Newsletter Archives

June 2007 Newsletter

Governor Patrick's Education Plan Reflective of Council-Led Agenda

During the past 15 months, MHTC Directors Henri Termeer of Genzyme and Ray Stata of Analog Devices - with the support of MHTC President Chris Anderson - have convened the Education Leadership Initiative, a diverse group of education, business, and government leaders working to create a feasible strategic plan that answers the global imperative to improve the K-12 education system in Massachusetts.

When Governor Deval Patrick released his "Cradle to Career" Education Plan on June 1, it was evident that this collaborative was making an impact on the education debate. Much of the strategy that evolved from our effort has been incorporated into the Patrick Administration vision of what should be achieved by 2015. Still other aspects reflect previously identified priorities supported by MHTC with respect to early childhood education. Following is a brief summary of the Patrick Administration education vision:

Governor Patrick's Key Components to Implement

• Universal public education pre-K through two years of community college or education in the professional trades
• Extended School Day and Year
• Universal Pre-K
• Full Day Kindergarten
• Improved Teacher Certification, Licensure and Professional Development
• Strong, Systemic Accountability
• Strengthen the High School Curriculum
• Short-Term Interagency Funding Task Force
• Regional Teacher Development Centers

The symmetry between the visions of the Education Leadership Initiative and the Governor is a reason for optimism, but it is early in this debate. We will continue to aggressively advocate for the reforms that will shape a world class education system and a continued pipeline of talent for the 21st century.

K-12 Education will provide the centerpiece of the Council's 30th Anniversary celebration on October 23, 2007. Leading up to the 30th celebration, the Council will continue to help shape and implement the next steps of education reform on behalf of the Massachusetts technology community.

Transforming our public education delivery system as outlined by the Governor will require substantial additional funding. Most of the funding debate so far has been focused on the pros and cons of closing specific corporate tax loopholes or creating new municipal taxes. The Council is working with its members and Beacon Hill leaders to communicate the need for a more comprehensive revenue growth strategy that simultaneously: 1) reduces barriers to job growth (i.e. highest in the nation payroll tax for unemployment insurance); 2) scales-up state resources available for competitive research projects driven by university-technology industry collaboration (winning a federal research center provides about 8:1 return immediately and creates revenue producing jobs); and 3) re-establishes tax incentives for capital formation and retention (capital gains, angel investors, estate tax). Only if these elements are included, should a discussion of other tax options be considered.

Commission Endorses Patrick Tax Proposal

Having announced his corporate tax proposal earlier this year, Governor Patrick, Senate President Therese Murray and House Speaker Sal DiMasi convened a commission to perform a wholesale review of Massachusetts corporate tax structure. On June 7 the commission announced it had voted (non-binding) on the Governor's plan, passing it by a narrow margin of 8-7.

The tax proposal approved by the commission was met with a stern rebuke by House Speaker Sal DiMasi who said, "any of these proposals that put more of a burden on business are only going to be adversely affecting our economy, and right now we don't need that."

Through a series of radio advertisements on WBZ, Op-Ed's in various newspapers and individual briefings with the tax commission principals and their staff, MHTC has been driving home the need for a comprehensive economic growth strategy. Such an agenda has not been adopted since the early 1990's.

Life Sciences for $1 Billion

The recent BIO 2007 convention was by all accounts a success for Massachusetts, capped off with Governor Patrick outlining a $1 billion life sciences initiative. Governor Patrick's plan, though bold and innovative, on its own will not achieve sustained growth for the state's entire biopharmaceutical industry -- or the state's economy in general.

The plan contains some of the critical elements of a long-term, tech-based economic development strategy, but that is not enough. Massachusetts needs a cohesive strategy and lack of such a plan has held us from our full economic potential. Four key proposals are:

• Create policies that benefit the entire biopharmaceutical industry. While the investment in biotech and stem cell research is important, at least of equal value is a state agenda that protects the leading economic generators of the state, including large biotech and pharma employers. See next section for more detail.
• Create strategies that benefit all sectors. Biotech jobs are important, but they represent a small part of the state's tech work force. The state has strengths in IT, telecom, medical devices, clean energy, defense and more. We aren't a one-technology economy.
• Support major R&D. Commit $100 million in state funds to enable our research institutions to collaborate with our tech firms to compete for large- scale federal R&D awards. This approach warrants more financial support from the state Legislature.

The last economic stimulus bill included only $10 million for the matching grant fund of the John Adams Innovation Institute, which helps the state's universities land federal research funds. We applaud that, but to keep up with R&D investments of other states and nations, we must focus on bigger awards and a larger center.

