Kara Baskin | MIT Sloan School of Management
August 1, 2016
London had a problem. In 2013, the capital was a hotbed of entrepreneurship, rife with early-stage businesses—nearly 500,000 launching per year. It was ranked a top city for startups by Nesta’s European Digital City Index. Its visa connections, tax incentives, and multicultural demographics made it a prime place to launch companies.
But many of London’s small businesses couldn’t quite scale up after the initial launch. They lacked ongoing funding sources, access to new markets and customers, and the kind of cohesive mentorship frameworks that transform startups into sustainable forces. Business insiders lamented that potential stakeholders and investors—financiers, government, academia—often had trouble networking to foster ongoing growth. How could businesses thrive?
Catalyzing change through influential stakeholders
Enter the MIT Regional Entrepreneurship Acceleration Program, known as MIT REAP, a two-year global executive education initiative designed to facilitate economic growth, social progress, and job creation in promising regions worldwide.
Since launching in 2012, the program has supported more than 20 regional economies from Morocco to Scotland to Singapore.
Typically, a well-connected local stakeholder—a “champion,” in MIT REAP parlance— applies with an urgency for change and a vision coordinated with a carefully comprised regional team. Each region’s team must include five representatives from required stakeholders: government, corporate, academia, risk capital, and entrepreneurship.
Regional teams are accepted to the program for their growth potential and unique entrepreneurial bona fides. MIT REAP admits up to eight partner regions each year, and a typical region has between 1 million and 10 million people.
“The program is a practical way for regions with strong capabilities to engage with MIT as they work to create more jobs and help the area become more economically vibrant,” says MIT REAP executive director Sarah Jane Maxted. “We select regions in part for their capacity for growth and innovation.”
The goal? Within two years, a “deliverable” tailor-made to boost the local economy.
MIT resources. Local solutions.
London was a prime target. The results could be huge: Research indicated that increasing the U.K. scaleup population by 1 percent could drive more than 238,000 jobs within three years.
And so a team of British influencers applied to MIT REAP from University College London and Loughborough University; RBS/NatWest and BT; UK Business Angels Association; UK Trade & Investment; plus several entrepreneurs. Their goal? To launch a development program for business leaders who wanted to scale their nascent companies into high-growth businesses but didn’t quite know how.
MIT REAP uses a multi-phased model on-site and remotely from the MIT campus to help each team execute its region-specific deliverable. It fosters what it calls “innovation-driven entrepreneurship” through interactive workshops and “action phases.” MIT faculty members shepherd teams through data discovery, competitive analysis, and implementation of the deliverable.
Participants attend three-day educational workshops twice a year for at least two years, where they learn the theory and practices of accelerating innovation-based entrepreneurship. Between workshops, they engage in MIT-led, action-oriented activities in their regions, using faculty coaching to share analysis and execute action plans. Meanwhile, members have access to the MIT faculty, leading-edge research, and tools and frameworks that help each team move from ecosystem analysis to real-world implementation.
Essentially, MIT REAP acts as a strategic facilitator and advising partner. Unlike consulting agencies, there’s no drive for profit.
“There are clear benefits that we have at MIT. We’re simply focused on how to help a region achieve what they need to achieve, without that overhead concern of making our numbers. There’s a lot of benefit, but less risk,” says Maxted.
An unprecedented networking opportunity
And thus London’s Growth Builder was born. The yearlong program offers hopeful entrepreneurs unprecedented access to high-growth peers and bespoke scaleup coaching. By 2020, Growth Builder aims to coach at least 200 businesses per year by leveraging expertise, networking, and funding support across all five sectors, from academia to corporations. The organization will host regular tutorials, workshops, high-profile speakers, and curated networking events with an ever-growing alumni network.
So far, so good: Growth Builder launched in February, receiving more than 100 applications and offering slots to 48 businesses. A kickoff event garnered plenty of media coverage; since then, similar business support programs have emerged. Clearly, the team identified a gap.
“The best thing REAP did was help us form a model of what a team should look like, and it gave us structure over two years,” says Growth Builder’s Laura Parker. “MIT has such strong practical expertise. A lot of universities focus on theory, but REAP was focused on practice, which was really quite refreshing. Today, we have 48 businesses on the program. Thanks to MIT, this has gone from a discussion to reality.”
Read this article on MIT Sloan.