Baker Takes On Skills Gap

Massachusetts Governor Charlie Baker has assigned three of his top deputies to oversee an effort that would better align the state’s education and workforce training systems with the needs of employers. The decision underlines the skills gap as a remaining obstacle to real economic growth.

Baker signed an executive order formally establishing a “Workforce Skills Cabinet”, which will develop goals, objectives and metrics with the input of individuals, businesses, government agencies and community-based organizations and advocacy groups. The Cabinet will be responsible for implementing by region the various suggestions for improving vocational and educational opportunities within the state, reporting their progress back to the governor.

The Workforce Skills Cabinet will be chaired by Labor and Workforce Development Secretary Ron Walker. Walker, a Democrat, was a cofounder of Next Street, a merchant bank that provides capital to entrepreneurs in urban areas. Baker said he anticipates that Walker will bring “the new, innovative approach he took in his role at Next Street” to his new position.

“I share the governor-elect’s emphasis on connecting education to work, his commitment to workforce development, and look forward to helping carry out his mission to make Massachusetts a great place to live and work in every region of the Commonwealth,” Walker said in a statement.

The inability to locate and hire skilled employees was by far the top concern expressed by Massachusetts employers last year.Over the coming months, Walker will be collaborating with Education Secretary Jim Peyser and Economic Development Secretary Jay Ash to create an effective plan to address the disconnect between available jobs and skilled workers by the summer.

“More than anything, we need to make sure we find a way to link our workforce to job opportunities that exist out there for our citizens. These are inseparable goals and critical strengths for the commonwealth to continue to be successful over time,” Baker said at a press conference.

The skills issue crosses almost every industry, from manufacturers in the Blackstone Valley to software companies in Boston’s Innovation District to research and engineering firms on the North Shore. Recommendations will take into account the differing economic and demographic needs of each region.

Boston Scientific Purchases American Medical Systems Unit for 1.6 Billion

Boston Scientific, a Marlborough-based life sciences company, announced on Monday that it has agreed to acquire the urology division of American Medical Systems for $1.6 billion. Boston Scientific expects to close the acquisition in the third quarter of 2015. This will be the company’s largest acquisition since it purchased Guidant Corp, a manufacturer of cardiovascular products, in 2006 for $27.2 billion.

American Medical Systems (AMS), a division of Endo International, published reports last week that Boston Scientific was to close a deal with Endo for an unspecified AMS unit. The urology unit of AMS, based in Minnetonka, Minnesota, employs roughly 800 workers worldwide. It covers the men’s health and prostate health divisions of AMS. The unit is being sold for $1.6 billion up front, plus a potential for another $50 million based on the unit’s sales in 2016. Acquisition of the urology branch encompasses AMS products that treat erectile dysfunction, male urinary incontinence, and benign prostatic hyperplasia.

Boston Scientific (BSX) states the company’s technologies complement their portfolio of products that treat other urological conditions, including kidney stones, pelvic organ prolapse, female incontinence and abnormal uterine bleeding. This follows their purchase of Bayer AG and IOGyn last year. IOGyn, based in California, received FDA approval for a system treating uterine fibroids and polyps. AMS products that treat urology related issues in women will not be included in the deal.

Over the course of the previous year, the AMS unit generated $400 million in sales and adjusted operating income of about $130 million, with net income of around $60 million according to BSX. President and CEO of Boston Scientific, Mike Mahoney, expects the acquisition will create a business with annual sales of nearly $1 billion and will enable “strong future growth prospects through portfolio innovation and international market expansion.” BSX anticipates more than $50 million in annual pre-tax cost savings by the end of 2018 with boosted profits starting as early as 2016.

The announcement comes less than a month after an out-of-court settlement with competitor Johnson & Johnson. BSX paid $600 million to their rivals after Johnson & Johnson disputed their purchase of Guidant. The settlement avoided a $7.2 billion lawsuit filed by the rival company that had agreed to purchase Guidant before BSX acquired it for $27.2 billion.

Study Foresees Continued Medical Technology Growth

The medical technology industry is growing as an increasingly significant sector of the Massachusetts economy. According to predictions from Evaluate Ltd., a market research firm, it is expected to grow at a 5 percent annual rate for the next five years. The report, entitled “EvaluateMedTech World Preview 2014, Outlook to 2020” (free registration required for download) shows that medical technology sales are expected to reach $514 billion by the end of that period, with influential mergers and emerging players reconstructing the faces of industry leaders.

Westborough-based Coghlin Companies, Inc. recently announced that their subsidiary Cogmedix, a medical device manufacturer founded in 2008, had outgrown its space and was relocating to its new location in Worcester, more than doubling the size of its facility to keep up with growth and demand. The announcement of the merger involving Medtronic and Covidien, estimated at $42.9 billion, is  is anticipated to form the new market leader in an industry that will be worth over half a trillion dollars by 2020.

