Scotland is revamping its innovative Pounds 11 million "proof of concept" fund, which has produced funding for only nine out of 83 research projects in the first round.
University leaders say this justifies their plea to the Scottish Executive for a "dramatic increase" in money for the scheme, which aims to fund the stage between scientific discoveries and the prototype stage.
The fund, managed by Scottish Enterprise, was to have been released in three annual tranches of Pounds 2 million, Pounds 3 million and Pounds 6 million, along with an increase in the sectoral clusters eligible to apply. But Scottish Enterprise has closed the first round, for the biotechnology, semiconductor and microelectronics clusters, at Pounds 1.5 million.
The second round will now be worth Pounds 4.5 million, and eight proposals from the first round, worth Pounds 1.7 million, are being actively encouraged to reapply. But optoelectronics, creative industries and oil and gas projects will also be able to apply. Institutions have until September 18 to submit their bids.
This leaves Pounds 5 million for the final round, but the Committee of Scottish Higher Education Principals is pressing for the executive to increase the available funding.
A Coshep spokesman said: "We have been saying since the Scottish Parliament was established that we must work closely with it to reap the benefits the Scottish economy can get from the higher education sector. This first round has shown that the potential greatly outstrips the funding."