mit_impact_full_report

MIT—Its Unique History, Culture, and Entrepreneurial Ecosystem
alumnus Richard Morse ’33 (later the first teacher of
entrepreneurship at MIT) to exploit advances in lowtemperature
physics. NRC later created several
companies from its labs, retaining partial ownership
in each as they spun off, the most important being
Minute Maid orange juice, later sold to Coca-Cola.
NRC’s former headquarters building, constructed
adjacent to MIT on Memorial Drive in Cambridge,
now houses the classrooms of the MIT Sloan School
of Management. Incidentally, long before the
construction of Route 128, Memorial Drive used to
be called “Multi-Million Dollar Research Row”
because of the several early high-technology firms
next to MIT, including NRC, Arthur D. Little Inc., and
Electronics Corporation of America. The comfortable
and growing ties between Boston’s worlds of
academia and finance helped create bridges to the
large Eastern family fortunes—the Rockefellers,
Whitneys, and Mellons, among others—who also
invested in early Boston startups. Although these
funds existed, they were not available in generous
amounts. Even in 1958, Ken Olsen ’50 and Harlan
Anderson ’53 had to surrender more than 70 percent
of startup Digital Equipment Corporation (DEC) for
the $70,000 they received from AR&D. Other aspects
of the surrounding infrastructure also were slow in
happening. By and large, lawyers were uninformed
about high-tech deals, and general law firms had no
specialists in intellectual property. As late as the early
1980s, the MIT and Harvard co-founders of Zero
Stage Capital, Boston’s first “seed capital” fund,
eventually found Paul Brontas, the senior partner of
Boston’s then-leading law firm Hale & Dorr, to be
among the only lawyers in town who knew how to
set up the complex structure of a venture capital firm.
By the end of the 1940s, when space constraints
in the inner cities of Boston and Cambridge might
have begun to be burdensome for continuing growth
of an emerging high-technology industrial base, the
state highway department launched the building of
Route 128, a circumferential highway (Europeans and
Asians would call it a “ring road”) around Boston
through pig farms and small communities. Route 128
made suburban living more readily accessible and land
available in large quantities and at low prices. MIT
Lincoln Lab’s establishment in 1951 in Concord,
previously known only as the site of the initial 1776
Lexington-Concord Revolutionary War battle with the
British, “the shot heard round the world,” or, to
some, as the home of Thoreau’s Walden Pond, helped
bring advanced technology to the suburbs. Today
Route 128, proudly labeled by Massachusetts as
“America’s Technology Highway,” reflects the
cumulative evidence of sixty years of industrial growth
of electronics, computer, and software companies.
Development planners in some foreign countries
occasionally have been confused by consultants and/or
state officials into believing that the once-convenient,
now traffic-clogged Route 128 highway system
actually caused the technological growth of the
Greater Boston area. At best the Route 128 highway
itself, later followed by the more distant Route 495
circumferential road, has been a moderate facilitator
of the development of this high-technology region.
More likely the so-called “Route 128 phenomenon” is
a result and a beneficiary of the growth caused by the
other influences identified earlier.
Throughout this period since World War II (and
to a lesser extent prior to that time), the sometimesoverlooked
but in reality quite vital formation of hightech
companies in the Greater Boston area, as well as
in most other high-tech regions in the United States,
has been aided powerfully, even if indirectly, by
government research funding. One visible example
at MIT and nearby was the foundation for the
modern computer industry, which benefited from
hundreds of millions of dollars of defense research
into semiconductors and electronics, much of it spent
in New England.
MIT depends on federal agencies for
approximately 75 percent of its $587.5 million of
on-campus-sponsored research. Another $636 million
of research and development is at MIT Lincoln
Laboratories, which MIT runs for the Air Force.
(Ken Olsen, founder of Digital Equipment
Corporation, worked on computer research and
development there.) A very early (1964) study by
Roberts documented forty-seven companies that
ENTREPRENEURIAL IMPACT: THE ROLE OF MIT 33