CAN A MANAGEMENT SCHOOL provide business leaders the tools and strategies they need to boost innovation and economic growth in their corners of the world? With the goal of proving that the answer is a resounding “yes,” the Massachusetts Institute of Technology in Cambridge has crafted the MIT Regional Entrepreneurship Acceleration Program (MIT REAP). This ambitious initiative convenes teams of high-powered stakeholders and guides them through devising interventions that could have broad economic impact in their localities.
MIT REAP ran its first pilot program in 2012 under the guidance of three MIT Sloan School of Management faculty members: Scott Stern, the David Sarnoff Professor of Management of Technology; Fiona Murray, the William Porter Professor of Entrepreneurship; and Bill Aulet, a professor of practice, technological innovation, entrepreneurship, and strategic management, and managing director of the Martin Trust Center for MIT Entrepreneurship.
While the topic of “entrepreneurial ecosystems” has become one of great importance, there are many examples of failed projects due to “unsystematic thinking and implementation,” observes Aulet. “We felt that by taking a rigorous, systems approach, we could make a significant contribution to more impactful solutions in this area. We also felt we could serve as a convening platform to build a committed community so that we all can learn what works and what doesn’t.”
Since it was first piloted, MIT REAP has evolved into an intense and carefully structured two-year program that annually admits up to nine regional teams into each cohort of changemakers. Every team must include five different types of stakeholders: entrepreneurs, risk capitalists, corporate leaders, government leaders, and university representatives. Each phase of the program is titled according to its function, as either a Workshop or an Action Phase. Over the course of the program, the teams come together four times for immersive three-day Workshops, then return home for long Action Phases where they can begin to implement some of the ideas and strategies they’ve developed.
Maxted notes that the program has changed a great deal since that first year, but it still revolves around three key tenets: assembling the right stakeholders, devising the right strategies, and assessing the results.
Before participants can apply to the program, they must put together a team that includes members from the five major stakeholder groups and is led by “a strong champion or co-champions who have a record of success in the innovation ecosystem,” says Maxted.
She and her team spend a substantial amount of time helping potential participants identify the local catalysts who might fill the five stakeholder slots and be deeply committed to the program. “We ask, ‘Who would you put in those groups and how can we help you in those conversations? What materials can we provide? Can we join a video conference or speak to somebody on the phone?’ Ultimately, it’s really up to the leaders in that region to put a team together. If the region isn’t ready for the program, we’re not going to push it.”
She looks for stakeholders who have a sense of urgency about the need for change. “Maybe there’s been talent flight in their region, or maybe it’s impossible to scale businesses, but something is causing leaders to think change is needed.”
Maxted has spent anywhere from three months to two years cultivating interest among potential participants, and she finds that the process varies widely. At times, there are multiple catalysts in one region, but they can’t get a team to jell. At other times, a team falls smoothly into place and members begin forming partnerships before they even attend the first meeting. “Sometimes the biggest impact we have is during the months or years we work with regions as they form their teams,” Maxted says.
One of the first tasks of any new team accepted to MIT REAP is to secure the funding to cover the fee for the program. “We definitely see this as a forcing mechanism to make them take the program seriously and commit to it as a team,” says Maxted. “We strongly encourage them to have a diverse funding portfolio that includes public-private funding across at least two parties. This helps create some accountability across the team and acts as a tool to make them work together.” Because the fee doesn’t entirely cover the cost of the program, MIT also offers financial support to develop and grow the initiative.
What of the many stakeholders and regional catalysts that Maxted cultivates but who never end up joining the program? Maxted believes they, too, have benefited from their contact with MIT REAP. “What we care about is getting information out there to help regions do a better job. We hope that maybe 50 of those people who don’t apply still end up changing something about their innovation ecosystem just because of the conversations we’ve had and the materials we’ve sent. The wheels are turning, the energy is there, the momentum is building. That’s a win for us, whether or not teams join the program, because ultimately the entire world is one big ecosystem.”
Once the teams are assembled and admitted into the program, each one makes a two-year commitment. Because a new cohort is admitted every year, each group overlaps with previous and successive cohorts, allowing participants to interact with regional leaders from around the world. “We try to maximize the amount of peer learning and interactions, both formal and informal,” says Maxted.
The four three-day Workshops mix lectures, discussions, cross-networking events, and team exercises. Workshops are held in October and June of the first year and in January and June of the second year. Both the second and fourth Workshops are scheduled to overlap with those of other cohorts for a day and a half.
Each Workshop is structured around a theme. The first one focuses on level-setting as team members discuss what they want to accomplish in the next three to five years. During this Workshop, the participants are exposed to a great deal of entrepreneurship research produced by MIT faculty. “This includes everything from basic design thinking to Scott Stern’s work on clusters in innovation theory to Fiona Murray’s work on innovation policy,” says Maxted. Other core faculty in the program, including lecturers Phil Budden and Shari Loessberg, can speak about stakeholder challenges such as gaining access to risk capital or enduring government transitions.
“We try to understand what is going on at the system level in any region we’re working with. This helps the teams understand what’s working now and what they could do better,” says Maxted.
Not only do the participants join team discussions on specific topics, they take advantage of a variety of cross-cohort opportunities. “We might have all the risk capitalists work on something together, and all the government people work on something together,” says Maxted. “We also set learning goals to help them think more innovatively as leaders.”
The teams return home and begin working on the actions they have decided will best suit their regions. During these Action Phases, teams typically meet at least once a month. The MIT REAP staff members set up three or four video conferences with each team during the Action Phases, and the core faculty also do site visits at least once to each region during the two-year program.
