High-tech firms push for funding
BEDFORD - Lamenting that the Route 128 brand has lost its luster, leaders of the information technology, communications, and defense industries yesterday called on Massachusetts to invest more than $64 million in new efforts to make the state an "innovation gateway."
Among their proposals was the creation of a talent development bank to expand ties between high-tech companies and universities, positioning the state as a hub for information technology security, and building a new branding strategy for the high-tech and defense sector.
The proposals were detailed in a report released by the Boston research firm Mass Insight Corp. at a meeting hosted by defense contractor Mitre Corp. They come amid rising sentiment within traditional high-tech and defense businesses - the state's largest sector with 331,000 jobs - that their struggles are being overshadowed by the state's bid to promote the much smaller life sciences industry.
Governor Deval L. Patrick traveled to San Diego yesterday to address the world's largest biotechnology industry trade show, and to tout a $1 billion life sciences initiative he signed just before leaving.
Mass Insight president Bill Guenther told about 70 executives and trade association leaders at Mitre that the state must pay similar attention to the other major parts of its economy, technology and financial services, at a time when growth in the technology industry has been slowing and many young people are moving elsewhere.
"We have a very proud and extensive heritage in Massachusetts in the high-tech and defense sector," Guenther said. "However, we're losing share and we're losing momentum to other states." If the trend continues, he warned, Massachusetts is in danger of becoming a "high-tech outpost and start-up boutique."
The report, prepared with the assistance of management consultants McKinsey & Co., said the information technology, communications, and defense sectors have shed 64,000 jobs since 2001, a drop of 3.5 percent, while sales growth has slowed to 4.3 percent, one-third the rate of the previous five years. But the combined sector still employs 10 percent of the Massachusetts workforce, roughly four times as many employees as the life sciences industry.
"In corporate terms, this is our core product line," said Pascal Aguirre, a consultant in McKinsey's Boston office.
The report calls for spending $10 million to recapitalize the Massachusetts Tech Transfer Center, which commercializes research from public universities and hospitals; $50 million to replenish a matching grant program at the John Adams Innovation Institute that helps the state capitalize on federal grants; $3 million to create the talent development bank to link businesses with colleges; $250,000 to develop a plan to make Massachusetts the "world's IT security capital"; and $1 million to create a new brand and marketing strategy for the tech sector.
Citing the diminished recognition outside New England of the Route 128 technology beltway, Guenther said, "The brand is dead. It's time to reinvent the brand. We have assets. We need to play at the California level. We need to get back on the high-tech map."
Annmarie Levins, associate general counsel for Microsoft Corp. in Cambridge, who cochaired the Mass Insight group that worked on the report, supports spending $1 million for rebranding. "An awful lot of success has to do with perception," Levins said. "If we've let our brand fall into 'old, cold Route 128,' shame on us. We've got a lot of cool things going on around here. We need to change the perception."
Technological advances have left the information technology, communications, and defense fields more integrated than ever, according to several speakers at yesterday's meeting.
Even the bulk of jobs at Massachusetts' military contractors, once known for metal-bending and assembly lines, have become more technology-oriented, said Keith Peden, senior vice president for human resources at Waltham defense giant Raytheon Co.
"You may have known us as a manufacturing company in Massachusetts," Peden said. "We're not. We've taken the Nintendo generation that's grown up and employed them as software engineers."
Robert Weisman can be reached at weisman@globe.com. 