Deep tech: The next frontier of the Mass. innovation ecosystem

We must support developments with potential to transform everyday life

IN THE RACE to get “shots into arms,” vaccine producers are literally trying to squeeze out more RNA from the manufacturing process. Enter Ginkgo Bioworks, Boston’s biotechnology giant, whose technology is helping speed up vaccine production at companies like Moderna.

Meanwhile, Massachusetts tech firm Pison Technology has harnessed the human body’s electrical impulses for touchless gesture-control, making it possible for patients with disabilities to control digital interfaces just by thinking of their intended movements.

And there’s Worcester startup Battery Resourcers, which has developed best-in-class technology for recycling lithium-ion batteries.  The WPI spinout will help create the next wave of electric vehicle batteries from almost exclusively recycled materials.

These three firms are among the many stars in “deep tech,” the future face of technological innovation in the Commonwealth.

What exactly is deep tech?

Deep tech represents breakthrough scientific and engineering technologies that address big societal challenges. Deep tech innovations hold the potential to impact everyday life. They’re often radical and can create new markets or disrupt existing ones.

We’re talking about artificial intelligence, robotics, photonics, biotechnology, IoT, health security, advanced manufacturing and materials, quantum computing, and more.

The basic formula for deep tech’s success rests on two needs: time and so-called patient capital. Massachusetts is leveraging its existing assets and building out a strategy to position the Commonwealth to be a national leader in this sector. But first, some history.

Recall the “Massachusetts Miracle” — the tech boom of the 1970s and ‘80s, when semiconductor, hardware, and microelectronics production spilled out from MIT and Harvard. From there, companies sprang up within range of Route 128, earning it the moniker “America’s Technology Highway.” Two decades of innovation and prosperity stretched into a third when corporations pivoted to other specialized technologies such as telecommunications in the 1990s.

The coming decades will be an extension of that “Miracle” because of deep tech, which has been incubating for years in innovation labs across the Commonwealth’s 34 research institutions—from Harvard and MIT to the University of Massachusetts, Boston University, and Worcester Polytechnic Institute—and is now poised to flourish.

To achieve that, MassVentures is taking the following deliberate steps to create a welcoming environment for this burgeoning industry for the long term based on four core objectives.

The first objective is tapping into the existing spirit of strong collaboration led by our elected officials, starting with Gov. Baker, who spearheaded a coordinated effort comprised of research institutions, industry, and government to rapidly produce personal protective equipment – made here in Massachusetts – when none could be found elsewhere to aid in the fight against COVID-19.

Second: funding. Our plan to support deep tech demands the kind of buy-in from seed stage investors that matches the belief in the sector’s potential already recognized by our research institutions.  The stage is set for investors to take part in the next big tech wave, but it’s no longer business as usual. Fast growth targets, near-immediate return on investment, and quick IPOs are not a part of the game plan for deep tech. Though deep tech can ultimately reap dividends and has the capacity to positively upend our lives, seed stage investors need to cultivate patience as technology is fine-tuned and the market is primed.

Third is a recognition that creativity and innovation are happening all over the state. Our strategy rests on the fundamental understanding that innovation is not strictly limited to Cambridge or Route 128 or Greater Boston.

The fourth objective is the most important: equity. Beyond geography, deep tech needs more entrepreneurs who are women and people of color; are from Gateway Cities, or from traditionally underserved communities and neighborhoods. We need to harness the existing enthusiasm necessary to attract the capital required to support a statewide industry cluster that has its doors open wide to innovators all over the Commonwealth representing every community, neighborhood, and demographic.

Gov. Baker recently signed a five-year economic roadmap called “Partnerships for Growth,” bringing $626 million in policy decisions to help the next deep tech businesses grow. In addition, the October 2020 “Partnerships for Recovery” targeted another $65 million in capital funding for innovations in the tech sector. Companies focused on cloud computing, AI, and advanced materials are boons for Massachusetts, and are prioritized in the state partnership.

Well aware of how Massachusetts leads the pack in terms of innovation, our political leaders want to keep it that way. According to Bloomberg’s Most Innovative States index, Massachusetts has repeatedly earned first and second place, competing with California and the state of Washington.

In 2019, excluding life science, less than half of one percent of all venture capital funding went to deep tech at the seed stage. There is a capital gap at the seed stage for deep tech, but it can be filled with non-dilutive resources such as the Small Business Administration’s SBIR grants, MassVentures’s START grants, the Massachusetts Clean Energy Center’s Catalyst grants, and others. There is a small, but collaborative, group of seed stage investors looking to foster these early-stage companies and get them to growth capital. There is an abundance of growth capital that will help create jobs in Massachusetts’s deep tech industry if we all collaborate at the seed stage.

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The “innovation orchard” in deep tech is small with only a handful of investors and grant programs, but with the right level of cooperation, additional federal resources expected, and the Commonwealth’s plan for these key sectors and technologies in Partnerships for Growth, the opportunities can be fruitful over the next decade. As we emerge into a “new normal,” let’s recognize the unique value of Massachusetts and our 34 research institutions and lead the world in technologies that we need.

Charlie Hipwood is president and CEO of MassVentures. MassVentures supports the state’s innovation economy and economic growth initiatives by helping to transfer research and early-stage innovations to viable technology businesses and jobs. www.mass-ventures.comFollow him on LinkedIn