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Archived: Blueprint for the Next Century | A Uniformly Strong Business Climate

Posted on November 18, 2014

(Editor’s note – AIM last week released the Blueprint for the Next Century, a long-term plan for economic growth and prosperity in Massachusetts. The AIM blog will this week publish one summary each day of the four recommendations contained in the Blueprint. We invite your responses in the Comments section.)

Create a competitive economic structure across all industries, geographic regions and populations rather than picking winners and losers.

BusinessClimateWhere We Stand

Effective governments build business climates that encourage employers in all industries to invest, expand and create economic opportunity. These governments resist the temptation to spend public resources on the high-profile industry of the moment and instead ensure that long-term business costs, regulation, education, training and responsiveness help everyone”from the multinational high-tech company to the small entrepreneur.

A stable and predictable business climate is particularly important to capital-intensive sectors of the economy like manufacturing. No sector creates more economic value than manufacturing in Massachusetts. Manufacturing productivity surged 8.7 percent from 2007-2011, far faster than the overall growth rate of 1.7 percent. Each Massachusetts manufacturing worker adds an average of $178,625 to gross state product versus $114,568 for all private-sectors workers.

Manufacturing remains a key area of interest for Associated Industries of Massachusetts, which has represented the interests of such companies since 1915.

Where We Can Improve

Business Climate

  1. Structure economic development incentives around the business requirements of employers rather than the preconceived notions of which geographic regions would benefit most from job growth. Incentives to locate in Gateway Cities are important, but no more important than the needs of companies that might grow in Massachusetts, but are unable to locate near older industrial cities.
  2. Extend economic development incentives to companies in all industries, in all regions, rather than limiting benefits to biotechnology, clean technology or other selected sectors.
  3. Use economic development to encourage projects that benefit the highest number and variety of wage earners.
  4. Build flexibility into economic development incentives so the commonwealth will have the opportunity to respond to new challenges as they arise.
  5. Let business needs drive the process.


  1. Massachusetts must solve the long-term electricity cost crisis that threatens the survival of manufacturing in the commonwealth. (Health Care and Energy Section)
  2. Employers, government and citizens must together elevate the role of vocational education and its potential to provide people the skills they need to realize their economic objectives. (Work Force Section)
  3. We should replicate partnerships such as the $9.7 million Berkshire Innovation Center in Pittsfield. A membership cooperative led by companies such as Crane & Company and General Dynamics, the 20,000-square-foot center will include tools for precision analysis and microscopy, rapid 3D prototype printing and other operations crucial to expanding productivity for smaller companies.
  4. The Massachusetts Advanced Manufacturing Collaborative should work to re-establish the once close connection between the innovation sectors of the economy and the commonwealth’s base of advanced manufacturers. Medical researchers, clean-tech entrepreneurs, nanotechnology developers and others need access to the unparalleled engineering and manufacturing expertise of Bay State companies to make their ideas tangible.  Allow innovation to drive downstream benefits in other sectors of the economy.
  5. Organize a “Trade Mission to Massachusetts” that would expose innovators from Greater Boston to potential partners and manufacturers in other parts of the commonwealth. It’s a way to encourage an exchange of ideas and the formation of long-term connections.
  6. Government and the private sector must help Massachusetts manufacturing companies expand markets overseas, especially as U.S. government spending on defense and health care declines.
  7. Ramp up the frequency and variety of trade missions. These missions make practical connections for employers and raise the visibility of exporting as a key issue.
  8. Support appropriate free trade agreements between the United States and important trading partners (T-TIP between the US and the European Union; and the Trans-Pacific Partnership), as well as initiatives such as trade promotion authority, re-authorization of the Export-Import Bank and immigration reform.
  9. Improve the current structure for encouraging foreign direct investment in Massachusetts.
  10. Establish an online portal to facilitate connections between Massachusetts companies and collaborators, partners and investors overseas.

Business Formation

Business formation and entrepreneurship represent the source of regeneration for an economy. It is particularly important in Massachusetts, which ranks among the highest in the U.S. for patent creation and venture capital investment.

  1. Government should remove impediments to the e-service economy (Uber etc.) by changing the independent contractor law.
  2. Support Best Return on America’s Investment Now, or BRAIN Act, which would create a visa for foreigners who receive an advanced degree in science, technology, engineering and math.
  3. Exempt businesses earning less than $500,000 from the corporate income tax.
  4. Reduce fees for starting and maintaining a business (LLCs have $500 initial filing fee and $500 annual filing fee; reduce to $125).
  5. Encourage the development of the Maker Economy and creative production facilities such as Industry City in Brooklyn.  The maker movement is the umbrella term for independent inventors, designers and tinkerers who combine crafts, manufacturing, open-source learning and personal technology like 3-D printers. The creations, born in cluttered local workshops and bedroom offices, are meant to appeal to consumers looking for locally-sourced, high-quality products instead of generic, mass-produced, made-in-China merchandise.