Social Role of Business


Some frustrating remarks at Saturday's SpaceVision, my studying for tomorrow's final exam in my MBA class "Innovation and Technology Strategy", and my daily chapter (maybe semi-daily; alright, weekly chapter) in Eric Beinhocker's The Origin of Wealth have combined in my head to something very important to me. In essence: NASA in particular has an important role to play in encouraging the commercial, private sector space companies in the U.S. precisely because they are not as safe as NASA.

 

When I'm asked about the role of NASA and the government, one of the (many) things that comes to my mind is an episode involving General Dynamics and the Navy in the late 1980 or early 1990's. I can't remember where I read this, and I'm fairly certain I'll get the details wrong, but this is how I remember it: General Dynamics wanted to build a capability for some aspect of ground control for launch systems and landed a contract with the Navy to supervise a launch with one of the rockets that is currently part of ULA (I can't remember which). This was a role that was traditionally done by a branch of the government, though I can't remember whether it was Navy personnel, Air Force personnel, or NASA personnel. There was a problem with the launch, it failed, and General Dynamics' inexperience was implicated in some fashion. The Navy made a commitment, however, that they wanted the capability to be in the private sector so that they would not have to support that capability internally; an organization would exist that would continue to develop that capability on its own time and then the Navy could purchase those services, in the future, from an organization that would have greater experience than any home-grown subdivision of the service. General Dynamics was kept on and it eventually worked out and General Dynamics was able to develop that new capability into the bright and sunny future of yesteryear.

 

I see this as a failure of NASA. Not in a finger-pointing sort of way, but in the way you can say "IBM should have gone into PCs earlier" or something like that. The reason is that the reason for NASA's charter to say "seek and encourage...the fullest commercial use of space" as a means of accomplishing its purposes, rather than a purpose of NASA itself, seems to me to be, in part, because of the roles that companies play as "knowledge brokers" (Firms as Knowledge Brokers [Andrew Hargadon, California Management Review Spring 1998]). Companies are themselves vessels to transmit, store, and grow knowledge. They are places to "put" knowledge, particularly implicit knowledge, when you don't need it. Implicit knowledge goes away when you don't use it; you must store implicit knowledge in an ongoing activity, so you can't just resurrect unused tacit knowledge (like designing launch vehicles 30 years after the last time you did it).

 

The failure that General Dynamics experienced as knowledge was grown in the firm is a natural part of the learning process. What concerns me is that, if the Navy wanted private sector capability to exist in the domestic markets so badly that it risked, lost, and rebuilt national security assets to make sure it existed, shouldn't it have been NASA's role to experience that failure themselves? It seems to me that NASA's high success rate is not the unqualified praise that many seem to think that it is. If it's NASA's job to fail so that others don't, then this scenario is revealing and it makes an important case for more support for the commercial sector from NASA. And it's not a failure of NASA employees; they have a job their given and they do it, like anyone else. Rather, it makes the case that Congress and the oversight it provides needs to direct NASA toward the bigger picture, which is that NASA should increase its support for the commercial sector, not because the commercial sector will be safer than NASA, but because it isn't yet.