Study Shows MA has the Most Great Ideas in the World

Reading reports about how Massachusetts’ economy has improved over the years is encouraging. Finding out that Massachusetts ranks highest in the world in several, key economic areas is thrilling.

This week, The Massachusetts Technology Collaborative released its annual “Index of the Massachusetts Innovation Economy,” which showed that the Bay State performed favorably not only in comparison to the nine states the Index surveyed (California, Connecticut, Illinois, Maryland, Minnesota, New Jersey, New York, Pennsylvania, and Virginia), but in comparison to twelve leading tech nations as well.

One of the Index’s most consequential findings was that Massachusetts dedicated a larger percentage of its GDP to research and development (R&D) than any other state or nation surveyed. Based on this figure, it is no wonder why Massachusetts also had the largest number of patents per capita in 2008 at 5.4 for every 10,000 citizens. The closest domestic competitor surveyed was California at 5.2 patents per 10,000 citizens, while Taiwan was the closest international competitor at 2.8 patents per 10,000 citizens.

“Massachusetts’ leadership role in research and innovation extends well beyond the US borders,’’ commented Patricia Flynn, chairwoman of the study’s advisory committee.

The Index went on to show that the once net flow of people out of Massachusetts ceased in 2008, turning instead into a net gain of nearly 4,900. Moreover, the state attracted the third most college graduates of the states surveyed. The Bay State’s own institutions churned out their fair share of diplomas too, of course. Massachusetts reported graduating more people with engineering and computer and information science degrees than any state surveyed.

Finally, continuing a streak that nearly dates back to the Index’s inception in 1997, Massachusetts ranked first in Small Business Innovation Research awards per capita. In 2008 alone, the state won $227 million towards proof-of-concept research and prototype development.

Investing the highest percentage of its GDP in R&D and having the largest number of patents per capita in the world, while concurrently winning the most Small Business Innovation Research grants per capita in the United States, is a monumental accomplishment for Massachusetts. Ideally, good will beget good, and this news will encourage more of the world’s brightest and most innovative to choose Massachusetts for college and employment.

[Sources: http://bit.ly/cFgSrf, http://bit.ly/aOiXyM, http://bit.ly/aNm1k8, http://bit.ly/aiaH52]

Venture Capitalists Feeling More Adventurous

Venture funding is the lifeblood of many new organizations. Often, without that multi-million dollar deal near inception, a now market leader would never have gotten off the ground. Considering this, it is heartening to see that according to Dow Jones VentureSource, for the first quarter (Q1) of 2010, venture funding was up by 12% in the U.S., as compared to Q1 of 2009. In a total of 597 deals, over $4.7 billion were invested in companies across the nation. (Image courtesy: http://bit.ly/9vGM8O)

“Despite a great deal of economic uncertainty in the first quarter, the venture capital industry moved forward with a more active start than it did in 2009, which bodes well for the remainder of the year,” Mark Heesen, president of the National Venture Capital Association, said.

In New England, while the number of venture deals was 80 in Q1 of 2010, as compared to 69 in Q1 of 2009, only $508.6 million were invested in the region, as compared to $667.4 million last year. Of course, some New England industries did not suffer the same 24% decline in funding as the region as a whole.

IT companies in New England obtained 15% more funding in Q1 of 2010 than in Q1 of 2009. Overall, New England IT venture capital investments amounted to $147.4 million over 30 deals, as compared to $127.5 million over 23 deals in 2009. Nationally, IT companies raised $1.5 billion over 192 deals in Q1 of 2010. Unfortunately, this was in keeping with a now five-year decline in both the share of venture deals as well as the total dollar value of venture deals won by the industry. Some sources cite the market gradually shifting more attention to service industries as the reason behind this trend.

Jessica Canning, global research director for Dow Jones VentureSource, remains cautiously optimistic about the future of venture funding, explaining that “as the liquidity and fundraising environments thaw, investors have more capital on hand, but continue to deploy it cautiously.”

