FOR A WHOLE bunch of Beacon Hill insiders, last summer was startling. The state’s usually apolitical information-technology sector roared in protest over a 6.25 percent tax on software services. The revolt of the techies helped spell the end of the tax, which was repealed less than two months after it came into effect — with exactly one dissenting vote in the House and none in the Senate.
But now that the dust has settled, the question remains: Did the IT industry’s unexpected activism mark its emergence onto the Commonwealth’s political scene, or will the sector return to its usual slumber after the victory?
Certainly those concerned about the state’s business climate were glad to see the tech execs speak up about the tax. “It was the most damaging proposal I’ve seen in my career — and I don’t say that lightly,” says Michael Widmer, president of the Massachusetts Taxpayers Foundation, the group that first flagged the tax in the budget.
And yet that big victory doesn’t necessarily mean IT has finally found its voice.
Part of the problem is that talking about the “tech community,” as people often do, lumps information workers into a broad category that also includes high-tech manufacturing and tech services and, further, fails to distinguish between small start-ups and established firms. Smaller companies have a very different set of needs than the larger ones, and don’t interact in a regular way with state government.
“The people who have the capacity to think about these issues tend to be from larger companies,” says Tom Hopcroft, president and CEO of the Massachusetts Technology Leadership Council, one of the state’s largest tech associations. “Entrepreneurs have a lot on their plate.”
The result is a mismatch between perception and reality on Beacon Hill. For most of the public (and the media, for that matter) the IT sector is a busy hive of small start-ups founded by bright young people in Kendall Square. But the tech folks legislators hear from are established firms with a regular presence at the State House. Smaller companies lack that presence because they don’t have the time or the money to devote to lobbying lawmakers.
The tech folks legislators hear from are established firms with a regular presence on Beacon Hill, something smaller companies often lack.
The results are as predictable as they are counterproductive. The concerns of the smaller companies that form the bedrock of the Commonwealth’s bustling IT industry often aren’t audible on Beacon Hill. Meanwhile, lawmakers used to dealing with an older generation of high-tech firms have a distorted picture of one of their state’s most important industries.
It will take more than a fight over a tax to change this dynamic. But last summer did serve as a wake-up call for both politicians and tech workers.
“The silver lining of the tech tax is that a lot of people got engaged,” says Hopcroft. “Now, every lawmaker on Beacon Hill knows about the tech sector.”
Some legislators had their epiphany earlier than others. State Senator Karen Spilka, the co-chair of the Tech Hub Caucus, has become a liaison between Beacon Hill and the tech sector. She has spent a lot of time trying to figure out ways of engaging smaller tech companies that don’t have the resources to lobby state government directly.
“We need to be doing more reaching out,” she says. One way of doing that, Spilka says, is by connecting smaller companies directly to state agencies or legislators who can aid them with their problems, either by helping navigate byzantine local ordinances or introducing them into larger organizations that can promote their growth, such as the 495 partnership in Spilka’s district.
That won’t fix the larger issue of small start-ups not having the time to be politically active. Still, fostering working relationships between legislators and entrepreneurs can only be an improvement over the status quo. And if the current state of affairs leads to more misguided laws and embarrassing retreats, state lawmakers will soon come to realize that they need to add some local techies to their Rolodexes.