There is no question that the announcement in January that Procter & Gamble, the Cincinnati–based consumer-products conglomerate, would acquire the Gillette Co., a Boston stalwart, struck a nerve. Partly, it was simply the shock. Unlike other recently sold companies, Gillette was not publicly in play. Indeed, having fought off P&G’s advances several years ago, Gillette’s eagerness for the deal took the public, and even seasoned observers, by surprise. Partly, it was the specifics of the deal, which involved a great deal of money for shareholders and executives but little in the way of obvious business imperative. But the main reason the Gillette buyout hit home is that old rule of thumb: It takes three to make a trend. And after the Manulife acquisition of John Hancock and the Bank of America takeover of Fleet Bank, Gillette was the third that formed a disturbing pattern.
Ferdinand Colloredo-Mansfeld, Thomas
Hynes Jr., and Una Ryan.
Old Boston is on the auction block, turning a place once known (if only to itself) as the Hub of the Solar System into what many people are starting to call a branch-office town. Still, apart from damage to the collective psyche, what is at stake for the city, and for the state, in global corporate consolidation?
Three areas of potential impact come to mind: jobs, philanthropy, and civic leadership. As it loses corporate headquarters, is the state losing control over its economic destiny? Are the region’s charities and nonprofit institutions of art, music, and culture losing their patrons? And, as the chieftains of the region’s biggest corporations take their golden parachutes and go home, is the body politic losing its biggest extra-governmental leaders? Inquiring minds want to know.
Marshall Carter is former chairman and chief executive of State Street Bank and Trust Co., which turned back a takeover attempt in 1997. In his retirement, Carter chaired a panel, appointed by Acting Gov. Jane Swift, that examined Logan Airport security and operations following 9/11; he is also a senior fellow at the Center for Business and Government at Harvard’s Kennedy School of Government and a member of the board (and on the short list for chairman) of the New York Stock Exchange.
Ferdinand Colloredo-Mansfeld is a partner in Cabot Properties, a Boston–based real estate investment firm, and former chief executive of Cabot, Cabot & Forbes. Colloredo-Mansfeld serves on the board of directors of the Raytheon Co. and is former chairman of the board of Massachusetts General Hospital. But “Moose,” as he is called by one and all, is best known for his leadership of the Boston Private Industry Council and, especially, the Coordinating Committee, or the “Vault,” in the 1980s and ’90s.
Thomas Hynes Jr. is president of Meredith & Grew, a downtown Boston real estate firm. He is also chairman of the Massachusetts Business Roundtable.
Rosabeth Moss Kanter, a professor at Harvard Business School and former editor of Harvard Business Review, is author of World Class: Thriving Locally in the Global Economy, and, most recently, Confidence: How Winning Streaks and Losing Streaks Begin and End. An advisor to corporations, governments, and community organizations, she is a veteran of many commissions and advisory boards.
Una Ryan, PhD, is chief executive of Avant Immunotherapeutics, a biopharmaceutical company based in Needham, which has under construction a manufacturing facility in Fall River. She is also chairman of the Massachusetts Biotechnology Council.
We gathered at the Boston offices of Goodwin Procter LLP for breakfast and conversation on the snowy morning of March 1. All, that is, but Marsh Carter, who joined us by speakerphone. What follows is an edited transcript of our discussion.
CommonWealth: I’d like to take this discussion through the three axes of concern about the loss of major business headquarters in Massachusetts. One axis is the economic. As Marsh asked on the phone before we began, are we turning into Albany? Are we becoming a backwater of a global economy that is based not here, perhaps not in any particular place, but elsewhere—all the elsewheres? Second, there is concern about what that means for philanthropy. Third is the matter of what the loss of corporate headquarters means for leadership in the civic sphere. For years we’ve depended on corporate leaders who, although they might have nationwide or worldwide business interests, were based here and were concerned about things in their own company’s back yard, and therefore played an active role in doing something about them. So let me ask first about the economic, the material issue. Do we have something to worry about? Or is this just sort of the normal process of change in an ever-changing economy? Maybe we should get used to it, get over it, and look to the future.