Worth noting is the fact that the venture capital numbers reported by Dow Jones do not mesh perfectly with those released by other sources. PricewaterhouseCoopers, the National Venture Capital Association, and Thomson Reuters reported the same dollar value of venture funding in Q1 of 2010 ($4.7 billion nationally), but spread this amount over 681 deals, instead of the 597 deals Dow Jones reported.

Furthermore, some sources claim that it is more telling to compare funding from Q1 of 2010 to quarter four (Q4) of 2009, rather than Q1 of 2009. When this approach is used, U.S. venture funding appears to have decreased, while New England venture funding appears to have increased--a complete reversal of the results yielded by using the year-to-year comparison method. Thomson Reuters, for example, reported a 9% decrease in the dollar value of venture deals and an 18% decrease in the number of venture deals from Q4 of 2009 to Q1 of 2010. (Image courtesy: http://bit.ly/clqYwR)

Ultimately, although discrepancies in estimations and quarter comparison conventions make it difficult to tell with certainty that recent venture capital reports are truly positive, analysts in the field seem to express the same idea: a slow improvement is underway. So, while now may not be the most hospitable time to seek venture capital, if businesses can hold out just a bit longer, that dreamed about multi-million dollar deal might just become a reality.

[Sources: http://bit.ly/ajc9m9, http://bit.ly/aqjKKF, http://bit.ly/9QEmMM, http://bit.ly/bX3HWR, http://bit.ly/bbd5d0, http://bit.ly/chn93b]

CEO Decides 14 Years of Progress is Enough

The decision to retire should never be taken lightly, and when you are a top executive at a company you care about, the decision is only complicated. Worrying that the company will suffer when you leave may be a difficult fear to subdue. (Image courtesy: http://bit.ly/9DiHnd)

This week, Norman “Bud” Robertson announced that at the end of the year he will be leaving his roles as senior vice president and chief financial officer (CFO) at Bedford’s Progress Software. Robertson will leave after 14 years of service at the company.

“Though there never seems to be the perfect time to make these life choices, I feel that Progress is strong and well-positioned to move to its next milestone of growth. I feel fortunate to have been a part of this company’s impressive track record of success,” Robertson said in regards to his pending retirement.

Progress designs software for large companies that allows them to better analyze business processes and correct for such problems as bottlenecks. According to the company’s website, their software is used by just under 140,000 organizations, including 70% of the Fortune 500, and in over 180 countries. In February of this year, Progress expanded its reach by acquiring competitor Savvion Inc. for $49 million.

“Bud’s contributions have been critical in helping us grow from a small company to a much larger, more disciplined, global company,” Progress’s president and chief executive officer (CEO), Richard D. Reidy, explained. “We will manage this transition as a company on very solid footing, in large part, thanks to Bud’s talent and skill as CFO. We will continue to build on the momentum we’ve achieved during Bud’s tenure at Progress.” (Image courtesy: http://bit.ly/9DiHnd)

Robertson will continue to work at Progress until someone can be found to fill his roles. Even after he officially leaves the company, Robertson may continue to work with Progress as a consultant to alleviate any potential stress caused by the transition.

When leaving a position you have held for 14 years, it must be comforting to know that you have the support of your coworkers. Also, in some ways, I am sure that the transition period during which Robertson will ease his way out of Progress Software is just as much for the company’s good as it is for Robertson’s personal wellbeing.

[Sources: http://bit.ly/bgl2x3, http://bit.ly/bgl2x3]

.2 Percent of Unemployed Citizens Feeling Good Again

As more positive reports trickle in, signs continue to hint that Massachusetts’ economy is slowly beginning to recover. For the first time since April of 2007, the state unemployment rate decreased. According to the most recent monthly data available, the unemployment rate was at 9.3 percent in March, down .2 percent from February.

