The high-tech sector in Massachusetts is booming, and the Commonwealth’s world-class universities and deep talent pool have served as a magnet for both entrepreneurs and some of the world’s largest companies. According to a report from the Mass Technology Leadership Council, over 209,000 people are employed in the sector. That’s more than 6 percent of the workforce, a larger share than financial services and the insurance industry. So it is crucial that Governor-elect Charlie Baker not only protect the Commonwealth’s competitive advantage in tech, but address regulatory roadblocks and cultural issues that could limit the sector’s future job-creation potential. That will require a five-pronged approach:
1) Help Boston, and to a lesser extent Cambridge, become the sort of cities that techies want to call home by loosening restrictions on quality of life issues such as closing hours and liquor licences.
2) Partner with universities and other nonprofits in cities such as Lowell and Springfield to create incubator spaces for startups, while insuring these gateway cities have adequate transportation options connecting them to Boston.
3) Increase the job pool for tech companies by ensuring that computer skills become a key part of K-12 education and community college retraining programs.
4) Foster an open-door policy for business leaders and entrepreneurs, while nudging legislators on Beacon Hill to do the same.
5) Pass legislation to end the practice of enforcing noncompete clauses, which stifle innovation by making it difficult for employees to leave their firms or start new ones.
Harvard and MIT have already given major pharmaceutical and biotech companies a reason to relocate to Greater Boston. The research done by scientists at local colleges has been an economic engine, creating jobs in robotics, clean energy, security, and data systems. Employment opportunities abound, but the Hub is still losing young people to other high-tech centers like Silicon Valley, often for reasons of lifestyle.
State government can help solve this problem. Baker should push the Legislature to increase the number of liquor licenses available in the Boston area, while working with municipal governments to cut the red tape that can stifle the region’s nightlife and cultural institutions. Restaurants, bars, and cultural venues add vitality to the city, and will give people a reason to stay. It’s also important to remember that Boston is losing tech talent to San Francisco, a city with a higher cost of living than the Commonwealth. While building more affordable housing is certainly a goal in its own right, it probably won’t do much to convince highly paid software engineers to stay.
Baker should also focus attention on bringing some of the energy that invigorates Kendall Square to the gateway cities. To do that, Baker should partner with colleges and nonprofits to provide funding and space to startups willing to settle outside of Greater Boston. UMass Lowell already does this, and has had great success at turning Lowell into a center for medical devices manufacturing. Baker should replicate this success by finding state-owned buildings in places like Lawrence, Holyoke, and Springfield that can hold young companies. Providing funding will be harder, but creative use of state resources might spur more interest from private sector investors.
Finally, leaders in the tech industry — whether they’re CEOs of major companies or running startups with just a handful of employees — need to know they have a friend in the corner office. Baker should be a presence at tech summits and industry gatherings, and he should encourage lawmakers on Beacon Hill to do the same. Luckily, some are already doing so. State Senator Karen Spilka and state Representative Ann-Margaret Ferrante have made it a point to reach out to tech leaders. The reason to do this is twofold: By showing up, Baker demonstrates that he considers tech a priority. And by meeting with leaders in the field, he can open channels of communication that could lead to smart policy down the line. Last year’s tech tax debacle was caused in large part by a misunderstanding, on the part of both the governor and the Legislature, of how IT firms operate. Fostering relationship with business leaders is the best way to encourage that sort of understanding.
The Massachusetts tech sector is strong — for now. Baker needs to find ways to protect the Commonwealth’s competitive advantage to ensure that the next generation of IT firms — and the job’s they’ll create — stay here.