The cohort reconvenes for the second Workshop, which is devoted to strategy. Team members discuss how they can develop strategic plans and what interventions might help them address specific issues. Depending on the region, the action could be as small as sponsoring a hackathon or competition or as big as launching a center for innovation or changing legislation,” says Maxted.
For instance, Team Andalusia determined that its region had few systems for supporting startups and spinoffs. After exploring ways the government could encourage new business creation, the team launched a bio-health accelerator and an organization devoted to providing mentorship to startups. Team Scotland wanted to help entrepreneurs improve their skill sets and scale up their businesses, so it created programs that would facilitate networking; it also supported competitions that have poured millions of dollars into startups. Team Singapore worked with a government agency called SG Innovate, which has focused on providing early stage seed funding for tech-enabled startups and promoting entrepreneurship in “deep tech” as a career path.
The third Workshop is built around implementation and evaluation. “At this point, teams are either about to implement an intervention, in which case we help them figure out how to get over the last hurdles, or they’ve already done one, in which case we help them evaluate the results,” says Maxted. During the fourth Workshop, teams focus on sustainability and what steps they should take next.
The third event typically is held in one of the member regions and hosted by a participating team, after the MIT REAP staff determines which group has the greatest ability to host eight or nine teams for a three-day visit and provide substantial exposure to the local ecosystem. Last year, the third Workshop was held in Tokyo, and this year it took place in Lima.
Host teams are expected to use the hosting opportunity as a catalyst for launching new initiatives, and they’re generally excited to show off the interventions under way in their regions, says Maxted. Often heads of state and business leaders join some of the activities to show how much local commitment there is to the program. She adds, “Having teams host Workshops is one way to make sure that the strategies are being bought into by the most senior levels of the government, the private sector, and the universities.”
““Five to ten years down the line, we’ll be able to see the impact in big-ticket items like jobs and GDP.”
—SARAH JANE MAXTED, MIT
At the end of the two-year commitment, teams formally graduate from the program—but they become affiliate alumni of the MIT Sloan School of Management and are offered opportunities to stay in touch. MIT recently launched a private platform to support the growing global community of graduated cohorts. This platform, which includes a news feed that is reminiscent of Facebook’s, allows team members to communicate with each other and other cohorts across regions and years. “We hope that it becomes a central repository for useful information related to ecosystem building,” says Maxted.
The fourth cohort just graduated in mid-2018, and there is now enough data to create an impact assessment that lays out what interventions are working best and what factors make a particular group successful. “If we can identify the characteristics of more successful teams, when new ones join, we can tell them, ‘You need to think about these 15 things,’” says Maxted.
Currently, MIT REAP considers three gauges to determine success. The first is strategy, Maxted explains. “Have the teams developed a strategy that everyone has signed on to, and do they know where they want to go in three to five years? Whether or not they accomplish something, a strategic planning document is a marker of some success.”
The second metric considers interventions. “How many did a team have, how successful were they, how many will continue? That’s another way to evaluate success,” says Maxted.
The final element is sustainability. “At the end of the two years, do they have backbone entities that will become the central places for innovation going forward? Is there funding for these entities? Are there enough human resources?” By looking at these three measures, Maxted says, the MIT REAP staff can get a sense of how successful the cohorts are going to be.
But other indicators also help predict success or failure. “When we see any team that’s fallen apart or has real issues, it almost always comes back to the stakeholders at the table,” she says. “Are some of them just sitting there? Or are they really making changes—not only at their own organizations, but to the broader ecosystem? We feel strongly that, to see full-fledged change across the ecosystem, we have to have the five stakeholders involved and really committed.” Otherwise, she says, the intervention ends up being conducted solely by the university or the government, and nothing really changes.
The MIT REAP staff also evaluates the success of the program by the personal and professional growth of the participants, and sometimes that growth has been impressive. For instance, says Maxted, some participants have gone from being, say, heads of incubators to becoming chief innovation officers in the government. “Because each individual is an ecosystem leader, the more we can help each one, the better off the world is, regardless of how successful the team is,” says Maxted. “I would bet that at least 75 percent of the leaders we’re working with will continue to be the innovation leaders of tomorrow.”
Of course, the most significant marker of success—sparking economic prosperity and social progress—is tricky to measure. “If this program is doing well, five to ten years down the line we’ll be able to see the impact in big-ticket items like jobs and GDP,” says Maxted. “But the reality is, will we be able to attribute that kind of growth to a team’s intervention? Probably not, but we will at least be able to say we were part of the journey.”
INSIGHTS FOR ALL
Maxted hopes that, in the near future, the school will be ready to make MIT REAP’s impact assessments available to the public.
“We feel it’s important to disseminate this information, because there are so many regions that need help, and there is no way we’re going to reach all of them,” says Maxted. “I don’t think we’re ever going to have a problem with people not needing help. Even teams that have graduated have asked if they can come back in a few years to focus on a different sector or try something else.”
The goal is to improve the world, not just run a successful program. “We want to be the home for the creation and implementation of models and frameworks that drive innovation ecosystems around the world,” says Maxted. “But can we be a better home? Can we be more collaborative? Do more research? Develop programs that would add more value?” In fact, the MIT REAP team is exploring some of those ideas right now, she adds—for instance, looking into opportunities for regional innovation ecosystem catalysts who can’t commit to the full two-year program.
More changes could soon be on the horizon, and Maxted sees that as a good thing. She says, “For our own sustainability and relevance, we need to evolve. In many ways, we’re a startup, and we’re still growing and scaling. We’re constantly bringing in new material, rethinking our curriculum, and trying to stay agile so we can help these regions be the best they can be.”
This article originally appeared in BizEd's November/December 2018 issue. Please send questions, comments, or letters to the editor to [email protected].
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