Kanter: This is exactly what my observations and my research show. First of all, on the philanthropy and civic leadership front, there is a strong headquarters effect. Companies do contribute disproportionately in their home city or in the home city of top management.… In terms of Bank of America, I think it’s a loss because BankBoston, and continued under Fleet, did take on the lion’s share [of public activity]. We have Larry Fish at Citizens, but actually his company is foreign-owned [by Royal Bank of Scotland], even though Citizens Financial itself is based here. Gillette, I think, is largely irrelevant. I think Gillette has been a good contributor but has never really been active as a civic leader. The ones that were big players were the ones that had an interest in the local market. So we should bemoan the loss of ownership of the [Boston Globe] newspaper [to the New York Times Co.], the development firms, the banks, and others that have an interest in downtown Boston. What happened also was our economy shifted in the ’80s toward companies that had no downtown interests, even though they might have been headquartered here [in Massachusetts]. They were in the suburbs and exurbs. They were out on I-495 and beyond.
GROWING BUSINESS, GROWING JOBS
CommonWealth: Focusing strictly on the economic question, perhaps some of our politicians and others who are playing bean counter around the Bank of America acquisition—asking, “Are you living up to your jobs commitment? How many jobs are going to be lost with the Gillette acquisition by Procter & Gamble?”—maybe that’s misguided. Jobs may not be the main thing that is at stake. If we’re really looking for job growth, that’s going to come not from the behemoths but from the entrepreneurial sector. Maybe the real question in the loss of large, visible companies is the leadership question.
Ryan: We will always end up with acquisitions and mergers. That’s part of growing up in business and achieving the goal that you really wanted when you set out. What we have to do is make sure it really is part of a life cycle, that we are starting the new, young companies, the entrepreneurial ones—because those are the ones that provide the job growth. A company like mine that’s not even profitable yet is part of a growth industry. We’re building a new plant in Fall River and I just can’t get people in fast enough.
Carter: I would certainly agree with that. Two aspects, though. When you have a loss like Bank of America or Gillette, you’re losing the corporate staff jobs, not necessarily as much of the worker-bee jobs. Those jobs you’re losing tend to be the higher paying, more community-involved jobs—the general counsel, the assistant human-resources executive. The second issue is, when these companies begin to grow, like the one you just mentioned, the people running them are 100 percent focused on growing that company and are in a stage of their career where they don’t have a lot of time to devote to the community. The community stuff tends to come when you’re more secure in your job and your company is beginning to gain a reputation. But the third thing is, people are really happy to put their [research-and-development] facilities around Boston but, boy, when it comes to production, they tend to go to those states where you can build a plant in six months instead of taking five years to get approval.
Kanter: We’ve been losing manufacturing and losing manufacturing jobs in Massachusetts for a long time.
Colloredo-Mansfeld: For a hundred years.
Kanter: Should we be really concerned about it? Because we’ve survived. Or should we do what we can to tweak the business climate so that we have a better shot at competing for the [kinds of companies] we should have, even if we’re not going to have so many shoe factories anymore?
Colloredo-Mansfeld: Boston has lived by its wits. That’s its history, when you think about it…. Today, health care is a huge business activity here. Back in the ’80s, when a fellow named Bob Buchanan was running the Massachusetts General Hospital, I asked him to come to the Vault to talk about what was going on in health care, and he later was asked to join the Vault. It was the first time, because up to that time, the business folks would say, “Oh, I’m on the board of this hospital or that hospital—we represent the hospitals.” In those days, it was more of a charity. It wasn’t considered a mainstream business. But the spinoffs and the research activities of the various hospitals in Boston are enormous. And I do think that is going to continue.
