MIT Report – Economic Impact Of MIT Alumni Entrepreneurs
The Massachusetts Institute of Technology (MIT) is a private research university in Cambridge, Massachusetts. Founded in 1861 in response to the increasing industrialization of the United States, MIT adopted a European polytechnic university model and stressed laboratory instruction in applied science and engineering.
Entrepreneurship is a strong marker of MIT’s global impact: 23% of MIT alumni’s new firms are founded outside the U.S. This in part reflects the global nature of the alumni themselves (some 30% of our current undergraduate and graduate students were born outside the U.S.), as well as the students’ global aspirations.
Leading research-based universities play a significant role in stimulating and sustaining U.S. economic growth. These institutions educate not only productive workers who create value as employees of large established firms but also entrepreneurs who commercialize ideas, often research-based, and build innovation-driven enterprises. These company founders (and their early employees) exert a major ripple effect in both local and global economies, as new companies have the potential to scale rapidly and thus create jobs.
This is especially true for companies based on emerging science, technology, or other sources of innovative concepts, whether in manufacturing process, distribution approaches, or newly defined markets. U.S. economic data demonstrate that start-up businesses are the primary driver of job growth and are responsible for a disproportionately high share of job creation, with new and high-growth young firms accounting for roughly 70% of gross job creation.
The new report reveals that MIT alumni contribute greatly to the global innovation economy and to particular regional innovation ecosystems. While MIT innovators contribute to companies large and small, as well as to and through governments, universities, and other public sector organizations, the report measures the impact of those alumni who start and build for-profit firms.
The report estimates that MIT alumni have launched 30,200 active companies, employing roughly 4.6 million people, and generating roughly $1.9 trillion in annual revenues.
That revenue total falls between the world’s 9th-largest economy by GDP, Russia ($2.097 trillion), and the 10th-largest, India ($1.9 trillion), according to 2013 data on those and other countries from the International Monetary Fund.
The MIT report shows the median age of first-time alumni entrepreneurs decreasing steadily over the last eight decades. The age dropped from 39 for alumni who graduated in the 1940s to 30 in the 2000s, with today’s median age for entrepreneurs being 27.
Other key findings include:
- 38 percent of early-stage employees eventually launched their own companies
- 25 percent of alumni have founded companies, with more than 40 percent of these labeled as “serial entrepreneurs” (founding two or more companies)
- 11 percent of alumni who have graduated in the 2010s have already founded companies, compared with 8 percent who founded companies within five years of graduating in the 1990s, and 4 percent in the 1960s
- 31 percent of alumni hold one or more patents
- 80 percent of alumni-founded companies have survived five or more years, while 70 percent have survived 10 years
The report was co-authored by Edward Robert, Fiona Murray and J. Daniel Kim of the MIT Sloan School of Management.
The Massachusetts Institute of Technology (MIT) is a private research university in Cambridge, Massachusetts. Founded in 1861 in response to the increasing industrialization of the United States, MIT adopted a European polytechnic university model and stressed laboratory instruction in applied science and engineering. Researchers worked on computers, radar, and inertial guidance during World War II and the Cold War. Post-war defense research contributed to the rapid expansion of the faculty and campus under James Killian. The current 168-acre (68.0 ha) campus opened in 1916 and extends over 1 mile (1.6 km) along the northern bank of the Charles River basin. MIT, with five schools and one college which contain a total of 32 departments, is often cited as among the world’s top universities. The Institute is traditionally known for its research and education in the physical sciences and engineering, and more recently in biology, economics, linguistics, and management as well. As of 2015, 84 Nobel laureates, 52 National Medal of Science recipients, 65 Marshall Scholars, 45 Rhodes Scholars, 38 MacArthur Fellows, 34 astronauts, and 2 Fields Medalists have been affiliated with MIT.
SOURCE: MIT.edu, Kauffman.org, Wikipedia.org