Massachusetts Technology Industry Needs a New Deal, Not a New Brand

If Silicon Valley didn’t exist, Boston would have to invent it in order to have someplace to feel inferior to.

That’s the thought that occurred to me when I read an article in the Boston Globe last week about the Information Technology Collaborative. This new posse of industry, government, and academic leaders met in Cambridge recently to discuss the best ways to publicize the information technology sector in Massachusetts. The idea is to recapture some of the luster that Route 128 used to enjoy as the East Coast’s answer to Silicon Valley. The group tossed around new brand names for the state, such as “The Innovation Hub,” but rather than settling on any single message, it decided to commission a $150,000 study to demonstrate how the infotech sector contributes to the Massachusetts economy.

Here at Xconomy, we haven’t gotten directly involved in these kinds of discussions and studies. Nor have we given them much ink. It’s not because we don’t care—on the contrary, our mission is all about chronicling the innovation ecosystems in and around our home cities (which also include San Diego and Seattle). Rather, it’s because we’re usually too busy writing about actual innovators at actual companies—both the successes they’ve achieved and the challenges they face.

Boston’s problem is not a lack of tech entrepreneurship. (If you don’t believe me, check out the 1,700 stories we’ve published on our Boston site alone since our founding 20 months ago.) Indeed, there’s so much amazing innovation going on in Massachusetts already that it seems superfluous to worry about better marketing slogans or how much mental real estate Boston occupies relative to Silicon Valley. It would be far better for economic growth in the state if public-private initiatives like the Information Technology Collaborative focused on a few substantive policy reforms targeting the all-too-numerous obstacles to prosperity for local businesses, technology professionals, and entrepreneurs.

Don’t get me wrong: it’s important to show the outside world, especially businesses considering locating in Massachusetts, that the state has an innovation-friendly government. But elected officials are already doing a pretty good job of that—witness Governor Deval Patrick’s recent tour of the Cambridge Innovation Center and his West Coast trade mission, and Boston Mayor Tom Menino’s creation this week of Boston World Partnerships, a group that hopes to use online social-networking tools to play up the value of doing business in Boston.

So instead of commissioning more studies and devising advertising campaigns to help people “discover” Massachusetts, let’s take a closer look at local problems we could fix and local success stories that could be emulated or amplified. I’m not a policy expert, and other observers could probably come up with a more trenchant or realistic list. But here are just five of the ideas officials could choose from:

1. Clone MIT inventions like the Deshpande Center at other universities in Massachusetts. We probably didn’t need one more report to tell us this, but MIT’s impact on the global economy, via companies founded by its alumni, is gigantic, amounting to some $2 trillion a year, according to a Kauffman Foundation study released last week. The report attributed much of MIT’s success at churning out successful graduates to a well-developed “entrepreneurial ecosystem” in which the institute, the local technology and venture-capital communities, and students themselves all assume key roles.

Kauffman vice president Lesa Mitchell told me the foundation supported the study mainly because it needed to put more data behind its campaign to nurture similar ecosystems at other schools. The foundation just gave the University of Kansas a major grant to set up an organization modeled on the Deshpande Center for Technological Innovation, which matches MIT innovators with business mentors and provides seed funding to get ideas from the lab bench to the prototype stage.

But we need more Deshpande Centers right here. Schools like Babson College, Northeastern, Boston University, and the University of Massachusetts have plenty of innovative faculty and students who could benefit from equal access to experienced mentors and the venture community. Unfortunately, not every school has a wealthy and public-spirited alumnus like Desh Deshpande, who founded Sycamore Networks, willing to pony up the cash needed for an array of seed grants. This is where the state should step in—either with direct grants to schools, or by funneling money through the state’s ample array of quasi-public technology advocacy agencies, like the Massachusetts Technology Leadership Council, the Massachusetts Technology Transfer Center, the Massachusetts Technology Collaborative, and the Massachusetts Technology Development Corporation.

2. Upgrade Boston’s transportation infrastructure to make commuting easier. One obvious project—and an expensive one, though it’s exactly the kind of infrastructure investment that the Obama Administration says it wants to make to put people back to work—would be to add a second set of train tracks to the MBTA’s Fitchburg-South Acton line. Because there’s only a single track west of Acton, there aren’t enough trains to get professionals who live in Boston out to their employers’ offices along the I-495 corridor in the morning, or to bring them home in the evening. If you live in Boston and you work at IBM’s new facilities in Westford and Littleton, for example, the earliest you can get to the office is after 9:42 a.m., when the first outbound train arrives at Littleton/I-495. That’s a business-unfriendly transportation policy if I ever heard of one. The fact is, so many people make the “reverse commute” from the city to the suburbs today that it’s no longer reverse.