Ryan: As you say, there are many spinoffs and startups. We love entrepreneurial, unprofitable startups in this state. Once you begin to achieve your goals and become big and profitable, you become ugly, like the big pharmaceutical companies that you’ve been emulating all along. I think we have the wrong model. We have the fish model, and I think we need the mammal model. We start all these babies and expect attrition to [sort out] the winners. We don’t nurture the small companies that are here and let them grow to the point where they will return revenues to the Commonwealth. We [in the biotech industry] are being wooed by every other state, every other country, and in Massachusetts, you can’t find the right agency to talk to.
Carter: Let me give you an example. About seven years ago, we [at State Street] decided to expand our Kansas City operation because we loved the workforce out there. We had had about 200 people out there. I went out to see the mayor…. He was an African-American Baptist minister, very pro-business. I said, “We want to put up a 500,000-square-foot, twin-towered building with a 3,000-car parking gar-age underneath. We don’t care where in town we put it.” He said, “If you put it in this part of town I’m trying to redevelop, I’ll have all your approvals in five weeks.” We were out there in January. We broke ground for that building in April. We occupied the first half of the building 18 months later. The problem we have here in Massachusetts is, we can’t even begin to grow a company at that level in less than a five-year timeframe to get approval for things.
Kanter: Why aren’t we holding politicians’ feet to the fire on this? Why are we decrying these awful corporations who merge and leave, when that’s not the underlying problem? … Our problems with permitting, of entanglements in state government, we’ve had that on the agenda here since at least 1990, since the Weld administration. Why don’t we do anything about the business climate? The focus of this [discussion] is that we’re at risk of being an Albany because of the global corporate economy when maybe the fault lies in us, here, not in them.
Ryan: I think that’s absolutely right, but I think we are doing things. The Mass. Biotech Council and I, in particular, pushed for streamlined permitting. We do what we can with our trade organizations. We’ve lobbied everybody here. One of the problems is home rule, of course, in Massachusetts, where you’ve got to deal with every township. But…we do now have streamlined permitting. It’s not perfect, but it’s a lot better.
Carter: We’re not getting the leadership at the top level of the state and the governor’s office on economic development that I think we should have. I have a hard time counting any success [in the past] 10 years—with the exception of the removal of the banking law, which went back something like 90 years, with banks taxed at 13 percent as against corporations at 9 percent. What finally made the difference was, I went to see Bill Weld. I said, “Bill, we have an 18,000-person workforce here, 85 percent university-educated, [but] I can be in Nevada in 90 days. We don’t care where we operate because we’re a global company.” We finally got that [banking law] removed, but I just don’t think we’re getting the leadership that we’re paying for in our taxes.
CommonWealth: How many times do we have to fix the same problem? I am amazed to listen to this. When Bill Weld came into office, it was going to be all about straightening out this overregulated state. “We’re going to streamline things. We’re going to let business get underway and not tie them up for years. We’re going to solve the permitting problem.” Yet, when Gov. Romney presents his economic stimulus plan to the Greater Boston Chamber of Commerce, he does a PowerPoint demonstration with a slide that describes the permitting process—and it’s a Rube Goldberg contraption. It’s chockablock full of boxes and arrows. Tom, you’ve been watching this process for years. Why do we never get off the dime on this?
BANKING ON LIFE SCIENCES
Hynes: Part of the issue is just the age and the maturity of our economy. We have cities and towns that have been around for 100 years, versus Dallas or Kansas City or Houston, where you can just go out to that “back forty”—there’s plenty of land and very little zoning constraints. So one of our great strengths is also our weakness. The weakness is how we get tied up in local government, and the approval of any project that goes through multiple layers of jurisdiction. It’s also one of our great assets, because it creates a [desirable] quality of life in our cities and towns. But I think we have to pay attention to [emerging] economic clusters where we could put the permitting in place in advance. The whole life sciences sector—biotechnology and pharma and all the rest of it—that is the future. Novartis could have gone anywhere, but they did a worldwide search and they plunked right down in Cambridge. Why? Three letters: MIT. To be sitting right adjacent to MIT to have the strength of the intellectual brain power that’s sitting right there.
