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In the March 28, 1997 Issue:

STUDY EXAMINES ECONOMIC IMPACT OF MIT-RELATED COMPANIES


In what is touted as the first major national study of the economic impact of a research university, BankBoston recently reported on the economic impact of companies founded by graduates of the Massachusetts Institute of Technology (MIT). The report, MIT: The Impact of Innovation, "is a case study of the significant effect that research universities have on the economies of the nation and its 50 states."

Graduates of MIT have founded some 4,000 currently active companies, according to the report. Worldwide, these companies account for annual revenues of almost $232 billion. Compared with foreign countries, MIT-related companies would rank 24th largest in the world -- just behind South Africa and ahead of Thailand.

The total employment of the companies exceeds 1.1 million. Within the U.S., the MIT-related companies employed 733,000 people at more than 8,500 offices and plants in the 50 states. According to the report, the five states benefitting most from MIT-related jobs are California (162,000), Massachusetts (125,000), Texas (84,000), New Jersey (34,000), and Pennsylvania (21,000). Thirteen other states had more than 10,000 MIT-related jobs: Colorado, Connecticut, Florida, Georgia, Illinois, Iowa, Kansas, New York, Ohio, Oregon, Virginia, Washington, and Wisconsin.

In determining the location of a new business, the factors cited most frequently were the quality of life in the community, proximity to key markets, and access to skilled professionals, according to a survey of 1,300 MIT graduates that founded companies. Other significant factors in locating businesses were access to skilled labor, low business costs and access to universities.

The report was prepared by the BankBoston Economic Department based on data maintained by MIT and independent resources. MIT has maintained a database of companies founded by its graduates since 1990. To provide more information about these companies and to lay the basis for maintaining current information on sales, employment, industry category, and location, the MIT database was matched against the records of American Business Information, which include employment, sales, and other information on some 10 million U.S. companies.

To request a copy of MIT: The Impact of Innovation, contact the MIT news office at 617/253-2700 or send an e-mail to newsoffice @mit.edu The report is also available on the World Wide Web at http://web.mit.edu/ newsoffice/founders/


GAO REPORTS ON STATUS OF SBICS


The General Accounting Office (GAO) has released information on the status of Small Business Investment Companies (SBICs) for fiscal years 1990 through 1996. The report, Update of Information on SBA's Small Business Investment Company Programs, provides data on the performance of the programs and related investment activities.

The SBIC program was created to help small businesses obtain financing. SBICs, licensed by the Small Business Administration, are privately organized and privately managed investment firms. With a combination of their own capital and funds borrowed at favorable rates through SBA, SBICs provide venture capital and loans to small businesses. A specialized SBIC (SSBIC) program was also established to provide funding to socially or economically disadvantaged small business owners.

GAO data for fiscal years 1990 through 1996 show that:

Data on SBIC and SSBIC investments show that:

GAO data also show that SBA incurred $365 million in losses from liquidating failed SBICs and SSBICs. Projections indicate that there will be an additional $123 million in losses from liquidations in process.

Copies of the report, (GAO/RCED-97-55 ) are available from the GAO at 202/512-6000.


POSITION AVAILABLE


Pittsburg State University in Kansas is seeking a person to serve as the executive director of its Business & Technology Institute (BTI) and as Director of the Center for Design, Development, and Production. BTI is the primary economic development unit of the university. Its mission is to serve as interface between education, technology, business and industry by providing management, finance, and technological services. Review of applications will begin on April 28.

A full description of the position can be obtained from SSTI's home page (http://www.ssti.org) or by calling SSTI at 614/421-7784.


CORRECTION


The Coopers & Lybrand Money Tree Report, reported on in the March 7 issue of the Digest, inadvertently omitted Ohio from its list of the top states receiving venture capital investments in 1996. The Survey should have ranked Ohio tenth with $279.0 million in investments. This revised information drops Virginia to 11th with $275.7 million, New Jersey to 12th with $264.3 million, and Tennessee to 13th with $261.5 million.

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