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State tech economy growing, but not fast enough

Google’s offices in Cambridge.Yoon S. Byun/Globe Staff

The state’s tech sector is growing fast, but a shortage of qualified workers is preventing Massachusetts from becoming the capital of the nation’s innovation economy, according to an industry report being released Thursday.

In recent years, new Web startups have cropped up around Kendall Square and an entire Innovation District has grown up along the South Boston Waterfront. But for Massachusetts to remain a technology powerhouse it needs to do more to attract skilled engineers and educate the next generation of programmers and software developers, according to the report from the Mass Technology Leadership Council.

“Creating the jobs isn’t the hard part — filling them is the hard part,” said Tom Hopcroft, chief executive of MassTLC, the state’s largest tech organization. “We can’t find enough people with the skills to fill all of these tech jobs.”


The organization has laid out an ambitious goal of creating 100,000 tech jobs by 2020. But already the state is behind, adding only 11,000 positions between 2009 and 2012. A full 100,000 new jobs by the end of the decade would pump $8.2 billion in additional wages into the state’s economy.

“We have the raw ingredients to take it to the next level,” said Hopcroft. But, “we can’t find enough people with the skills to fill all of these tech jobs.”

Indeed, within Massachusetts technology is not the fastest growing employment sector: hospitality, professional services, and health care all added new jobs at a faster rate from 2009 to 2012.

Moreover, other regions around the country are catching up to Massachusetts in technology activity. Indeed, New York is attracting a growing number of technology startups and a bigger share of venture capital dollars and deals, and New York City is even building a technology campus in an effort to compete with the Massachusetts Institute of Technology.


“The competition is pretty fierce,” said Hopcroft.

The 2014 State of Technology Report is the first broad survey of the industry by the organization since 2009. Among all states Massachusetts has the largest concentration of jobs in tech manufacturing and is second only to North Carolina in the rate of adding new positions throughout the tech industry.

The Boston area is also home to some of the nation’s leading venture capital firms, and its universities are spinning out dozens of fresh startups. Every week it seems a host of companies are born, while others report raising millions of dollars in venture funding or tech giants such as Amazon.com or Facebook Inc. seek workers in Cambridge.

The exuberance around tech was on full display Wednesday afternoon at an event in the Innovation District to kick off the fifth year of MassChallenge, a contest that provides seed money to promising tech startups.

Both Governor Deval Patrick and Mayor Martin J. Walsh of Boston were on hand to laud the success of MassChallenge, holding it up as an example of how to create tech jobs in Massachusetts.

Still new to the office, Walsh seemed surprised to learn MassChallenge has helped startups in its program create about 4,000 jobs. “We are going to make sure that companies that start up in Boston stay in Boston,” Walsh said Wednesday, “and not go off to California.

Massachusetts is certainly fertile ground for continued growth. But to ensure that technology grows at a faster rate, MassTLC is calling on the state government to help — for example, the organization is urging candidates in the gubernatorial race to specify their plans for the tech sector.


The report is indicative of a new activism taking root among tech firms and Web entrepreneurs. MassTLC plans to follow its state of technology report with a set of policy recommendations it believes will help speed the growth of tech in Massachusetts.

Last year’s debate over a short-lived tax on software services awoke many in the industry to the value of paying attention to Beacon Hill. The so-called “tech tax” was repealed only after the tech community took notice and started speaking out.

Tech executives have also been more vocal about pushing for computer science education in public schools.

Executives from tech giants such as Google Inc. and Microsoft Corp. have banded together to advocate that Massachusetts start offering computer science classes as early as elementary school as a way of getting students more interested in tech careers.

Michael B. Farrell can be reached at michael.farrell @globe.com.