Ryan: But they didn’t put their manufacturing plant there.
Hynes: That’s the other half of the equation. If that were a focus, if we could capture some of that, it would give us a better chance also to attract more and more of those companies.
Ryan: And I think we can.
Kanter: I think with Novartis, by the way, it wasn’t MIT, it was the medical centers.
Ryan: I think it was the biotech companies [who were already here].
Hynes: It’s a cluster.
Kanter: Exactly—all of that. I think we should all be jumping on the bandwagon for the Harvard plans in Allston, by the way, because that’s going to produce a whole new city that’s science-based.
Hynes: I’m heading in that direction. We’re blessed with having the base of Harvard and MIT and all the other colleges and universities that cluster around Boston. That they don’t have in Albany. They don’t have it in Buffalo and lots of other cities around the country. We’re also by the way, as you all know, under attack. We’re the leader in [National Institute of Health research] grants. On a per-capita basis we’re far ahead of the rest of the country. I think we’re second, maybe, behind California in absolute terms and I think we’re ahead of New York. But those are under attack because every state in the union is chasing NIH grants, and there’s a greater chance that we’ll have a long-term reduction in those grants.
Colloredo-Mansfeld: If there’s a move away from peer review of those grants, we are in serious trouble.
Ryan: It’s interesting how everybody gives credit to their own, so to speak. I would argue that the reason that biotech and life sciences companies come here is because this is the oldest, the best, life-sciences cluster. It’s very nice to have the universities and the hospitals, but as you begin to grow and you’re not a spinoff any more, you could be anywhere. I mean, my clinical trials are all over the world, they’re not run just in Boston.
Kanter: And they should be. But let’s look at Genzyme, for example, which is a successful company in your industry, which built a gorgeous factory. I think it’s a better building than the university’s new buildings along the river.
Colloredo-Mansfeld: I would agree with that.
Kanter: [Genzyme] developed many of its products through collaborations all over the world. The new technology companies are almost born global, from the beginning. [So] we have to make sure that we’re a place that is easy to get in and out of, that it’s easy [for companies based here] to make those connections. Logan Airport is improving, but that’s always been an issue. The convention center ought to be helpful. I’m on the board of the Massachusetts Convention Center Authority, and we’re targeting the same industries to bring their meetings here, to make connections locally. But there are other aspects of the infrastructure here. We ought to have Wi-Fi [wireless Internet access] everywhere. I don’t understand why it’s other cities that are first in using our technology, technology developed here, to make it attractive for businesses to locate there.
FOLLOW THE LEADER
Kanter: Now we have to come back to one of the reasons we’re here: leadership and where it’s going to come from. We have counted disproportionately on business leaders, on corporate chieftains. And should we? Are there other sources of leadership who can speak out on these issues, who can have credibility? Where will it come from? Will it be the Partners [HealthCare] CEOs and the university CEOs? Will it be the smaller companies? Will it be the [trade] councils themselves, even though the small-company executives are way too busy, that collectively have an impact? Where will we have the leadership to make these changes?
CommonWealth: That’s exactly what I want to get into next. It’s been suggested to me that, historically, civic leadership from the business world has come very much from place-based companies, often downtown rather than the Route 128 area, and from regulated industries.
Colloredo-Mansfeld: Companies that can’t go away.
Kanter: That can’t go away, and that depend on the good will of local politicians and the public.
CommonWealth: Banks, insurance companies, utilities, developers, commercial property owners. Now even these businesses have become less place-based. In the real estate industry, much of downtown Boston is now owned by real estate investment trusts that are national and global in nature rather than local. Interstate banking is a fact. These companies are becoming less place-based and, in many cases, less regulated. Increasingly, they have their sights set elsewhere and are less dependent on the local political structure. Does this mean that we’ve lost some of the structural basis for even expecting corporate leadership in the civic realm?
