys — innovation flourishes under them. Of course entrepreneurs are innovative by nature.

Nebeker:

Isn't it more and more difficult, as the companies get bigger and bigger, to have that kind of leadership?

Flaschen:

You are right, it is rare today. Now I think the fellow up at Kodak, Fisher, is that type of person. I think he inherited a very difficult situation, and he is turning it around. He is sponsoring and encouraging innovation. Of course Microsoft, the innovator leader, reflects this as well. So every time you see an innovating company, look to the leader and you will likely see the cause of the successful innovation.

Nebeker:

You took the job at ITT in 1964. In 1980 you were named the senior vice-president and chief technical officer?

Flaschen:

Yes, and member of the management policy board as well. These are the officers of the company who have set the policy for running the corporation. It was very nice that ITT felt that the lead technical person in the corporation should be a member of that strategy and policy board of the corporation.

Nebeker:

Were you always centrally located in ITT?

Flaschen:

Yes.

Nebeker:

Where exactly?

Flaschen:

On Park Avenue.

Nebeker:

Looking back on it now, how do you feel that ITT's research policies worked out in those years?

Flaschen:

I would say under a leader like Geneen they were very powerful. Our companies were leaders in their markets; we developed the leading telecommunications switching equipment, with a market almost twice as large as AT&T's. Our equipment was selected worldwide as the leading equipment. There was quite a bit of innovation in distributed control switching, which was very similar to distributed control computing. But when Geneen left, when a man of that genius leaves, then the new leaders come in and you don't have the same degree of foresightedness. So the corporation has been broken up. The telecommunications were sold off to the French. There were more short-sighted financial decision-making, as opposed to the Geneen type of decision making.

Information Exchange within ITT

Nebeker:

You have already answered part of this question: How important was it for companies like Teves and STL and so on to be part of ITT? I assume they functioned, to a large extent, autonomously.

Flaschen:

Yes, they did.

Nebeker:

What did they gain from being part of ITT?

Flaschen:

The value they gained — I would say ninety percent of it came from the fact that they had a rich parent who would subsidize their long-term R&D work.

Nebeker:

There was not a central lab, from which they were drawing results, but rather central support for long-term R&D to be conducted by the companies themselves?

Flaschen:

Yes, they could get that from ITT. Being a member of a rich family allowed them to pursue things that there would be no possibility of being able to do in smaller company or on their own or in universities.

Nebeker:

What about exchange between ITT companies? Did that happen?

Flaschen:

Very rarely between the research and the operating companies, because these are totally different breeds of people. The research companies are primarily scientists; the operating companies were primarily engineers. I have to tell you there is a big difference in the culture of work and in motivation in general between scientists and engineers. So it is a difficult coupling between people from central research laboratories and profit-and-loss organizations, very difficult. There are exceptions, of course, but it is very difficult to get that interchange going.

Nebeker:

I was thinking about exchange between an R&D group for an ITT cable company in Britain and maybe some other cable company within ITT.

Flaschen:

Oh, yes. That was a function of our corporate staff. We would be the pollinator. We would know who was doing what and where and who were the decision makers in technology. We would take ideas and development and processes from one part to another part. So that went on, a lot of that went on. But that was done through the corporate technical staff, as opposed to our laboratories. We took laboratory work to the divisions, and we took division work to other divisions. But we at the corporate level were the instigators and the gate keepers and the couplers of these things. That worked well, very well.

Nebeker:

Did you cease doing research yourself when you went to ITT?

Flaschen:

Yes, I did. I think I had an impact and influenced the work of the people in our companies because I had been a researcher and was always interested. I would often make suggestions.

I have an example of what you asked about. Our semiconductor division in Germany was working on digital electronics, and our consumer television company was producing TVs. Yet they never talked to each other. They were totally separate organizations. I said, "Look, semiconductors can make digital television a reality; there's a real opportunity here." I couldn't get the guys to talk to each other. So I brought them together and made them an offer too good to refuse. I said, "I am going to fund the first year of an interaction between your two companies. You get it free." They couldn't refuse that one. So they did exchange people, and eventually ITT became the leader in digitization of TV and in supplying digitized semiconductors, even to the Japanese.

Innovation and Technology Exchange

Flaschen:

I am presently the chairman of a semiconductor company that I founded with some of the best and brightest of our ITT people. We took the company public in June 1995, and we have done a beautiful job.

In the semiconductor industry I think you are going to see a major change. The ability to put three to four million transistors on a chip says that you are going to be in the systems-on-the-chip business, and several big companies are moving in that direction. But if you are going to design systems on the chip, you better have people who understand systems design and the architecture of systems. Big semiconductor companies do not have these people. Big semiconductor companies cannot attract a world class telecom architect, because he knows he is not in the mainstream of the company. He knows he is in this box. He knows he is not likely to move beyond being the telecom expert.

So it's these little start-up companies — these small innovative companies that you are seeing developing left and right — who are primarily systems designers. They understand how to translate their system design onto silicon. They are going to continue to be leaders and innovators in the semiconductor industry. I truly believe that. Frankly, TranSwitch has no competition in our telecom marketplace. The telecom guys just don't want to go, or if they go they don't stay in the big semiconductor companies.

So we will see another wave of innovation in semiconductor technology in which new companies will be started up with systems designers taking the leads in the company, as opposed to material scientists or process engineers. That will all be subcontracted out to the foundries, the for-profit foundries. The added value would be the intellectual property that these people bring, not the capital equipment, not the one billion dollar fabs.

