Why is it Significant?
Universities and other non-profit research institutions are critical to the Massachusetts Innovation Economy. They advance basic science and create technologies and know-how that can be commercialized by the private sector. This R&D also contributes to educating the highly-skilled individuals that make up one of Massachusetts’ greatest economic assets. The National Institutes of Health (NIH) is the federal government’s main source of funding for medical research. Awards from the NIH help fund the Commonwealth’s biotechnology, medical device, and health services industries which together comprise the Life Sciences cluster.
Industry funding of academic research is one measure of industry-university relationships and the ability to transfer academic research into the commercial market. Industry-university research partnerships may result in advances in technology industries by promoting basic research that may have commercial applications. Moreover, university research occurring in projects funded by industry helps educate individuals in areas directly relevant to industry needs.
Venture capital (VC) firms are an important source of funds for the creation and development of innovative new companies. VC firms also typically provide valuable guidance on strategy as well as oversight and governance. Trends in venture investment can indicate emerging growth and recruiting opportunities in the Innovation Economy. Empirical research suggests that the amount of VC in a region has a positive effect on economic growth.