Innovation Blog

MIT – Massive Impact Technology:    How One University Created “Entrepreneuria”,  a $2 Trillion Economy

By Shlomo Maital

      A research report by two MIT researchers reveals the massive impact that a single university can have on an economy, by generating innovative technologies and the entrepreneurs who know how to leverage them to meet real wants and needs. [1]

      Edward B. Roberts, Sarnoff Professor of Management of Technology, and doctoral student Charles Eesely, surveyed all living MIT alumni/ae in 2003, while verifying and updating data through the Compustat database. 

      Here are a few of their findings.  

      *  MIT alums launched 25,800 companies still active, employing 3.3 million people and generating annual world sales of $2 trillion  (nearly equivalent to the 2008 GDP of Italy — at $2.3 trillion, the world’s 7th largest economy). 

      * Just 796 of the largest MIT alum companies (2 per cent of the total) account for more than 80 per cent of total sales and 70 per cent of total employees, of all the MIT-founded firms.  In other words: Some of the MIT-based startups grew to global size.

     *  MIT-origin firms had a massive impact on the State of Massachusetts;  some 6,900 companies with worldwide sales of $164 b. are located in Massachusetts, representing fully a quarter of the sales of all Massachusetts companies and creating over a million jobs.

   *  Many of the MIT-origin firms are engaged in manufacturing (instruments, machinery, electronics, biotech, software), accounting for half of all MIT-generated employment.

  *  MIT is the center of a world-leading biotech cluster, with 95 biotech companies clustered around the Kendall Square area.  Prof. Fiona Murray found that 65 out of MIT’s 493 life scientists have founded or served on the boards of directors of at least one venture-funded company.  

      If I were a Dean or President at a leading science and technology university, I would carefully benchmark MIT to learn the secret of its enormous success in transferring basic research into jobs, exports, revenues and $2 trillion!   Here is a clue:  When William Barton Rogers founded MIT 144 years ago, in 1865, in a grimy industrial building in Cambridge, MA., he chose as MIT’s mantra:  mens et manus,   “mind and hand” — powerful science, transformed into useful products for mankind.   Those three Latin words have driven MIT’s vision for a century and a half. 

[1] Edward B. Roberts and Charles Eesley.  Entrepreneurial Impact:  The Role of MIT.  MIT Sloan School of Management, 2009.  Download the report at  http://www.kauffman.org/mit