Today I went to the Massachusetts IT Collaborative Workshop meeting (http://innovate.masstech.org/about/) at Microsoft Research in Cambridge. The Governor came to announce a new venture funding prize competition, as part of a ~150(?) person brainstorming session to figure out how to drive IT sector job growth here. There were plenty of very accomplished people there, and it was helpful to hear what they had to say. The initiative certainly seems to have a blue-chip organizing committee behind it, and today's event did it justice.
Some thoughts on the day:
It helps to have goals, if only to prioritize different ideas according to the contribution they could make toward meeting them. The UMass Donahue Institute presented some interesting research (anybody got the link?) on IT sector capital investment on a per IT job basis, and some job growth stats for the sector here in the Commonwealth. This got me thinking. Let's say a reasonable objective would be to create and retain 25k IT sector jobs each paying $100k -- I picked this number to reflect skill, cost of living, and inflation -- over the next five years. What top line would justify that? What characteristics would the jobs have to have to make sense in Massachusetts, rather than some other place?
For each person you pay $100k, there's overhead: benefits, taxes, rent, tools of the trade. Call it another $100k per job. Plus you need other people to make and sell what the IT folks engineer. Then in some cases the stuff is real physical stuff and has material costs. Whatever, all in let's say that the required top line, for each $100k IT job, is $800k. 25k new IT jobs thus means we need $20 billion in new annual revenues to justify them. Or, to coin a new unit of currency, $20B = a Google (though not as profitable -- GOOG generated $20B in revenue in 2008 with only 10k total employees worldwide, of whom maybe half (??) are engineers).
Hmm. A little daunting, but maybe not. Question: what sectors a) are huge b) need huge change and c) are led by Massachusetts practice and innovation? Answer: health care and education. Together, these push $3 trillion in spending in the US. A 2% efficiency gain (the same with less, or more with the same) would represent a 3X ROI on the $20B folks would pay to achieve that.
There's precedent for the state mobilizing at this pace and scale. In 2004 I was honored to be asked by BENS to work with MEMA on an initiative to increase emergency (read anti-terror) preparedness in conjunction with the 2004 Democratic National Convention. In six weeks that summer, with a low-six-figure budget, we developed the equivalent of "Craigslist-for-emergencies" and registered $300M in emergency-related assets from 30 major local corporations which could have been made available if needed. (See clearinghouse ideas below.)
OK, now let's think about the pipeline. We need to attract, engage, and convert that revenue, and the jobs that go with it, to Massachusetts. Some we grow from scratch, some we have to import. Maybe the work from here is to do the math to figure out how much activity we need in the attract and engage buckets to convert the target revenue and jobs, and then prioritize and manage the initiatives according to how (cost-effectively) they contribute toward the goals in each bucket.
Other thoughts (some previously tweeted:)
- You get what you measure. We have debt clocks and population clocks. Maybe the Boston skyline needs a job creation clock?
- Tough times drive folks toward isolation, when what they need is more circulation for more company formation and job creation, so maybe encourage circulation-friendly initiatives? Like online clearinghouses for cheap office space to get them out of their basements? (For example, Craigslist doesn't present options in a very consumable way. A better service would allow filtering by total budget, or location, or number of people to be accomodated, to help clear the market more readily.) Or, help finding shared financial and HR services for VC-backed startups struggling to use capital efficiently with the B-round door slammed shut?
- Our competition is described by vastly larger scales -- China, India, even Silicon Valley (SJ to SF can be 2-3 hours in tough traffic). Can we afford to define ourselves so narrowly? Heretical thought: NE+NY as a marketing partnership? It's only 4 hours and 15 bucks by Bolt Bus (with free wifi!) between the two. Now that's capital-efficient!
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