Ryan: I don’t think it’s just about being place-based. I think there’s a completely different leadership culture now. We don’t fly around in our own planes, live the lifestyle of emperors. It’s considered a little tasteless. There’s a big move against huge extravagance and huge largesse at the top. But I do think people are doing things locally. You know, we may not give large amounts to the [Boston Symphony Orchestra], but we do support the local schools, the local parks, give our time teaching and things like that. So, I think maybe the model is changing.
Carter: I would agree with that. I can tell you, in the 10 years I was CEO at State Street, not once did any shareholder or stockholder ever ask me how much time I was spending in the community. In fact, unless the CEO of a company has some inner compass that’s driving them to get involved, there is generally no pressure from Wall Street or your owners to become involved in the community, despite what we read about corporate social responsibility and things of that nature. But I do think the model is changing. What I’d like to see is the mayor and the governor ask for a little more help. I don’t think I’ve ever encountered that, other than the time I did the Logan Airport investigation after 9/11, where [Acting Gov. Jane Swift] asked me to do that.
Part of the reason why CEOs are reluctant to get involved is because you get hung out to dry by the Globe and the Herald, and the other local publications. It always gets down to the lowest common denominator, which is how aggressive the local newspapers are and how badly they treat people. There’s certainly a factor of that that I hear all the time. It doesn’t do you any good with your board of directors if you get negative publicity for activities that don’t even have anything to do with your business.
Hynes: That’s unfortunate.
Kanter: There are other cities where the press doesn’t do that, and that’s part of their attractiveness. But on the question of leadership and where it comes from, the problem with the branch-office city is, even if somebody is holding the Northeast chair or the executive position that is supposedly the equivalent of what the company offered previously [as a corporate headquarters], those people are more likely to rotate. They’re not stable. One of the reasons that communities relied on corporate executives from companies headquartered there for so many years is that politicians came and went. It used to be that the politicians rotated and the only stable civic force was the corporate CEOs. Now we’re seeing the opposite here, having a mayor in office for such a long time. [Leadership comes from] those with a long-term stake in the community. I think it is an inner compass, as Marsh said. But it’s also people who live here and choose to live here for a long period of time…. It also is [companies] where the local market matters, including the labor market. Companies give [their money and their executives’ time] because they have employees who care about [the local area]. The employees are changing in terms of what they expect the company to do and the kind of leadership they think a company should provide. I’m impressed by the young people that Sherry Penney’s Center for Collaborative Leadership at UMass–Boston has found as emerging leaders. The Greater Boston Chamber of Commerce has an emerging leaders program. These are energetic, entrepreneurial young people who are willing to take on civic projects. We don’t use them enough.
Colloredo-Mansfeld: I agree with that. There are younger people in this community, working various jobs, who, in traditional thinking, are the next generation of key business leaders. My thought is—and I keep saying this to [Mass. General Hospital] and other places—get some of these young people into your organization, often on your board, before they’re at the top. Ride up with them, if you will.
You will benefit and they will benefit. The question is, identifying them—who are those people? But that’s important, and I think that’s a failing we have at the moment.
CommonWealth: I wonder, too, are the institutions that have been the vehicles for developing business leadership changing by their nature as well? Things like chambers of commerce—natural places for businesspeople to get involved in the community—used to be headed by CEOs and major executives of locally based companies. But in many smaller cities, especially, the chambers are now just collections of small firms, and don’t have large locally based companies to rely on.
Colloredo-Mansfeld: And who’s now the head of the Greater Boston Chamber of Commerce?
CommonWealth: The chairman is [Partners HealthCare chief executive] Jim Mongan.
Colloredo-Mansfeld: Health care.
Ryan: I think the trade association model is much more useful for political action, getting the legislation that you want, because you usually have very, very similar issues. The clustering of minds around the issue is where you have the real power. Whether or not the politicians have reached out to us, we have rattled their chains enough that we now interact with them quite significantly. Before we knew who the governor [would be, after the 2002 election], we wrote the MassBiotech 2010 report. We laid out very clearly what would happen to biotechnology if Massachusetts stayed the same, got worse, or got better [as a place to be in the biotech industry]. We really put the dare out there. I think that has been responsible for several of the smaller companies staying here as they grew to the manufacturing and commercial level, mine included.
