Grants Nurture Tech Innovation

Deshpande center at MIT funds development of risky research projects into marketable ideas.

Inventions may, as the axiom goes, require 1 percent inspiration and 99 percent perspiration, but getting the fruits of that labor to market can also take a sizable chunk of money. Typically, the money to fund development of IT innovations comes from government sources—take the Internet, for example—or from large companies such as IBM.

Enter the Deshpande Center for Technological Innovation at the Massachusetts Institute of Technology, in Cambridge, Mass. Last week it awarded $1.25 million in its first round of grants that it said it hopes will be a model for a third way to pay for the development of basic IT technology. The center, which was funded early this year by a $20 million grant from high-tech entrepreneur Gururaj Deshpande, is designed to support new ideas by MIT faculty members.

"The high-tech community outside MIT doesnt leverage MIT as much as they should, so we want to do this in a methodical fashion—to take ideas and bring them so they are ready for prime time," said Deshpande, who is chairman of Sycamore Networks Inc., in Chelmsford, Mass., an optical networking products maker. "New ideas pop up during research, but if you left them to themselves, those ideas would never see the market."

Deshpande knows something about turning ideas into marketable products. He founded networking companies Coral Network Corp. and later Cascade Communications Corp., which he sold to Ascend Communications Inc. for $3.7 billion.

The awarding of grants last week to nine MIT faculty was the first of what the center said will be a semiannual practice. The grants are given at two levels. The $50,000 Ignition Grants are awarded at the conceptual stage of development and target risky technological projects. They could, for example, fund equipment for a graduate student assistant to perform initial research. The $250,000 Innovation Grants, which serve as a second round of funding, are for faculty who have gone beyond early research and want to turn research into marketable products.

MIT Professor Robert Langer, who received an Innovation Grant for work on tissue engineering, has founded a number of companies to commercialize his research. The Deshpande grant will provide him with a good starting point for his latest brainchild, a way to replace human tissue with tissue grown in a laboratory.

"[The grant] can help you move your concept closer to a product, so it makes the time to get to profitability closer and lowers the risk, which is often very high and may prevent you from getting venture capital funding," said Langer, in Cambridge, Mass.

The Deshpande Center looks to partner with venture capitalists, entrepreneurs and local businesses to identify sources for a third round of funding for the grant winners. An additional resource backed by the center is a seminar series. The first seminar, a panel discussion on intellectual property, is scheduled for this week.

The links to the venture capital community would be vital, said Alexander Slocum, who was awarded an Innovation Grant to develop his concept of the nanogate, which provides a filtering element for nanometer-size particles.

"VCs have a vital roll in bringing technology to market, but they must be brought in at the right time," said Slocum, a professor of mechanical engineering at MIT.

"The Deshpande Center holds the promise of freedom, with a gentle make-it-real catalyst to get us ready for the VC phase," Slocum said. "The Deshpande Center paves the way toward a badly needed new funding mode which is something halfway between government and industry funding sources."

The center is funding a broad range of projects across IT and biological sciences, and these include initiatives that could turn into products quickly and others that have a longer timeline, said the centers executive director, Krisztina Holly.

Colleges and universities over the last few decades have become an increasingly important source for new technologies. Prior to 1980, the U.S. government issued fewer than 250 patents to universities each year, according to the Chicago-based Association of University Technology Managers. During the 1990s, the annual filings for new patents by universities increased 77 percent to 5,545. In 1999 alone, association members signed 3,914 new licensing agreements.

MIT is a beehive of activity. Each year, it receives $750 million for research projects sponsored by local and national government and big businesses. The university community produces between 400 and 450 inventions annually, which results in about 100 technology licenses and about 25 startups.

As ideas turn into products, Holly and Deshpande expect that more businesses will see the value of the center and provide more funding. The center has already accepted two additional grants of less than $1 million from other donors, whom it declined to name.

"We need a quick way to get research out and create wealth and cycle that back into a pool," Deshpande said.