March 2008
Volume 31, Number 2
March 2008
2008 MHTC Leadership Team Named; UI Frozen Not Fixed; DTI Pursues Cyberspace Command Center
Former MHTC Vice-Chair and current U.S. Social Security Commissioner Michael Astrue provided the keynote speech at the 2008 Annual Meeting.
Council President Christopher Anderson,
Social Security Commissioner Michael Astrue,
and Council Chairman Joshua Boger
Boger Elected New MHTC Chairman
The High Tech Council Board of Directors unanimously voted Dr. Joshua Boger, President and CEO, Vertex Pharmaceuticals, to serve as the Council's 15th Chairman. Dr. Boger joins Vice Chairman, James Regan, Chairman, President and CEO of Dynamics Research; Treasurer, Rob Scott, President and CEO of Colubris Networks and Secretary, Paul Gauron, a Senior Partner at Goodwin Procter who were also elected to the leadership team.
"As the U.S. economy slows, Massachusetts will face increased global competition for both the businesses and talented workforce that support our economy," Boger noted in remarks upon accepting his two-year term. "Education reform and the creation of attractive cost structures for businesses must remain key priorities for Massachusetts if we are to remain competitive in the international business environment."
Dr. Boger founded Vertex in 1989, after starting his life sciences career at Merck. He also currently serves as Chairman of BIO, the national biotechnology trade association. A council member since 1997, Dr. Boger had served as Council Vice-Chair for the past two years.
2008 CEO Survey Released
Despite national and regional reports about the economy slipping into recession, a vast majority of top state technology CEOs is optimistic about the state's business climate and expects to add jobs in the next year, according to Annual Business Climate (CEO) Survey results released at MHTC's Annual Meeting on February 15. MHTC's annual CEO survey also indicates that a growing number of technology leaders want government leaders to focus on specific tax policies to improve the state's business costs structure and make the public education system more globally competitive.
"In order to maintain our standing as a top tier environment for tech business development and growth, Massachusetts must employ a comprehensive economic strategy that includes continued education reform," said Council President Christopher R. Anderson, a member of the Massachusetts Board of Education. "The long-term vitality of our technology industry requires a fair, predictable tax climate coupled with a constant infusion of innovation and new talent. It is incumbent on us to create world class public schools that compete globally."
The survey revealed that 64% of participating CEOs expect job expansion this year, while only 7% anticipate their company to reduce workforce. In addition, 76% of CEOs felt Massachusetts was either an "outstanding" or "good" place to run a technology firm, up one percentage point from 2007.
The annual survey helps set the Council's public policy agenda this year. The top five priorities for technology employers, as defined by the CEO survey are:
- Work to implement the consensus K-12 priorities established by the diverse group of education stakeholders convened by the Council during the past two years;
- Work to oppose new taxes, protect existing favorable tax policies and make other tax policies more competitive;
- Support the continued development of a long-term, tech-based, economic development strategy for our entire innovation economy;
- Reform the state's Unemployment Insurance system to make it competitive with the structure of the other 49 states;
- Focus state's workforce development programs to address the specific needs of technology sectors (i.e., defense, biopharma and others).
Unemployment Insurance; Frozen not Fixed
After months of relentless pressure by the Council, on February 21, Governor Patrick signed a bill approved by the Legislature that freezes the unemployment insurance rate at 2007 levels. Currently, there is more than $1.16 billion in the UI trust fund - a number that is expected to grow to $1.4 billion by the end of this year. If the system is not reformed, Massachusetts will be faced with another $100+ million assessment within the next two years, possibly by the end of 2008.
While a welcomed development, this rate freeze represents only temporary relief and does not address what is widely regarded as a broken system. The Council will continue its efforts to work with legislative leadership to achieve real unemployment insurance reform. The fact that the Legislature acted to prevent an unnecessary automatic rate hike underscores their understanding that a comprehensive set of reforms is ultimately needed to make our UI system competitive for the long term.
The UI rate freeze is reportedly part of a subsequent package that will close certain "tax loopholes" ($297 million in 2009) while lowering the corporate income tax rate .4% each of the next 3 years, 9.5% to 8.3% in 2011, according to Governor Patrick's proposed legislation (HB4499). House Speaker Sal Dimasi has publicly stated that he believes the corporate excise tax rate should be further lowered if the "tax loophole" measure is adopted, recommending a more aggressive schedule, that lowers the rate to 7% by 2011. The bill is currently pending.