Hynes: I want to make one comment in terms of enlightened self-interest. How do you pull all these disparate issues on leadership together? Associated Industries of Massachusetts, Greater Boston Chamber of Commerce, Massachusetts Taxpayers Foundation, Boston Municipal Research Bureau, and Massachusetts Business Roundtable are meeting quarterly to combine agendas, to eliminate duplication, and to focus on so many of these issues. When you overlay those different constituencies, you’re covering a great part of the economy of the state.
Ryan: That’s the best thing I’ve heard. There are so many [business-related groups] that you cannot attend and support all of them. If it would amalgamate interests, I’m all for it.
GIVING AND RECEIVING
CommonWealth: As we look ahead to the emerging industries as the linchpins of our economy, how is that trade association advocacy going to translate into a broader civic agenda? People getting involved and providing leadership not only in defending the industry’s own interests but in…
Kanter: Enriching community life. I mean, the same quality of life that all those companies need to attract employees. Actually, we are high on quality-of-life dimensions, other than affordable housing, so we do find it easier to attract people [to Massachusetts]. A high proportion of the successful business leaders in Massachusetts first came here to go to college and then decided to stay. But I think it is also incumbent on our nonprofit community—and now I’m not talking about the huge nonprofits, the universities and hospitals, but the arts and community-service organizations —to make themselves more attractive to companies, to recognize that there’s been a change. In that old model, where we had a number of headquarters companies here that were very generous, most of them simply wrote checks.
It was kind of knee-jerk, and it was easy. The nonprofits themselves could get lazy. Where’s the collaboration among our arts organizations? The dozens of really wonderful early-music groups, classical music groups we have here, where’s the collaboration among them—
Colloredo-Mansfeld: They’re artists!
Kanter: [to show] some collective clout, to have Boston Early Music Week? The hotels and convention center are eager to have events that show off all of our attractions when we’re out marketing ourselves to other places. Where is the reinvention of how the museums connect with both businesses and the community? Now, there are new models. They work with the schools, they’re much more embedded. But we have to create those connections. And there’s a new kind of social entrepreneur also growing up in Boston. Don’t all of our nonprofit organizations have to think about how they, too, can go global, even if they’re serving a local market?
Hynes: I’d just like to jump in a little bit on the nonprofit and charities. We have some extraordinary successes in this economy, which have resulted in new funds and new monies for charitable giving. Just look at the sale of the Boston Red Sox. Talk about a win-win-win, apart from the World Series, which of course was a great win. The Yawkey Foundation is $500 million, plus or minus. That money is going directly to the Greater Boston community—a $20 million, $25 million commitment to Mass. General for the Yawkey [Center for Outpatient Care], for instance. That is an extraordinary benefit [from a change in ownership]. The new management of the Red Sox, the new ownership, has also established an outreach to the community. They’re a source now of charitable dollars. The Patriots, the Kraft family, are enormously generous. The Barr Foundation is a relatively new foundation. The [Peter] Lynch Foundation. The Johnsons at Fidelity, they’ve been long-term silent givers, very steady. There’s lots of emerging wealth that’s been created and that’s being recycled into the economy. But there’s also an obligation on the nonprofits themselves to state their case and to be relevant to the community and to their constituency. If they’re not relevant, they’ll disappear.
Kanter: They are also economic engines. We shouldn’t forget that. Take Miami. I’m struck by the new association of Miami with the arts, how many arts festivals, crafts festivals, etc., are drawing huge numbers of tourists, spending lots of money. In fact, that draws more than sports, in terms of an economic engine. So when we talk about the nonprofit community here, we shouldn’t think of them just as charity, although it may be good to give to them. But they create jobs and they also can attract other kinds of dollars into the community.
