Massachusetts Emerging as Robotics Leader

In the Commonwealth of Massachusetts, one need not look very hard to find robots under construction, being tested or in action. The state is fast becoming the robotics capital of the country. A long list of companies make their headquarters here including iRobot Corporation, the creators of the Roomba vacuum cleaner. Bluefin Robotics Corporation manufactures underwater units, CyPhyWorks Incorporated designs spying hover crafts and Rethink Robotics creates robots used in manufacturing. Massachusetts also boasts MIT and WPI, both schools that remain on the cutting edge of developing new technology every year.

Altogether, there are 100 robotic companies and 35 research and development facilities that design and manufacture robots for consumer, industrial, law enforcement, medical, military and research purposes. In the past four years alone, 11 new companies emerged. Massachusetts sells and exports more robots than any other location on the planet. Studies estimate that annual sales are close to $2 billion. The industry also currently employs approximately 3,200 people.

Robotics companies are thriving in the state, as manufacturers and other organizations are expressing an ever-growing desire to incorporate the machines into daily operations. While some fear that the automated devices will replace humans in the employment sector, the machines are largely being created to perform the work, not replace worker. In military scenarios for example, robots have the capability of entering dangerous areas, which saves the lives of troops.

The phenomenal growth of robotics also influenced the University of Massachusetts Lowell to construct the New England Robotics Validation and Experimentation Center. The 10,000 square foot facility will serve as the testing grounds for manufacturers desiring to test their robots in a variety of environments. The site will feature indoor and outdoor testing centers that include sand pits and splash pools. The ideal location means that the facility will be readily accessible to dozens of companies.

Massachusetts Technology Leadership Council chief executive Tom Hopcroft believes that robots are becoming common technology and that only a few places in the world make that possible.

Massachusetts is one of them.

Two Atrius Health Providers Merging in 2015

Two major healthcare provider organizations will be ringing in the New Year by breaking away from Atrius Health. Worcester-based Reliant Medical Group and Southboro Medical Group have announced their merger plans will take effect on January 1, 2015.  The two will merge together into a new organization that will keep each group’s identity separate. Once the merger is complete, they will have formed a healthcare provider that can offer the services of some 300 doctors along with more than 2,000 other healthcare professionals to serve more than a quarter of a million patients living throughout Central Massachusetts and the MetroWest region.

Formerly known as the Fallon Clinic, Reliant has 20 locations employing 2100 individuals throughout greater Worcester. The smaller Southboro Medical Group has only about one-fourth the number of employees spread throughout its four offices, located in Framingham, Westborough, Southborough and Milford. Each  organization plans on being known by its current name rather than having the merger create a new name or identity. Reliant and Southboro officials first announced plans for the merger, the details of which have yet to be released, at the end of summer. After Atrius Health seriously considered pursuing the merger of all of its network of six medical groups, Southboro and Reliant decided it was best to establish their own merger free and clear of Atrius.

In early 2014, Reliant premiered a medical office at the main medical center operated by Southboro, which gave the two healthcare providers a small taste of what it would be like to be in permanent partnership together. Southboro Medical has already been supplying one of the Reliant offices in Central Massachusetts with the services of one of its physicians to assist in patient care there.

Ebola and the Economy

Unless you’ve been under quarantine for the past few weeks, you know that Ebola has once again reared its ugly head, causing widespread concern – bordering on panic in some quarters – about the possibility of a global pandemic. How realistic a possibility is this?  Could it actually happen? Frankly, it’s still too early to say one way or the other. However, it’s not too soon to make some basic predictions about how some businesses will be affected should matters get much worse.

Dr. Bruce Aylward is the Assistant Director General for the World Health Organization (WHO). He recently announced that organization’s prediction that the number of cases is expected to top 9000 by the end of this week, and the fatality rate of the current outbreak has risen from just under 50% to over 70%. When asked how the situation might evolve over the next 60 days, he warned: “We anticipate the number of cases occurring per week by that time to be somewhere between 5,000 and 10,000 per week.”