And while we’re at it, how about getting serious about fixing the 103-year-old Longfellow Bridge, which, as anyone can see, is a rusting hulk? The Department of Conservation and Recreation recently removed lane restrictions that were in place during a six-month, $12.5 million emergency repair project, but those measures were merely palliative. The disruption to business in both Boston and Cambridge if this vital automobile, rail, bicycle, and pedestrian artery had to be shut down for safety reasons would be massive. Estimates are that rehabilitating the bridge could cost $200 million to $400 million and take 10 years to complete. All the more reason to start now—and as President Obama keeps reminding us, spending is stimulus.

3. Ease siting and permitting hassles for new technology projects. New England has a promising young cleantech sector developing new ways to generate energy from wind, sunlight, wood chips, municipal waste, cow manure, you name it—but ironically, when it comes time to build pilot facilities and go after commercial-scale customers, most of these companies look to places like Florida, Texas, or Michigan, where state and local governments are far more accommodating toward new facilities.

Part of the problem is that New England towns and cities take the “home rule” tradition to a ridiculous extreme. When I visited IST Energy last month to learn about its compact waste-to-energy machine, executives told me the biggest obstacle to selling its technology is the tangle of inspections, reviews, and permits that potential customers face, which are different from town to town. “The best support we could possibly get from the state would be clearing regulatory pathways for all new energy technologies, not just ours,” IST Energy’s vice president of corporate development David Montella told me. “No one would characterize the Northeast as an easy locale” for green energy projects, he said.

Obviously, this problem doesn’t affect information technology companies as severely as it does cleantech firms. Software developers bent over their terminals are a pretty benign bunch, environmentally speaking. But even in infotech, the expense and difficulty of building and permitting facilities like clean rooms for semiconductor research force many companies far out of their way. SiOnyx, an innovative company exploring applications for “black silicon,” settled in an office park in Beverly, MA—quite a hike from both downtown Boston and the core of the state’s electronics industry along Route 128—because that was the only place it could find an existing, unoccupied clean room.

Legislative reforms enacted in 2006 created a system that lets Massachusetts towns opt into a fast-track permitting system, but as of mid-2008, fewer than 50 of the state’s 351 cities and towns had joined, according to Boston-based research and consulting firm Mass Insight. The state government needs to do more to reward communities that adopt fast-track permitting and penalize those that don’t. (You can see how individual towns are doing along several measures of tech-friendliness at masstrack.org, a site maintained by the Massachusetts High Technology Council.)

4. Play up New England’s gay-friendly credentials. Any startup that’s trying to choose between, say, Cambridge and Palo Alto for its HQ needs to consider what kind of environment it will be asking its employees to live in. Is it one that respects the rights of all citizens equally, black or white, Hispanic or Asian, gay or straight? With the passage of Proposition 8 in California last November, outlawing gay marriage, the place that Apple, Google, Facebook, and eBay call home joined the ranks of states where voters have said gay people are not entitled to equal protection under the law.

Eventually, majorities in those states will realize that they are on the wrong side of history. But for the moment, Massachusetts and Connecticut have the right side to themselves—and as I argued in a column in November, it’s time to play up that fact. This is one area where a little marketing wouldn’t hurt. What better way to wake up California and other anti-gay-marriage states than to launch a campaign to lure their most talented gay and lesbian employees here, where they, their spouses, and their families will be fully welcomed?

5. Make non-compete agreements illegal in Massachusetts. Local venture capital leaders like Spark Capital’s Bijan Sabet have been arguing for some time now that the Massachusetts tradition of strict enforcement of non-compete clauses in employment contracts stifles innovation. It prevents qualified engineers or marketers from moving from one company where their services or ideas may not be needed to another where they may well be. It keeps the creative professionals who are germinating ideas and potentially building tomorrow’s leading companies from even talking with one another, for fear of retribution from their current employers. For the new legislative session that began in January, State Representative Will Brownsberger has introduced a bill that would (non-retroactively) disallow non-compete agreements, putting Massachusetts on an equal footing with California in this area. The Patrick Administration should get behind the Brownsberger bill.

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Implementing a few of these business-friendly changes, or the many others being suggested nowadays, would help Massachusetts entrepreneurs keep doing what they’ve always done best—innovate. Take care of that, and the branding will take care of itself.

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Wade Roush is a contributing editor at Xconomy. Follow @wroush

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