Massachusetts Innovation Economy Drove $209.8 Billion in Output During 2014, Growth of $25.6 Billion Over 2009
‘Index of the Massachusetts Innovation Economy 2015/16’ Shows Job Growth in Innovation-Focused Sectors Outpacing Job Growth Overall
Special Analysis on ‘Collaborative Workspaces’ Highlights Demand from Entrepreneurs Statewide, But Cites Funding Challenges for Facilities Outside Greater Boston
BOSTON – A new research report released today by the Innovation Institute at the Massachusetts Technology Collaborative shows that the Commonwealth’s innovation-focused sectors drove $209.8 billion in economic output in 2014, $25.6 billion more than in 2009. Data from The Index of the Massachusetts Innovation Economy - 2015/2016 Edition also shows that Massachusetts recorded positive job growth in 8 of 11 innovation economy sectors between 2014-2015, and that the Commonwealth’s innovation sector employees earned higher wages in 10 of 11 major occupational categories when compared to workers in other innovation-focused states.
The Index highlights the improved job growth in the Commonwealth’s innovation sectors compared to the overall economy. Innovation sectors saw 0.9% job growth between Q1-2013 and Q1-2014, rising to 2.0% growth between Q1-2014 and Q1-2015. In the 2014-2015 timeframe, overall job growth only hit 1.7%, showing the higher employment gains in innovation-focused sectors.
The findings in the Index echo the recent recognition from Bloomberg Business, which listed Massachusetts as the #1 “Most Innovative State” and from the Consumer Technology Association, which cited the Commonwealth as an “Innovation Champion” in its 2016 Innovation Scorecard.
“Massachusetts is home to the most innovative economy in the United States, and it drives our economic development, job creation, and wage growth throughout the Commonwealth,” said Housing and Economic Development Secretary Jay Ash. “The Baker-Polito administration is committed to investing in our innovation ecosystem to help entrepreneurs bring their ideas to market, support successful startups as they grow and scale, and attract and retain world-class companies and talent.”
Other key findings from the 2015/16 edition of the Index include:
- VENTURE CAPITAL INVESTMENT ON THE RISE: Venture Capital investment in Massachusetts increased 74% from 2009 to 2014, with Biotechnology ($1.822 billion) and Software ($1.059 billion) leading the pack.
- EDUCATION CONTINUES TO FUEL EMPLOYMENT: Massachusetts is home to the highest percentage of adults with a bachelor’s degree or higher (46.1%) compared to both the average of Leading Technology States (35.5%) and the rest of the U.S. (33.1%). The employment rate among adults with ‘at least a bachelor’s degree’ in Massachusetts (76%) remained comparatively high, sixteen points above those with ‘only a high school diploma’ (60%) and more than double the rate of adults ‘without a high school diploma’ (36%). This highlights not only the strong link between educational attainment and employment, but also the value of expanded workforce training efforts.
- SBIR/STTR AWARDS, DOWN SINCE 2010, POST RECENT REBOUND: The Commonwealth experienced a 26% decline in Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) awards from 2010 to 2014, a steeper decline than the 18% seen nationally. These highly competitive federal awards enable small companies to conduct ‘Phase I’ proof-of-concept research on technical merit and idea feasibility and prototype development in ‘Phase II’ awards. Massachusetts bucked the trend in 2013-2014, posting a 5% rebound and bringing total SBIR/STTR awards in the Commonwealth to $248 million.
- LEADING TECHNOLOGY INFRASTRUCTURE: The Commonwealth is the #2 state for both broadband speed and access, with an ‘Average Connection Speed’ of 15.3 megabits per second (Mbps), higher than any of the Leading Technology States studied.
“This year’s Index demonstrates the strength of Massachusetts innovation economy in terms of job and wage gains, output growth, and increased funding both for R&D and from Venture Capital firms,” said Patricia Flynn, Trustee Professor of Economics & Management at Bentley University and Chair of the Innovation Index Advisory Committee. “Assessing the Commonwealth’s performance relative to other leading technology states is essential for assessing both our strengths and our challenges in remaining competitive in growing existing businesses as well as attracting or creating new ones.”
The 2015/16 edition includes a ‘Special Analysis’ focused on “Collaborative Workspaces in the Commonwealth,” highlighting the impact that co-working spaces, incubators, accelerators, and other innovation-focused facilities are having on the growth of entrepreneurs and as anchors of regional economic development initiatives. The Analysis, which was based on interviews with executives from collaborative workspaces statewide, discovered a “significant demand for collaborative workspaces outside of Greater Boston,” but that these facilities face barriers including trouble attracting funding and energizing a critical mass of start-ups.
“Incubators, accelerators and co-working spaces are helping grow new startups by providing entrepreneurs with the tools they need to succeed, through training and mentorship, but also providing a community of innovators that provide critical guidance, feedback, and support to an emerging small business,” states Pat Larkin, Director of the Innovation Institute at MassTech. “We’re seeing the impact of these spaces statewide, from Boston’s neighborhoods, to the Merrimack Valley, South Coast, and Western Mass.”
Launched in 1997, the Index of the Massachusetts Innovation Economy compares Massachusetts’ performance to a group of nine states, collectively identified as the Leading Technology States (LTS), with significant levels of economic concentration and impact within the innovation economy. The Massachusetts innovation economy is then compared to the LTS in six key areas, including:
- Economic Impact
- Business Development
- Technology Development
For an in-depth look at the methodology and data from the research, visit the Innovation Index’s interactive online portal at http://index.masstech.org/.
The Massachusetts Technology Collaborative is an innovative public agency working to enhance economic growth, accelerate technology use and adoption, and harness the value of research by engaging in meaningful collaborations across academia, industry, and government. From improving our health care systems and expanding high-speed internet across the state to fostering emerging industry clusters, MassTech is driving innovation and supporting a vibrant economy across the Commonwealth.
The Innovation Institute at MassTech was created in 2003 to improve conditions for growth in the innovation economy by enhancing industry competitiveness, promoting conditions which enable growth; and providing data and analysis to stakeholders in the Massachusetts innovation economy that promotes understanding and informs policy development.
For more information visit www.masstech.org.
Brian Noyes, Senior Communications Manager
(508) 870-0312 X: 293, email@example.com