Research has also shown that spending on global research and development will reach $30.5 billion by that year, a growth of 4.2 percent. In the first half of 2014, $1.3 billion was raised in completed medical technology IPO offerings, a 44 percent increase from the same period in 2013. During the first half of this year, the value of mergers in the medical technology field rocketed up by 363 percent compared with the same period the year before, a huge indicator of what can be expected in the near future.

The End of AstraZeneca in Westborough

The AstraZeneca plant in Westborough has announced it will shut its doors permanently by the end of 2015. This is the final step the company has taken to shut down the plant, having already decreased employee levels there from 800 to just 180.  More employees will be relieved by March, but others will remain employed until the company closes at the end of 2015.

The closing of the facility means the city of Westborough will lose its biggest taxpayer. The AstraZeneca plant pays the city an estimated $2 million in total; $360,000 in property taxes and $1,548,547 for equipment taxes. Residents and businesses in Westborough will begin to feel the pinch of the revenue loss in fiscal year 2017.

City officials hope to fill the vacancy quickly.   The building is 420,000 square feet and could be a great site for a wide spectrum of businesses.

The AstraZeneca plant processed the asthma treatment Pulmicort Respules, which will now be produced at the company’s locations in Sweden and Australia. A company representative stated the move is to attain “increased efficiencies in our global supply chain.”

AstraZeneca will continue to house its research-and-development operations in Massachusetts, with facilities in both Waltham and Cambridge.

Snow Throws Wet Blanket on Economy

Starting in late January, Massachusetts has been battered by major snowstorms that have blocked roads, buried parking spaces, and caused widespread power outages. MBTA service has been limited, and even shut down in places. Snow and ice continues to block roads, keeping people away from shops and restaurants and impeding industrial and agricultural operations.

According to Christopher Geehern of the Associated Industries of Massachusetts, employees are having trouble getting to work, and companies are having difficulties distributing their products. Industrial businesses are also spending a lot of time on snow removal.

Here are some other ways the snow is impacting the economy.

The Mystic Generating Station, an eight unit oil and natural gas power facility on the Mystic River across from Charlestown, lowered output to keep snow and ice in the river from making the plant malfunction. Workers also shoveled the flat roofs on the facility constantly. Kevin Thornton, a spokesman for the plant’s owner Exelon, said that the plant put workers in a hotel and provided food to make sure that they could get to work despite the snow. The plant has about 100 workers and the ability to power roughly two million homes. “The biggest costs have been snow removal,” Thornton said.

Insurance broker Marsh & McLennan in Worcester is seeing more claims for ice dams on roofs that have caused leaking and collapses. Jerry Alderman, president of property and casualty in New England, expects an increase in auto claims from snow and ice as well. Snow removal services are stretched very thin.

Economist Michael Goodman said that all the bad weather in January and February could cost the state billions of dollars while, according to a study by IHS Global Insight, a one day shutdown due to snow in Massachusetts would cost the state’s economy about $265 million.

Medical Device Manufacturer Moves to Worcester

Cogmedix, a wholly owned subsidiary of Westborough-based Coghlin Companies Inc., recently announced the relocation of its world headquarters to 17 Briden Street in Worcester.  The medical device engineering and manufacturing services provider has become quite a success story in an increasingly important sector of the Commonwealth’s economy.

Chris Coghlin, President and CEO of the Coghlin Companies, stated “We are very excited about the trajectory of Cogmedix and the recent relocation, renovation and expansion of this world-class facility. For more than 100 years, our family has shared a deep-rooted passion for the economic success of Worcester and its surrounding communities, and we look forward to adding many new jobs in the greater Worcester area for years to come. The proximity of this facility lends itself well to attract highly skilled technicians as well as engineering and supply chain personnel as our growth continues into 2015 and beyond.”

Matt Giza, Vice President and General Manager of Cogmedix, said, “This move was made necessary by our steady pattern of growth. We really needed the additional space and these newly outfitted facilities are more than twice the size of our former location. This expansion will allow us to increase capacity to accommodate the needs of our customers, both existing and new, as well as provide improved inventory and supply chain management operations.”

Addressing Cogmedix’ growing niche in manufacturing finished laser and optically-based medical devices, Giza noted that upgrades included the installation of five purpose-built, independently climate-controlled, laser-safe test labs. Amenities include new cafeteria spaces, modern conference rooms, and a new Customer Convenience Center featuring fully equipped workspaces exclusively for visiting clients to enable a more intimate and efficient product launch experience with total transparency.

In addition to expanded production capacity and other benefits made possible by the much larger facility, the address itself has significant advantages. “Our new location,” Giza explained, “is at the junction of Interstate I-190 and I-290, providing quick and easy access to the entire region’s transportation infrastructure, including major airports in Boston, Worcester, Providence, and Hartford. We are also only about a mile from Worcester’s Union Station. All of this makes it possible for our visiting clients to arrive by air or rail and be hard at work in their own dedicated spaces in about an hour or less.

