Desh Deshpande on Starting Merrimack Valley Innovation Center—and Making a Global Impact from Massachusetts to India

1/6/11Follow @gthuang

For some people, innovation is not enough. Gururaj “Desh” Deshpande is one of those people. Let’s just say the Boston-area tech entrepreneur and billionaire philanthropist has earned the right to make such a claim.

“For innovation to have impact, it needs relevance,” he says. “Innovation plus relevance equals impact.”

Deshpande is talking about global impact, but his latest project is in his own backyard. Last month, his foundation committed $5 million over the next five years to support a new innovation center housed at the University of Massachusetts Lowell. The Merrimack Valley Sandbox, as it’s called, will work together with local colleges and nonprofits to boost entrepreneurship among students and professionals, and to develop local leadership through mentoring and seed funding programs.

The new initiative has similarities to the Deshpande Center at MIT and a social entrepreneurship center Deshpande set up in northern Karnataka, India—with some big differences. But to understand what Deshpande is really trying to accomplish with the Merrimack project, you need to know more about his story.

Gururaj Deshpande grew up in India and studied electrical engineering at the Indian Institute of Technology in Madras (Chennai). He went on to do his PhD in data communications at Queen’s University in Ontario, Canada. Starting in the late 1980s, he founded a series of successful technology companies—Coral Networks, Cascade Communications (which sold to Ascend Communications for $3.7 billion in 1997), Sycamore Networks (NASDAQ: SCMR), and Tejas Networks. He currently serves as chairman of Sycamore, Tejas, and A123Systems, among other top-level duties.

The success of Cascade and Sycamore made Deshpande a wealthy man, and he and his wife Jaishree set up the Deshpande Foundation in 1995. Its unifying theme has been to foster innovation ecosystems and social entrepreneurship. Its first major initiative was setting up the Deshpande Center for Technological Innovation at MIT in 2002. That organization has been active in providing grants to MIT labs, connecting faculty with the business community, and more generally tying ivory- tower research to market realities.

“In society, thinkers all come together, and they come up with new ideas,” Deshpande says. “But as they keep coming up with new ideas, they have to play the game of impressing each other”—whether that means other professors or government funding agencies. “In the process they lose the ability to have impact,” he says, because of a lack of relevance to real-world problems (and products). “The center at MIT is about bringing that relevance.”

After a few years, Deshpande looked at setting up something similar in his native land. “But somehow doing nanotechnology in India didn’t sound that exciting,” he says. Instead, he thought, “Let’s do the same thing, but for social innovation.”

In 2006, he and Jaishree worked with local partners to launch the Deshpande Center for Social Entrepreneurship, based in northern Karnataka (north of Bangalore). The center serves an experimental “sandbox” region, near where Desh grew up, that is home to more than 5 million people. It has helped develop midday meal programs for schools, and various infrastructure projects—some 2,000 in all—across areas like education, health, farming, and water management.

“A few of these programs have really matured,” Deshpande says. “The idea is very much like building a company. You focus on one intervention, you perfect it, and then you scale it.” The broad impact of the project made him think, “We should bring that same idea back to the United States,” he says.

That point is particularly interesting because it’s the reverse of how most American business leaders are used to thinking—namely, that innovative ideas tend to start in the U.S. and then move abroad.

Fast forward to early 2010, when Deshpande was invited by U.S. Commerce Secretary Gary Locke to attend a meeting in Washington, DC, with a number of university presidents and other dignitaries. (This was before Deshpande was appointed to serve on President Obama’s National Advisory Council on Innovation and Entrepreneurship.) One of the discussion points was whether the Deshpande Center at MIT could be cloned at other universities. “People were skeptical—will this play in other places?” Deshpande says. “It should be everywhere, but everyone needs to figure out their role in life.”

The discussion got him thinking more about how to build another center. MIT is a powerhouse of innovation, he reasoned, but “all this innovation is contextual.” Deshpande realized that the MIT and India centers serve opposite ends of a spectrum of communities. As he sums it up, “MIT has innovation but lacks relevance. These other places have relevance but lack innovation.”

Which brings us to the Merrimack Valley Sandbox. As Deshpande sees it, Boston is an intellectual capital of the world. On the other hand, Lawrence, MA, just 30 miles to the north, is the 43rd poorest city in the U.S. “Innovation is getting trapped at MIT and in intellectual circles,” he says. But “not everybody needs to try to be MIT or Harvard. They can define a new role of developing relevance and doing things that are good for local business.” (He adds: “In fact, people often say, ‘There’s MIT and Harvard—how come they don’t do more for Cambridge?’ It’s because those people have global ambitions. Community colleges will do more for Cambridge.”)

To that end, the Merrimack Valley center is based on partnerships with UMass Lowell, Middlesex Community College, Northern Essex Community College, Merrimack College, and Teach For America. The Deshpande Foundation hopes to raise an additional $10 million from outside investors to support the initiative, which has already provided grants to community programs including Ashoka Youth Ventures, Interrise, Lawrence Community Works, National Foundation for Teaching Entrepreneurship, Jumpstart, Social Enterprise Alliance, and United Teen Equality Center.

A particular area of focus is social entrepreneurship for college students—getting teams of students to identify problems in Lowell and Lawrence and propose solutions. One potential idea, Deshpande says, is for teachers in Lawrence to be supported by small groups of college students who could come in regularly and help out around the classroom.

Deshpande adds that if it takes $2-5 million a year per innovation center, “doing a thousand Sandboxes is not that expensive for the U.S.”

Ultimately, he’s talking about a much bigger goal, which is “closing the gap between haves and have nots.” As he explains, “The global economy is favoring people who are very smart who have opportunities and education. It’s leaving behind a lot of people. This country has always been good at creating opportunities for everybody.”

But that can’t be done by the upper crust alone—everyone has to get involved, he says. “A company can’t be successful unless they co-create [products] with their customers. In philanthropy, there’s too much of people prepackaging things for other people. In the process, we lose the customers.”

Now it’s time to get down to business at the new Sandbox. As for the differences between the Merrimack Valley and Indian centers, Deshpande says, “There’s a lot more infrastructure compared to India. It’s right next to Boston, so people from MIT and Harvard are excited about getting involved in the program. We won’t lack talent or brainpower. The question is whether we can make a difference in a few years.” The first big challenge, he says, is to “pick the right people in the community who can actually work with us to create the excitement.”

Deshpande says he will personally spend time at the Merrimack Valley Sandbox, and on its programs—though not every day, of course. “This is very near and dear to my heart,” he says. “If we can make this work, this has big implications.”

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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