2_C11W1_Day1_MIT_REAP_Overview_STERN FINAL FINAL.pdf

@MIT_REAP
Overview:
The MIT Regional
Entrepreneurship
Acceleration Program
Day 1
9:15 –10:30 AM

@MIT_REAP
Good Morning,
Cohort 11!
Welcome to MIT!
2©2024 Stern

@MIT_REAP
z
MIT Sloan School of Management
David Sarnoff Professor of Management
Co-Faculty Director, MIT Regional
Entrepreneurship Acceleration Program
Scott Stern
3©2024 Stern

@MIT_REAP
These well-intentioned approaches
often end…in the Boulevard of
Broken Dreams
Many regional efforts to accelerate
through entrepreneurship fail to turn
“ideas” into action, or fizzle out after
an initial burst of energy and initiative
Far too often…
8©2024 Stern

@MIT_REAP 9©2024 Stern
"The other thing that we would have done differently…is really madeour goals much more explicit."
– Tony Hsieh, August 2016, nearing 5-year anniversary

@MIT_REAP 10©2024 Stern
How can we
accelerate and engage
innovation-driven
entrepreneurial ecosystems?

@MIT_REAP
MIT REAP draws on a range of Faculty expertise
David Sarnoff Professor of Management
MIT Sloan School of Management
Scott Stern
William Porter Professor of
Entrepreneurship & Associate Dean
for Innovation
MIT Sloan School of Management
Fiona Murray
Managing Director
Martin Trust Center for MIT
Entrepreneurship
Ethernet Inventors Professor
of the Practice
MIT Sloan School of Management
Bill Aulet
Senior Lecturer, Technological
Innovation, Entrepreneurship,
and Strategic Management &
Diplomatic Advisor to MIT REAP
MIT Sloan School of Management
Phil Budden
Senior Lecturer, Technological
Innovation, Entrepreneurship,
and Strategic Management
MIT Sloan School of Management
Shari Loessberg
SMR Distinguished Professor
of Technological Innovation,
Entrepreneurship, and
Strategic Management and
Engineering Systems
MIT Sloan School of Management
Michael Cusumano
12
Member of the Board of Directors
European Innovation Council
Special Advisor on Technology
Sovereignty
European Commission
Lars Frolund
©2024 Stern

@MIT_REAP
…and the MIT REAP staff team
Travis Hunter
Director
MIT REAP
David Capodilupo
Assistant Dean
MIT Sloan Global Programs
Kavan O’Connor
Associate Director
MIT REAP
Sinan AbuShanab
Associate Director
MIT REAP
Caroline Oei-Clark
Assistant Director
MIT REAP
Jumakhan Rahyab
Assistant Director
MIT REAP
13©2024 Stern

@MIT_REAP
90+
MIT REAP Teams
around the world!
14©2024 Stern
2 3 2
2
4
2
2
7 2 2
7
5 3 2 8 8

@MIT_REAP
MIT REAP Theory of Change
15©2024 Stern

@MIT_REAP
No one is “in charge” of entrepreneurship…
16©2024 Stern
STAKEHOLDERS

@MIT_REAP
MIT REAP Cohort2 (2014 –2016)
Entrepreneur? Team Singapore
SINGAPORE
17©2024 Stern

@MIT_REAP
MIT REAP Cohort2 (2014 –2016)
Entrepreneur? Team Singapore
SINGAPORE
18©2024 Stern

@MIT_REAP
No one is “in charge” of entrepreneurship…
19©2024 Stern
But each stakeholder
plays a critical role in
success…
STAKEHOLDERS

@MIT_REAP 20
The challenge of empowering stakeholders
for ecosystem change
IDE Ecosystem-led growth
is different from traditional economic
development approaches
Collaboration across key
stakeholders is crucial for collective
impact and acceleration at the
ecosystem level.
©2024 Stern
STAKEHOLDERS

@MIT_REAP
MIT REAP Cohort 6 (2018-2020)
Central Denmark
Aarhus University
establishes “The Kitchen”
in February 2020.
A new interdisciplinary incubator for
both students and employees
The Kitchen has a strong
connection with and is open for
the surrounding ecosystem.
The incubator provides new
offers for entrepreneurs including
micro grants for student
entrepreneurs in collaboration with
a regional enterprise.
DENMARK
21©2024 Stern@MIT_REAP

@MIT_REAP
MIT REAP Theory of Change
22©2024 Stern
SYSTEM

@MIT_REAP 23
SMEs & IDEs
©2024 Stern
Small-/Medium-sized
Enterprise (SME)
Income over time
Income
Time
Innovation-Driven
Enterprise (IDE)
Income over time
Income
Time
0 25 50 75 100%

@MIT_REAP 24©2024 Stern
Where do IDEs come from?

