Living MIT graduates who have started and built for-profit companies do not qualify as a nation. However, if they did, they'd be the world's 10th largest economy, with gross revenue falling between the GDP of Russia ($2.097 trillion) and India ($1.877 trillion), according to a report released earlier this week.
"The report confirms what has long been clear: Our community's passion for doing, making, designing, and building is alive and growing," President L. Rafael Reif wrote in an email to the MIT community. "As we do our part by continuing to foster our students' natural creativity and energy, it is inspiring to see the potential our alumni hold to extend MIT's power to do good for the world."
Illustration by Christine Daniloff/MIT
As of 2014, the report estimates, MIT alumni have launched 30,200 active companies, employing roughly 4.6 million people, and generating roughly $1.9 trillion in annual revenues. An update to a previous report authored in 2009, the new report outlines key entrepreneurial trends, such as the declining age of entrepreneurs, and alumni contributions to company growth and innovation, such as patents filed. Other key results for entrepreneurial impact and trends are:
- 25% of alumni have founded companies, with more than 40% of these labeled as serial entrepreneurs
- 11% of alumni who have graduated in the 2010s have already founded companies, compared with 8% who founded companies within five years of graduating in the 1990s, and 4% in the 1960s
- 80% of alumni-founded companies have survived five or more years, while 70% have survived 10 years. (Across the U.S., roughly 50% of all new companies last five years, while only 35% last 10 years.)
- MIT entrepreneurs favor the East and West coasts: More than 30% of all the surveyed companies are located in Massachusetts, with 8% in Cambridge; 20% are located in California. Approximately 23% operate in other countries.
The report was authored by Edward B. Roberts, the David Sarnoff Professor of Management at MIT Sloan; Fiona Murray, the Bill Porter Professor of Entrepreneurship and an associate dean for innovation at MIT Sloan; and doctoral student J. Daniel Kim.
Getting to the numbers
For the study, researchers surveyed MIT's 104,000 living alumni. From a sample size of 19,730 respondents, they added up 5,534 alumni-founded companies in several sectors: energy and utilities, health and medicine, biotechnology and medical devices, computer hardware, engineering, manufacturing, and software (the most popular sector, representing 18% of all companies). The numbers were validated by a telephone survey of non-respondents to the earlier web survey.
Extrapolating from that data, they estimated the total number of companies (30,200) across the entire alumni base, as well as employment and revenue data. The researchers excluded companies that are no longer active, as well as numerous large companies, such as Hewlett-Packard, Intel, Raytheon, and Texas Instruments, whose co-founders are deceased.
Executive Education and entrepreneurship
Entrepreneurship and innovation opportunities abound at MIT, affording students from all disciplines many ways to learn, gain experience, make connections, and unleash their inspiration. At MIT Sloan Executive Education, we offer multiple courses that connect global executives to MIT's entrepreneurial network and help participants launch and navigate the challenges of new intrapreneurial and entrepreneurial ventures. Some of these programs include:
- NEW: Launching Your Entrepreneurial Venture: Key Legal Issues (online): An innovation-driven startup or growth company--one designed to commercialize a new technology or a business model enabled by a new technology--faces distinctive law-sensitive challenges. This program is a hands-on, focused "deep dive" into the law-sensitive issues that face innovation-driven businesses at key junctures.
- Entrepreneurship Development Program: Drawing from the vast culture of innovation and entrepreneurship at MIT, this unique course introduces participants to MIT's entrepreneurial education programs, technology transfer system, and global entrepreneurial network. It covers the entire venture creation process, from generating ideas to building viable global businesses, with a special emphasis on the nurturing roles of corporations, universities, governments, and foundations.