Stanford-Rooted Companies Would Form World-Sized Economy

Almost 40,000 active for-profit companies trace their roots to Stanford University, and if they formed an independent country, it would be the world’s 10th largest economy, a study found.

The companies’ combined annual sales of about $2.7 trillion have generated an estimated 5.4 million jobs since the 1930s, according to the study released last month by Charles Eesley, an assistant professor in management science and engineering, and William Miller, an emeritus professor of public and private management, at the college near Palo Alto, California.

The entrepreneurial community at Stanford played a key role in attracting future business founders to the school, Miller said. In the past decade, 55 percent of alumni who started companies said they chose Stanford specifically because of its entrepreneurial environment, the study found. The university first offered classes in small business and entrepreneurship after World War II. Stanford graduates have also created about 30,000 nonprofit organizations.

In 2011, Eesley sent an e-mail survey to 142,496 Stanford alumni, current faculty and selected research staff. He received responses from 27,780 individuals. About 23 percent of survey recipients with connections to the business school responded.

The study doesn’t name the companies that participated and offers only a partial list of those that didn’t respond, including Hewlett Packard Co. (HPQ), Cisco Systems Inc., Yahoo! Inc. and Google Inc. (GOOG), the Internet giant founded by alumni Sergey Brin and Larry Page. These companies aren’t figured into the methodology.

The Stanford study was modeled after a similar study Eesley helped conduct when he was a doctoral student at the Massachusetts Institute of Technology, based in Cambridge, Massachusetts. By the end of 2006, that study found that living MIT alumni had created 25,800 still active companies, which employed 3.3 million people and produced annual global revenues of almost $2 trillion, the school said.

To contact the reporter on this story: Alison Damast in New York at adamast@bloomberg.net

To contact the editor responsible for this story: Louis Lavelle at llavelle@bloomberg.net

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Companies With Stanford Roots Would Form 10th Biggest Economy

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An aerial view of the Stanford Graduate School of Business.

An aerial view of the Stanford Graduate School of Business. Photographer: Proehl Studios/Corbis