Reports issued by the Executive office of Labor and Workforce Development show that 4,000 new jobs were created in Massachusetts in February, with an additional 7,600 jobs created in March. In fact, the March increase was the greatest employment gain for a single month in Massachusetts since May of 2007. (Image courtesy: http://bit.ly/9hqyLY)

By industry, in the Bay State, retailers showed the greatest number of new jobs created in March at 2,000. Another 1,800 new jobs were accounted for by the financial services sector. Finally, business services reported the third largest gain in jobs at 1,600. Educational services; wholesale trade; arts, entertainment and recreation; real estate, rental and leasing; non-durable goods; and administrative and support services also reported job gains in March. Jobs in the education and health services industries decreased slightly in March.

A recent Federal Reserve survey also pointed to a hopeful future in Massachusetts, finding New England businesses were reporting rising demands, increasing sales, and increased hiring.

“We’re not looking at spectacular growth, but we’re seeing new jobs being created,’’ Andre Mayer, senior vice president for research at Associated Industries of Massachusetts commented. “This is what we needed to see.’’

It will be a while still before Massachusetts will gain back the estimated 155,000 jobs it is currently down from March of 2008, when the recession is said to have begun. Presently, over 300,000 Massachusetts citizens are unemployed, with even more underemployed.

Offering some relief, this week President Obama signed into law a bill that extends the term of COBRA health insurance and federal unemployment benefits, which are offered to workers "who have exhausted regular state unemployment benefits." Presently, long-term benefits will last through to June 2nd and are retroactive, in order to bridge the gap for individuals whose benefits previously expired. (Image courtesy: http://bit.ly/cS1MmA)

“Millions of Americans who lost their jobs in this economic crisis depend on unemployment and health insurance benefits to get by as they look for work and get themselves back on their feet,” Obama said. “I’m grateful that the House and Senate moved forward on this temporary extension.”

Although Obama feels that the $18 billion relief package will go a long way, his new goal is to pass another bill that will extend benefits until the end of the year.

While it is clear to see that a full recovery has not yet been realized, and probably will not be within the year, Massachusetts’ economy does appear to be gaining traction. After months of negative data and reports, even a decrease of just .2 percent in the state’s unemployment rate is welcomed. We can only hope that this is the beginning of a positive trend.

[Sources: http://bit.ly/bkrQ98, http://bit.ly/b1DsGR, http://nyti.ms/bOdWCa]

Wind Turbines to Generate 150 Jobs in Massachusetts

By meeting companies half-way, Massachusetts has taken sincere steps towards bringing new, lasting jobs into the state. Recently, the commonwealth approved an aggressive financing package for FloDesign Wind Turbine Corp., a “developer of wind energy technology,” which led the company to establish its headquarters and primary research and development center in Waltham. (Image courtesy: http://bit.ly/jLPp9)

“FloDesign has been recognized for its ‘transformative’ technology by U.S. Energy Secretary Steven Chu, and I am pleased to see this innovative Massachusetts company choosing to stay and grow right here, creating jobs and helping Massachusetts show the nation and the world the way toward a clean energy economy,” said Governor Patrick about FloDesign’s decision.

To encourage its expansion into Waltham, the Massachusetts Clean Energy Center (MassCEC) offered FloDesign a financing deal totaling $3 million. The largest component of this deal was a $1.7 million allowance from the Renewable Energy Trust to reduce the company’s cost of constructing wind turbines for public entities and nonprofits in the state. The second largest portion of the deal came in the form of a $700,000 forgivable loan. As long as FloDesign maintains its headquarters and research center in Massachusetts and creates or retains at least 150 jobs over the next three years, which remain for no less than an additional two years, the company will be freed from repaying the loan. Finally, the remaining $600,000 of the financing deal was in convertible grants, which provide MassCEC the ability to acquire equity in FloDesign in the future as the company grows.

“In a very competitive process, the Commonwealth developed a financing package that allows FloDesign to accelerate its job growth in Massachusetts,” Lars Andersen, CEO of FloDesign explained. “We have a lot of hard work ahead of us, and are excited to have strong partners in Governor Patrick and the MassCEC.”

