MassTLC 2020 Challenge: A vision for the coming decade


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Steve O'Leary's presentation at MassTLC's 2010 Annual Meeting: Flipping the Switch from Survival to Growth

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  • Consider this:155 degree-granting institutions445,000 currently enrolled students1.5 million projected degrees awarded by 2020
  • 232 Active Venture Capital firms348 companies funded with $2.11 billion in 2009The 2nd largest venture capital cluster on the planet
  • Consider a collection of world class companies and divisions such segments as Video Mobile Marketing Technology Infrastructure Analytics and Workflow Robotics and key vertical markets like healthcare and life sciencesConsider a state with 24 of the 200 Digital Economy IPOs since 2000 - the second largest total of all states
  • A recent study counted more than 178,000 IT workers in the stateIT is the second largest employer, surpassed only by healthcareEach IT job creates 1.63 incremental jobs – for an additional contribution of some 290,000 positions
  • #1 overall ranking in eachof four studies that were conducted in 1999, 2004, 2007 and 2008 - studies funded by the Ewing Marion Kauffman Foundation.The 2008 study ranked all States across 29 factors in five categories. It defined a New Economy as: Knowledge Dependent Global Entrepreneurial Rooted in Information Technologies Driven by InnovationThe report ranks states with a simple question: To what degree does the structure of a state economy match the ideal structure of the New Economy?Consider a state that was #1 in innovation capacity #1 in knowledge jobs #1 in digital economy transformation #2 in economic dynamism #8 in globalization
  • Moreover, a state that earned a total score of 97 compared with the runner-up state’s score of 82.And had a one or two ranking in each of the subcategories in bold – like fastest growing firms and percentage of initial pubic offerings.Imagine all those attributes …
  • Now imagine – we are that state! In fact, let me pause for a second. How many people know that the word “technology” itselfwas invented in Massachusetts – in fact, in Cambridge.Thomas M. Paine, in a 2006 article, credits Harvard’s Jacob Bigelow, in 1828, with this invention.
  • So …. With all those attributes … why do we feel so much pain?
  • The 2000s were a tough decade. A consortium of IT Leaders came together in 2008 to measure the contributions of IT industry to the Massachusetts economy.The resulting study, conducted by the UMass Donahue Institute, gives us a set of data from which we can measure the problemMassachusetts lost 17,000 IT jobs during the ten year course of this study.Also, from a top-of-the-bubble peak of 240,000 people, the study’s endpoint measured 178,000 peopleBEGIN ANIMATIONBut this was a decade bracketed by the collapse of two speculative bubbles and their resulting recessions. It was the decade of the 9-11 attacks. And it was a decade marked by a huge movement to offshoring and outsourcing.So yes it was a tough decade…
  • Consider that the Industrial revolution began in the mid 1700s and lasted some 200 years. In fact, Robert Krim, of the Boston History and Innovation Collaborative identifies nine eras of this type – like the Industrial Revolution -- in Massachusetts’ 400 year history.
  • In that broad historical context, it’s only the 2nd or 3rd inning of the digital economy game. We may have swapped out some of our players but we’re still very much in the Game
  • Let’s look forward to the next decade. The 2010s hold great promise for innovation and business growthThe Communications Infrastructure – ubiquitous, very high bandwidth, wired and wireless, networks – will be a huge enabler.The accelerated disruption of media – music, video, newspapers, advertising – will continue. As highlighted recently in an Economist magazine special report, Big Data and analytics will see an increasing important role as data volumes explodeMobile devices of all kinds will continue to proliferate.The theme and content of today’s annual meeting address this promise – and will provide a unique projection across four facets of the digital economy of 2020We think you’ll share our excitement as we look forward.
  • As mentioned, RobertKrim wrote an interesting article published in CommonWealth Magazine a few years ago exploring 400 years of Massachusetts innovation history.In that history, he defined NINE discrete eras. The first began with Boston’s failure as a farm town and its transition to a maritime economy. The most recent is Massachusetts’ emergence as a world leader in high technology, biotech, healthcare and mutual funds.He assessed 60 Massachusetts world changing breakthroughs in those eras including Alexander Graham Bell’s invention of the telephone. Drilling into these 60 breakthroughs he found a pattern of five recurring drivers: - a driving entrepreneur or team of leaders - a local network of people and groups sharing information across sectors - local funding - local demand that the entrepreneur can use to perfect a new idea or product - national or global demand for that innovation.
