On this day in economic and business history...

A small company called Geophysical Science was incorporated in New Jersey on May 16, 1930 to create instruments for the oil and gas industry. The company used analog signal-processing technologies to help drillers in the Texas oil fields find deep undiscovered reservoirs. For more than a decade, this company continued to push the boundaries of technology in the oil patch, until a growing demand for the cutting-edge products of its electronics subsidiary pushed executives in a new direction, which demanded a new identity: Texas Instruments (NASDAQ:TXN). The company was renamed in 1951 -- executives originally wanted to become General Instruments, but the name was already taken -- and thus began its march toward computing history.

Texas Instruments went public two years later, but it was the creation of the first integrated circuit in 1958 that truly put the company on the map. The integrated circuit's inventor, a young TI engineer named Jack Kilby, would later receive the Nobel Prize in physics for his efforts. A hearing aid released in 1964 became the first commercial product featuring TI integrated circuits, and TI became a source of national pride when its circuitry helped control the Apollo 11 lunar lander in 1969.

As the semiconductor industry began to shake out, TI would cede ground in microprocessors to Intel (NASDAQ:INTC), which produced the first commercial microprocessor in 1971. TI instead began to focus more on microcontrollers, which offer a complete system on a chip. That decision both kept TI in contention and prevented it from dominating an industry it helped build -- today, it's the fourth-largest semiconductor manufacturer in the world, but it only generates a quarter of the semiconductor sales as industry leader Intel.

One day, we'll put this on a shark's head
The first functional laser beam shot out of a synthetic ruby at the end of a polished, mirrored tube on May 16, 1960. Developed by physicist Theodore Maiman at Hughes Research Laboratories -- now a jointly owned subsidiary of General Motors and Boeing -- the laser was originally described by its inventor as "a solution seeking a problem." As we now know, many problems have been solved by lasers, including barcode scanning, missile guidance, eye surgery, optical-disc reading, precise distance measurements, scientific instrumentation accuracy, and even semiconductor manufacturing.

The New York Times commemorated Maiman's invaluable contributions on his death in 2007:

This first laser, tiny in power compared with later versions, shone with the brilliance of a million suns. Its beam spread less in one mile than a flashlight beam spreads when directed across the room. Scientists call laser light "coherent light."

Dr. Maiman published his discovery in the British journal Nature, after the journal Physical Review Letters mistakenly rejected it as repetitive. In a book marking the centennial of Nature, [fellow laser pioneer] Dr. [Charles] Townes called the short article "the most important per word of any of the wonderful papers" that the prestigious journal had published in its 100 years.

Today, the direct worldwide economic impact of laser manufacturing amounts to more than $7.5 billion each year. Because lasers enable the use of so many different technologies, the total economic impact of lasers is likely to grow at least an order of magnitude larger.

The development of both integrated circuitry and laser has brought prosperity to much of the world at an incredible rate. One need only examine the growth of America's market benchmark, the Dow Jones Industrial Average (DJINDICES:^DJI), before and after these two inventions. The Dow closed May 16, 1960 at a value of 617.39 -- a 1,400% gain from its initial value when it was created in 1896. Over the 50 years following this breakthrough, the Dow posted a total gain of 1,600% -- that's 200% more growth in 14 fewer years.

Fool contributor Alex Planes owns shares of Intel. Add him on Google+ or follow him on Twitter @TMFBiggles for more insight into markets, history, and technology.

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