Investment &

1. Investment & Mass Jobs Opportunity “An Act Making One-Time Investments in Emerging Technologies to Stimulate Job Creation and Economic Opportunity Throughout the Commonwealth”

2. A Global Recession Our state and our nation are in the midst of a severe economic crisis. In the last year, 160,000 people in Massachusetts have lost their jobs and companies profits have declined, leading to reduced revenues for the state and subsequently reduced services. “…there are now more than two million fewer private sector jobs than at the start of the current recession. Overcapacity, corporate scandals, and uncertainty have and will continue to weigh down the economy.” -Three Nobel Prize winning economists and over 450 of their colleagues in a statement released to the National Press Club on 2/10/03

3. Why do we need to focus on economic development? “The legislature and general public focus enormous attention on specific quality of life issues – prescription drugs, early childhood education, community policing, and more. These programs are almost totally dependant on a vibrant, healthy and diverse economy to advance our individual and collective quality of life. During these turbulent times in our national and global economy, states, now more than ever, need to maximize their economic potential and prepare for future opportunity. Rapidly developing emerging technologies are our best opportunity to positively impact our fiscal and economic crises.” --Assistant Vice Chairman Peter Larkin (D-Pittsfield) House Committee on Ways and Means

4. What can we do to encourage economic growth? • Invest in research and development • Currently, Massachusetts is second in the nation for receipt of total National Institute of Health grant dollars, and we attract over $1.9 billion in research and development grants annually. • Research and Development grants foster the creation of small science and technology-related businesses throughout the Commonwealth. • Encourage small firms based in technology, health care, and science research and development—they are the driving engine of our economy • Of the 500,000 new jobs created during the last decade, 88% were in firms of 100 or fewer employees. Many of these firms were in new and emerging technologies.

5. What are other states doing to create jobs? • Pennsylvania • The Ben Franklin Initiative supports business assistance and technology development programs at a cost of about $54 million a year in state operating funds. The state’s total technology-related budget is about $70 million and they have $480 million in outstanding investments. • New York • New York is currently seeking a $250 million, five-year capital authorization for five highly-touted Centers of Excellence. The state is also investing $225 million in capital funds over five years to projects that promote life science development and economic spin-offs at public and private universities throughout the state. The state also spends approximately $50 million in operating funds to support regional initiatives in technology and competitiveness. • Ohio • Ohio’s Third Frontier Project is a $1.6 billion public commitment to the state’s high technology sector. The project includes providing funds to improve research facilities, to recruit world-class researchers and bring state-of-the-art products to market, to invest in technology and biomedical research, and to finance targeted industries with high-growth, high-wage potential consistent with regional priorities. • California • California has invested $100 million in its state university system to develop its science programs and CalPERS, the state’s retirement fund, has invested $500 million in the CalPERS California Biotechnology Program.

6. “Massachusetts must get its economy back on track. We can do this by dominating the national economy in industries that require a highly educated and skilled workforce. We are poised to become the next Silicon Valley, and we must take every step to position ourselves ahead of states like California, New York, New Jersey, and North Carolina to make this a reality.By investing in our workforce and business environment we will bring our economy back into prosperity and once again be a leader in the national and global economies. We can and must foster the creation of jobs for all skill levels throughout the Commonwealth.” -Speaker of the House Thomas M. Finneran

7. Six Steps to Statewide Economic Renewal • Capitalize on our state’s already strong industries including Education and Health Care; • Create a stable and reliable rate of taxation; • Streamline the state’s permitting process and review new state regulations to assess their financial impact; • Consolidate all economic development functions to create a “one-stop shop” for people doing business in the Commonwealth; • Invest $110 million in job creation and economic opportunity within our state economy’s most promising segment—Emerging Technologies; and • Inventory economic assets, identify industry clusters, and make strategic investments to ensure that all of our regional economies are bolstered.

