GE Can Help Boston Lead Internet of Things Era, Steve Case Says

The U.S. tech industry’s center of gravity shifted from Boston to Silicon Valley during the rise of consumer Internet companies. But the Boston area has an opportunity to be a leader in software’s next era, particularly around the emerging “Internet of things,” according to AOL co-founder Steve Case.

And GE’s move here will give Boston a big leg up in those efforts, Case said Thursday, during an event promoting his new book, “The Third Wave.”

“I think it sends a big signal that Boston, which has always been strong in startups and entrepreneurship, is well positioned for what I’m calling this third wave,” Case said.

His premise is that the “first wave” of the Internet was the era of AOL and other companies that helped consumers connect to the Internet. In the next phase, companies built software and apps on top of the Internet—think Google, Facebook, and Snapchat. Now, Case argues we’re entering a “third wave” in which technology will remake major sectors like healthcare, education, government services, food systems, banking, and so on.

The “industrial Internet” will play a significant role in tech’s next chapter, Case said, as GE and others help integrate sensors, networking technologies, and analytics software into factories and other business settings.

Some locals have raised concerns over the $145 million in local and state government incentives used to entice GE to relocate its headquarters from Fairfield, CT, to Boston. In general, Case said he’s “not a big fan” of such tools. But “in this case, I think it was brilliant.”

Steve Case

Steve Case

“It’s going to lift up Boston more than people think,” Case said.

He said locals should judge GE not just by its number of local employees. It’s also about “building the ecosystem and becoming more connected to startups and entrepreneurs here.”

The Boston area played a critical role in the early years of the Internet. Case pointed to BBN Technologies (now part of Raytheon) as one of several local companies that “created some of the core technologies that made the Internet possible.”

But over the past 15 years or so, “Boston was somewhat missing in action,” Case said.

“I don’t mean that disrespectfully, but the reality is the Facebooks and Twitters and Snapchats and so forth were not here,” he said. “Obviously, Facebook started here and moved. That was a sign that while a lot of things are happening in biotech in Boston, in terms of the consumer Internet, it was less important in the second wave.” (Bostonians heard that same sentiment earlier this week from none other than GE chief executive Jeff Immelt.)

Case said Boston lost ground to Silicon Valley because its tech community got too cautious and its investors too often backed away from risky ideas. “They thought some of the ideas were just too crazy. And that’s when Silicon Valley said, ‘We’re going for it.’”

Boston has the requisite tech talent, but it needs to “swing for the fences,” Case said.

“It needs to get that fighting spirit back again,” Case said. “This issue of fearlessness and pushing is critical.”

Jeff Engel is a senior editor at Xconomy. Email: jengel@xconomy.com Follow @JeffEngelXcon

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