How to stoke the innovation economy
Larkin: There’s a cultural gap between industry with its defined timelines for product development and researchers whose job is to pursue knowledge. So you need to create incentives to bridge that gap. You also must have the apparatus in place to transfer technology from labs to industry. The most recent economic stimulus legislation created the Massachusetts Technology Transfer Center as an arm of the University of Massachusetts, and there’s a much more aggressive focus on technology transfer on all the UMass campuses. MTC over the last couple years also invested about $14 million in collaborative research centers, which in turn is leveraging about $45 million in federal and private industry resources. These centers, which typically involve several research institutions and companies, are very valuable in shaping research that meets the needs of commercial enterprises.
WBJ: Which parts of the innovation economy are creating the most jobs?
Larkin: Ironically, the only two sectors that are growing are higher education and innovation services, a catch-all category that includes legal services, finance and consultants. We hope that the vitality of these sectors will provide the critical mass to grow other parts of the economy — from defense to nanotechnology.
WBJ: Where is the venture capital money going?
Larkin: Biotechnology is the largest area of investment, attracting 26 percent of VC money, followed by software at 23 percent. Then you drop down to IT services and medical devices, both accounting for about 8 percent of the funds.
WBJ: How important is your e-Health Collaborative?
Larkin: The cost of healthcare is one of our biggest concerns. MTC recently brought together more than 400 of the state’s leading healthcare experts to explore ways to use healthcare technologies to save lives, while cutting costs. We are working with hospitals to develop a roadmap for installing computerized physician order entry systems in all 52 Massachusetts hospitals that don’t currently have them. The potential savings is $275 million annually.
WBJ: Has California’s funding of stem cell research put this state’s biotech industry at a big disadvantage?
Larkin: Mark Fishman, president of the Novartis Institutes for Biomedical Research in Cambridge, has said that isn’t necessary for the commonwealth to match a $3 billion California stem cell bond offering to be competitive in biotech. It is far more important, he believes, for this state’s policy makers to demonstrate that the biotech industry matters. For example, streamlined state permitting for biotech companies seeking to expand is very important. Clearly, investing billions in stem cell research will provide California with some advantages, and there may be some star researchers or companies in Massachusetts that will move there. But Massachusetts has an extraordinary, broad-based biotech cluster, along with institutions that are not going to move. You need to be in Massachusetts if you want to be a viable company in biotechnology.
WBJ: Biotech aside, how good a job is the state doing in attracting new industry?
Larkin: Massachusetts historically has not spent a lot of money on marketing and sales force activities to lure companies. That said, there’s been increased emphasis by the Romney Administration on taking the state’s research and economic development capacities and aligning them with the needs of companies from inside and outside the state. The Business Connect program is a good model of that match-making effort and should be the centerpiece for economic development.
WBJ: What must the state do to address the shortage of skilled workers?
Larkin: A good example of the creative solutions we need is the STEM pipeline network. This program, started two years ago, provides state funds to encourage more teachers and courses in science, technology, engineering, and math. We also need more focus on workforce lifelong learning. Community colleges should become a more inegral part of the workforce development system. It comes down to a lot of blocking and tackling in our communities and educational institutions to get the resources and make the right connections with industry. There are plenty of examples of our institutions moving quickly to build curriculum that will produce the talent needed to grow the innovation economy.
This interview was conducted and edited for length by WBJ Chief Editor Larry Maloney.
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