@MIT_REAP 26©2024 Stern
MIT REAP System
SYSTEM

@MIT_REAP
are Distinct Regional Assets
Innovative Capacity & Entrepreneurial Capacity
27©2024 Stern
SYSTEM
E-Capacity
Ability to start and build
new to the world
businesses from
inception to maturity.
Strong E-Cap:
Entrepreneurs
Mentors
Founding teams
Investors at all stages
I-Capacity
Ability to develop new to the
world innovations from
inception through to the
market.
Strong I-Cap:
Universities,
Central R&D
Network of researchers
Medical centers

@MIT_REAP
I-Cap versus E-Cap
28©2024 Stern
Entrepreneurial Capacity
Innovation Capacity
SYSTEM

@MIT_REAP 29
I-Cap versus E-Cap
©2024 Stern
Entrepreneurial Capacity
Innovation Capacity

@MIT_REAP
Relationship Between
Innovation Performance & Entrepreneurial Performance
30©2024 Stern
Patent Rate (I-Cap) vs. Business Formation Rate (E-Cap)
SYSTEM

@MIT_REAP
Foundations of I-Cap & E-Cap
SYSTEM INPUTSI-Capacity E-Capacity
HUMAN
CAPITAL
FUNDING
INFRA-
STRUCTURE
DEMAND
CULTURE &
INCENTIVES
•New PhD graduates per capita
•Availability of scientists & engineers
•Researchers engaged in R&D per million
•Quality of STEM ed. & graduates per capita
•R&D expenditure as % of GDP
•R&D expenditure in ‘000 current PPP$
•Public/ private R&D as % of total R&D
expenditure
•ICT access
•Internet bandwidth
•Production process sophistication
•Availability of latest technologies
•Gov’t buying adv technology products
•University-industry research collaborations
•Trade, competition & market scale
•Quality of scientific research institutions
•Graduates in science & engineering (%)
•% School grads in tertiary education
•Entrepreneurship perceived capabilities
•Easy access to loans, Ease of credit
•Venture capital availability, Venture capital
investment & VC deals
•Electricity & telephony infrastructure
•Number of internet users
•Logistics performance
•Buyer sophistication
•Domestic market scale
•Entrepreneurial intention
•Attitudes toward entrepreneurial risk & failure
•Attitudes towards entrepreneurial risk among
men & women
•Entrepreneurship as a good career choice
31©2024 Stern
SYSTEM

@MIT_REAP
Must Be Effectively Linked
I-Cap and E-Cap
32©2024 Stern
SYSTEM
E-Cap
Strong E-Cap:
Entrepreneurs
Mentors
Founding teams
Investors at all stages
I-Cap
Strong I-Cap:
Universities,
Central R&D
Network of researchers
Medical centers
Linkages are critical to combine innovative ideas and
entrepreneurial opportunities to
enable innovation-based enterprises to flourish.

@MIT_REAP
MIT REAP Southwest Norway R P
e t o t
niver it
on ortiu
33©2024 Stern
SYSTEM

@MIT_REAP 34©2024 Stern
MIT REAP System
SYSTEM

@MIT_REAP
Clusters and the IDE Ecosystem
35©2024 Stern
Level and Impact of Innovation
Level, Growth,
and Survivability of Start-ups
Source: Delgado/Porter/Stern, Clusters and Entrepreneurship, Journal of Economic Geography, 2010
Industries that are part of a strong cluster environment register
•higher level, growth and sustainability of start-up activity
•higher level and impact of innovation
CLUSTER
ENVIRONMENT
Within a Cluster
Related Clusters
Neighboring Clusters

@MIT_REAP 36©2024 Stern
SYSTEM

@MIT_REAP 37©2024 Stern
How does your ecosystem and MIT
REAP Strategy leverage entrepreneurial
comparative advantage?

@MIT_REAP 38©2024 Stern
SYSTEM
Clusters are the fulcrum around which a region realizes the potential from its
I-Cap and E-Cap, shaping the potential to develop and commercialize new
technology and scale new businesses for global impact.

@MIT_REAP 39©2024 Stern
But how can we see the relationship
between their ecosystem and impact
on a real-time basis at a high level of
granularity?

