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The Role of MIT Alumni Companies in the U.S. Economy 22 Percentage 45 40 35 30 25 20 15 10 5 0 Patents and Research Expenditures Figure 11 Percent of Surveyed Firms Holding One or More Patents In all, between nearly 30 percent up to more than 40 percent of the surveyed firms in aero/astro, biomed, chemicals, electronics, and machinery hold at least one patent. Consistent with their reputations as the two premier technology locations in the country, as shown in Figure 11, California and Massachusetts firms are more likely to hold patents than are their colleagues in the same industries in other states. The companies that hold patents average around twentysix patents each. Since larger companies are more likely to have had the time and legal resources to generate and protect intellectual property portfolios, larger companies are more likely to hold patents (59 percent of companies with 500 or more employees hold at least one patent, compared to only 16 percent of companies with fewer than fifty All California Massachusetts Aero/Astro Architecture Biomed Chemicals Consumer Products Consult Electronics Energy Finance Law, Misc. Machinery Publishing Software Telecom Other Services Other Mfg. employees). The larger companies also hold more patents (sixty-four per company for those with 500 or more employees versus only 0.78 for those with fewer than fifty workers). Aerospace, biotech, electronics, chemicals, and software firms tend to <strong>report</strong> spending more on R&D, as shown in Figure 12. The average for all surveyed MIT alumni companies is 24 percent of total revenues spent on research and development, whereas software companies spend 29 percent. In contrast, the average R&D spending for all U.S. firms is estimated by the National Science Foundation to be 2.6 percent of GDP in 2006, demonstrating rather dramatically the extraordinary scientific and technological base of the MIT alumni firms. Average MIT companies’ spending on marketing is 18 percent of revenue. ENTREPRENEURIAL IMPACT: THE ROLE OF MIT
Percentage of Revenues 60 50 40 30 20 10 0 Competitive Edge, Obstacles to Success The Role of MIT Alumni Companies in the U.S. Economy Figure 12 Spending on R&D and Marketing in MIT Alumni Companies The recent survey of MIT alumni entrepreneurs has generated some interesting insights into these knowledge-based companies and what gives them a competitive advantage. The survey listed competitive factors and asked respondents to rank each of them in importance. The most frequently cited factors perceived as vital to competitive advantage were: (1) superior performance, (2) customer service/ responsiveness, (3) employee enthusiasm, (4) management expertise, and (5) innovation/new technology—all ahead of product price. Although price is not unimportant (it is hard for a company to compete if its price is unreasonable), if a startup has a cutting-edge product with outstanding performance and good customer service, it reasonably can charge a premium. All Aero/Astro Architecture Biomed Chemicals Consumer Products Consult Electronics Energy Finance Law, Misc. Machinery Publishing Software Telecom Other Services Other Mfg. R&D Marketing In the aerospace industry (where government is the major client), price is the second-most important factor (behind superior performance). Price is least important to finance and consulting firms. Time to market is particularly important in electronics and instruments, software, and aerospace, and least important in management consulting and finance. Innovation, new technology, and time to market are particularly important to founders who graduated in the last fifteen years. Eighty-five percent of the alumni entrepreneurs <strong>report</strong>ed association with MIT as having helped boost their credibility with suppliers and customers. Fiftyone percent of the entrepreneurs also felt that their association with MIT helped in acquiring funding. Had we studied alumni entrepreneurs from Stanford University, Cal Tech, or other research-intensive ENTREPRENEURIAL IMPACT: THE ROLE OF MIT 23
Page 1 and 2: Entrepreneurial Impact: The Role of
Page 3 and 4: Entrepreneurial Impact: The Role of
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
Page 11 and 12: The Role of MIT Alumni Companies in
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
Page 19 and 20: The Role of MIT Alumni Companies in
Page 21 and 22: Percentage Global Markets 80 70 60
Page 23: growth since the 1960s of ventures
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
Page 69 and 70: lectures, facilitated by direct “
Page 71 and 72: epresented in the survey responses
Page 73 and 74: Notes ENTREPRENEURIAL IMPACT: THE R
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ENTREPRENEURIAL IMPACT: THE ROLE OF
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