Massachusetts is home to some of the world’s leading technology and clean energy companies. The vast talent pool and cutting-edge research and development being generated by our colleges and universities makes Massachusetts the envy of other states and nations.
However, there are real challenges that threaten our competitiveness, and many of them are self-inflicted. We need to do more to maintain and extend our competitive edge or risk losing the jobs and economic engines that are so vital to the continued success of our knowledge-based economy.
At the Massachusetts Business Roundtable and the Massachusetts Competitive Partnership, public policy organizations representing some of the state’s largest employers across industry sectors, we are focused on strengthening the state’s long-term economy and making Massachusetts a highly desirable place to do business. Our competitiveness agenda calls for investing in our competitive advantages and re-focusing on our disadvantages.
While the Commonwealth has many tremendous advantages over other states and countries, Massachusetts is a high cost place to do business, which negatively impacts the ability of our businesses to invest and grow here. In a hyper-competitive global economy, where margins are razor thin and jobs are being eliminated, even slight increases in cost can tip the scales against growth in our economy.
The state is working hard to reign in health care costs while appropriately striking the right balance between cost, access, quality, and jobs in the health care sector. Sadly, the same type of coordinated effort is not happening with another major cost driver — energy — that is hurting our competitiveness. The simple, difficult truth is that Massachusetts has the sixth highest electricity rates of all states in the nation. This is a severe drag on economic activity that must be addressed with the same zeal and careful balancing that we are employing right now in health care.
Business leaders in Massachusetts want to strike the proper balance between economic competitiveness and harnessing alternative energy sources. To be clear, the business community strongly supports diversifying our energy portfolio — as indicated in the state’s economic development strategy, “Choosing to Compete in the 21st Century,’’ which we helped develop.
The economic development strategy calls for pursuing clean, cost-competitive renewable energy and energy efficiency technologies such as wind, solar, and hydroelectric power. Indeed, the state has a deep pool of innovative young companies, terrific access to venture financing and all the ingredients necessary to develop new, leading clean energy technologies. In fact, Massachusetts has enjoyed strong support from the federal government and from Governor Patrick to develop exciting projects such as the state-of-the-art wind testing facility in Charlestown, an example of a project that plays to our strengths in this state.
But as we develop these technologies, we must pay keen attention to our already burdensome energy costs. All investments in this sector — be they public or private — in high cost projects such as the Cape Wind Project and others must be balanced with careful consideration of the negative impact they could have toward exacerbating an already crippling competitive disadvantage for the state. In an era of fiscal austerity and severe budget cuts at the federal and state levels, it is even more urgent that both the risks and benefits of public investments are weighed, particularly those that will significantly increase electricity costs for businesses and individuals.