Despite a tougher funding climate, Media Lab founder Nicholas Negroponte remains committed to the institution's guiding creative chaos, writes Karlin Lillington.

"This has been one hell of a three years," says Mr Nicholas Negroponte.

Wearing his trademark blue- and-white striped shirt, the well-known digital opinion-maker, founder and chairman of the Massachusetts Institute of Technology's famed Media Lab and Dublin spin-off, Media Lab Europe (MLE), looks serious.

"The big companies - AOL, Lucent, Motorola - have had a hard time. Start-ups have disappeared. There has been monumental change in the industry. And that is our core constituency [of support for the labs]."

He gazes out of the window of a taxi speeding him towards Dublin Airport.

That change has caused trauma for MLE, which Mr Negroponte had predicted would easily fund its running costs from industry support, back when the project was announced at the end of 1999.

At the time, there was little reason to believe such a model wouldn't work. After all, until the downturn, Media Lab in Massachusetts had been almost entirely funded - and generously - by industry throughout its life-span, and the same strategy was expected for new international spin-offs in Europe, Asia and India.

Instead, MLE - along with all the labs - has had to go through a rethink.

In search of industry support, MLE has been holding a regular series of open houses, at which it showcases research for prospective supporters.

And Mr Negroponte says all the labs must look more towards competing for government funding and research contracts from sources like international science foundations and the European Union.

That shift in perspective has led to a search for a new director for the lab following the departure of Dr Rudy Burger nearly a year ago.

His departure marked another area of volatility for MLE: in just under four years, the lab has been through as many directors - although Mr Negroponte is quick to note that he was only interim director for the lab's first year, and that its director up until this week, Dr Ken Haase, was also an interim appointment.

A new director, Dr Simon Jones, took up the reins this week.

Still, research labs have a hard time thriving under constantly changing leadership, and lab personnel acknowledge they will be happy to have a permanent director in place, someone who can begin to form a longer-term agenda for MLE.

Dr Burger's departure came suddenly, though the formal explanation was that he was leaving to pursue other interests and would keep a research position within MLE.

According to Mr Negroponte: "When we brought in Rudy, Rudy was exactly the right guy at the right time."

At the time, the lab was focused on both forging connections with industry and with trying out an entrepreneurial model of spinning off start-up companies through a new company incubator called Media LabVentures.

Mr Burger had a strong industry and entrepreneurial background, says Mr Negroponte, and the lab was looking for a director with "a VC [venture capitalist] approach. That's what Rudy was good at."

He continues: "When the technology bubble burst, two things happened. We needed to put ML Ventures aside and on hold. And we needed to look for government funding in parallel to industry funding.

"Both these required a stronger research and science base. So the job description changed."

Thus the arrival of MLE's new director, Dr Jones, this week.

Dr Jones comes from an academic background at the University of Bath, where he was Dean of Engineering and Design as well as chair of the British and Irish section of the Institute of Electrical and Electronic Engineers (IEEE), but he also "has a track record of deal-making and fundraising", says Mr Negroponte.

He stepped into the directorship as of Wednesday.

Whatever the changing approaches for fundraising, one element that remains steadfast at the labs is their own special brand of innovation, which is stubbornly uninfluenced by commercial imperatives.

Mr Negroponte went against the standard research model when he created the vaguely organised chaos of Media Lab years ago, and he still feels strongly that breakthrough innovation comes unexpectedly, from interdisciplinary experimentation way out at the edge.

He shrugs off criticism that the labs are not sufficiently sober in today's tough economy.

"The biggest criticism I hear is 'Nicholas, you're not crazy enough. The lab should be nuttier'," he tells a corporate audience at MLE.

The backers of the MIT labs don't want another set of traditional research labs, he insists. "They don't need us to do those things. They need us to be on the lunatic fringe."

He describes Media Lab and MLE as a corporate "demilitarised zone" where companies that often compete in the real world can instead collaborate on ideas and intuitions.

He says the labs are beginning to look at sourcing corporate support from less obvious places, not technology companies but industries that dominate their sector.

Such companies will be hard hit by even slight shifts in the status quo of their sectors - shifts often introduced by the use of new technologies.

"Any business that has a very dominant position has to be looking for ways to diversify," Mr Negroponte said.

An example? Lamppost or manhole manufacturers, perhaps - lampposts are ideal sites for locating base stations for wireless (wifi) networks, he notes.

Manholes are spaced at regular intervals throughout a city and could be used for - who knows, he says; but now is a good time to start thinking about the unexpected possibilities.

That's where innovation comes from in tough economic times, he said: thinking in unexpected ways. One industry he has been considering at length from different angles - a sector that has been a longtime supporter of Media Lab but has been battered in the technology downturn - is telecommunications.

Telecommunications is now at a cusp, after "almost ice-age economics over the past few years", he said.

But the cusp is historical, not simply economic. "This cusp is much more fundamental and intellectual and comes from looking at things in a different perspective," he says.

The industry in Europe faces a particular challenge - the decision it made to opt for 3G networks as its next-generation telecoms system, he says.

Choosing 3G was "a small tragedy... which started when people in Europe said, 'Boy, this party has been pretty good - let's do it all over again'.

"The Europeans, I'm sorry to say, decided to do that with 3G. It was too little too soon, and the party is not going to happen. Most people realise that and will get out of the dilemma one way or another," he believes.

Overall, the industry must totally rethink the way in which it values revenue streams, he says. Right now, telecoms operators still think in terms of revenue generated per user, from a single handset.

Yet the world is moving towards an era of multiple devices, and the possibility of having intelligent microchips embedded in almost any object, from a refrigerator to an automobile to the family dog.

Such objects will need communication services, but the telecommunications operators are stubbornly resisting any change to their existing business models, he said.

As for his own future, he's at work on a new book to follow on from his best-seller Being Digital, tentatively entitled Geodigital, "about global technology and especially technology in the developing world".

But, he says, as he leaves to go catch yet another airplane, that's only if he can force himself to make the time to sit down and write it.