Study Shows Innovation Economy Drives Job Growth & Investment, Brings New Residents to Massachusetts

Monday, February 10, 2014

Study Shows Innovation Economy Drives Job Growth & Investment, Brings New Residents to Massachusetts

MassTech’s Annual ‘Innovation Economy Index’ Shows Growth in Key Industry Sectors, Highlights Need to Foster both Technical and Professional Skills in State’s Modern Workforce

NOTE: To access an online version of the study or to download a PDF copy, please visit the Innovation Index web portal. 

BOSTON – Nearly 40 percent of the jobs in Massachusetts are in the innovation economy, more than any other state, according to a study released today by the Innovation Institute at the Massachusetts Technology Collaborative. The Annual Index of the Massachusetts Innovation Economy, which benchmarks the performance of the Commonwealth in key industry sectors, also shows that Massachusetts added roughly 50,000 new innovation economy jobs since 2006. 

The report shows that Massachusetts has a higher share of innovation economy jobs than any other state in the U.S. (38 percent), highlighting the Commonwealth’s reliance on these high-skill positions.  The state with the next highest share is Connecticut (35 percent) followed by Pennsylvania (33 percent). The average for all U.S. states is 30 percent.

“This year’s report reaffirms that Massachusetts continues to lead the nation in the innovation economy,” said Housing and Economic Development Secretary Greg Bialecki. “We remain committed to supporting growth in these industries in every region of the Commonwealth.”

Specific findings in this year’s Index include:

  • Science & Engineering occupations make up 6.5 percent of all occupations in Massachusetts, a higher percentage than in any other Leading Technology States (LTS). This is a category that has steadily increased since 2003;
  • During 2011 – 2012, the Commonwealth attracted a higher share of college-educated adults to the state when compared to other LTS. This statistic counters recent trends which pointed to a ‘brain drain’, with talent moving out of state post-college;  and
  • Massachusetts remains the leader in VC funding, with $7.74 of venture capital spent per $1,000 of GDP, just ahead of California ($7.08), and well ahead of third-place New York ($1.55). In Massachusetts, VC funding as a share of GDP grew by 0.4 percent between 2011 and 2012.

“This year’s results show the Commonwealth not only climbing out of the Great Recession, but also growing in the key sectors that will drive long-term growth, bringing new investment and jobs,” said Pamela Goldberg, CEO of the Massachusetts Technology Collaborative.  “The rise in STEM-related occupations indicates that the investments the Commonwealth has made in innovative sectors such as robotics, biotech, big data, and health IT are paying dividends.”

Completed each year since 1997, the Innovation Economy Annual Index compares Massachusetts’ performance to a group of nine other states with significant levels of economic concentration and impact within the innovation economy, collectively identified as the Leading Technology States (LTS). The innovation economy of Massachusetts is then compared to the LTS in six key areas, including:

  • Economic Impact
  • Business Development
  • Technology Development
  • Capital
  • Research
  • Talent

The report found some specific areas for Massachusetts to focus on, including disparities in public funding for education, an area that is critically important in preparing a talented and innovative workforce.  At the primary/secondary level, Massachusetts spends $3,000 more per full-time student when compared to the national average. In funding public higher education however, the Commonwealth spends $1,184 less per full-time student than the national average and $1,375 less per student than the average of the LTS.  As the Index notes, the  Patrick Administration has moved to reverse this trend through targeted investments which should be reflected in future versions of the Index.  

“The Index highlights the central role the innovation economy plays in employment, incomes and long-term economic growth in the state,” said Patricia Flynn, Trustee Professor of Economics & Management at Bentley University and Chair of the Innovation Index Committee.  She notes, however, that “this year’s Index emphasizes why Massachusetts’ position as an innovation leader is by no means guaranteed, and that now more than ever we need to invest in the state’s talent base, infrastructure, and institutions as well as continue to attract people and capital from around the globe.”

This year the Index includes a special analysis section titled “Talent in the Commonwealth’s Innovation Workforce.”  The special analysis addresses the critical need to build strong technical capacities, but also cites the importance of strengthening broader professional skills such as collaboration and communication, skills particularly relevant in startup companies. John Barrett, Managing Director of Cook Associates Executive Search and one of the featured commentators, notes that “trends such as lower cost computing and the growth of mobile computing are greatly accelerating the velocity of human interaction… hastening the need to focus on these ‘soft skills’.”  Other industry leaders featured include executives from Communispace, HubSpot, and the Massachusetts Computing Attainment Network (MassCAN).  

“The Index helps us gauge where we are as a Commonwealth, and enlightens the discussion about where we are headed,” said Patrick Larkin, Director of the Innovation Institute at MassTech. “The Index will assist policymakers in charting a course that maintains and strengthens Massachusetts’ position within the innovation economy.”

In addition to publishing the Innovation Economy Annual Index, MassTech works in partnership with the Patrick Administration, the Executive Office of Housing and Economic Development, and the Massachusetts Legislature to make strategic investments which help create conditions for innovation to thrive.  These investments include:

  • The MassTech Intern Partnership, which allows students and young innovators to get a head start on their future by placing individuals with emerging and startup technology firms, while helping the companies defray the cost of the placement;
  • The recent rollout of the MassBigData web portal, a site aimed at growing the Commonwealth’s role as a global leader in Big Data and advanced analytics; and
  • Support for the expansion of the electronic healthcare and health IT cluster across Massachusetts, which includes over 200 individual companies.

Data from the Innovation Index is available in an interactive online portal at http://www.masstech.org/research-and-analysis/innovation-index

 

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About the Massachusetts Technology Collaborative

The Massachusetts Technology Collaborative is an innovative public agency working to enhance economic growth, accelerate technology use and adoption, and harness the value of research by engaging in meaningful collaborations across academia, industry, and government.  The Innovation Institute at MassTech was created in 2003 to improve conditions for growth in the innovation economy by enhancing industry competitiveness, promoting conditions which enable growth; and providing data and analysis to stakeholders in the Massachusetts innovation economy that promotes understanding and informs policy development.  Learn more at www.masstech.org.

 

About the Index of the Massachusetts Innovation Economy

Published annually since 1997, MassTech’s Index of the Massachusetts Innovation Economy is the premier benchmark report for measuring the performance of the Massachusetts knowledge economy. The Index benchmarks Massachusetts against other Leading Technology States, including California, Connecticut, Illinois, Minnesota, New Jersey, New York, Ohio, Pennsylvania, and Texas.  The Index monitors eleven innovation clusters, including:  Advanced Materials; Bio-Pharma and Medical Devices; Business Services; Computer and Communications Hardware; Defense Manufacturing & Instrumentation; Diversified Industrial Manufacturing; Financial Services; Healthcare Delivery; Postsecondary Education; Scientific, Technical, and Management Services; Software and Communication Services.

 

 

MEDIA CONTACT:
Brian Noyes, Communications Manager
(508) 870-0312 X: 293, noyes@masstech.org