University Innovation & Incubators
In 1975, the National Science Foundation (NSF) funded innovation centers, including Carnegie Mellon’s CED, to reshape American science and foster campus startups. These university incubators aimed to transform ideas into businesses and students into entrepreneurs.Critics questioned the value of some projects, yet the NSF experiment ultimately institutionalized the innovator-entrepreneur on college campuses, a lasting impact highlighted by News Directory 3. Discover how these early initiatives, like the dial-a-ride service, seeded the modern startup ecosystem and the role that secondary_keyword played. What insights can we glean from those challenges and successes to fuel the next wave of innovation?
How NSF Innovation Centers Shaped US Entrepreneurship
Updated June 8, 2025
In 1975, Carnegie Mellon University students, led by Dwight Baumann, prototyped an automated taxi-dispatch system. This service, designed to revitalize a defunct cab company in Pittsburgh’s African American neighborhoods, used algorithms to connect riders and drivers, prefiguring modern ride-sharing apps.
The dial-a-ride service was among 11 ventures supported by CMU’s center for Entrepreneurial Growth (CED), which was funded by a $1 million National Science Foundation (NSF) grant. The CED aimed to foster risk-taking and create startups focused on market-based technological solutions. These university incubators sought to transform ideas into businesses and students into entrepreneurs, influencing the landscape of American science to address national needs.
Today, university incubators are common. But the concept of universities as engines of innovation was not always a given. The CED distilled lessons into brochures and seminars, emphasizing personal reflection before market evaluation.Their assessment underscored that innovation demands time, effort, sacrifice, and an understanding of risk. It cautioned against sacrificing family goals for entrepreneurial pursuits.
Some CED students launched triumphant startups. Compuguard, founded by electrical engineering ph.D.students Romesh wadhwani and Krishnahadi Pribad, developed a security bracelet before pivoting to security- and energy-monitoring systems for schools and warehouses.
With CED’s help, Compuguard secured government contracts and venture capital, growing to over 100 employees. Wadhwani became a serial entrepreneur and philanthropist, whose Wadhwani Foundation supports innovation and entrepreneurship education worldwide.
When NSF funding ended in 1978, tensions arose around Baumann’s leadership. his style clashed with CMU’s aspirations to compete with programs like the Wharton School at the University of Pennsylvania. In 1983, Jack Thorne replaced Baumann at Enterprise Corp. Baumann relocated the CED, with limited success, to assist unemployed laborers in becoming innovators. The center eventually faded amid faculty disputes over university innovation’s role.
Was the NSF’s experiment in innovation a success?
As the university Innovation Center experiment concluded in the late 1970s, the NSF touted its success, claiming new ventures, millions in revenue, and nearly 800 jobs. However, license returns from intellectual property were modest.
The Innovation Centers attracted national and international attention, inspiring business schools to create technology-innovation tracks. Delegations from Canada, Sweden, and the United Kingdom sought to replicate the model.
Critics, including Sen. William Proxmire,criticized the centers as wasteful federal spending. Grant Venerable faulted the program for its limited view of innovation,excluding women and minorities.
While the immediate impacts were debated, the NSF experiment institutionalized the scientific innovator-entrepreneur. It established that innovation education benefits all students, fostering an entrepreneurial mindset, and embedding innovation into our institutions and beliefs.
What’s next
The legacies of the NSF experiment are visible on nearly every college campus,shaping a culture where innovation and entrepreneurship are integral to education and research.