The Pleasure of Their Company

A recent BankBoston study reports that the economic impact of MIT is just enormous.

MIT grads have begun 4,000 companies, which in 1994 alone, created 1.1 million jobs and generated $232 billion in world sales.

If these companies created by grads and faculty formed an independent nation, the revenues would make it the 24th largest economy in the world, the report said.

The 36-page report, prepared after interviewing 1300 CEOs and checking facts for two years, is the first one in the nation ever to examine the economic impact of a research university.

The study reveals that in the U.S., MIT-related companies employed 733,000 people in 1994 at 8500 plants and offices. That’s one of every 170 jobs in America. Eighty percent of the jobs in the MIT-related firms are in manufacturing (compared to 16 percent nationally) and a high percent of the products are exported.

California, with 162,000 MIT-related jobs, topped Massachusetts, with 125,000. Texas took third place, followed by New Jersey and Pennsylvania. Thirteen other states have more than 10,000 MIT-related jobs.

In addition to firms founded by a grad or faculty member, MIT-related companies are said in the report to include firms spun off from a major MIT lab and those begun with a licensed MIT technology.

The companies tend to be knowledge-based and inclined toward software, high-tech manufacturing and consulting rather than businesses in the economy at large. The report added: “These companies have a disproportionate importance to their local economies because they usually sell to out-of-state and world markets, and because they so often represent advanced technologies.” Other industries represented include manufacturing firms in chemicals, drugs, materials, and aerospace, along with energy, publishing, and finance.

The grads interviewed said many factors at MIT inspired them to start a company, including faculty mentors, cutting-edge technologies, entrepreneurial spirit, and great ideas.

by Liz Karagianis Next »

On Topic: alumni/ae, business, entrepreneurship