Ryan: But their outreach to us has largely been, “Have your party here [at the museum].” As you know, there’s a catering side. And it’s a shame, because we can find a hotel or village hall anywhere to have a party. Arts groups in St. Louis, for example, did a much better job of interfacing—I was with a Fortune 500 company there—with the companies at the artistic level, putting on events and things like that to draw people in for the right reasons, not because you can have a party there.
CommonWealth: That sounds fascinating. Explain that a little bit more.
Ryan: I was at Monsanto, which included Searle and NutraSweet and all of those companies. Every one of us in senior management had a pet charity—one of us would be on the [board of] the zoo or the museum. We certainly did have our parties there, but in order to increase their membership we would have an evening at the ballet, say, where we could invite all of our colleagues and they could come and it was free. Then, at the end, rather discreetly, membership forms were handed out. A certain number of people became acquainted that way with what that institution had to offer. Here, the ballet has done it once or twice with the biotech community. But I think museums should do it. People should be able to take their children, have free hot dogs or something on a Saturday, and let them grow up going to museums.
THE EDUCATION PIPELINE
Colloredo-Mansfeld: We were involved [at the Boston Private Industry Council] in getting employers involved with job training and job development. [But] how do you get law firms, accounting firms, to participate? They are big employers, but how do you get them involved? In the hospital industry, there are a lot of jobs that are not doctors and nurses, an enormous range of technicians. If you look at the demographics of the city, and you want to continue to fill those jobs—these hospitals have been recruiting in the Philippines, and Ireland until Ireland’s economy took off—what’s got to happen is to bring the new immigrants, of which there are 20,000 or 30,000 a year, into the education pipeline and into the employment pipeline by getting employers and schools and training agencies together. Otherwise, hospitals won’t be able to fill an enormous number of jobs they need. I wonder if the same thing is true with lawyers and accounting firms, in terms of clerks and support services.
Kanter: Let me ask you [Ryan] a question and then I want to make a comment. You talked earlier about the permitting problems, etc., but also that you’re growing and you can’t fill the jobs fast enough. Do you find that we have a big enough pool here? Should we add to this public agenda the employment and job-training question?
Ryan: Absolutely, we should. Again, we’ve gone for the self-help model. We train people in the company. We in the Massachusetts Biotech Council have had to train people in manufacturing because there aren’t enough for that pool. But we also need to get back to the very basic educational issue in the Commonwealth of Massachusetts. People leaving high school cannot enter biotech companies and be competent.
Kanter: MassINC has done a fabulous series of reports documenting so many of the problems that we’re talking about [see Getting the Job Done: Advancing the New Skills Agenda, and New Skills for a New Economy] and made fabulous recommendations about the community college system, which is the job training network in other states. Other states have increased their competitiveness dramatically simply by reforming that system, connecting it to the needs of employers. I get concerned about why there is no action. We started this conversation talking about the obvious, visible, all-at-once shock of a company appearing to pull out, but this is a failure of our own local human infrastructure.
Colloredo-Mansfeld: On the community college issue, and it’s been around for some time, is it partly the political structure? They’re state enterprises in one form or another, subject to the vagaries of political processes and cushy-job seekers. They don’t see education, necessarily, as their mission. What do you do about that?
Ryan: You go out into the community and you tell them what you need. I mean, these branches of the University of Massachusetts—for example, UMass–Dartmouth, down near our New Bedford facility. We actually were very happy they’re neighbors. A lot of these places think that they need to teach business courses, and they do, but they don’t really understand that they [also] need to teach manufacturing [and] quality. Those are the jobs that the community needs to provide, and it’s our job to tell them what we need. But again, it takes time. I have a public company to run and I can’t be, as a hobby, a professor on the side anymore. I think it just needs communication, us telling people what we must have.
Carter: You know, Bob, maybe this session ought to come out with the three or five most important things the leadership of the state should do. The people who read this article don’t just want to hear us complaining. Don’t they want us to suggest what we think should be done?