MHTC Presents at BIO 2007

The BIO 2007 convention was also occasion for MHTC to reach a broader audience with our well- received UMass Donahue Institute report, A Critical Alliance: The Biotechnology and Pharmaceutical Industries in Massachusetts, which continues to resonate among members of the industry. Millipore Chairman, President and CEO Martin Madaus who has a long history of working with the state's top biotechnology and pharmaceutical firms, joined Chris Anderson and the report's chief researchers Dr. Michael Goodman and Eric Nakajima to present the study during the convention's opening session.

The study shows that more than ever pharmaceutical and biotech firms in Massachusetts are interconnected and interdependent, that deep financial and scientific relationships have essentially blurred the lines between biotech and pharma to create a unified biopharmaceutical industry in Massachusetts.

From 2000 through 2006, a snapshot of just 13 of the leading pharmaceutical firms with Massachusetts locations identified investments of $13.4 billion through 357 alliances with state biotech companies. To put the size of that investment in perspective, the entire Massachusetts biotech industry received $4.5 billion in venture capital funding over that same timeframe.

Nearly half of these alliances occurred during the early stages of drug discovery - in the 'Death Valley' between federal grant awards and venture capital funding when many drugs fail. And these alliances are not merely marketing agreements; they are substitutive partnerships with research, development and commercialization components.

Massachusetts has one of the world's top biotech clusters, but there are challenges ahead. While the Massachusetts biopharmaceutical sector gained 15,000 jobs from 1998 to 2004, competitor states grew at much higher rates. Massachusetts was also outpaced percentage-wise by other states in rates of venture capital growth and in National Institutes of Health grant awards.

Consider the promise of biopharma growth in China, Ireland and Singapore, and the Bay State has a lot of work ahead to maintain its reputation as "the place" for biotechnology.

MHTC on the Hills

MHTC has been busy with the recent spate of legislative committee hearings testifying on bills proposed to change corporate tax structure, Unemployment Insurance and several major education policies including MCAS.

Unemployment Insurance

In keeping with the long-standing belief of the Council and its membership that Unemployment Insurance reform is a necessity, MHTC President Chris Anderson recently gave testimony to the Joint Committee on Labor and Workforce Development in support of House Bill 1799, An Act Relative to Reform of the Unemployment Insurance System.

For over 15 years, the Council and employers who have lower payroll tax options in every other state, have recommended the following fundamental and long-overdue additional UI reform measures: 1) Providing benefits for 26 weeks instead of 30 weeks, bringing us in line with the 49 other states; 2) Strengthening Eligibility Requirements - Massachusetts currently allows an individual who has been working for 15 weeks to be eligible for the same benefits as someone who has been in the workforce for 20 years. We recommend a minimum of 20 weeks; and 3) Replacing Rate-Setting Mechanism - A new rate-setting mechanism will make UI costs more stable and predictable without the need for annual legislative action.

Education

Anti-MCAS activists arrived en masse to lobby for a series of bills that weakened or abolished the test which currently provides the backbone for the state's standards based education system.

The proof of the success of this higher standards teaching and learning in the basic skills needed for academic (and future economic) achievement, is in our fourth and eighth grade students' first-place finish on the "Nation's Report Card," Math and English tests. This is a result of keeping Massachusetts' standards among the country's highest, despite pressure to lower the bar.

In response to questions from the Boston Globe, Chris Anderson said, "I couldn't conceive at this point of a scenario in which we would want to abandon MCAS as a yardstick for graduation in Massachusetts."

Immigration

MHTC recently weighed in on the Immigration debate communicating strong support to both Senator Kennedy and Senator Kerry's offices for Senator Cantwell's amendment (#1249) to the Immigration Reform bill (S.1348).

The green card and H-1B provisions in Senator Cantwell's amendment would help stem the tide of talent leaving the country by providing 140,000 visas to key professionals and would incorporate certain exemptions passed by the Senate last year.

It would also separately establish a merit-based system to advance an immigrant's place in the permanent-resident green card line based on age, work specialty, education, and number of years working in the country. This would raise the cap on H- 1B work visas to a maximum 115,000 visas from 65,000 visas.

The current Congressional debate on immigration highlights the need to retain the top talent that our universities produce. Massachusetts' diverse technology economy and high concentration of world class research universities and institutions will be significantly impacted by the Senate's immigration proposal. As currently drafted, it limits the potential for businesses to grow, prosper and stay in Massachusetts.