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Merrill Lynch is known as a company that invests money, not one that gives it away. Yet with its Innovation Grants Competition, Merrill Lynch has joined the world of charitable giving.

Or has it? In the words of the contest's executive director, Michael Schrage, the Innovation Grants Competition (MLIGC) "is not pure business but it's not pure philanthropy either." Merrill Lynch has created an incentive for academics to consider the business potential of their work and make it more relevant to the public at large, Schrage says. And by creating the competition, Merrill Lynch hopes to influence the debate regarding the proper education of doctoral students.

"A global financial services institution that cares about human capital is basically deciding to help influence a discussion that should be going on in higher education, and that discussion is the generalist-versus-specialist discussion," Schrage says. "You don't want a person to know more and more about less and less, until they know everything about nothing."

In its quest to improve "entrepreneurial literacy" in academe, the contest reaches beyond the obvious disciplines of engineering and science. Doctoral students in the humanities are also invited to enter the competition. Thus biologists, clinicians, and chemists compete, not only against physicists, engineers, and computer scientists, but also against Ph.D.s in comparative literature and diplomatic history. That having been said, all the winners in the competition's brief existence have hailed from science and engineering.

The top two prizes from the competition's second year, announced on 21 January, went to proposals for faster computer processing technologies. Other winning proposals ranged from nanoscale probes to lab-grown blood vessels.

Winning proposals from the first year included plans to develop a male oral contraceptive, an artificial retina, and a yogurt genetically engineered to lower blood cholesterol. The top prize, $50,000, went to an electrical engineer for his design of a new type of power converter.

At present, applicants must have successfully defended their doctoral dissertations before applying. However, officials say the contest may be opened to Master's level students in the future. Graduation, on the other hand, is neither "a requirement nor a hindrance" for applying to the competition. Students pursuing doctoral degrees in law, business, or journalism are not eligible.

Graduate students who are savvy enough to have already sought a patent for their work will be met with a lukewarm reception. "If you're already seeking a patent for your research, you're already predisposed to being 'commercial,' " Schrage says. The competition is more interested in challenging academics to think about real-world applications than in rewarding the already-converted.

To enter the MLIGC, applicants submit a proposal "that clearly and concisely explains how their doctoral dissertation topic could be translated into a commercial product or service." The proposal must include a brief description of potential customers as well as enough market research to describe what advantages the applicant's product would have over the competition. The proposal is limited to 3000 words and may contain a maximum of two illustrations.

Schrage makes the initial evaluation of all the proposals and selects up to 25 to pass on to the independent panel of judges. (The contest received 213 and 154 applications in 1998 and 1999, respectively.) However, the contest has several built-in safeguards to prevent a top-flight proposal from being overlooked. In addition to Schrage's selections, each judge receives a list containing a title and a 30-word summary of every proposal. The 30-word abstract, written by the entrant, describes the single most important idea contained in the proposal. From this complete list, any judge can select for consideration additional proposals to be added to Schrage's initial group. And the judges make their selections without knowledge of the applicants' identity or academic affiliation.

"I don't believe there's a single grant-providing foundation that is more flexible, more reasonable, and takes a more creative approach than the MLIGC," Schrage says.

The nine judges of the competition are internationally known as entrepreneurs, innovators, journalists, or venture capitalists. Their areas of expertise span a wide range of disciplines. In addition to executive director Schrage--who is a research associate at MIT Media Lab, a columnist for Fortune, and a member of the Merrill Lynch Forum--judges who selected the 1998 and 1999 winners included William A. Haseltine, chair and CEO of Human Genome Sciences in Rockville, Maryland; Peter Goldmark, chair and CEO of the International Herald Tribune in Paris and former president of the Rockefeller Foundation; and John Seely Brown, chief scientist at Xerox. With the exception of Schrage, the judges have completed their 2-year term and a new set of judges will be announced soon for the year 2000 competition.

Are judges without expertise in say--genetics--really able to judge the merits of a proposal from a geneticist? Schrage bristles at the question. "If I were doing cutting-edge work on monoclonal antibodies or DNA probes, or doing the next generation of research on enzymes, or developing a new algorithm for population analysis--whatever--I would view the lack of expertise as an opportunity to educate the judges, to educate intelligent lay people," he says. "This is a chance to encourage, invite, and persuade people who matter, as to the value of your work." Schrage adds, "By the way, if [scientists] want to get money from NSF or money from Congress, they bloody well need to learn how to communicate."

Indeed, the competition was created, in part, to encourage the university community to better communicate the importance of their work in a clear and compelling manner. "One of the ways to judge whether a project is good is to see whether it's clear enough for a broad group to understand," Haseltine says.

Academe "often gets this confused," says Brown. "They think people who are incredibly clear are just trafficking in sound bites as opposed to people who have mastered an idea so well that they can now say it simply." He adds, " Any attempt to obfuscate what you've really done will knock you out of the winner's circle. We're not interested in being snowed."

A successful proposal must also demonstrate innovation and commercial viability. "I personally try to look for technologies that have a potential to transform a broad sector of the industry," says Haseltine. "[I look for] technologies that aren't small advances but are fundamental breakthroughs."

Says Brown, "It's a chance for these students to be rewarded for thinking out of the box and for going beyond the existing paradigm for what is possible."

Young scientists aren't expected to become venture capitalists overnight. However, they should do enough market research to determine the originality and feasibility of their proposal. Applicants shouldn't shy away from describing the barriers that must be overcome in order to take their product to market, either. The judges want to see "somebody who has the confidence to lay his or her cards on the table and to be willing to admit that these are things that remain to be done," Brown says.

"The beauty of the competition is that we want you to be rigorous without being obsessed," Schrage says. "Make a couple of phone calls and do enough research to be respectful of the judge's time."

Haseltine concurs. Contest applicants need to ask themselves several questions: "What is the business concept? What are the opportunities and what are the hurdles? How will those be encountered and discussed?" As a judge, he says, "You're looking for an appreciation of what's doable that's easy and what's doable that's hard. Because not all things that are doable are easily doable."

Schrage adds, "These are the sorts of questions that most doctoral students should be delighted to answer, if for no other reason than these are the kinds of questions they'll be discussing whether they go into academia or the private sector."

Adapted from articles on the MLIGC published on GrantsNet.