H
aving General Electric here in Massachusetts will probably have a halo effect that benefits the local economy.
It will be a source of pride for many. It could attract other companies. GE could buy from local companies, its executives could participate in local philanthropy, and the company’s presence could spawn further technology innovation.
But spending up to $276 million to attract 800 GE jobs is not the most effective way to create an economic return for the state. Instead, we should take the opportunity to shift our priorities to education and training to bridge the technical skills gaps keeping many Massachusetts firms from hiring employees for open positions — and growing.
The $276 million package comprises up to $120 million for infrastructure to support GE’s new headquarters, $100 million to reopen the Northern Ave Bridge, $25 million to improve roads, walkways, and bike lanes in the Seaport District, $25 million in city tax breaks, and $5 million for an innovation center.
That leaves $1 million for workforce development, an amount that is insufficient and will do little to build our state’s talent pool or train the next generation of technical leaders.
Research shows that STEM careers — those related to science, technology, engineering, and math — are a boon to the Massachusetts economy. The state’s technology sector employs more than 200,000 people directly and supports another 400,000 jobs at parts suppliers, restaurants, dry cleaners, and other businesses, according to a 2014 report by the Massachusetts Technology Leadership Council, or Mass TLC.
These direct and indirect jobs account for more than 25 percent of the wages and salaries paid in Massachusetts, according to the trade group.
Even during the three difficult years that followed the 2008 financial crisis, the state’s technology sector created more than 11,000 direct jobs and thousands more indirect jobs — a substantially greater number than the 800 new GE jobs, many of which will be filled by people transferring from Connecticut.
Meanwhile, the technology industry’s ability to find qualified workers is highly constrained. As the Mass TLC report emphasized, “[I]t turns out that creating jobs is not the real problem. It’s filling them. Attracting, developing, and retaining talent is perhaps the most critical issue threatening our ability to compete, lead, and grow.’’
As chief executive of Carbonite, I see this every day. In 2015, we hired more than 100 new employees, but it would have been far higher — 50 more in the engineering department alone — if we could select from a deeper talent pool. My peer technology chief executives report the same.
The rapid pace of change within the dynamic technology sector exacerbates STEM skills shortages, but it’s an issue we must address. A 2014 report by the Massachusetts Department of Higher Education indicated a “critical gap between the number of degrees granted in computer science and information technology at our public institutions and the current and projected growth in jobs requiring those credentials.’’ Public colleges and universities would need to double computer science and IT degrees to fill the talent gap, according to the report.
The state, however, has been very slow to act, and our educational institutions, from primary schools to research universities, remain underfunded. For instance, after years of debate, the state recently allocated up to $1.5 million to fund computer science education in public K-12 schools. If the state were to put $100 million towards technical skills development and mid-career skills retraining, we would not only fill the void for tech talent but also create far more than 800 jobs.
I call on Governor Charlie Baker and Mayor Martin J. Walsh to take skills development and retraining for the millions of our youth and midcareer workers seriously. Let’s allocate a much greater portion of the $276 million toward workforce development and prepare our citizens for 21st-century jobs.
Simply put, $1 million is not enough. Our great state’s innovation economy depends on it.
$276m
GE-related incentives and spending
$1m
Set aside for worker training
A CASE AGAINST
Mohamad Ali is chief executive of Carbonite, a leading provider of cloud-based backup and disaster recovery solutions for consumers and businesses. It is headquartered in downtown Boston with more than 800 employees worldwide.