  • Distilling these enablers one more step:Leadership matters – leaders challenged to “Change the World”Density matters – Krim also defines something called the Bump Rate: “when people are in a position to meet – serendipitously or by design” they more readily exchange their ideas and services. For the bump rate, Krim argues, “physical proximity matters” – in other words wired connectivity is not sufficient.Growth matters – growth develops leaders and it contributes to density. It is themost measurable indicator of success.So as we begin to look forward ten years , here is our Challenge
  • Our Challenge is to add 100,000 Digital Economy Jobs on Massachusetts by 2020. Let me emphasize this is a challenge – it’s not a goal or a budget.It came about as we sought to create a strategy for the combined MassTLC and MassNetComms. We had a common vision but we needed alignment. This Challenge aligns what we want be as an organization – what we aspire Massachusetts to be.
  • Is this challenge aggressive? We’re starting from 178,000 employees…But considering the math of compound growth, if, each year, every company hired one new employee for every 22 employed … we’d meet the Challenge. One employee for every 22 each year. That’s a 4.5% compound annual growth rate.I like this picture because the boy on the right is really getting his head into his challenge.
  • Now 100,000 new jobs represents a very different trend line than we’ve seen recently. A five-year slope shows greater growth than we saw in the tech bubble. A ten-year slope also represents major change.
  • Here’s a fact. We really do have an A team. It’s time to play an A game.This Challenge needs growth at all levels.We need more startupsWe need to grow more mid market companies. To get more public. To grow more management depthWe also need more global leaders $Billion, $10Billion and perhaps even $100Billion market cap companies – this is where the game will change. This is where Bill and I are completely aligned before you today.
  • The payoffs are huge. 100,000 new IT employees means - Incremental wages of $8.8 billion – using the current average IT salary in Massachusetts - using the IT Study’s job multiplier of 1.63 – the jobs that come from service providers to IT companies and the providers of services consumed by their employees – there are an INCREMENTAL 163,000 jobs created. - And using market metrics for revenue per employee and enterprise value to revenue, an estimated gain in wealth of $50 Billion to $75 BillionThese numbers move the needle in a state of 6.6 million people and a budget of $27 Billion.
  • MassTLC is committed to the Challenge. We are energized to make a difference.What can we do? - Connect – we often call ourselves a “connection engine” – we seek to catalyze the bump rate and bring people and ideas together -- Measure – measurement provides insight and enables change – we will be seeking new ways to measure and inform our members and the broader community -- Influence – there is clearly work to be done in policyAnd lastly, we will help lead in this Challenge.
  • As we consider what work to pursue – here is a framework that encompasses Ideas, People, Capital, Digital and Physical Infrastructure. Each of these dimensions can benefit from greater attention and change.You’ve seen some changes – - our breadth of industry and market clusters - our unConferences (catalyzed by Bill Warner) - major programs like today that inform and inspireWe are also looking a policy and infrastructure -- our trustees voted to endorse the Startup Visa legislation sponsored by Senators Kerry and Lugar that you may have read about recently -- we are looking at ways to dramatically improve the communications infrastructure for companies in this area -- and we are looking at policies that constrain Massachusetts companies from hiring Massachusetts workers
  • This is a collaborative effort. We ask you to let us know what constrains your growth. Together we can make change happen.Please email us your issues at
  • Let me close with one last metaphorImagine a snowball – it starts with one idea. You scoop some snow, pack it, shape it, pack it some more.Then you begin to roll it. It gets bigger. People join.
  • One a snowball gets started – it’s a magnet for kids.The bigger the snowball the more people come.
