Chapter 3: Finding, Financing and Growing Technology-based Innovations: A Perspective on MIT
David Verrill INTRODUCTION Schumpeter’s vision in 1939 about entrepreneurial innovation as a key driver of the economy is even more true today, as creative destruction is exhibited in a new technology-driven economy. In 2007 US venture capital companies invested nearly $30 billion in technology ventures – more than half of them in California (Silicon Valley) and Massachusetts (Boston/Cambridge). Individual, wealthy ‘angel’ investors contributed nearly the same amount ($26 billion) of capital, investing largely in early stage companies. Universities like the Massachusetts Institute of Technology (MIT) act as important engines of innovation. In 2007 MIT sponsored more than $600 million of research. A good portion of that was funnelled through interdisciplinary research centers that bring expertise from different schools and departments together to solve complex problems. A BankBoston study (Ayers, 1997) performed in 1997 showed that MIT had spawned more than 4000 companies which employed more than a million people and had revenues of nearly $250 billion a year – or the equivalent in 1997 of the 24th largest economy in the world above South Africa, Greece and Norway. The Boston/Cambridge area has a key set of ingredients that make it a dynamic ecosystem of innovation. These ingredients are similar to other parts of the USA that are also sources of innovation – Silicon Valley and Orange County in California, Research Triangle in North Carolina and Austin in Texas. MIT’s role in enabling innovation is undeniable. But in addition to MIT, the Boston/Cambridge area provides a critical set of ingredients that allow the region...
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