THE NEXT BIG THINGS
Author(s): Robert Gavin, Globe Staff
Date: April 27, 2003
Massachusetts' economic history is a search for the next big thing.
Since Francis Cabot Lowell returned from England in the early 19th century and developed, what, in today's terms, might be called a next-generation power loom, innovation - new ideas, new technologies, new products - has spawned industries, jobs, and prosperity. But the innovation economy has a flip side: the technology becomes standardized and easily adopted, and the industries it creates move operations and jobs to other places with cheaper labor and costs. That leaves Massachusetts to find new innovations.
So, with the state struggling to climb from one of its worst recessions, and the computer technology industry in shambles, the question comes: what next? Where will the new jobs come from to replace those in the software industry which, like textiles before them, are getting exported overseas?
Almost certainly, as the job losses mount, the next driver of the Massachusetts economy is taking shape. Groundbreaking research is underway in university and corporate laboratories, in biotechnology, materials engineering, photonics, and alternative energy. Meanwhile, any number of entrepreneurs are launching new companies, tapping into a deep talent pool, and transferring skills from old industries to new ones. For example, Konarka Technologies Inc. of Lowell, a start-up developing a plastic solar cell, has hired people who once worked for Polaroid Corp. because of their expertise in coatings, a key component of Konarka's cell.If history provides any clue, the next big thing won't become apparent until it is here. But history also underscores that it is indeed taking shape. Out of the recession of the mid-1970s arose the minicomputer industry that drove the "Massachusetts Miracle" years of the 1980s, sprouting companies like Digital Equipment Corp., Wang Laboratories Inc., and Data General Corp., which ranked among the biggest computer makers in the world. When that industry crashed, another technology, unnoticed during the dark days of the 1990-91 recession, emerged to fuel a record economic expansion: the Internet. The technology-related jobs that grew from the Internet revolution accounted for nearly 40 percent of the 580,000 jobs created in the '90s.
With software jobs now heading to places like India, China, and Russia, where labor is cheaper, economists see the same pattern put in place by the power loom, whose heyday in the 19th century ended in the 20th as production and jobs moved to North Carolina and other southern states in search of lower costs. And, eventually, they expect to see new innovations to complete the circle.
Here's a look at some of the innovative sectors that, if not the next big thing, could fuel new growth. They include technologies to build microscopic machines, wireless, biotechnology, and information technology. Ultimately, for Massachusetts, with these diverse sectors, the next big thing might come from where the technologies intersect.
Smaller is better
The next big thing might well be small. Increasingly, as engineers, researchers, and technologists talk about the next transformational technology - that is a technology, such as electricity or the Internet, which leads to broad social and business changes - they look to an emerging sector that manipulates atoms and molecules to create new materials and machines, invisible to the naked eye, and that are measured in billionths of a meter, or nanometers.
Simply called "tiny technology" at the Massachusetts Institute of Technology to encompass its two main branches, nanotechnology and microelectronic mechanical systems, or MEMs, this sector holds the promise of a wide array of new materials, products, and processes. For example, instead of batteries to power laptops and handheld devices, this technology could lead to small generators that operate 20 times longer. When the generators stop running, instead of tossing them out, a user would just add fuel.
Massachusetts is already a leader in tiny technology. Small Times, a magazine that covers nano- and MEMS technologies, recently ranked the state second, behind California, in developing this new technology. MIT is the site of the Institute for Soldier Nanotechnologies, to which the Army has committed $50 million for research. There, scientists are investigating so-called nanomaterials that might lead to protective radiation suits as light as a T-shirt, or tiny surveillance planes powered by engines as small as a button.
In addition, MIT scientists are developing an array of tiny tech applications, from microchemical processors to produce small amounts of chemicals, and eliminate the hazards and costs of storage and shippping to drug delivery systems that can be implanted in patients.
In the university's Deshpande Center for Technological Innovation, which supports technologies that have commercial promise, professor Francesco Stellacci is trying to develop a process that will allow microscopic parts and machines to be mass produced, research that is still in early stages.
Companies are already putting the technology to work. Analog Devices Inc. of Norwood uses MEMS technology to build millions of sensors to tell automobile air bags when to inflate. Hyperion Catalysis International of Cambridge, which tripled its work force to nearly 100 in recent years, makes tiny tubes of carbon, one-billionth of a meter in diameter, and mixes them with plastic, giving the plastic the ability to conduct electricity. That allows the production of electronic components that are cheaper than metallic counterparts. Because plastic can be easily melted and poured into molds, components can be made more quickly and cheaply than metal, which needs to be stamped or machined.
In Lowell, Konarka Technologies Inc. is using nanomaterials in its development of a photovoltaic cell, which turns sunlight into electricity. Konarka officials say their technology could lower the costs of solar power for homes, businesses, and other applications. In Bedford, MicroCHIPS Inc., is developing a silver-dollar-sized drug delivery system that would be implanted in a patient and programmed to deliver precise doses of drugs at the right times. With up to 400 tiny reservoirs to hold the drugs, a patient might not have to worry about taking pills for a year.Turn on, tune in, unplug
Wireless applications, including Wi-Fi, is expected to grow quickly over the next few years, and Massachusetts, long a center for telecommunications, is poised to tap into that expanding market. Wi-Fi, which uses radio waves to create wireless networks and high-speed Internet connections in small areas, is attracting the attention of venture capitalists. In the first quarter, venture firms sunk as much as $175 million into Wi-Fi start-ups, according to Growthink Research of Venice, Calif.