@MIT_REAP
(at or near the time of founding)
Three Steps to Measuring Entrepreneurial Quality
42©2024 Stern
Business Registrations
“Digit l Sign ture ”
of Growth Potential
“Succe ” outco e c n
be mapped to initial
“digit l ign ture ”

@MIT_REAP
43
Change in the Probability of Growth
Has Short Name 248%
Firm Named after Founder -70%
Corporation (Not Partnership or LLC) 405%
Trademark in First Year 501%
Patent and No Delaware Registration 3,534%
No Patent and Delaware Registration 4,470%
Both Patent and Delaware Reg. 19,640%
Sectoral Controls Included
State Controls Included
How do “Digital Start-up Signatures”
Predict Growth? (NB: Prediction NOT Causal)

@MIT_REAP 45©2024 Stern
0
50
100
150
200
250
300
350
200720082009201020112012201320142015
Relative Percentage
Change
Change in Entrepreneurial Quantity
i6 SitePortland (City)
0
50
100
150
200
250
300
350
Relative Percentage
Change
Changes in Entrepreneurial Quality
i6 Site (Nowcasted)Porltland (Nowcasted)
No changes in quantity But an upward (noisy) swing
upward in quality around i6 site
What Happens to Quantity and Quality
after the i6 Program?

@MIT_REAP
The Impact of Research Institutions on the Quantity and Quality of Entrepreneurship
More Than an Ivory Tower:
46©2024 Stern
0
0.02
0.04
0.06
0.08
0.1
Average RECPI by year
Without research university
With research university
-0.05
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
University
Research
University
non-Research
National Labs
Change in RECPI From
Change in Univ R&D
RECPI

@MIT_REAP 47©2024 Stern
How can your region use metrics and
accountability to accelerate through
entrepreneurial comparative
advantage?

@MIT_REAP
MIT REAP Theory of Change
48©2024 Stern
STRATEGY

@MIT_REAP 49©2024 Stern
Linking System to Strategy
LATENT STRENGTHS AND BOTTLENECKS
STRATEGIC INTERVENTIONS
STRATEGY-SPECIFIC OUTCOMES
STRATEGY
SYSTEM

@MIT_REAP 50©2024 Stern
STRATEGY
The theory of collective impact
Collective impact occurs when
organizations/actors from different sectors
agree to solve a specific social problem
Requires
integrated
tailored best
practices
Works
when key
preconditions
are in place
Lays foundation
for near-term
and sustained
impact
Beyond the
impact of
individual
organizations

@MIT_REAP
Action
hrough t keholder’ collective i p ct ppro ch
Accelerate real-world meaningful change
IDE
ecosystem
acceleration
Setting a common agenda
Shared metrics & evaluation
Stakeholder engagement &
communication
Backbone support
organization
51©2024 Stern
STAKEHOLDERS

@MIT_REAP
Policy and Programmatic Interventions (PPIs)
52©2024 Stern
STRATEGY
Policies Programs
Durable changes (typically taken
by the government) that shape the
overall context in which ecosystem
resources are developed and
deployed
Specific time-bound activities –
undertaken by any (group of)
stakeholders – that can change
the ecosystem in a specific way &
through demonstration.

@MIT_REAP 53
What are the alternative types of strategic
interventions that regions typically consider?
©2024 Stern
What key priority can “unlock” change
in the rest of the system?
ECOSYSTEM
STRATEGIC
INTERVENTIONS
COMMERCIALIZATION &
ACCELERATION PROGRAMS
HUMAN CAPITAL AND
WORKFORCE DEVELOPMENT
INNOVATION
PARTNERSHIPS
INVESTMENT
AND RISK CAPITAL

@MIT_REAP
Policy and Programmatic Interventions (PPIs)
54©2024 Stern
STRATEGY
Policies Programs
Durable changes (typically taken
by the government) that shape the
overall context in which ecosystem
resources are developed and
deployed
Specific time-bound activities –
undertaken by any (group of)
stakeholders – that can change
the ecosystem in a specific way &
through demonstration.