As in previous instances of global health scares, airlines, theaters, sports arenas, and other locations where large “fraternities of strangers” gather are sure to be the first to suffer the economic consequences of a population frightened into isolation. Participating in purely recreational activities will be weighed against the fear of contagion, and attendance is sure to plummet.  Schools, churches, and other venues where attendance is “less voluntary” will follow suit in very short order if the outbreak is not quickly reigned in.

The WHO announced yesterday that the Ebola epidemic had officially been halted in Nigeria, Africa’s most populous country.  Sadly, Liberia, Sierra Leone, and other nations in the region remain mired in the misery of a highly-contagious, incurable, deadly viral outbreak, and new cases are popping up around the globe on a daily basis.  Should this situation continue, the global economy is sure to take a big hit.

From a business perspective, this could cause a loss of billions of dollars in revenue. On a more personal level, this could very likely fundamentally change the way we socialize. How big a change depends entirely on how long this outbreak takes to be subdued and how much damage it does in the meantime.

Worcester Chamber Says ‘No’ to All Four Ballot Questions

In November, voters across the Commonwealth will have the option to cast their vote for or against four positions that could impact business across the state. Recently, the Worcester Regional Chamber of Commerce met to discuss each of these questions in detail and to develop a policy to assist its members with a better understanding of how their vote would impact the business environment in the community and beyond. The chamber ultimately took a negative position for each of the questions on the ballot, stating that the proposed initiates would be detrimental to business.

  • In 2013, a law was passed tying the Massachusetts gas tax to the rate of inflation. This means the tax automatically adjusts every year without the legislature having to vote on it. This ballot question would repeal that automated yearly increase. The chamber noted that the additional gas tax will help fund needed infrastructure repairs throughout the state and are therefore against repealing the law.
  • In 1983, Massachusetts instituted a 5-cent deposit on soda and beer bottles and cans. This question asks if that deposit requirement should be extended to include water, juice, and sports drink containers as well. The chamber stated that this proposed change would have a negative financial impact on bottlers, distributors and retailers who sell these drinks, and are therefore against the measure.
  • In 2011, the Massachusetts legislature chose to allow casino gambling in Massachusetts. However, several citizens groups have come out strongly against legalized gambling and this question allows voters to express their opinion on the topic. While repealing the law may not impact Worcester, the chamber believes that the proposed initiative would limit job growth on a statewide scale.
  • The fourth question involves a proposal to alter how businesses provide paid and unpaid sick time to their staff members.  The measure would tie the number of sick days to the number of hours worked. The chamber believes that this proposal would limit a business’s flexibility to structure benefits as they need to.

The Worcester Regional Chamber of Commerce President and CEO Tim Murray drafted a letter to its members recently regarding the chamber’s position on each of these points. Both the executive committee and the public policy committee met to discuss the ballot questions in detail before the chamber created a comprehensive decision on the questions. The Chamber committees ultimately agreed that these initiatives would not benefit the business community in Worcester and that they may negatively impact their members.

Should Partners HealthCare System be Allowed to Acquire More Boston-area Hospitals?

A three week comment period has been ordered by a Suffolk Superior Court Judge before a final ruling permitting or denying a settlement between Massachusetts Attorney General Martha Coakley and the giant Partners Healthcare System. The proposed deal allows Partners Healthcare to expand in size by acquiring three hospitals while hiring more employees in exchange for stricter controls on their pricing policies and increased regulatory oversight.

Supporters of the deal argue that Partners Healthcare is likely to grow in size over time no matter what is done, therefore, the deal between the Attorney General and Partners Healthcare represents a chance for the government to have a role in monitoring and controlling their growth. Because of its size, Partners Healthcare has an outsized influence on prices and policies throughout the Massachusetts healthcare system. Coakley has argued that her agreement to allow some further growth, but only in exchange for greater regulation, represents a sensible balance between the rights of Partners Healthcare and the interests of healthcare consumers.

Critics are calling the settlement a sweetheart deal. They say that the restrictions on Partners Healthcare are vague and mostly to be determined at a future date. They point out that Partners Healthcare will be allowed to increase their revenues ten-fold under the settlement, which critics say is too much for a company that is already four times bigger than their next largest competitor. They fear that the resulting overwhelming market dominance by Partners Healthcare will actually serve to increase prices rather than restrain them.

