The Technology Industry & State and Local Governments: Back in Synch?
For reasons more likely related to humility than apathy, the technology industry in Massachusetts generally has not asked for much from its state and local government officials. Up until mid last year, that meant many within the industry (myself included) did not pay much attention to what was happening at the State House or in local city and town governments (no offense meant to the local organizations who have lobbied on the industry’s behalf).
Then came the wake-up call. The state’s fiscal 2014 budget, signed into law mid-2013, included an amorphously-worded tax on software and cloud services. Tech companies in Massachusetts sprang into action and explained to their legislators and Massachusetts Governor Deval Patrick that the tax would significantly and adversely impact the tech industry—specifically software, cloud and infrastructure companies. Governor Patrick agreed, and in a move with rare precedent, he backed a rapid repeal. Legislators joined him, and the tax was history less than two months after first becoming law.
Fast forward to today. Recent statements and activity demonstrate that local elected officials are more interested in the tech industry than they have been in the past. During his State of the State Address in late January, Governor Patrick set a goal of doubling the size of the innovation economy in ten years. At the Mass Technology Leadership Council’s (MTLC) annual meeting held February 13, new Boston Mayor Marty Walsh said he wants Boston “to be the tech capital of the world.” Mayor Walsh said he didn’t want the next Facebook to start in Boston and move elsewhere.
These are good signs, and the tech industry applauds them. Whether or not the uproar over the tech tax was the reason for the newfound interest, the industry humbly understands that part of the problem was it did not do a good enough job explaining the importance of its business to the overall economy. Industry groups are now responding to this self-effacing fact.
At its annual meeting, the MTLC released a Massachusetts state of technology report that quantified the industry’s economic impact. The report, conducted by the University of Massachusetts Donahue Institute, found more than 209,000 technology jobs currently in Massachusetts, representing 6.5 percent of the overall workforce. That’s 150,000 more jobs than the BioPharma industry, as an example. When you include indirect jobs, or jobs that are created to support tech workers, and induced jobs, service workers such as restaurant employees, the technology industry impacts 19.1 percent of the state’s workforce (more than a quarter of its payroll), representing $156B in economic output.
Hopefully, the study’s results make obvious the reality that the tech industry isn’t small. They were certainly a nice rallying cry during the annual meeting– giving the event more of a pep-rally feel. This is not to say that the industry–or the MTLC– is resting on its laurels. Way back in 2010, years before even considering publishing the state of technology report, the group laid out the “2020 Challenge,” which asks the tech community (including its member companies) to add 100,000 jobs over ten years. Of note, the new report shows the industry is nearly on track toward that goal.
With its opposition to the tech tax, the industry was asking the state government not to interfere with its growth. However, the tone of the discussion of late seems to be that of the government asking how it can help the technology industry to reach its goals. To any tech company in the state, that is a welcomed ask.
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