8. We Must Continue to Support Our State’s Strongest Industries 1 in 5 jobs in our economy are in the Education and Health Care sectors. Source: MA Division of Employment and Training

9. Supporting the Health Care and Education Sectors • Massachusetts’ Health Care and Education sectors bring in nearly $2 billion in federal research grants. • These grants allow new ideas, largely in the area of emerging technologies, to become reality. • By supporting and encouraging these industries, we are setting the groundwork for future economic prosperity.

10. Science and Technology Education Study Commission The Special Commission on Science and Technology Education will consist of government, business, science, technology, and education representatives. They will investigate ways in which Massachusetts can continue to foster a specialized science and technology workforce to support the demands of the industry. Studying the state’s public university, college, and community college systems, they will investigate ways to establish job training programs specifically geared toward creating manufacturing, science and technology employment opportunities. “Massachusetts’ highly educated workforce is one of its greatest assets. We need to find a way to further utilize this strength by teaching students of all ages the necessary skills to further advance their own economic potential through careers in science and technology.” --Chairman Brian Dempsey (D-Haverhill) House Committee on Science and Technology

11. We Need to Reauthorize the Investment Tax Credit at 3% Since its inception in Massachusetts, the ITC has aided companies by offsetting higher production costs and encouraging firms to invest in facilities and equipment. As companies become more productive, they create more jobs that pay good wages at all levels. Source: MA DOR The ITC brings in more money than it costs the state.

12. What has the ITC done for Massachusetts? • In the last 5 years, the ITC has • Created over 9,000 new jobs. • Retained over 17,000 jobs, many of which are in manufacturing and pay, on average, $59,000 annually. Massachusetts needs job growth now more than ever. By reauthorizing the ITC at 3% permanently, Massachusetts will sustain the growth of the past five years while giving businesses the security they need to make investment decisions in a weak economy.

13. We Must Streamline Permitting and Review New State Regulations “We need to put people back to work in Massachusetts. To do this, we must be vigilant to ensure that government regulations do not needlessly prevent our businesses from creating jobs.” --Chairman Michael J. Rodrigues (D-Westport) House Committee on Commerce and Labor • Any new regulation proposed by a state agency must be accompanied by a regulatory impact statement which details both the purpose and the financial impact of the regulation. • A permitting ombudsman will be created to guide new businesses through the state permitting process and serve as the main contact for new and expanding businesses on permitting and zoning issues.

14. All of Massachusetts’ Economic Development Functions Should be Consolidated into One Department • This will reduce duplication of efforts, save money, and ensure streamlining of the regulatory, licensing, and permitting processes. • They will also greatly simplify the process of developing and expanding businesses within the Commonwealth.

15. We Need to Invest in Emerging Technologies The Seven Industries that Make Up the Emerging Technologies Are: Biotechnology National defense and security Advanced Materials Medical devices Pharmaceuticals Information technology Environmental technologies/renewable energy

16. Why Emerging Technologies? • In the last two years, Massachusetts has lost over 160,000 jobs, while our state’s emerging technology industries have added 37,454 jobs in the last year alone. • A $110 million state investment in these industries will leverage several times this amount in private investment. This will infuse at least $500 million into these sectors. • The Biotechnology industry estimates that by 2010, with a cooperative state atmosphere, they can create 100,000 jobs which pay on average $73,200 each. This will create an additional $320 million in state income tax revenue alone. • The addition of $320 million in state income tax revenue will allow Massachusetts to further invest in the health care, education, and public safety of its residents, making our state a more desirable place to live, study, work, and raise a family.

