NEW YORK - It was only a matter of time before Wall Street figured out a way to get the ivory tower to cough up some of that ivory. With the creation of the Merrill Lynch US$150,000 Innovation Grants competition, the tony financial-services company is looking to "unlock the commercial value of research by PhD candidates around the world" by encouraging students to mine their dissertations for business ideas, says Merrill Lynch CEO David Komansky.
"FedEx started as Fred Smith's [undergraduate] thesis - which only got a C+," Komansky said at a press conference on Thursday. "The PhDs represent an undervalued asset from a business point of view. There are a lot of reasons why doctoral students should think commercially about their work."
While not an explicit incubator for business proposals, the awards - worth as much as $50,000 apiece - are clearly a chance for the billion-dollar company to get first dibs on academia's only real product: good ideas.
Merrill, which is getting more aggressive in the tech field and just opened a new Silicon Valley investment banking office, won't own the winning ideas. The company claims it is not "approaching [the competition] as a commercial venture," said Schrage. But the implications of the award are clear. The entry form essentially asks the students to put together a business proposal by describing "how to test the usability, utility, and feasibility of the prototype ... under market conditions (in less than 500 words)."
The list of judges reads like a Who's Who of industry big-shots, including New York Times technology writer John Markoff, Esther Dyson of EDventure Holdings, celebrity venture-capitalist John Doerr of Kleiner Perkins Caufield & Byers, Edward McKinley of Warburg, Pincus & Co., and Xerox PARC's chief scientist, John Seely Brown. There are no academics on the list.
Candidates are asked to submit a précis of their dissertation through the contest Web site and speculate on the potential market and technical steps required for the creation of their product or service. The awards (one $50,000, two $20,000, and an array of smaller grants) will be administered by the Merrill Lynch Forum. (The Merrill Lynch Forum and Wired will publish joint research findings in the magazine's December issue.)
Competition director Michael Schrage encouraged candidates from all disciplines, including the arts, humanities, and social sciences, but when asked about the potential "uses" of a history dissertation, Schrage responded enigmatically, "Some will require more ingenuity than others - I can imagine a project in 'statistical history.'" Those pursuing PhDs in schools from business, law, and journalism are explicitly excluded from the contest, along with any students who already have venture-capital financing for their nifty ideas.
To qualify, the applicants must have completed their doctoral defense - the final stage of a PhD program - between 1 January 1996 and 31 May 1997. But with such a late deadline, Lynch is targeting the students least likely to apply, says Columbia computer-science professor John Kender. "If they want to grab onto students, the time to get them is their third year, at the stage of the thesis proposal when the formal project is finished," he says. "By their sixth year, they could have been in private industry already as much as a year."
In addition, the pool of entrepreneurial spirits in graduate programs is small, because strong students with any business leanings forego PhDs to enter the private sector immediately after getting their BAs, notes Kender. Back in the '80s, "when it was popular to do so," about a quarter of Columbia's PhD candidates in computer science started companies, said Kender, but that number is now significantly smaller.
The creation of the new grants points, in part, to a larger laziness on the part of businesses about doing research themselves, said Kender. With industrial groups and the government committing less to their own research, the Merrill Lynch grants offer a kind of shortcut to valuable research findings. But universities have also recognized the lucrative possibilities of cozying up with the private sector, evident in the recent move by Columbia, Carnegie Mellon, and Cornell to open satellite offices in the financial district.
