Independence spurs innovation
Associated Industries of Massachusetts has dozens, perhaps hundreds, of members providing products and services in the clean-technology/energy efficiency sector, and many more taking advantage of those products and services.
These firms see business opportunity, building on our state’s concentration of research and development, venture capital, innovative management, and skilled workforce. Their customers are responding, above all, to the imperative to control costs and reduce waste in order to operate competitively in a high-cost environment.
Real world market forces and the business climate are far more powerful in shaping our economic future than any attempt by government to pick winners among industries. Emerging industries are vital, but so are existing sectors - innovation and technology are hallmarks of successful business throughout the Massachusetts economy. All industries, including clean-tech, ultimately respond to the same influences.
Policy makers love to paint new-economy jobs as immune to high taxes, staggering electricity costs, and bureaucratic regulation. They subsidize the development of innovative “industries of the future’’ while raising costs for industries of the present - as when they add to our already highest-in-the-nation electricity costs by mandating use of alternative energy sources at far-above-market prices. Then they are shocked when their “new economy’’ investments are lost to leapfrogging technology and, yes, uncompetitive business costs.
Subsidies do have their place. Support of research and development - a public good - is essential. Well-calculated subsidies may induce households and small businesses to adopt efficient technologies earlier rather than later. But the best business decisions, those most likely to create sustainable jobs, are market-driven.
Long-term economic growth requires state government to create a predictable and competitive business climate for all industries across the board. Sound, consistent economic policy - reasonable costs, efficient regulation, world-class schools, and predictable fiscal outcomes - serves as a far better fuel for creating jobs than picking winners and losers from individual industries.
Richard C. Lord is president and chief executive officer of Associated Industries of Massachusetts, the state’s largest employers’ group.