17. A Statewide Investment in the Economic Development of Emerging Technologies • Massachusetts’ Development Finance Agency (MassDevelopment) • Emerging Technology Fund: $55 million • Massachusetts Brownfield Redevelopment Fund: $8 million • Massachusetts Technology Collaborative • The John Adams Innovation Enterprise: $15 million • The Massachusetts Research Center Matching Fund: $25 million • Massachusetts Technology Development Corporation: $5 million • Commonwealth Corporation’s Economic Stabilization Trust: $2 million In order to implement the funding portion of MassJobs, the House looked to the state’s already successful and prudently managed public trusts. These quasi-public agencies have a strong record of working with businesses and community leaders throughout the state. By developing jobs and the economy, they have proven the value of strong competition for scarce public resources and set a high bar for companies seeking public funding. A $110 Million Investment:

18. The John Adams Innovation Enterprise • Promote scientific research and technology development in all of Massachusetts’ regions; • Drive new economic growth throughout the state through the types of public investments in the formation of core technologies; and The John Adams Innovation Enterprise honors John Adams’ innovative thought and public commitment to the betterment of our state and nation by establishing a statewide network of regional support for the encouragement of technological advances, the new frontier of the 21st century. Adams is responsible for two of the world’s oldest living government structures through his writing of the Massachusetts’ Constitution, which later served as a guide to the United States’ Constitution, setting the structure for our nation as we know it today. The Innovation Enterprise Will: • Administer the Massachusetts Research Center Matching Fund which will attract federal research support and private sector investment for industry-university academic research centers.

19. MassDevelopment MassDevelopment provides the financial tools and real estate expertise needed to stimulate economic growth across the state of Massachusetts by working with businesses, community leaders and elected officials to address blighted areas, help create jobs, and other overarching issues that impact economic development In the last five years, MassDevelopment has helped create nearly 30,000 jobs, and has financed $6.5 billion in projects across the state of Massachusetts. Last year, it financed a record $1.7 billion in projects, and began fiscal year 2003 on strong footing with a full pipeline. • MassDevelopment was formed in 1995 by the informal merger of the Government Land Bank and the Massachusetts Industrial Finance Agency. • The quasi-governmental agency was formally created by legislation in 1998. • Its role and responsibilities are laid out in Chapter 23G of the Massachusetts General Laws.

20. MassDevelopment Board of Directors Robert L. Beal, Chairman, President, The Beal Companies David F. Squire, Vice Chair, Trustee and Former Vice President, Brandeis University Lisa M. Campoli, Executive Vice President, Meredith & Grew, Inc. Dix Davis, Vice President, Allmerica Financial, Retired Christopher F. Egan, President, Carruth Capital, LLC Robert Fox, President, Bradford Development Corporation Robert E. Gray III, President, Gray Media Eric Kriss, Secretary, Executive Office for Administration and Finance Benaree Pratt Wiley, President/CEO, The Partnership Barbara B. Berke, Director, Department of Economic Development Michael Hogan, President and CEO

21. The Emerging Technology Fund • An investment in the ETF will leverage a minimum of four times its amount in private capital. • ETF investments can be targeted specifically on technology-based, physical infrastructure—making for a permanent development and manufacturing presence in Massachusetts. • An increase in Development and Manufacturing operations will bring thousands of well paying jobs to Massachusetts. The current ETF was created in 1998 to stimulate increased financing for manufacturing and related facilities for emerging technology companies and to provide match funding for federal and foundation grants for advanced research and development of emerging technologies.

22. Massachusetts Brownfields Redevelopment Fund The Brownfields Redevelopment Fund was established under MassDevelopment on August 5, 1998 as part of the "Brownfields Act", which established new incentives to encourage parties to clean up and redevelop contaminated property in Massachusetts. (M.G.L. Ch.23G, Section 29A) This $30 million fund has awarded site assessments or brownfield cleanup loans to over 322 separate projects across the Commonwealth. Currently, almost $24 million of the fund is active. This fund targets viable redevelopment projects that will deliver significant economic benefits, including job growth and increasing the housing supply .

23. Massachusetts Technology Collaborative The Massachusetts Technology Collaborative is the state’s development agency for renewable energy and the innovation economy, which is responsible for one-quarter of all jobs in the state. They work with cutting-edge companies to create new jobs and stimulate economic activity in communities throughout the Commonwealth while bringing together leaders from industry, academia, and government to advance technology-based solutions that lead to economic growth and a cleaner environment in Massachusetts.

