mit_impact_full_report

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The Role of MIT Alumni Companies in the U.S. Economy 18 Table 7 MIT Alumni Companies by Industry Industry # of Firms Employment (Median) Revenue (Median–in $000s) Aerospace 467 15 1,200 Architecture 1,209 5 265 Biomedical 500 27 2,000 Chemicals and Materials 742 25 1,275 Consumer Products 1,417 23 1,500 Management Consulting 2,239 2 200 Electronics 3,285 25 2,000 Energy and Utilities 789 8 507 Finance 1,111 7 1,800 Law and Accounting 1,046 8 450 Machinery 322 25 2,600 Publishing and Schools 564 12 1,200 Software 5,009 22 1,500 Telecommunications 902 5 143 Other Manufacturing 773 20 1,600 Other Services 5,395 30 1,750 their cumulative <strong>impact</strong> is significant, the median size in every industry is quite small, reflecting the overall national experience and the large number of young firms. Firms in software, electronics (including instruments, semiconductors, and computers), and biotech form a special subset of the MIT alumni companies. These high-technology firms (1) spend more of their revenues on research and development, (2) are more likely to hold one or more patents, and (3) tend to export a higher percentage of their products. They are more likely than companies in other industries to provide the bases for long-term economic growth. Together, firms in these three industries account for one-third of the employment in all MIT alumni companies; electronics and instrument firms alone account for more than 13 percent. The expansion plans of the companies we surveyed form an interesting “leading indicator,” pointing to growth prospects by industry. More than 30 percent of the firms in chemicals, aerospace, and biotech are planning to expand. They are followed closely by telecommunications and consumer products companies. ENTREPRENEURIAL IMPACT: THE ROLE OF MIT
Percentage Global Markets 80 70 60 50 40 30 20 10 0 In any regional economy, firms that sell out-ofregion play the major role in driving economic growth because, as these firms grow in total revenues, they also are growing in local employment, and they create markets for utilities, service firms, retailers, and other local-market businesses. MIT alumni companies have a disproportionate importance to their local economies because so many of them are manufacturing, biotech, and software firms (48 percent of the employment of MIT alumni companies) that tend to compete in and sell to national and world markets. Overall, 54 percent of company sales are to out-of-state markets; 13 percent of total sales come from goods or services sold by U.S. firms abroad. Figure 7 shows these percentages by industry. For electronics, chemical, machinery, biotech, software, and management consulting firms, 65 percent of sales are out-of-state. The only companies The Role of MIT Alumni Companies in the U.S. Economy Figure 7 Sales of MIT Alumni Companies Out-of-State and Exported Abroad Proportion of Revenue not from Founding State Aero/Astro Architecture Biomed Chemicals Consumer Products Consult Electronics Energy Finance Law, Misc. Machinery Publishing Software Telecom Other Other Mfg. Percent of Revenue from Out-Of-State Percent of Revenue from Exports that have in-state sales amounting to 50 percent or more of total revenues are architects, finance companies, publishing, and law firms. Across all industries, exports (outside of the United States by U.S.-based firms) account for 13 percent of the sales revenues of MIT alumni companies. Exports are slightly higher for biomedical, machinery, and electronics firms (more than 20 percent). Companies in all other industries have an average export share of just under 10 percent. These high-tech, high-growth industries clearly depend on foreign as well as domestic markets. Figures 8 and 9 present the distributions by industry of the 2003 survey responses. Among manufacturing industries, electronics has held its own for six decades as a major opportunity area for MIT alumni entrepreneurs. On the services side, software firms have grown strikingly as a percentage of firms founded since the 1950s. Also of note is the rapid ENTREPRENEURIAL IMPACT: THE ROLE OF MIT 19
Page 1 and 2: Entrepreneurial Impact: The Role of
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Page 5 and 6: Table of Contents An Evolving MIT I
Page 7 and 8: closed prior to our 2003 survey. Th
Page 9 and 10: The MIT Technology Licensing Office
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Page 13 and 14: Alumni who were not U.S. citizens w
Page 15 and 16: Percentage of Entrepreneurs 20 18 1
Page 17 and 18: Number of Firms 50 45 40 35 30 25 2
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Page 23 and 24: growth since the 1960s of ventures
Page 25 and 26: Percentage of Revenues 60 50 40 30
Page 27 and 28: Percentage of Capital Coming from E
Page 29 and 30: ’49 started an electronic testing
Page 31 and 32: MIT—Its Unique History, Culture,
Page 47 and 48: The first significant local follow-
Page 49 and 50: documented above, these programs th
Page 51 and 52: Soon, additional entrepreneurship-f
Page 53 and 54: The I-Teams model, initiated by Ken
Page 55 and 56: Number of Entries 250 200 150 100 5
Page 57 and 58: Entrepreneurs promotes networking e
Page 59 and 60: on Patent Policy was formed to addr
Page 61 and 62: Table 16 Primary Universities Doing
Page 63 and 64: Recent MIT Institutional Broadening
Page 65 and 66: $20 million from Jaishree Deshpande
Page 67 and 68: entrepreneurship, media, and even b
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epresented in the survey responses
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Notes ENTREPRENEURIAL IMPACT: THE R
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ENTREPRENEURIAL IMPACT: THE ROLE OF
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