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November 15, 2010

Tech-Business Divide - A Call To Arms

While Facebook founder Mark Zuckerberg’s decision to drop out of Harvard and move to Silicon Valley was a plot point in in the movie “The Social Network,” it looked like a watershed event to many in the local technology community. It was a call to arms for all who want Massachusetts to remain a competitive environment for entrepreneurs to build ventures that change the world.

Over the last five years since Zuckerberg’s emigration, there has been a transformation in the local start-up environment. The plethora of mentorship opportunities for entrepreneurs is mind-boggling — programs like TechStars and Mass Challenge, not to mention myriad business-plan contests. Despite these positive advances, though, the tech community is still less visible and engaged with the broader public in Massachusetts as compared with California, where tech executives Meg Whitman and Carly Fiorina recently made high-profile bids for statewide office.

In particular, there is a disconnect between the political system and the business environment, a disconnect that risks getting wider with time. It’s a natural outgrowth of the fact that the participants in the innovation economy — which includes biotech, Internet startups, and other tech-related firms — are often so consumed with building their businesses that they just don’t engage in our civic environment. And many of them view the local government as an irrelevant factor in their business.

This disconnect is also reflected on Beacon Hill, where so many movers and shakers walking the halls represent constituencies that have been active in state politics for generations. That’s not to say that these groups are not important, but it’s clear that the transformation in the local business environment has not produced much change in the local political system.

The transformation in the economy has been profound. Major technology companies like Microsoft, IBM, Oracle, and Google have acquired local companies and opened large offices here to tap into the local talent pool. Recently, Disney was seen scoping out space in Kendall Square to set up a research lab. Fourteen of the top 20 Massachusetts-based companies ranked by market capitalization and all of the top 10 growth companies are from the innovation economy — arguably a more concentrated industry sector than in any other state in the country. Interestingly, most of these companies did not even exist 30 years ago — they grew out of our start-up ecosystem that is so central to Massachusetts’ economy.

What can be done to bridge the civic divide between government and tech? Simply put, innovation economy leaders need to get more engaged in the local political scene. Business leaders who don’t think that the political system affects them are both naïve and missing the opportunity to affect real change. As one high-tech CEO observed to me the other day, “I realize now that if I’m not out there on the political playing field, someone else is playing my position!”

Groups like the Progressive Business Leaders Network (which I co-chair), New England Clean Energy Council, and Massachusetts Innovation and Technology Exchange are a good starting point, but need to elevate their impact on local policy. The need for better communication goes two ways: Mayors and state representatives need to get to know their innovation economy business leaders and learn how to help support their growth.

Right now, there is a mismatch between what our innovation economy start-ups need and what the employee base has to offer. Our unemployment rate is high, yet the job boards of local venture-capital firms show hundreds of job listings across their portfolios. Our companies desperately need more lab technicians, search engine marketers, online advertising salespeople, and software developers. How do we galvanize the public-university system to produce skilled workers that more closely match our innovation economy’s needs?  How do we tackle the mismatch between immigration reform, Washington-style, and immigration reform, business-friendly style - most glaringly evidenced by the lack of support still for the Start-Up Visa movement?

Facebook, Twitter, and other innovative forms of communication have had a profound impact on elections and public opinion. Now let’s find a way to engage the people behind those companies, as well as the next generation of emerging leaders closer to home, in transforming the local political system.

An edited version of this piece originally appeared in the Boston Sunday Globe


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Jeff, great thoughts here. You may have seen/heard about Mayor Menino's appearance at Mobile Monday recently (http://www.momoboston.com/2010/10/26/mayor-menino-presents-citizens-connect-at-mobile-monday-on-november-8th/). So here is at least one example of the tech industry building stronger bonds to the local government. Although it seems like this is a case in which government essentially came to the tech folks instead of the tech folks extending themselves and making a concerted effort. I could be wrong. I don't know the details of how the Citizens Connect iPhone app project came about, but to your point, it seems like there's a lot of room for progress to be made.

Yes - Mayor Menino, Governor Patrick and a few others have made real efforts. As you said, though, we need more tech leaders engaged - and influencing real policy. Immigration reform is a good example.

It looks like lots of start ups are happening only to compete w/ their former bosses. Just so much talent got laid off that they in turn are starting their own gig. Now that the economy is coming back, competition is heating up. :D

As I see it, there are two key requirements to sustaining innovation and nurturing it for global competitive advantage. They complement political engagement that Jeff aptly stated in his blog. They include:(1)political will to make it easier to start a business, and (2)real immigration reform so we attract the best abd brightest to this country. As someone who waited 13 years to get his permanent residence, I saw lots of talent leave the USA since I moved here in 1995. That same talent is now making Indian, Chinese and European startups more competitive. I am a proponent of retaining talent no matter where it comes from. But to retain that talent, I believe we need to look beyond tech leadership. Policymakers need to show leadership and the political will to develop policies that inspire entrepreneurs to create their startups here rather than overseas. Starting up companies outside the USA is a growing trend, which explains why an increasing amount of startup capital is flowing outside the USA.

Is capital flowing overseas and startup activity there significant at this time? No, not yet, but the G20 summit showed that many countries are making serious inroads in the world of scientific and technical innovation.

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Agreed, Mario.

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