Nebeker:

I am very interested in that instance of stimulated cooperation of the German companies on digital television. Did it work out well, putting those two into collaboration?

Flaschen:

Extremely well. ITT's German TV company was the first out with digitization of TV, which is now world-wide standard. Our German company International still is the leader in digital electronics for TV, a worldwide market. It still supplies digital semiconductor components to Japanese consumer product companies, and I will tell you that anybody who can sell consumer chips to Japan has to be ahead of the curve. So that worked out very well. And it would not have happened unless there was this organization which saw an opportunity and brought together two sister companies, giving them the seed money to do something that was not in their immediate plans to do.

Nebeker:

What about the technology transfer more generally? I know you received some awards from Chile and Singapore. What can you tell me about that process?

Flaschen:

Well, the difficult thing about technology transfer is to get the whole thing started, to bring about the birth. Here you have to find the decision-maker at the receiver end who is willing to stick his neck out for a new idea. It is very difficult to bring new ideas into a running organization that has its focus on just making its numbers. You have to have a champion internationally.

The problem today is the tight budgets and the lack of long-range thinking in many companies. If a person takes a risk and calls for an investment of substantial funds, then if it isn't working, he could lose his job — at the very least he loses his credibility. So it is extremely difficult today without these seed funds to find a receiver for a technology transfer in the profit-and-loss company.

Sources of Funding

Nebeker:

Now I take it that's something you were involved with when you were with ITT, finding the right company in another country?

Flaschen:

Yes, then seeding it to make it attractive for both players to take the risk. Then if it failed, at least they could say it was done at the corporate's behest with corporate moneys. Now the same thing was true of the United States Defense Department. The Defense Department does not get the credit that it deserves for providing the seed money for innovation in the 1960s, 1970s, and even the early 1980s. The whole Internet and much of semiconductor technology was paid for from the military checkbook.

Nebeker:

I know that kind of funding has declined.

Flaschen:

Yes, it has declined tremendously.

Nebeker:

Is it much harder in general to get that kind of seed money today?

Flaschen:

Oh, yes. Much harder. The government has backed off from funding corporate long-range development. They feel it is the corporation's job.

Nebeker:

But what about other sources? Is it easier to raise money from venture capitalists?

Flaschen:

Yes. So whereas the innovator in a corporation has a very difficult time in getting support — again, this is a generalization that may not be true, depending on the quality of the leader of the corporation — he can spin out of that company. He has an opportunity to raise money in place of a corporation (such as ITT) or in place of the military, he can go to the venture community and raise money that way. This has been extraordinarily healthy and dynamic for this country. I am on the board of a couple of venture capital companies. I am with companies that have started with venture money and powerful ideas.

Nebeker:

How has this venture capital scene changed over the past couple of decades?

Flaschen:

The providers of venture capital — the pension funds, the insurance companies, private individuals — have found that in the long term it gives an excellent return for them. So there is a lot of money flowing into venture funds. A lot of it. If you have a good credibility as an individual and you put together a good management team, you have an excellent chance. Ninety percent of the decision on funding is not based on your market or your technology, it's on you and your people. That's how we decide what investments are made. So a credible innovator who surrounds himself with a good marketing guy, a good operating guy, and a good sales guy has an excellent chance now of being funded, while he is not in general able to do it in corporate America or through the defense department. This is really the dynamism in our economy.

Retirement and Directorships

Nebeker:

From what I see, you have been very active since your so-called retirement in 1986.

Flaschen:

Yes, I have been.

Nebeker:

Can you sketch out your main activities since then?

Flaschen:

I am chairman of the board of a $100 million NASDAQ telecom company called Telco Systems and chairman of the board of the NASDAQ semiconductor telecom company called TranSwitch, which has about thirty million dollars in sales. I am going onto the board of another semiconductor company, Sipex, and on the board of Ascent Logic which is a systems software company that has an excellent solution for the year 2000 problem; it will be going public shortly.

Nebeker:

Is that their main product?

Flaschen:

Yes, that's their main thrust. They were in systems software for the aerospace defense industry, but as that industry has leveled off they had to find new markets. They have found some very nice applications. Again, here is business supported by the military finding commercial applications. That is going very nicely.

I am on the board of directors of a private venture-capital fund called Advanced Technology Ventures, which has some very successful innovators who are the general partners. I am on the board of a public venture-capital company, Merrill Lynch Venture Capital, which has about 500 investors in it, so we are required by the SEC to be sure that Merrill Lynch does a good job. I enjoy that. And I am helping some other innovators in an early stage get financing from the venture community for their ideas.

I am enjoying what I am doing. I have gotten much from corporate America. I got my education from the G.I. Bill and my doctorate degree from the Office of Naval Research funding. So I want to give as much as possible back to the United States.

Historical Records

Nebeker:

One thing that the Smithsonian wants us to ask everyone: what personal records or company records do you have yourself that might be historically important, and do you have any artifacts of possible historical interest?

Flaschen:

Well, I have some copies of my patents and some copies of the old Bell Telephone Laboratory reports — we called them "memoranda for file". Boy, those were powerful communication tools among the 4,000 employee at Bell Labs. Those memoranda for file were as good as a foremost publication, because you got people to interact.

I have those things, which would give some of the early history of these projects. But with having moved twenty times in our marriage, a lot of things, I am afraid, went by the wayside. We would rent a trailer and have to make decisions: what are we going to take with us and what are we going to leave behind? Our furniture or my papers and rock specimens? Some of my papers, I am afraid, got left behind.

Nebeker:

Well, thank you very much for the interview.

Flaschen:

It was my great pleasure.