mit_impact_full_report

epresented in the survey responses are somewhat
more recent and average fewer employees than
the universe of MIT alumni-founded companies.
All told, these 4,611 specific surveyed firms included
in the direct responses employ more than 585,000
people. We estimate, however, that the entire
population of MIT alumni firms employs more than
3.3 million people.
The report’s findings on where and why
companies locate where they do, what gives them
their competitive edge, how they received initial
funding, where they sell their products, and how many
patents they have, are taken directly from the
responses to this 2003 survey, updated to reflect the
2006 corporate information obtained from Compustat
and Dun & Bradstreet. To estimate accurately the
entrepreneurial activity and economic impact of those
in the entire MIT alumni population who did not
respond to the surveys, we multiply the direct response
numbers by a scale factor. For further details, see the
Appendix section, “Estimation Methods,” below.
The detailed questionnaire used for this survey
is available at www.kauffman.org/MITstudy. We
encourage other universities to undertake and share
comparative analyses. We also should note here that,
although we correctly identify all of the alumni in the
MIT database as “MIT alumni,” a substantial fraction
of them are also alumni of other universities in the
United States and other countries. So the economic
impacts cited in this report reflect the direct and
indirect educational impact of many institutions of
higher learning in science, technology, and
management.
Estimation Methods
As in all surveys, a large segment of the alumni
population did not respond to the MIT alumni surveys.
Therefore, estimation of the total impact of MIT alumni
entrepreneurs requires extrapolation to account for
non-respondents. To estimate the numbers for the
entire MIT alumni population, we multiply by a scale
factor to give an accurate estimate of the
entrepreneurial activity of those who did not respond
Appendix
to the surveys. Since we have aggregated data from
both the 2001 and 2003 MIT surveys, with
adjustments from the 2006 Compustat and Dun &
Bradstreet databases, the appropriate scale factor
depends on the particular statistic or question being
answered.
1. For survey items where we have data on all
companies created over the life of the
entrepreneur, the base scale factor is
approximately 9.476 (i.e., 2.425 * 3.906 =
~9.476). These numbers are approximate because
we actually use more than three digits after the
decimal. We multiply by 2.425 because, as
indicated above, the total population of MIT
alumni is 105,928 and 43,668 responded to the
first survey. To get from 43,668 to 105,928 we
have to multiply by 2.425 (i.e., 105,928/43,668 =
~2.425). Then we multiply by 3.906 because
8,044 indicated that they were entrepreneurs and
only 2,059 responded to the Founder’s Survey
(i.e., 8,044/2,059 = ~3.906). We multiply that by
0.773 to avoid duplicate counting by correcting
for multiple MIT alumni on the same founding
teams. Because 23.4 percent of the reported
companies were out of business by 2003, we
finally multiply by 0.766 to count just those
companies likely to still be active.
2. For items where we only have data on one of the
companies the entrepreneur founded, we then
multiply by 1.61 because 1.61 is the number of
companies on average each entrepreneur has
founded (27 percent of the entrepreneurial alumni
are repeat/serial entrepreneurs). For example, if we
take 100 alumni entrepreneurs, on average they
would have created 161 companies during their
careers. If we only have data on total employees
for one company each (100 companies), then we
must multiple by 1.61 to get an estimate of the
real total number of employees for all the
companies founded by that entrepreneur.
3. We further adjust the scaling factor for items
where data are missing due to entrepreneurs
skipping a survey item. This process may seem
ENTREPRENEURIAL IMPACT: THE ROLE OF MIT 69