“We also couldn’t help but take notice of the rapidly growing biotech and biomed industry presence in the neighborhood,” said Giza. “Both regionally and nationally, Worcester has become well-known as a home for these cutting-edge industries, and Cogmedix is now located right in the heart of it all. We are immediately adjacent to WPI’s Gateway Park, Massachusetts Biomedical Initiatives (MBI), as well as multiple life science companies in the immediate vicinity, something that will surely add to the atmosphere of innovation and create real opportunities for meaningful collaboration.”


Technology Skills for Manufacturing are Lacking in Region

With recent trends toward onshoring and reshoring, manufacturing jobs are gradually returning to the USA from overseas. Most do not, however, seem to be finding their way into Central Massachusetts. While manufacturing – and the technology propelling it forward – is projected to continue to grow, albeit slowly, during 2015, the focus here remains on locating workers qualified to help the local manufacturing sector expand.

Workforce Sharpening

A suitable workforce is still not available to help grow the manufacturing industry back into the social fiber of the region. Key manufacturers in Worcester County point to the lacking workforce as a major factor in re-establishing manufacturing in the Bay State. Some companies have actually reached the point of having to sell off capital equipment because they simply can’t find anyone to operate it.

“The trend is going to be virtual training and online training,” says Torbjorn Bergstrom, the director of the Haas Technical Education Center at Worcester Polytechnic Institute. These are both rather inexpensive and could provide some workers in a short amount of time. They have proven helpful in other fields and should be just as helpful in restoring industry to its rightful place in Central Massachusetts.

Economic Innovation

Before a product can launch in the public marketplace, someone needs to manufacture it. Massachusetts has become world-renowned as an incubator for technologies useful in many industries, and it continues to rely on local small and medium-sized businesses (SMBs) to nurture that reputation. “Almost all of the manufacturing companies here in Massachusetts are SMB companies,” Bergstrom commented.

The City of Worcester has many multi-story brick buildings sitting vacant since the day a toy, shoe, textile, or furniture manufacturer left – often several decades ago. Worcester is also the center of finance and education in the county. It would seem as though all the pieces were in place. However, unlike some other sections of the country, the management staff required for operations is already here, but the workers are not.

All this must somehow change if the manufacturing sector is to ever have a chance of resurgence here.

Study Foresees Continued Medical Technology Growth

In recent years, the medical technology and medical device manufacturing industries have become an increasingly significant sector of the Massachusetts economy. According to predictions from Evaluate Ltd., a market research firm, it is expected to grow at a five percent annual rate for the next five years. The report, entitled “EvaluateMedTech World Preview 2014, Outlook to 2020,” shows that medical technology sales are expected to reach $514 billion by the end of that period, with influential mergers reconstructing the faces of industry leaders.

The announcement of the merger involving Medtronic and Covidien, estimated at $42.9 billion, is one such example. It is anticipated that together they could become the new market leader in an industry that will be worth over half a trillion dollars by 2020. Research has also shown that spending on global research and development will reach $30.5 billion by that year, a growth of 4.2 percent. In the first half of 2014, $1.3 billion was raised in completed medical technology IPO offerings, a 44 percent increase from the same period in 2013. During the first half of this year, the value of mergers in the medical technology field rocketed up by 363 percent compared with the same period the year before, a huge indicator of what can be expected at least in the near future.

The Evaluate Ltd. report predicted that activity among the major players in the sector will continue on a large scale. The Medtronic-Covidien union represents the biggest merger in the industry’s history and marks the beginning of a period of rapid change for the market. This, and other megamergers, will continue to dominate and reshape the various areas of the field in the immediate and possibly extended future.

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.

Columbia Tech Names Laura Deming Senior VP Engineering

Columbia Tech, a contract engineering, design, and manufacturing services provider based in Westborough, MA has announced that Laura Deming has joined its team as Senior Vice President of Engineering. With more than 25 years of experience building and leading talented teams in delivering innovative solutions to meet customer needs, Deming has led the development and commercialization of numerous capital equipment and consumable products for medical device, life science, and other applications.

Columbia Tech’s Senior Vice President and General Manager Gerry Burns was enthusiastic in welcoming Deming. “We could not be more excited about Laura joining our leadership team. She brings a background that is highly compatible and the depth of experience that will be required as we continue to grow.” Commenting on leadership style, he added, “I’ve had the opportunity to work closely with Laura over the past few months and she leads with intelligence, experience and passion and has already made a significant impact with our Engineering team.

“I’m thrilled to join the team here at Columbia Tech and to contribute to the success and growth of the organization,” said Deming. She added, “My overriding goal is to further strengthen Columbia Tech’s commitment to realizing the incredible potential that exists to deliver services and products that meet and exceed our customer’s expectations.”

Prior to joining Columbia Tech, Deming held the position of Senior Vice President of Product Development at RainDance Technologies. She has also held senior leadership roles in Product Development and Operations at WaveRx, Cytyc, Applied Biosystems, PerSeptive Biosystems, and Millipore.

Deming holds a BS in Professional Chemistry from Bridgewater State College, an MS in Chemical Engineering from the University of Lowell, and an MBA from Worcester Polytechnic Institute.