Monday, April 23, 2012

The Innovation Economy - Regional Questions

From the plate glass windows of the Microsoft offices in Cambridge, the spectacular view of Boston, its stately Back Bay homes and its large office buildings, comes into view.  The grand trees that dot the river's edge hold court.  Even baseball's Fenway Park can be spotted off the right shoulder in this majestic portrait of one of America's great cities.

What cannot be seen, but lurks underneath every part of this picturesque scene, is the depth of political distrust between Cambridge and Boston over the locating of companies like Microsoft and Google and many biotech companies that want to start a home in the region.  

While the origins of this distrust go back long before the invention of the personal computer, never mind the internet, the parochialism of local governments in Massachusetts fighting over their share of the pie has particularly insidious effects in today's global world and the consequences are much greater and longer lasting and damaging to the communities involved.  

In the past 30 years, Cambridge has not had troubles attracting suitors.  It has good bones -- a riverfront, good transit connections, lots of vacant and underutilized land, ancient and venerable squares, a long and storied history.  It's also got good in-laws, in the form of two of the world's most famous and increasingly important universities, Harvard and MIT.

In the 20th century, Harvard was the "it" place, and hosted the quintessential American moment of that American Century. Gen. George Marshall came to Cambridge in 1947 to announce the plan that became synonymous with his name. It pronounced American dominance, hegemony and beneficence in the post-war world.  In the 21st, that moment is much more likely to happen somewhere in an M.I.T. lab some quiet Saturday night or in a research institute at a summer conference, if it hasn't happened already.  

Boston has its own attractiveness.  The teaching hospitals are the cornerstone of a very strong edifice. Boston is also the heavy hitter in New England and is the gravitational center around which everything else in the region revolves, like it or not. 

But Boston hasn't missed the fact that Cambridge continues to garner the lion's share of the attention these days.  Kendall Square claims to be "most innovative square mile on the planet".  Boston's mayor Tom Menino now routinely claims all of Cambridge's activity as if it were his own.  And he's going one step beyond that.  He's trying to make this activity his own by creating his own Innovation District.

Meanwhile, the region, hampered by a deep-seated Yankee aversion to cooperation in these economic spheres, limps along with no coordinated effort.  The governor's office seems happy whenever any portion of economic growth happens, and claims indifference to its locale, as long as it is happening in Massachusetts.  The Metropolitan Area Planning Council, the region's planning agency, has an advisory capacity but no binding power to compel any action on anybody's part, and even less money.  The folks at Cambridge Innovation Center, one of the area's most dynamic and energized hotspots for innovation, have been heard to say that "anything goes" is fine as long as it is going.  

There's highly charged energy in these waters, but there is also blood.  It is hard to imagine now, but there was a time when Cambridge wasn't part of a front running pack.  Not too too long ago, Cambridge was suffering from that same post-industrial disease that wiped out communities from Maine to Michigan and beyond. The collapse of the American industrial backbone north of the Mason-Dixon line did not leave even tony Cambridge untouched, and in the 1950s and 1960s, there was a sense of desperation about what needed to be done.  A lot has changed since then, but it is predictable that a lot will change from now. Wise men and women caution: just wait, for this too shall pass.

The dearth of a coordinated effort makes no sense. Whatever its appeal for the cowboys in the room, robbing each other's resources leaves all poorer in the end. Growing the pie is the challenge, not shifting the pieces around. This will require some real thinking, some real determination, some real commitment, and some real work. The taste for this does yet appear to have shown up on the menu.

4 comments:

  1. Sam, take a look at the New England Clean Energy Council - they're now accelerating the pace of clean energy business where they started, here in Massachusetts, but also in Maine, New Hampshire, Vermont, Connecticut, and Rhode Island. They recently won a federal grant to coordinate the Cleantech Innovations New England program, linking all of these states' cleantech efforts. There's more about the program here: http://www.cleanenergycouncil.org/cleantechinnovationsnewengland

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  2. I think it is healthy rivalry. It's continuity will bring the best of developments to the two communities. Tom Menino is introducing Innovation District, many after him will come up with different ideas in the future.

    Pictures of boundary areas and other strategic places in the two communities can influence this article in taking us to Boston and Cambridge.

    Lookman Oshodi
    Lagos, Nigeria.

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  3. Hey Sam. While a lot of what you say is right, the overall gloom you seem to have about the lack of cooperation between the municipalities is I think overstated, and I'm not really sure where the "blood" lies. Sure, Boston recruited Vertex away from Cambridge, but as the City Manager's report states, that space will probably be full of other innovative companies the day after they move out. Cambridge is, effectively, sold out at this point, so it doesn't harm Cambridge to arm the rest of the Commonwealth with some of its riches. MIT believes that if you took all the companies it has helped spawn, it would amount to the 11th largest economy in the world. Surely Cambridge has a lot of growth and innovation to share, and we should be proud of doing so. As to the competition, I think it is the very competition that makes the otherwise (lets face it) pretty nerdy topic of "innovation" and puts it front and center of the planning process for cities like Cambridge, Boston and Somerville. This is a good thing, not a bad thing. The forces that have led Boston to invest in creating a "Boston Innovation Center" are good for Boston AND for Cambridge. The real competition is not local. It is with other regions that are larger and stronger than us, such as the SF/SV cluster. It is roughly twice our size in absolute $ of venture capital invested--a simply measure of the quantity of innovation. We will succeed, long-term, only if we narrow that gap. That means both Cambridge and Boston (and Somerville, and other nearby towns) getting into the act, making themselves more friendly to innovators, and new businesses. As your readers may know, the research says that it is essentially ONLY new businesses that create new jobs (Kauffman/US Census bureau research). So its healthy for us, as we think about the needs of our economies and regions, to be trying to one-up one another in this department. Sure, we may miss some opportunities for joint efforts, but I actually haven't seen a lot of good, concrete suggestions for such joint efforts. In the one case I am aware of such an opportunity (an SBA grant that required participation from both Cambridge and Boston) the collaboration did occur, and the grant application was written to include both cities. So, I say, let the process take its course. Some say that it is the fierce competition between Chinese manufacturers that make them strong, not the competition between them and the rest of us. Perhaps the fierce competition between Massachusetts municipalities will make us all the world's envy.

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