Among those companies attracting the venture investment - some $32 million - is Bluesocket Inc. of Burlington. The 3-year old start-up makes a system that allows companies to protect wireless networks from hackers, competitors, and other intruders, and manage the uses by employees. Since it began shipping its system in 2001, chief executive Eric Janszen says, sales have been growing 40 percent a quarter. The company expects to become profitable soon. It taps into a market, which for hardware alone, is expected to grow by $1 billion to $3.5 billion worldwide, according to In-Stat/MDR, a market research firm.
Other companies are tapping into the wireless revolution, too, providing the hardware and software that allow wireless companies to provide customers new services, such as Internet access from cellphones, and track the use of services and bill customers accordingly. They include Boston Communications Group Inc., which provides billing systems and services for the fastest growing segment of the wireless market, prepaid services. It plans to add some 65 jobs to its work force this year.
WaterCove Networks of Chelmsford, a 3-year-old start-up, has attracted some $70 million in venture capital financing. Its customers include British mobile phone provider Orange UK, with 14 million customers.
Janszen says he believes his company is poised to grow for one major reason: the deep pool of technical talent in Massachusetts. "If you want to build a good company, you have to hire good people, and there's lots of them out there," he says.
Patience is a virtue
In the wake of the last recession, many expected Massachusetts' vaunted biotechnology industry to take off and become a major generator of jobs. The 1990s, however, came and went without the sector fulfilling those expectations. With about 30,000 jobs, the industry accounts for just 1 percent of the state's total employment.
Now, biotech is poised if not for explosive growth, at least steady growth. After years of research, and navigating regulatory processes, Massachusetts biotech companies are increasingly bringing their products to market, promising new jobs in manufacturing, packaging, and shipping products. The Massachusetts Biotechnology Council estimates that the number of products on the market will more than double to 90 by 2005, while the number of biotechnology jobs also could double to more than 60,000 by 2010.
Vertex Pharmaceuticals Inc., founded 15 years ago, is an example. The company has an HIV drug on the market, another awaiting approval from the US Food and Drug Administration, and 15 in midstage development. Expecting a steady supply of drug discoveries moving into the development phase in the near future, Vertex is considering building a pilot plant to manufacture the drugs as they move through clinical trials toward approval. That work currently is contracted out. The company says it could add several hundred jobs across its operation by 2008.
Even as it matures, the industry continues to innovate. Alnylam Pharmaceuticals Inc. of Cambridge, an early-stage company, is the leader in an emerging technology that uses RNA, the intermediary between the information-containing DNA and production of proteins in a cell, to cure disease.
Another emerging technology: tissue engineering. As the baby boom generation ages, its members will increasingly need spare parts. At MIT, scientists are experimenting with combinations of biological tissue and synthetic materials to create products that act like living tissue, with the durability of synthetics. Robert Langer, a professor of chemical and biomedical engineering, estimates that tissue and organ failure costs the US healthcare system $400 billion a year.
Not dead yet
While many are ready to sound the death knell for information technology, the sector is almost certain to grow and expand. Ultimately, as wireless grows, or biogenetic research advances, information technology will continue to play a key role in managing ever-growing applications and data. Growing companies like BCGI, WaterCove, and Bluesocket are a testament to that. Other companies are innovating and growing, too, in areas such as information security and network management.
"Whatever the next technology is, it's going to be powered by software," says Joyce Plotkin, president of the Massachusetts Software and Internet Council.
Many see opportunities in the intersection of healthcare and IT. For example, the completion of the human genome project, which mapped the genetic blueprint of human life, and other breakthroughs, will make genetic information an increasingly important part of medical treatment, meaning doctors will need systems that allow them to quickly collect, store, manage, and access substantial amounts of genetic data.
This opens up opportunities in the emerging and already growing field of bioinformatics, the intersection of information technology and biotech. At Novartis Pharma AG, a Swiss firm that is locating its research headquarters in Cambridge, its Functional Genomics division, a unit that uses bioinformatics, has grown to 20 employees from four since it was launched five years ago, and will continue to expand, says Dalia Cohen, head of the group.
"There is so much data," she says, "and the only way to bring value to it, to drug research, is bioinformatics."
Ultimately, says Dr. Isaac Kohane, a professor in the Harvard-MIT Division of Health Sciences and Technology, bioinformatics could create computer models of how human systems work, allowing researchers, for example, to see how new drugs might affect people before testing it on humans. And that will require the development of even more powerful computers and far more sophisticated software.
"It's a huge opportunity," Kohane says. "The current amount of genomic data is fast outstripping our biomedical knowledge, and it's going to sit in a database until we can extract the information."
Robert Gavin can be reached at email@example.com.
© Copyright 2003 New York Times Company