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Boston Route 128’s Past and Present (2)

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Boston Route 128’s Past and Present, Vicissitudes of Political Life 

       “Better the occasional faults of a government that lives in a spirit of charity than the consistent omissions of a government frozen in the ice of its own indifference.”                                                            —— Franklin D. Roosevelt

                                                                                                                                          Officialdom can hardly be a long-time lover.       —— The Scholars

       If a person were interested in the American public’s opinions about their country’s economic performance, he or she would easily notice their contradictory attitudes toward the role of their government. When the economy is booming, people oftentimes attribute the growth to factors extraneous to the executive power such as entrepreneurship, technological progress or international environment. In times of economic stagnation or recession, they would hold the government accountable for its demotivational or ill-considered measures. All kinds of criticism, accusation and even denouncement would come flooding in from every walk of life. Indeed, it takes not only integrity and sacrifice, but in particular “good temper” and “magnanimity” to hold key political posts in America.

The American people’s “vigilant” and “prudent” attitudes toward the government are reinforced in the mutual fault- picking and derogatory attacks between the Democratic and Republican parties. In fact, the two parties’ divergence with regard to the function and role of the executive branches of the government remain as the touchstone of their fundamental difference. However, their respective positions on the economic policies are not as clear-cut as “interference” versus “laissez-faire”, nor can the specific measures they take simply be labeled as “conservative” or “liberal”, “left” or “right”. In his 2012 State of Union Address, President Obama made the following statement, with which many well-intentioned politicians may side, “I believe what Republican Abraham Lincoln believed: ‘That government should do for people only what they cannot do better by themselves, and no more.’”

Ryan and Clinton, whom will the people trust?

(From http://www.rollingstone.com/politics/blogs/national-affairs/one-shockingly-true-fact-from-paul-ryans-rnc-speech-20120830

http://articles.nydailynews.com/2012-09-06/news/33623274_1_democratic-party-jobs-equal-opportunity)

The recently concluded Republican and Democratic National Conventions, while making formal declarations of their respective presidential nominees, also staged a vigorous debate on the assessment of current economic situations and of the present economic policies. Republican vice presidential candidate, Paul Ryan, attributed America’s high unemployment rate and deterioration of credit rating directly to Obama’s incompetence. In his eyes, the president’s promise of “change” four years ago has delivered nothing but “fear and division”. Obama failed to prioritize job creation on his agenda; instead, he got Americans into “a long, divisive, all-or-nothing attempt to put the federal government in charge of health care”, which not only intensified bi-partisan conflicts but came at the expense of the elderly. Obama’ s best shot at fixing the economy was a costly stimulus plan; however, the $831 billion went to companies like Solyndra, which announced bankruptcy in September 2011, not long after its acceptance of the funding. Indeed Paul saved little face for Obama by so bluntly saying that the president had wasted the feelings, time and money of the American people! In contrast, former president Bill Clinton’s remarks at the Democratic National Convention, at least on the surface, was much more courteous. Yet his rebuttal to all the major criticisms from the Republicans was equally vehement. By reviewing the presidency history of the two parties since 1961, Clinton pointed out with pride that with shorter ruling period, the Democratic presidents had produced more jobs than their Republican counterparts. With specific data, Clinton defended Obama against Ryan’s accusation of hurting the elderly. On the contrary, Clinton held that Obama’s reform would “add eight years to the life of the Medicare Trust Fund”, extending it from 2016 to 2024. Obama’s policies to support education are, moreover, of strategic importance and far-reaching significance. Drawing on his own experience as president, Clinton encouraged his fellow Americans to give the president a bit more time, because, to quote him, “No President – not me or any of my predecessors could have repaired all the damage in just four years.” Both Ryan and Clinton sounded uncompromising and reassuring, but whom can the people trust and whom will they trust?

Academia certainly would not remain silent, and a warning voice came from Stanford University on the west coast, “American economy faces an uncertain future…the reason for this predicament is clear: we have deviated from the principles of economic freedom upon which America was founded.” If John B. Taylor was echoing his concerns with Hayek’s works and ideas in his article “The Road to Recovery”, he was also emphasizing that as rightly perceived by Hayek, freedom and rule of law are the key to prosperity, policy-makers must adhere to rule of law and predictable policies, for only stable policies can sustain economic growth. ” On July 31, 2012, the centennial celebration of Milton Friedman, also held at the Hoover Institution Stanford University, could be seen as a straightforward critique on “big government”, “governmental regulation” and “aggressive fiscal policies.” Indeed, the criticisms made decades ago are still astonishingly relevant today!

