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Massachusetts is one of the fastest growing tech states in the country, according to a new report from the Massachusetts Tech Collaborative, a quasi-public economic development agency.
"Let’s be honest, sometimes people don’t come here for the taxes or the climate, it really is the dynamic employment opportunities, industry groups and academic pathways that people can [feel] here," said Mass Tech Collaborative CEO Tim Connelly.
For the last 20 years, the annual Index of the Massachusetts Innovation Economy has been tracking the upswings and downturns of the local economy — highlighting strengths to celebrate, but also pointing out potential causes for concern.
Sure, the big headline from the report itself is probably no surprise to anyone living in the state. Connelly said the innovation economy has been a "six-year-run." But some of the specific numbers in the report are noteworthy.
1. Roughly 38 percent of employees in the state work in the innovation economy in some way. According to the report's analysis, this includes more than pharmacists and software engineers; it accounts for people who work in administrative positions at tech companies. Most of the recent job growth has come from two sectors: 1) biopharma and medical devices and 2) scientific, technical and management services.
2. Venture capital investment in Massachusetts grew by 25 percent in 2015 — that's faster than California, but notably slower than both New York and New Jersey. During that year, in terms of raw dollars, there was $5.8 billion of venture capital invested in Massachusetts — that puts the state third, behind both California and New York. Most of the investment money in 2015 went to biotech and software.
3. Could exports become a Massachusetts weakness? International exports out of Massachusetts fell by $2 billion in 2015. And while maybe we shouldn't read too much into data from one year, the long-term trend is important. Exports to the United Kingdom, Japan and Canada have all fallen by double digits in recent years. And exports as a percentage of GDP are still below 2009 recession levels.
4. Massachusetts has a hyper-educated workforce: 67.5 percent of working age adults have at least some higher education. And, in 2016, the state graduated a larger percentage of students with life science degrees than any other state.
5. Although the share of federal funding to Massachusetts universities and nonprofits for R&D has stayed the same, the raw amount has declined by 20.7 percent from 2010-2014. Connelly suggests this is a sign that Massachusetts cannot rely on federal funding, and needs to look more for private investment.
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