DTI Pursues USAF Cyberspace Command HQ in Massachusetts
The Defense Technology Initiative (DTI), under the leadership of General Donald Quenneville (USAF, Ret.), has been at the forefront of efforts to bring the United States Air Force Cyberspace Command headquarters to Massachusetts. General Quenneville, who took the reigns at DTI in January, has since reached out to our federal delegation and the Patrick administration to rally support and has been building a "BRAC-like" team to pursue the headquarters since the new information surfaced.
In a March 13 State House News Service story, Air Force spokesman Charles Gulick confirmed that Massachusetts was one of 15 states in the running for the command headquarters, which could bring up to 500 new direct jobs to the state.
The Cyberspace Command is the first new Air Force Command established since the mid-1980s. If located at Hanscom AFB, the headquarters would have optimal proximity to the area's world class academic, research and business resources that would significantly augment the command and provide collaborative opportunities with the region's high tech cluster. According to USAF reports, a decision about the headquarters' site will be made by December 2008. DTI will continue to pursue this opportunity vigorously.
Pharma Marketing Ban Counterintuitive
MHTC recently weighed in through written testimony on Senate President Murray's bill addressing health care costs (SB2526 An Act Relative to Promoting Cost Containment, Transparency and Efficiency in the Delivery of Quality Health Care). Senate President Murray deserves credit for proposing the first set of recommendations that address the serious challenge of controlling health care costs without any new broad-based taxes or increasing the tax burden of employers. In particular, the increased investment in electronic medical records will benefit hospital efficiency and patient safety, while at the same time providing economic opportunities for Massachusetts technology employers.
However, the Council strongly opposed the recommendation to prohibit pharmaceutical companies from effectively educating doctors on life-altering drugs. Council President Chris Anderson argued that the proposal has no place in a bill that is designed to control costs and the fact that no specific cost savings have been publicly tied to the education ban reinforces that it is more of a political proposal than a fiscal one.
The Council contended that it would be shortsighted for the Commonwealth to commit a historic $1 billion investment for the state's life sciences industry while simultaneously undercutting biopharmaceutical employers that are expected to create jobs here. While the public prediction of 250,000 new jobs from the life sciences bill is already being questioned, imposing harmful policies on the biotech sector will greatly temper life sciences job growth in Massachusetts.
A much better idea would be to reform the state's medical malpractice laws. Creating a system that minimizes frivolous lawsuits and provides protections to doctors would greatly stabilize skyrocketing medical malpractice premiums that are driving many good doctors out of state. A 2002 federal study showed that reforming the nation's medical malpractice system would save up to $108 billion in annual health care costs. And the Massachusetts Medical Society's 2007 Physician Workforce Study found that 48% of practicing physicians surveyed said they alter or limit their day-to-day practice activities because of the fear of being sued - a disturbing prospect for both controlling costs and retaining doctors.
MHTC Sponsoring Venture Summit East
The Council is pleased to be supporting Venture Summit East, taking place at the Four Seasons Hotel in Boston, April 7-9.
Like its sister event in Silicon Valley, Venture Summit East is a two-day gathering that highlights the significant economic, political, and technology trends impacting the global growth investor. The Venture Summit East program will feature the most influential institutional investors, venture capitalists, corporate buyers, investment bankers, and research analysts in the Eastern U.S. in keynote presentations and panel debates.
The goal of Venture Summit East is to match growth- company buyers and sellers and identify the most promising innovation-driven, growth investment opportunities. Executives who attend Venture Summit East will enjoy unrivaled access to the most influential investors and private company CEOs in New England.
Five hundred institutional investors, venture capitalists, investment bankers, research analysts and corporate buyers will attend Venture Summit East. The most influential members of the financial and technology media and blogging community will also be on hand to moderate debates and cover the action. Executives attend Venture Summit East to identify and debate emerging investment opportunities in venture and private equity funds and private growth companies, and to build high-level relationships with technology and greentech CEOs and corporate buyers.
To register at the discounted rate, friends of MHTC can visit http://alwayson.goingon.com/cart/add/23817 to take advantage of the special 50%-off ticket rate.
Clean Energy for High Tech
Businesses across Massachusetts-and around the world-are facing increasing pressure to make their operations more energy efficient. Those who act early will attain a competitive advantage; those who fail to act may find themselves in an expensive game of catch-up later on.
On March 26 MHTC and the New England Clean Energy Council will hold Clean Energy for High Tech. This symposium is designed to help high tech company CFOs, facilities and sustainability executives better understand and manage the energy challenges confronting their organizations.
The event features:
- An unveiling of the High Tech Council's new Sustainability program
- Insights from corporations leading the charge on energy management and efficiency
- Explorations of innovative, new technologies and services for optimizing energy efficiency
- An overview of policy-both State and federal-which will affect energy prices now and in the future
Please contact Daniella DeChristopher at daniella@mhtc.org for more information.
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