MIT Churns Out New Ciscos, Akamais, E-Trades

CAMBRIDGE, Mass. (TheStreet) -- Which factory is responsible for the employment of 3.3 million people who generate annual revenue of $2 trillion?

The high-tech entrepreneur factory known as the Massachusetts Institute of Technology in Cambridge, Massachusetts.

Alumni of the school, located two subway stops from Harvard University, have founded Intel(INTC Quote), Qualcomm(QCOM Quote), Raytheon(RTN Quote), Teradyne(TER Quote), E-Trade(ET Quote) and almost 26,000 other companies. MIT was founded in 1861 as the U.S. was becoming industrialized.

Among companies formed by former MIT students that are still active today, 2,900 were founded in the 1980s, 5,900 in the 1990s and 5,800 from 2000 to 2006, according to a February study from the Kauffman Foundation.

While throwing together a few thousand geniuses would breed innovation at any university, the growth of the startup success rate at MIT is due, in part, to the MIT Entrepreneurship Center. Found in 1990 by entrepreneur and investor Edward Roberts (who also co-founded Chinese search-engine company Sohu.com(SOHU Quote)), the center nurtures potential corporate superstars. It brings together money-minded students at the university's Sloan School of Management and the brains in the science labs.

"MIT is a phenomenal hotbed of entrepreneurship," says Matt DeBergalis, a 2000 graduate who co-founded the online political action committee ActBlue in 2004.

There's the MIT $100K Business Plan Competition, an annual contest that gives student entrepreneurs the opportunity to compete for cash prizes and, more importantly, to get feedback from investors and potential partners. The competition has led to the founding of more than 120 companies, including Akamai(AKAM Quote), Webline Communications (acquired by Cisco(CSCO Quote) in 1999), Silicon Spice (bought by Broadcom(BRCM Quote) in 2000) and Harmonix (purchased by Viacom's(VIA Quote) MTV in 2006).