Inertia and the Mass. Biz Climate

Never before had CEOs and officials in Massachusetts been assembled in a room to talk specifically about why they do business here and what they wish were different. The passionate and incisive responses from these executives at the first-ever Massachusetts Business Climate Summit last week underscore just how much CEOs care about doing business in the commonwealth. Despite its flaws, they love Massachusetts and want to grow here.

The question remains whether the political infrastructure — its leaders and the laws and regulations they promulgate — can return the love.

In contrast to the political status quo, CEOs are not complacent or infinitely patient people. While they put a premium on talent, which ultimately is Massachusetts’ calling card, they see a commonwealth that often makes it difficult to do business, and is not making the kind of investments the workforce needs. That’s why so many companies expand disproportionately out of state or overseas. They don’t have time to wait for things to get better.

And often the bigger businesses come here and take advantage of the difficulty businesses have in scaling up. Massachusetts is becoming “a plankton field for the whales from other parts of the country to come and feed,” said Pegasystems CEO Alan Trefler, a Jamaica Plain native and the builder of a fast-growing business management software company in Cambridge. Acquisitions of promising companies are greeted with a shrug of the shoulders, and what is lost is often innovation, potential job growth, and the civic benefits of having CEOs of prominent companies living and working locally.

While government officials can’t stop many acquisitions, save for antitrust considerations, there’s much more they can do to promote growth. Stabilize the tax environment — don’t ding businesses with $500 million more in taxes, for starters, Gov. Patrick. Make a public transportation overhaul the No. 1 economic priority, rather than a Trojan Horse to unleash an assortment of new taxes. Dismantle punitive laws, such as the noncompete and the independent contractor laws, that make CEOs wish their businesses were elsewhere.

As one attendee said at the event, Massachusetts suffers from a lack of alignment about the business climate. It ultimately comes down to leadership. We need more of it in the governor’s office and both chambers on Beacon Hill.