Now That’s a Multiplier Effect

Long-term economic growth can only stem from a culture of cutting edge innovation, not from a culture of debt-driven consumption. That’s why I think the taxpayers’ dollars are put to far better use over the long run when the government funds basic research that can potentially create exciting technologies. It’s still a better bet than Wall Street bailouts because you are not incentivizing risk and creating a moral hazard. Of course, proponents of the bailouts will argue about the vast contagion effects of a bank failure – but that’s a different column.

While the government really has no business to be in business, it has the power to fuel the kind of technology companies that will help create jobs and economic growth. The danger of course is turning the system into some kind of corporate welfare, but with strict accountability in place, the grants could well help create the kind of multiplier effect that is needed for sustained growth.

The SBIR and STTR programs provide more than $2 billion in federal R&D grants each year to small, high-tech, and innovative businesses throughout the U.S.

I spoke to the heads of three such companies in north central Connecticut, recipients of grants awarded in 2010.

One of them, John Hanson, CEO of Aquatic Sensor Network Technology LLC (AquaSeNT) in Storrs, said early-stage companies succeed when they have the optimum innovation environment, which, in AquaSeNT’s case, is being a part of the UConn incubator program, and receiving support from Connecticut Innovations.

“It’s a good model to get technology out of the universities and into the market and thereby help create jobs,” Hanson said.

The firm, originally founded by three UConn researchers, received $500,000 in a federal SBIR Phase II grant last year to build and demonstrate a working prototype of its underwater acoustic wireless communication and networking solutions.

In its nascent stage when the founders were involved in academic research, the technology was awarded academic grants by the National Science Foundation (NSF) and the U.S. Office of Naval Research.

“We’ve sold two prototypes to the U.S. Navy for testing and hope to promote our product more broadly in six to nine months,” Hanson said.

He claimed the technology developed at UConn allows the firm to transmit more information from sensors on the ocean floors for climate science and marine biology research.

In some cases, it can also reduce communication time, Hanson said.  He offered an example: suppose a tsunami wave has started far out in the ocean, the firm’s system can transmit the data onshore more quickly.

Biorasis Inc., another Storrs-based company, received a $150,000 NSF grant last year to further develop an auto-calibration system for glucose and metabolic monitoring.

CEO Ioannis Tomazos, Ph.D., claimed that from the information available in public domain, his sensor was unique because of its miniature size – a wee 0.5 mm by 0.5 mm – which is also body friendly and cost-effective.

The device is implanted subcutaneously by a hypodermic needle cannula and transmits blood glucose readings to another device called the Proximity Communicator, which is placed outside the body close to the sensor. The communicator can then send the data to either a smart phone or the PC. 

“We’ve developed a methodology to mask the device from the immune system (so the body does not fight and reject the foreign object),” Tomazos said.

The product is aimed to enable constant monitoring of blood glucose levels to detect hypo or hyper glycemia.

 “We are ready for the non-human market next year and have begun investigating the FDA (Food and Drug Administration) approval process for human use,” he said.

Manchester-headquartered Fuss & O’Neill, an engineering firm, received a $150,000 NSF SBIR Phase I grant early last year to develop a cathode that can recapture energy from treated wastewater via microbial fuel cell technology. It again received a Phase II SBIR grant of $500,000 to further develop different aspects of the technology.