  • MassTLC 2020 Challenge: A vision for the coming decade

    1. 1. The MassTLC 2020 Challenge<br />Looking Ahead to the Next Decade<br />1<br />
    2. 2. Imagine a State with …<br />2<br />
    3. 3. Consider this:<br />155 degree-granting institutions<br />445,000 enrolled students<br />1.5 million graduates projected by 2020<br />3<br />
    4. 4. Imagine a State with …<br />4<br />
    5. 5. Consider this:<br />232 Active Venture Capital Firms<br />348 companies funded with $2.11B in 2009<br />2nd Largest Venture Capital cluster globally<br />5<br />Sources: PricewaterhouseCoopers and Ernst & Young<br />
    6. 6. Imagine a State with …<br />6<br />
    7. 7. Consider this:<br />World-Class Companies/ Divisions:<br />Video<br />Mobile<br />Marketing Technology<br />Infrastructure<br />Analytics / Workflow<br />Robotics<br />Healthcare / Life Sciences<br />24 of 200 Digital Economy IPOs since 2000<br />#2 IPO total of all states<br />7<br />
    8. 8. Imagine a State with …<br />8<br />
    9. 9. Consider this:<br />More than 178,000 workers<br />IT is the second largest employer in the state<br />Each IT job creates 1.63 incremental jobs<br />an additional 290,000 positions<br />9<br />Source: University of Massachusetts - Donahue Institute<br />
    10. 10. Imagine a State with …<br />10<br />
    11. 11. Consider this:<br />#1 Overall Ranking in Each of Four Surveys Conducted (1999-2008)<br />Remarkable Depth:<br />#1 in Innovation Capacity<br />#1 in Knowledge Jobs<br />#1 in Digital Economy transformation<br />#2 in Economic Dynamism<br />#8 in Globalization<br />11<br />Source: Ewing Marion Kauffman Foundation <br />
    12. 12. … and a 15 point margin (100 point scale) over the next-ranked state<br />Bold indicates #1 or #2 subcategory ranking<br />12<br />Source: Ewing Marion Kauffman Foundation<br />
    13. 13. Imagine: We are that State! <br />13<br />
    14. 14. So Why Do We Feel So Much Pain?<br />14<br />
    15. 15. The 2000s Were a Tough Decade… <br />Massachusetts IT Employment<br />September 11, 2001<br />Technology Market Crash<br />Financial Market Crash<br />Financial Market Crash<br />Recession<br />Recession<br />15<br />Offshoring and Outsourcing<br />
    16. 16. … but Consider that the Industrial Revolution Lasted About 200 Years<br />16<br />
    17. 17. In Historical Context, it’s only the 2nd or 3rd Inning of the Digital Economy Game<br />17<br />
    18. 18. The 2010s Offer Great Promise for the Digital Economy<br />The Enabler: <br />Ubiquitous, Very High Bandwidth Connectivity<br />The Opportunities:<br />Accelerated Disruption of Media<br />Massive Measurement by Connected Devices (Big Data / Analytics)<br />All Things Mobile<br />18<br />
    19. 19. Capitalizing on the Promise: Common Enablers in Every Era of Innovation<br />19<br />Source: Boston History and Innovation Collaborative; John Adams Innovation Institute, 2006<br />
    20. 20. Distilling the Enablers Yields Leadership, Density and Growth<br />20<br />
    21. 21. Our Challenge to Massachusetts:<br />100,000<br />Incremental Digital Economy Jobs by 2020<br />21<br />
    22. 22. Is this Challenge Aggressive?<br />22<br />
    23. 23. 100,000 New Jobs Represents a Very Different Trend Line<br />Massachusetts IT Employment<br />100,000 New Jobs – Ten Years<br />100,000 New Jobs – Five Years<br />23<br />
    24. 24. We Have an “A” Team We Must Play an “A” Game<br />24<br />
    25. 25. The Payoffs Are Huge<br />100,000 IT Workers Means<br />Incremental IT Wages of $8.8 Billion<br />163,000 Additional New Jobs Created in Massachusetts (263,000 total)<br />Enterprise Value Gain of $50 billion to $75 Billion<br />25<br />
    26. 26. We Will Align MassTLC to the Challenge<br />26<br />
    27. 27. MassTLC is Moving in New Directions<br />27<br /><ul><li> Clusters
    28. 28. unConferences
    29. 29. Major Programs
    30. 30. Startup Visa Act Endorsement
    31. 31. Communications Initiative
    32. 32. Reviewing Barriers to Hiring</li></li></ul><li>What Constrains Your Growth?<br />28<br />
    33. 33. One Last Metaphor – the Snowball<br />29<br />
    34. 34. The Bigger the Snowball,the More People Come<br />30<br />
    35. 35. The Challenge is <br />not just the Number.<br />It’s the Change.<br />31<br />