CommonWealth: Sounds good to me. Anybody willing to nominate some key points to take away from the discussion this morning?
Kanter: Having been involved in so many of these issues now for a very long time, going back to pre-Weld, back to Gov. Dukakis’s administration, it seems to me that there are so many things on the agenda, and so many groups wanting to do each one of them, that the important thing is to take one or two broad themes and try to encourage every group to connect to that theme in the way their own organization can do. Take math and science. If we could crack math and science in the schools, teaching math and science everywhere, getting math and science embedded in our signage on the road—I don’t know what it is, having quizzes, having the media support the effort—if everybody took on, in their own way, doing something about improving math and science skills, we might make progress.
Carter: I would think the second thing would be asking the political leadership to recognize the new reality and to reach out to the three biggest sectors—health care, education, and finance—for leaders in the community. By finance, I mean private equity, capital investment, mutual fund companies, not the big regulated financial institutions like the banks, because there are only two banks left anyway.
Ryan: I think what Massachusetts is really good at is innovation. So my view would be to forget the dinosaurs. Support the innovative industries, but understand the life cycle of those industries. We’re very good at spawning young companies. We’re not good at keeping them here. We need to nurture them. You cannot, on the one hand, be friendly and say, “Bring your young [biopharmaceutical] company to my community,” but at the same time say, “I’m in favor of price caps and re-importation [of prescription drugs] from Canada.” You’ve got to understand the life cycle of the industry and what will make it successful. Think long-term.
CommonWealth: How about one more?
Colloredo-Mansfeld: Long-term, education is the key. We are in general agreement that we have an idea-based, technology-based economy here, and we have some great colleges and universities. But we cannot ignore schools. My only observation, after 30 years of banging my head on the anvil of school reform in the city of Boston and getting a flat head for the first 15 years, [is that] you cannot avoid getting involved. The one thing we learned through the Boston Compact was that the schools were not going to change unless there was pressure, involvement, and activity from community leaders.
Kanter: I think the Boston Compact was a terrific model and it was used all over the country, so I really support that. Actually, the Boston public schools today are considered in better shape than most nationally, with a superintendent with more longevity than in other parts of the country. But from the outside there are so many other organizations that have a piece of the education puzzle and have something to contribute. We have overly concentrated education only on the schools. For example, the great after-school programs that do apprenticeships with law firms and accounting firms. They get drawn into the educational process.
Ryan: I think this is an argument for small solutions, actually. We may not get it all done at once, but we can make a difference just a few at a time.Kanter: These are all great ideas. None of them has the immediacy or the drama of a corporate acquisition that makes headlines and has a sudden shock to the system. We don’t have the tight circle of downtown corporate leaders we once had, nor do we have the single companies that will take on huge initiatives. But we do have people who can make a contribution, who could make commitments, as you said, toward the small goals. Small wins. In my book Confidence, I talk about small wins. Keep building that sense of success, create more momentum, draw in more initiatives, stimulate more innovation. But it needs to be large groups of people now. It can no longer be 20 people sitting around a conference table in a downtown law firm. It now needs to be much larger numbers of people because we’re talking about younger leaders, dispersed leaders, smaller companies.
Hynes: By the way, I just can’t let the Gillette and Hancock and Fleet mergers go without final comment. I don’t look at them as mergers. They’re acquisitions. They’re acquisitions by out-of-town entities. It hurts and it’s loss of pride, on the one hand. On the other hand, I gave a talk recently at a college and I asked how many students in the class had ever heard of An Wang [founder of Wang Laboratories]. None. Ed DeCastro [founder of Data General Corp.]? None. And Digital [Equipment Corp.]? Nobody. Nobody had heard of the companies. All the talent that came up through those one-generation companies, they dispersed into new technology and formed new companies. I look at it more as evolution. We’re in an extremely competitive global economy. There’s no doubt about that. But we have resources here that many other areas do not have and it’s up to us to harness them. Or shame on us.