Wednesday, August 3, 2011

How I See It

Enhancing the business infrastructure of Massachusetts

By Steve Krom, vice president, AT&T

As we face the economic challenge of our lifetime, we in Massachusetts take solace in the fact that our business ecosystem is one of the most innovative in the world. In fact, CNBC just ranked Massachusetts No. 6 on its 2011 roster of America’s Top States for Business. This is valuable recognition in the near term, but it does not guarantee success in the long term. While celebrating the many assets and successes of our region, we must work to better understand and invest in overcoming structural deficiencies that will otherwise weigh on our ability to succeed in the global economy for generations.

So what does success look like, and what must we do to move forward aggressively? The MassTLC set a challenge of creating 100,000 new tech jobs by 2020. The council articulated its challenge as a number of jobs, but our aspiration is arguably more about the kind of business environment that would result in the rise of new companies and, of course, the associated jobs. The council’s challenge requires the creation of hundreds of small, innovative companies, continued expansion of our mid-market companies, and the emergence of a number of new $1 billion companies over the coming decade. We should not assume that it can be done with our current business infrastructure. We must address the structural impediments and opportunities that are real but not insurmountable.

How does Massachusetts compare?

First, let’s celebrate what is working. CNBC ranks us No. 2 in access to capital, No. 3 in technology and innovation, No. 4 in education, No. 10 in quality of living and No. 15 in both economy and business friendliness. While the rankings for access to capital and for technology and innovation have remained constant, education slipped from No. 1 in the 2010 ranking to No. 4 in 2011. We need to continue to invest and nurture our strengths to remain competitive in the global economy.

We should also look at areas where we compare less favorably to other states. Cost of living and cost of doing business remain high, tied in 41st place. While cost of living and cost of doing business are balanced by our strong quality of life and our strong economy and business friendliness, we should reduce these costs. Our transportation and infrastructure ranking has improved from No. 39 to No. 29, but we know we need to make more investments if we are to capitalize on the potential.

The economy in Massachusetts has been recovering faster than the national average, so our need for talented workers is also growing. This might help explain why our ranking slipped from No. 23 to No. 31 on workforce. We need to continue to address the shortage of skilled programmers and engineers that are the engines of our economic resurgence.

What big moves can we make? Density and proximity of talent, research, capital and entrepreneurs accelerate company formation. We must create more physical density, along the lines of the Cambridge Innovation Center and MassChallenge, that tie together universities, service companies, startups and government. An emerging tech fund modeled after the fund based in Austin, Texas, could target capital for startups housed in these centers. Government can assist by revising the corporate tax structure to encourage R&D investment.

• Let’s keep the best and brightest here in the commonwealth by supporting the Visa/Green Card initiative.

• Connect more of our universities to businesses via co-op/internship programs.

• Build a plan that would encourage private investment for the expansion of broadband services in Massachusetts.

A Massachusetts industrial policy comprising these actions would clear a path for creation of billion dollar companies based in Massachusetts and bring us down the path to meeting our challenge of creating 100,000 new tech jobs by 2020.  

 

Steve Krom is a vice president at AT&T.