Beginning with the founding of Arthur D. Little, Inc. in Cambridge in 1886, MIT alumni, faculty, and students have played key roles in launching thousands of companies worldwide, ranging from small, specialized high-tech operations to corporate giants such as Genentech, Gillette, Hewlett-Packard, Teradyne, and Raytheon. Many of these companies have formed the cornerstone of new industries, including biotechnology, streamlined digital technologies, local computer networks, defense, semi-conductors, minicomputers, advanced computers, and venture capital. MIT scientists and entrepreneurs laid the groundwork for much of the current biotech industry - and biomedical advances have continued with MIT-originated developments such as the first effective new treatment for brain cancer in a generation. The MIT Technology Licensing Office (TLO) has more than 1,000 issued US patents in its portfolio, many with foreign counterparts. Each year, the TLO annually grants as many as 60-80 licensing agreements.

The unmatched record of achievement of MIT-educated entrepreneurs worldwide is described in a Fleet BankBoston study: "MIT: The Impact of Innovation." This study, prepared by the Economics Department of BankBoston (now Bank of America) in 1997, stated that if the companies founded by MIT graduates and faculty formed an independent nation, the revenues produced by the companies would make that nation the 24th-largest economy in the world. The 5,000+ MIT-related companies that exist today employ 1.1 million people and have annual world sales of $232 billion. That is roughly equal to a gross domestic product of $116 billion, which is comparable to the 1996 GDP of South Africa or Thailand. And MIT's impact extends far beyond the borders of Massachusetts. In April 1990, a study released by Chase Manhattan Corp. showed 176 MIT-founded companies existing in the Silicon Valley area. This number has since more than doubled.

In the 1940s, MIT President Karl Taylor Compton, working with members of the local business community, conceived the idea of a high-tech venture capital firm to help nurture the development of companies springing up in the region. This work led to the founding of the first modern venture capital company, American Research and Development (ARD), in 1946. The Harvard Business School was MIT's partner in founding ARD.