Much controversy centers around the settlement’s placement of a cap on price increases based on the rate of inflation. Coakley believes this will place a significant break on future price increases, resulting in savings for consumers and taxpayers. Critics reply that economic indicators suggest that the rate of inflation will increase in coming years at rates that would make the caps meaningless.

Both sides are certain to use the three week comment period ordered by the judge to aggressively present their arguments. The question remains whether the court will then approve the settlement, or order it renegotiated.

 

Did the $525,000,000 Massachusetts Poured Into Biotech Generate 571 or 17,994 Jobs?

Yes? No? Maybe? The state of Massachusetts has spent $525 million encouraging the development of the state’s biotech industry, just over half of the $1 billion budgeted for this purpose. This public investment is being applied to grants, tax breaks and business loans for companies planning on moving to Massachusetts or expanding their operations in the state, and is intended to encourage a healthier state economy. But, just how many jobs are really being created by this taxpayer investment?

One academic study by Pioneer Institute claims that Massachusetts’ $525 million directly created only 571 new jobs in life science industries. This figure applies to a period starting in 2009 and ending in 2013. In contrast, consider a study from Northeastern University that claims that between 2006 and 2012, life sciences and related industries added 17,944 jobs in the state. While Northeastern’s period of study doesn’t exactly match Pioneer Institute’s, the astounding variance of the results illustrate that questions remain about public investment Massachusetts biotech industry.

Questions need to be answered. Should the government of Massachusetts take tax dollars collected from businesses and individuals and give them to other businesses? Should government be picking industry winners and consequently with businesses that pay taxes but don’t receive tax breaks and cash investment by government losers? If government should take money from some businesses and give it to other businesses, should the alleged investment be made from politicians who are being lobbied by special interests or independent professionals?

Creating new jobs isn’t the only way public incentives can aid select businesses and potentially the economy of Massachusetts. Specifically for a more complete picture of how biotech incentives are working, other questions should be answered. For example, one could ask how much private capital biotech firms have attracted and what kinds of returns backers have seen on their investments.

It is also useful to ask how much extra tax revenues the state may see from capital gains. Until questions like these are answered, it will remain impossible to know just how much Massachusetts has received for its $525 million biotech investment.

Worcester on the Affordable Care Act

Recently a panel was held in Worcester to discuss health care reform. Secretary of administration and finance, Glen Shor acted as the keynote speaker and spoke positively on the Affordable Care Act (ACA). He claimed it would help break down barriers to health care, along with assisting Massachusetts in receiving extra federal Medicaid reimbursements, that are issued to help cover uninsured or low-income patients. There is still plenty of room for improvement, and Shor is quoted saying, “Positive does not mean perfect.”

Other speakers on the panel include Patrick Farrell, Peter J. Martin, Jack Myers and Jean Yang. Topics were covered such as small businesses incentives to provide health care and how company culture relates to health care. Peter Martin was optimistic stating that Massachusetts has  “a relatively easy path ahead of us.” Employers are encouraged to keep up with the law as it changes and take a look at what others in the industry are offering.

Read more on the affordable care act panel here.

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Millions in Massachusetts State Tax Credits To Life Science Companies

The 2012 Mass Tax Credit Transparency report revealed that about $17 million was awarded to life science companies. In total $159.2 million in state tax credits were issued this year, with 11% going to life science companies. The $17 million was distributed to 28 different companies to improve life science research and investments

The largest category in the life science is the research credit, which received just under $7 million. This is due to the yearly increases in expenses in the state. $1.8 million of that seven went to Biogen Inc., a biotechnology company, that manufacturers drugs for the treatment of multiple sclerosis as well as other diseases. Shire Human Genetic Therapies Inc. was awarded $3 million, the largest amount for investment tax credit. In 2010 Shire began a $400 million venture into Lexington Technology Park. Along with investment and research credits, job credits were also awarded. Enough was issued to create at least 50 total new full-time jobs in the state of Massachusetts.  

Read more details about the tax credits to life sciences companies here.

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