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MassDevelopment In The News
Look West, Young Entrepreneurs
September 13, 2004: Mass High Tech, by Robert L. Culver
Why are there so few high-tech companies in western Massachusetts, particularly the Pioneer Valley? Other than picturesque town centers and beautiful scenery, what does the area have to offer the high tech sector?
The answer is simple: a lot. The area has a robust health care community; well-established college and university research centers; easy access along the Massachusetts Turnpike and Route 2 east to west and Route 91 north to south, as well as Bradley International Airport in the south and Manchester Airport in the north; an educated workforce within easy driving distance; a committed banking community; space to renovate or build; and finally, low- to moderately priced housing.
Take Springfield as an example. It's an easy shot out the MassPike from the Boston-Cambridge and Worcester-area high tech clusters. There's a flourishing Biomedical Research Institute, a cooperative venture involving the city, University of Massachusetts at Amherst and Baystate Medical Center. The Institute has already attracted a private company, Biomedical Research Models Inc., bringing 70 new jobs to town. It also is working to foster collaborative efforts in life sciences research in the region.
A Regional Technology Corp. formed last year and is aggressively seeking to link UMass researchers to local companies to ensure that when discoveries are ready to move from R&D to commercialization, local businesses reap the benefits in new jobs and revenue.
The award-winning 15-acre Springfield Technical Community College Technology Park now houses a thriving telecommunications hub with Internet and telecommunication companies that employ nearly 1,000 people. A recent survey of technology businesses in the region found that lab technician positions were expected to grow at an ever-increasing rate, underscoring STCC's importance as a potential primary resource for professional training.
Another sign of progress: Blackstone Medical Inc., a designer and manufacturer of spinal implant devices, just expanded the company's operations in Springfield. The company has added more than 40 new jobs, doubled its revenues, increased its export business and capitalized on the valley's wealth of high-level precision manufacturing shops. These adaptable industrial fabrication operations are an important legacy of the region's eroded manufacturing base and a key resource for companies moving from R&D to production. And there are hundreds of them.
In addition, MicroTest Laboratories Inc. has announced an $8 million plan to expand its operations in neighboring Agawam. A leading contract services and manufacturer for the biotech industry, MicroTest intends to build a 20,500-square-foot facility including laboratories and production suites. The company forecasts more than 60 new jobs when the work is done.
According to U.S. Census figures, Springfield and the Pioneer Valley area currently lag behind the state in the percentage of workers with a bachelor's or advanced degree. However, that population is on the rise, from 21.2 percent in 1990 to 25.2 percent in 2000. Persuading those who graduate from area schools to stay and drawing qualified workers from other parts of the state or region is an attainable goal. Who wouldn't want to head west instead of east in a reverse commute during morning rush hour if the right job were waiting?
Add to this mix a comparatively low cost of housing and the appeal for workers continues to mount. With median single-family homes priced from about $115,000 in Springfield to $183,000 valleywide, the advantage is obvious when matched against the Massachusetts median of $315,000. Indeed, the area already has begun to draw educated, high tech employees away from congested population centers and slow drive times.
On the business side, compare $17 per square foot for Class A office space in Springfield to $35.50 in Boston and high-tech R&D at $6.25 versus $12. While vacancy rates for the former are about the same as those in the Boston market, the rate for the latter is 5 percent to Boston's 18.5 percent. For companies willing to build, however, large industrial lots are available in cities and towns such as Agawam, Westfield, Holyoke and Chicopee. And derelict mill complexes and other brownfields sites in older industrial areas are ripe for creative reuse.
Finally, we all know how important it is to have a supportive and responsive banking network. For instance, in recent months Banknorth has been an active partner with MassDevelopment in providing tailored financing packages for area businesses and nonprofits. A recent $17.5 million tax-exempt bond issue to support the expansion of the Lower Pioneer Valley Educational Collaborative's Career Technology Center is a good example. As is a $3.1 million financing package to help Kleer Lumber LLC, a synthetic lumber startup, purchase equipment for an expansion that is expected to create 40 new jobs.
Certainly no one is questioning the stature or importance of the technology clusters in Boston, Cambridge and Worcester. They represent a key ingredient in the future health of the commonwealth's economy. However, it's time to capitalize on the Pioneer Valley advantage. Committed academic, municipal and business leaders are making an eloquent case for the area. It's time for the high-tech community east of 495 to listen and respond.
Robert L. Culver is president and CEO of MassDevelopment, the state's finance and development authority.
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