Commonwealth’s Innovation Economy
Leads Recovery from ‘Great Recession’
Job Gains in Innovation Sectors Have Become Leading Economic Driver According to
Annual Index of the Massachusetts Innovation Economy;
Massachusetts Maintains Strong Leadership in Venture Capital & Patent Filings
BOSTON – The Massachusetts innovation economy has created around 100,000 jobs in Massachusetts since 2003, according to a new research report published this week by the Innovation Institute at the Massachusetts Technology Collaborative. According to the findings released in the 2014 Annual Index of the Massachusetts Innovation Economy, over the last decade the Commonwealth as a whole added only 29,000 jobs, highlighting that without the impact of innovation economy jobs, Massachusetts would have fewer jobs today than in 2003.
Massachusetts receives a greater economic impact from the innovation economy than any other state according to the new report, with 8 of 11 innovation economy sectors having significantly above average employment concentration when compared to other Leading Technology States (LTS). The Commonwealth continues to have the highest concentration of innovation economy jobs of any state (37.8%), followed by Connecticut (34.8%), and Pennsylvania (32.8%).
“This year’s Index highlights how the innovation economy can help drive the Commonwealth’s economic success, in both good times and bad,” stated Patrick Larkin, Director of the Innovation Institute at MassTech. “As Massachusetts continues its recovery from the ‘Great Recession’ it will be critical for policy makers and innovation leaders alike to heed these key metrics and to work collaboratively to make sure we’re addressing those areas which will continue to spur innovation and technology advancements.”
Other key findings from the 2014 Index include:
- NET MIGRATION: According to the study, Massachusetts is attracting more international migrants while losing fewer people to other states than it did a decade ago. The Commonwealth remains a top relocation destination for college educated adults, although it remained in second place behind Connecticut in 2013 (the most recent data available).
- PATENTS: Since 2009, Massachusetts has seen a 70% growth in patents issued per million residents, a rate higher than any other state, and leads in patents per capita. Massachusetts is fourth in terms of total number of patents issued, trailing much larger states such as California, Texas, and New York.
- VENTURE CAPITAL: Massachusetts is a top destination for venture capital (VC) as well, ranking #2 behind California in absolute terms in 2013. However, the Commonwealth led in the category of ‘Venture Capital per $1,000 of GDP’, where Massachusetts ($7.68) outpaced California ($6.72) and New York ($2.13). Biotechnology ($985M), Software ($742M), and Medical Equipment ($349M) were the leading recipients in terms of Massachusetts innovation sectors.
Of note, non-innovation economy employment in Massachusetts is currently growing faster than innovation economy employment, an issue seen in the majority of the LTS as well.
One area of decline has been in household income. While Massachusetts saw increases in household income between 2011-2012 (1.8%) and 2012-2013 (0.7%), both higher than the LTS or national average, median household income is still lower than pre-Recession levels. That fact has not deterred new residents from coming to the state, as the study finds that Massachusetts has seen positive net-migration over the past decade.
"The 2014 Index shows that the innovation economy is a dynamic engine for Massachusetts, driving job gains, technological innovation and patents, and new funding for business ventures,” said Patricia M. Flynn, Trustee Professor of Economics & Management at Bentley University. “Taking stock of where the Commonwealth stands relative to other leading technology states allows us to learn from steps being taken by many of our key competitors, and thus assess how best to invest in our own innovation economy to stay ahead of the pack.”
Completed each year since 1997, the Annual Index of the Massachusetts Innovation Economy 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
Each edition of the Index tackles a single issue that is critical to the growth of the innovation economy in Massachusetts. The 2014 Index highlights the impact that innovation plays in strengthening regions outside of Greater Boston, with a focus on how legacy industries such as paper manufacturing have evolved via technology and innovation, providing economic resiliency and stability for these regions. The Special Analysis section highlights manufacturing firms in Central and Western Massachusetts, as well the move toward technological innovations such as “nanocellulose” in paper production, a high-value product derived from wood. According to the Index, the move toward advanced technology and specialized products has allowed these ‘traditional’ Massachusetts manufacturers to stay ahead of trends toward offshoring and declining demand for commodity paper products.
In addition to publishing key research, MassTech works in partnership with industry, academia, and government 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;
- Investments into research and development projects, including a recent $5 million grant to the Woods Hole Oceanographic Institution toward the construction of new facilities for the testing and research of innovative marine robotics; and
- Support for the expansion of the electronic healthcare and health IT cluster across Massachusetts, which includes over 280 individual companies.
Data from the Innovation Index is available in an interactive online portal at http://index.masstech.org/.
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. From improving our health care systems and expanding high-speed internet across the state to fostering emerging industry clusters, MassTech is driving innovation and supporting a vibrant economy across the Commonwealth.
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.
Brian Noyes, Senior Communications Manager
(508) 870-0312 X: 293, email@example.com