Pretend for a moment that you're an economic god kind of like Alan Greenspan was for 18 years and you're assigned (yes, even economic gods report to higher beings) to improve the Massachusetts economy. You gaze down on the Commonwealth and say, gee, what this place really needs is a lot more jobs in high tech.
No, of course you don't. After all, for years the Massachusetts economy has been defined by high tech: computers, software, microelectronics, health care, biotech (and soon, nanotech and cleantech). We're awash in high-tech jobs, so much so that we don't have enough workers to fill the jobs we already have. Our problem isn't that we have too little high tech; if anything, it's the opposite. There's a measure for this: economic diversity. A diverse economy has a good balance of businesses that are high- and low-tech, cyclical and countercyclical, cutting edge and well established. That's not us. A recent analysis by Moody's Economy.com, for example, ranked Boston's economic diversity last of the nation's 25 largest metro areas. (Chicago, with a stable mix of manufacturing, food processing, and services industries, ranks first, by the way.)
There are a lot of problems with this lack of diversity. Our high-tech economy is great for well-educated workers, but it's terrible for those without a college degree. And, while the high-tech emphasis is good for Boston, which is chockablock with universities, research hospitals, and laboratories, it's not so good for anyone west of Worcester. Moreover, unbalanced economies tend to be cyclically vulnerable, making Massachusetts more subject to wild up-and-down swings in its economy. One might even argue that other worrisome issues high housing costs and our stagnant population, for instance are connected to our unbalanced economy.
So given all this, as an economic god you have to wonder: Why are those mortals in Massachusetts, led by Governor Deval Patrick, planning to spend $1 billion over the next 10 years promoting even more high tech in this case, the biotech industry? Patrick's fund, still in planning, has already won plaudits. Why? Granted, biotech is very cool, everyone is certain it's the next big thing, and we're mad that President Bush put the kibosh on stem-cell research, so this is a good way of getting back at him. But really, is this the best way we can find to spend a spare billion?
It's not as if biotech needs the money. Massachusetts is already in the forefront of the industry, with money for start-ups readily available. We consistently rank second (behind Silicon Valley) in venture-capital investments, and biotech is now our hottest investment area. If biotech is going to succeed in Massachusetts, it'll do so as every other business has on its own merits, not because state pols (as Patrick and Senate President Therese Murray recently wrote in a Globe op-ed), "will help guide [biotech ideas] to the marketplace."
Indeed, the biotech fund feels like piling on in a football game. It tackles a problem that doesn't need tackling and risks increasing the imbalances in our economy, making Massachusetts even less hospitable to the low-skilled or differently skilled workers that it chronically underserves.
So what to do instead? Some say spend the money on education or infrastructure or perhaps just save it for a rainy day all good ideas. Alternatively, if state pols still insist on trying to "steer" the economy, how about focusing on the areas where we lag? Now before every economist reading this jumps down my throat, I'm not saying the state should make venture capital-like investments in, say, dead-end smokestack industries. However, we could consider encouraging the growth of businesses that are countercyclical, non-high tech, or located outside of Greater Boston. There are many ways to do this, such as small and micro-loans to start-ups, tax breaks for urban entrepreneurs, and, for those living in the western part of the state, financial incentives for small consumer-service, manufacturing, and assembly-type operations.
The point is, good economies are diverse economies. Massachusetts already excels in everything high knowledge and high tech. If the role of government is to do desirable things left undone by the private sector, we should turn our attention elsewhere.
Tom Keane, a Boston-based freelance writer, contributes regularly to the Globe Magazine. E-mail him at firstname.lastname@example.org.