24. Massachusetts Technology Collaborative Mitchell Adams, Executive Director Executive CommitteeDr. Karl Weiss, Board Chairperson, MTC; Professor Emeritus, Northeastern University Lawrence J. Reilly, Board Vice-Chairperson, MTC; Senior Vice President, General Counsel and Secretary, National Grid USA Barbara Berke, Director, Department of Economic Development, Commonwealth of Massachusetts David D. Fleming, Group Senior Vice President, Genzyme Corporation Dr. Paul C. Martin, John H. Van Vleck Professor of Pure and Applied Physics, Dean for Research and Information Technology, Harvard University Board Members The Honorable William M. Bulger, President, University of Massachusetts Patrick Carney, Executive Vice President, Members Plus Credit Union Dr. Aram V. Chobanian, Provost, Medical School Campus; Dean, School of Medicine, Boston University Michael J. Cronin, President and CEO, Cognition CorporationDr. Priscilla Douglas, PHDouglas & Associates Thomas A. Farrington, President and CEO, Farrington Associates, Inc. Dr. Patricia M. Flynn, Trustee Professor of Economics and Management, Bentley College Debra Germaine, Senior Partner, International Technology Practice, Heidrick & Struggles Judith I. Gill, Chancellor, Massachusetts Board Higher Education C. Jeffrey Grogan, Partner, Monitor Group, LP Alain J. Hanover, Managing Director and CEO, Navigator Technology Ventures Eric A. Kriss, Secretary of the Massachusetts Executive Office for Administration and Finance Gloria C. Larson, Partner, Foley Hoag LLP Paul Wesley Nakazawa, President, Nakazawa Consultants; Lecturer in Architecture, Harvard University, Graduate School of Design Dr. Lindsay Norman, President, Massachusetts Bay Community College William H. O'Rourke, Business Manager, International Brotherhood of Electrical Workers, Local Union 455Dr. Joan Y. Reede, Dean for Diversity and Community Partnership, Harvard Medical School Dr. Krishna Vedula, Dean, Francis College of Engineering, UMass, Lowell

25. MTDC Cumulative Investments 1980-June 2001 Massachusetts Technology Development Corporation The Massachusetts Technology Development Corporation (MTDC) is a state-sponsored venture capital company that focuses on providing capital to fund economic development in the Commonwealth. In the past 20 years, it has demonstrated a 17% rate of return on investments, and the Commonwealth receives 20% of any net gain that its investments yield. MTDC is currently developing the Commonwealth Fund III, a $25 million capital fund targeting emerging technology development, in which they are expected to invest $1 million and solicit an additional $24 million from other parties.

26. Massachusetts Technology Development Corporation Board of Directors Paul J. Severino, Chairman, MTDC's Board of Directors, Private Investor Frank B. Manning, Vice Chairman, MTDC's Board of Directors, President, Zoom Telephonics, Inc. Drew J. Hannah, Treasurer of the Corporation (MTDC), President, Parker Guitars, Inc. and Fishman Transducers, Inc. Dr. Ellen R. Frank, Stratex Group Leonard L. Lewin, Gadsby Hannah, LLP David I. Lewis, Information Technology Consultant Elizabeth P. Powell, Chairman of the Board, Diamond Machining Technology, Inc. Barbara Berke, Director, Department of Economic Development Eric Kriss, Secretary of the Executive Office for Administration and Finance The Honorable William M. Bulger, President, University of Massachusetts Robert J. Crowley, President of MTDC

27. Conclusion We are in the midst of a global economic crisis, but we must find local solutions to prepare our state for economic and fiscal recovery. Through wise investment and regulatory overhaul, emerging technologies can help bring the entire Massachusetts economy back into prosperity, providing our families financial security and giving the state the revenues necessary to fully fund the programs and services upon which we all rely.