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Massachusetts tech job growth lagging
Mass High Tech: The Journal of New England Technology
December 18, 2006

Massachusetts is at risk of losing ground in key technology clusters, a new report shows.

While Massachusetts remains a magnet for research funding, venture capital dollars and patentable technology, the Bay State is weak in job creatio, according to a report released today by the Massachusetts Technology Collaborative. Seed venture capital investment in Massachusetts is down and the Bay State's young, skilled work force is dwindling.

The tech collaborative, a quasi-state agency, released the 60-page report on the state of the Massachusetts innovation economy. The report rates Bay State industry clusters against leading technology states including California, North Carolina and Virginia.

For instance, life science research emerging from Massachusetts companies is not creating commercial jobs and capital at the same rate as California.

"The life sciences industry is ours to lose," said Pat Larkin, director of the Massachusetts Technology Collaborative's John Adams Innovation Institute. "It's a warning sign."

Today's released findings corroborate issues technology executives and industry pundits have been discussing all year -- particularly that the state's labor-supply problem needs a concerted response in 2007. A separate report published earlier this month by The Massachusetts Institute for a New Commonwealth (MassINC), shows the Bay State labor force remained flat from 2000 to 2005 while the national labor force grew by 5 percent.

Other key Bay State findings of the Massachusetts Technology Collaborative report include:

• Publicly traded health care technology companies grew at an average annual rate of 22 percent from 1996 to 2005. Massachusetts maintains the highest-in-the-nation per-capita research investment in local research institutions by the National Institutes of Health. However the cluster faces challenges from California, Minnesota, and North Carolina.
• The defense manufacturing and instrumentation industry continues to shrink. Bay State employment rates in the defense industry dropped by 1.8 percent from 2004 to 2005, but went up, for instance, 6.2 percent in North Carolina during the same period.
• After significant declines since 2001, the software and communications services cluster in Massachusetts is experiencing a modest recovery. Patent applications and venture capital invests are both on the rise.
• The scientific, technical and management services cluster is the fastest-growing cluster in the state. Employment rose by 5.4 percent from 2004 to 2005. Employment rates in places such as Virginia rose 14.1 percent during the same period, the highest percentage growth of regions examined in the report.
• The percentage of total U.S. patents granted to Massachusetts remained flat from 1995 to 2005, while California's total percentage of patents granted rose from 16.2 percent to 23 percent during the same period.
• Massachusetts companies won four times as many Small Business Innovation Research (SBIR) grants than companies in California in 2005.