@MIT_REAP
Choosing and
winning your
MIT REAP
must-win battle
55©2024 Stern
STRATEGY
@MIT_REAP

@MIT_REAP
Executive
Scottish Enterprise
Clive Reeves
MIT REAP Cohort 1 (2012-2014)
Team Scotland
Chief Executive
AWS Ocean Energy LTD
Simon Grey
Head of Business innovation
and Growth Sector,
Highland & Islands Enterprise
Donna Chisholm
Professor & Director of
Centre for Entrepreneurship
University of Strathclyde
Jonathan Levie
Serial software entrepreneur
and influential investor
Ian Ritchie
Editor
Young Company Finance
Jonathan Harris
56©2024 Stern
STRATEGY

@MIT_REAP 59©2024 Stern
Team Scotland – IMPACT
MIT REAP Cohort 1 (2012-2014)
“ e don’t ee the olution erie of ll intervention , but
rather a repositioning of the pieces of the ecosystem so that they all
work more effectively and the linkages are continuous.
r n for tion l ch nge doe n’t h ppen overnight; ou need to
understand the system very well and how to facilitate mindset
change and create societal role models. MIT REAP is playing an
important role in influencing the direction that we want to take to this
end.”
– MIT REAP Team Scotland’s Champion Donna Chisholm

@MIT_REAP 64©2024 SternCORE TEAM
EXTENDED TEAM
ADVISORS
Patricio Villarreal
Alivio Capital
Rogelio de los Santos
DalusCapital
Victor Treviño
FEMSA
Martin Herrera
CEMEX
Edgar Muñiz
ITESM
Antonio Ríos
ITESM
Julio Noriega
ITESM
Martha Leal
I2T2
Peter S. Cohen
Babson College
Brad Feld
Foundry Group
Nicolas Negroponte
Media Lab
Peter Diamandis
X Prize
Bill Aulet
MIT Martin Trust Center
Opportunity generators
Information disseminations
Collaboration
Deal flow
Investment
Mentors
CORPORATE CORPORATE UNIVERSITY UNIVERSITY
ENTREPRENEUR CAPITAL UNIVERSITY GOVERNMENT
STARTUP CITIESSTARTUP COMMUNITIES NEXT BIG THINGS
MOONSHOTS ENTREPRENEURSHIP MONTERREY
The 1st. Venture Cafe
in LATAM

@MIT_REAP 66©2024 Stern
STAKEHOLDERS
Each of these acceleration strategies resulted from
systematic stakeholder engagement…

@MIT_REAP
Since the precise
configuration of
ecosystems differs, the
impact of a potential
Engine depends on
“matching” strategic
intervention to potential
bottlenecks, latent
capacities, or
addressing critical
“missing pieces”

@MIT_REAP
Towards Ecosystem Impact
LATENT STRENGTHS AND BOTTLENECKS
STRATEGIC INTERVENTIONS
STRATEGY-SPECIFIC OUTCOMES
ECOSYSTEM OUTCOMES

@MIT_REAP
MIT REAP
Strategic Interventions
MIT REAP
Alumni Teams
Examples
COMMERCIALIZATION AND
ACCELERATION PROGRAMS
14
Hangzhou, New Zealand, Scotland, Vera Cruz, London,
Puerto Rico, Al Madinah, Ashdod, Southwest Norway,
Lima, Saudi, Sydney, Abuja, STL
INNOVATION PARTNERSHIPS 16
Andalusia, Wales, Dubai, Iceland, Madrid, Nova Scotia,
Kentucky, Campania, Monterrey, Fukuoka, New Taipei,
Rio, Hungary, Kansas City, Piaui, Western Australia
HUMAN CAPITAL AND
WORKFORCE DEVELOPMENT
7
Bangkok, Beijing, Santiago, Tokyo, Queensland, Oslo,
Caldas
INVESTMENT AND RISK CAPITAL 3 Central Denmark, Singapore, Yakutia
Strategic Interventions

@MIT_REAP
0
2
4
6
8
10
12
AcceleratorCenterCompetitionHackathonEventsEducation Other
PROGR “ B”
MIT REAP Impact
h t re the o t co on progr tic “ u t in B ttle ”?
•Almost all teams that completed the
MIT REAP program established at
least one ”Must Win Battle”
•Accelerators, Centers and Education
come out top among programmatic
MWBs.
•At least eight teams also made
significant POLICY interventions

@MIT_REAP
REAP Teams offer a lens to see “what
is possible” from engaging in an
innovator-focused stakeholder-led
approach to ecosystem acceleration.
72©2024 Stern

@MIT_REAP
•What was the “system”-level challenge that Team Leeds City
Region was trying to address?
•What stakeholders were they able to engage? Not engage?
•What did Team Leeds City Region choose to do (and NOT do) as
part of the process of choosing an acceleration strategy? What
challenges do they face going forward?
75
Buzz Group….
Team Leeds City Region
©2024 Stern

10:45 – 11:45 AM
Report Out I: Intro to Your Regional Ecosystem
NEXT
10:30 – 10:45 AM
Break
NOW
@MIT_REAP

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