FloDesign holds more than 170 patents and patent applications for its cutting-edge wind turbine technology. Presently, using comparably sized turbines, the company can churn out more than three times the energy produced by traditional wind turbines. In recognition of its success, in 2008, just one year after opening, FloDesign was awarded the MIT Clean Energy Entrepreneurship Prize.

“I commend the Patrick-Murray Administration for acknowledging the important innovative work that FloDesign Wind Turbine Corporation is doing to develop clean energy alternatives and solutions. I think it is a testament to the city of Waltham that once again, given its rich history as the birthplace of the industrial revolution, we are on the cusp of new technologies moving Massachusetts into the future,” said Representative Peter Koutoujian about FloDesign. (Image courtesy: http://bit.ly/86bvoD)

To date, FloDesign has raised over $40 million in venture capital financing. The US Department of Energy has also awarded the company an $8.3 million grant as part of its Advanced Research Projects Agency Energy program.

In this situation, everyone wins: FloDesign is given the means to expand its operations, Massachusetts gains new jobs, and clean energy initiatives get a cash infusion. Strategically creating mutually beneficial relationships with promising companies, such as FloDesign, looks to be a practical use of state money and a solid way of further strengthening Massachusetts’ economy.

[Sources: http://bit.ly/86bvoD, http://bit.ly/jLPp9, http://bit.ly/9KLzdF]

Cambridge's Brightcove Going Public After All

While some companies choose to remain private forever, for others, deciding to go public is only a matter of choosing the optimal time. After raising $12 million in funding last month, bringing its total funding to $103.9 million, and reporting positive cash flows since last June, Cambridge’s Brightcove Inc. has announced that it is taking steps towards an IPO sometime next year. (Image courtesy: http://bit.ly/aIZge8)

Brightcove runs an online video publishing service that offers the simplicity of “point and click” video posting as well as the option for advanced users to fine-tune how their videos display by editing programming code. After posting, Brightcove provides in depth analytics information to help its users track the performance of their videos.

The announcement of the proposed 2011 IPO came as a surprise to many, considering that in just February of this year, Brightcove’s CEO, Jeremy Allaire, was quoted saying that an IPO was not imminent. Currently, annual sales for the company are projected to be in the area of $50 million for 2010. According to the Brightcove’s blog, with its most recent $12 million in funding, it plans to increase “growth initiatives... in Asia and Europe,” as well and finance research and development.

Presently, Brightcove has users in over thirty countries and offices in Cambridge, Seattle, New York, London, Hamburg, Barcelona, Bejing, and Tyokto. Sun Microsystems, Ticketmaster, The New York Times, and General Motors are just a handful of Brightcove’s big-name customers. (Image courtesy: http://bit.ly/aIZge8)

Of course, a lot can change in a year, but if the projections for Brightcove’s future hold true, the company should have little trouble following through on its proposed 2011 IPO. Given the incredible growth rate of the online video market, potential investors will definitely want to watch for newas about the specifics of the IPO as the date grows nearer.

[Sources: http://bit.ly/aIZge8, http://bit.ly/a7l7Yw, http://bit.ly/9W1edg]

Microsoft Offers Vouchers to Unlock the Potential of the Unemployed

Technology is constantly evolving. Often, just when you have mastered a program, a new version is released and falling too far behind with the technology of your field can make finding a job difficult. Massachusetts’ Governor Deval Patrick has proven he understands this concept by partnering with Microsoft Corp. to provide 26,000 vouchers for free online training in Microsoft products to unemployed individuals. (Image courtesy: http://bit.ly/bAtOov)

Vouchers will be distributed at the thirty-seven Career Centers
located throughout the state as part of the “Elevate America”
partnership between Microsoft Corp. and Massachusetts. The program promises to provide something for everyone by designating half of the vouchers for learning Window’s operating systems and the Office suite and half for learning advanced topics. This latter half includes 5,000 courses for IT professionals and developers and 8,000 vouchers for certification exam courses in such areas as database administration and web design.

