Setting up an embedded centre of excellence would be a nice thing to do. Bsides offering students the practical orientation, it'll also provide the institute opportunities at industrial collaborations. If things work out properly it can even be a collaboration center for off-shore projects too.
I am trying to intriduce some changes in the student projects this year. I'd like the faculty too to make their hand dirty and participate in the projects themselves too. Not only forces them too learn practical ideas, students too would like the leadership. Rigorous tresting is another thing I'd like to introduce so that software projects create products rather than yet another data acquisition system!
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