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Gap Appearing Between Jobs, Innovation in Local Businesses

By Robert Weisman


A gap is emerging in Massachusetts between innovation and job creation, as the state’s high-tech workforce continues to shrink despite the growth of a robust technology infrastructure, according to a report being released Monday by the Massachusetts Technology Collaborative.

Its eighth annual Index of the Massachusetts Innovation Economy says the state’s infrastructure of entrepreneurs, research and development labs, inventors, and venture capital firms may be stronger than ever. But the state has lagged in converting innovation into jobs.

One factor may be difficulty in capitalizing on the globalization trend, the report suggests. “Unfortunately,” it says, “in today’s global economy, innovations are pieces of intellectual property that are traded in an international market much like any other set of goods.”

Federally funded research grew to $4.6 billion in 2002, the most recent year for which figures were available, up 10 percent from 1999. Patent awards to Massachusetts inventors, meanwhile, climbed 8.3 percent in 2003, compared to an 1.1 percent increase for the nation as a whole. And the Massachusetts share of venture capital investments reached 14 percent in the first half of this year, one of the highest percentages in the nation, up from 11 percent in 2003.

But the report also documents disturbing trends: Massachusetts has lost more than 94,000 jobs since 2000 in technology sectors such as computer hardware, software, and communications. Fewer than a quarter of state workers are employed in what the collaborative calls the “innovation economy,” and the decline of jobs in high-tech sectors contributed to a 3.2 percent drop in median household income in Massachusetts last year.

Governor Mitt Romney called on businesses to take advantage of innovations to create jobs and said state government needs to create a more entrepreneurial climate. “We need to continue to work aggressively to develop new incentives, lower costs, and remove barriers for businesses across all industry sectors,” he said.