“This public-private partnership is exactly the kind of innovative program we need to help our workforce advance. Massachusetts residents will benefit from the opportunity to strengthen their computer skills as we continue to lead the way in businesses that rely heavily upon technology,” Patrick said about Elevate America upon its announcement at Boston’s JobNet Career Center.

Elevate America is just one program in Microsoft’s “Unlimited Potential Initiative.” Over the next three years, this initiative will train two million people across the country in Microsoft technologies. “At Microsoft we certainly believe that technology can be an enabler for economic development,” said Gail Flynn, Microsoft Vice President of State and Local Government.

Moving forward, the Elevate America program should benefit both Microsoft Corp. and Massachusetts. Microsoft will gain users as new people become comfortable with their products and Massachusetts citizens will learn programs crucial for landing their next job. It would be great to see other companies, such as Adobe, following Microsoft’s example by launching similar programs in the future."

[Sources: http://bit.ly/cQY95K, http://bit.ly/bpsjLk, http://bit.ly/d4CPWh]

Gemvara CEO Requests a Demotion

Oftentimes it is difficult to evaluate whether an executive is truly adhering to her duty to put the well being of her company before personal gain. This is not the case for Deb Besemer, former CEO of Gemvara, however. After recommending that Gemvara make the shift from selling jewelry to small retailers to selling jewelry direct online, Besemer stepped down as CEO, explaining that her skills no longer fit with what the company needed. (Image courtesy: http://bit.ly/bDHY22)

Besemer will still remain close to Gemvara, severing as its chairman of the board. While Gemvara searches for a replacement CEO, co-founder and former CEO, Matt Laurzon, will reassume the role. “There’s zero doubt Deb is a world-class leader and company builder,” Laurzon said. “But in terms of the experience building a consumer company, we thought having that in place at the top of the company would be very important.”

It was only March of this year that Paragon Lake Inc, a Lexington, Massachusetts startup, rebranded itself as Gemvara and announced the launch of its direct-to-consumer website (www.Gemvara.com). According to its site, the name Gemvara was inspired by the ancient Sanskrit word “vara,” meaning “wish.” This plays into the company’s concept that every price of jewelry it sells “is available as you wish: customized to suit your style.”

The Gemvara website includes an easy to use tool that provides customers the ability to design their own custom jewelry and purchase it through the site for lower than retail store prices. The specific price for each customized order is based on the unique design, precious metal, and jewels selected by the purchaser. By providing a wide selection of base designs created by experienced artists, the Gemvara website provides customers with a “jumping-off point,” so novices do not need to worry about producing an unattractive piece of jewelry.

“The closer we can get to the consumer, the better experience that we can offer in terms of having customer support be direct, connecting the designers directly with the consumers, offering more aggressive price points in the value associated with that, (and) being able to merchandise more freely,” acting CEO Laurzon explained.

While Gemvara will no longer take on new retail customers, it will continue to service those “mom and pop” jewelry stores it was working with before the company revised its business model.

Shifting Besemer from her role as CEO to chairman of the board was just the most recent change of a string of position changes at Gemvara. Just weeks ago, the company took on Dan Marques, previously of VistaPrint, as its director of online marketing. Cheryl Kremkow, formerly editor-in-chief of Modern Jeweler magazine, also recently joined the Gemvara team as the company’s head of merchandising. (Image courtesy: http://www.gemvara.com/)

It will be some time before it’s clear if it was wise for Gemvara to transition from the retail supplier market into online, direct sales. Still, it’s reassuring to see a high-ranking executive like Deb Besemer willing to step down to ensure that the best person for the company can assume her role and give Gemvara a fighting chance.

[Sources: http://bit.ly/9Fm4eH, http://bit.ly/bDHY22]