After being hit by the most severe economic crisis since the Great Depression in 1930s, Americans today pay unprecedentedly close attention to their domestic economic situation. People have every reason to expect that the “economic card” would be the watching focus of this year’s presidential campaign and that economic issues would ultimately determine who becomes the next host of the White House. Against such a complicated backdrop, will there emerge a set of economic policies marked by wisdom, practicality, innovativeness and minimum controversy out of the presidential campaign?  Perhaps such a wish is hard to gratify.

Two worldly renowned and respected economists and advocates of “free market”, Milton Friedman and Hayek Friedrich A. von

With earnest attention and expectation, let us look back on the history of Route 128, and following its rise, decline, resurgence and steady development, recollect the performances of several former governors of Massachusetts from both parties. Through the ups and downs of their political lives, we may be able to gain some valuable insights.

*               *              *

       Michael Dukakis was the man who single-handedly created the “Massachusetts Miracle” and later eye-witnessed its collapse. But Route 128, which was built during his term, has taken its fame thenceforth. Dukakis’s political life had quite a legendary flavor—he lost one election, won a reelection, and fulfilled three terms (1975-1979、1983-1991), serving the longest as governor in the history of Massachusetts. The “Massachusetts Miracle” enabled him to compete aggressively and favorably with George H. Bush in the beginning, but the sudden turn of fortune made him the closest governor to the White House from Massachusetts. Upon leaving office, he took full professorship at Northeastern University, and visiting professorships at University of California, Los Angeles as well as Loyola Marymount University. A devoted teacher apart, Dukakis has also committed himself to the strategic studies of Democratic election campaigns, and helped Deval L. Patrick win the gubernatorial election in 2006. He has been an “evergreen pinaster” in American politics.

The Dukakis economic policy took on a bold stroke during his second and third terms. His approach emphasized strong interference from the government and was known as “big government” and “industrial policy” in academia. The so-called “industrial policy”, as opposed to “technology policy”, refers to policies that provide direct fiscal and financial support to selected companies in specific industries. With the advance of new technologies and the increase of tax revenues, the aggressive Dukakis aimed at all-encompassing economic measures. The government stepped in to plan a number of industrial parks and went as far as to propose the slogan “if you need help, ask.” These practices invited challenges from the industry and the academia even in his heydays, not to mention more doubts and censure when the economy began to slow down in early 1989. Jeff Jacoby, a journalist from the Boston Globe argued that, “There never really had been a Massachusetts miracle. The state had outperformed most of the nation during the economic boom of the mid-1980s, but not because of any Dukakis wizardry. Its soaring growth had been powered by two engines: Proposition 21/2, the 1980 property tax cut adopted by ballot initiative that lit a fire under the Massachusetts real estate market; and the Reagan-era military buildup, which pumped hundreds of millions of dollars into Route 128, the high-tech highway ringing Boston…” The “miracle” argument failed to send Dukakis to the White House; worse still, it was derided by George H. Bush as “Massachusetts Mirage”. Dukakis spent the latter half of his third term in pain and remorse.

 Dukakis, aggressive and upbeat, retreated under the onslaught of Bush senior

(From http://www.johnpratt.com/items/docs/lds/meridian/2003/parallel.html)

(From Spokane Chronicle, July 14, 1989)

Dukakis’s political legacies cover at least four aspects: encouraging and supporting the cooperation of production, study and research; developing public transport system (Dukakis himself takes the subway to work every day); promoting the advance of multi-industries in industrial parks; and championing the Boston urban revival. Dukakis blamed his own faulty strategies for losing the campaign, as he chose not to fight back forcefully George H. Bush’s malicious attacks. Even in the 2011 interview, he was still full of self-reproach and regret, saying that his failure to contain Bush senior and the subsequent resurgence of Republicans led by Bush junior had been the root cause for America’s crisis today. Despite its arguable truthfulness, Dukakis deserves our sincere respect for his strong sense of duty.

        *               *              *

       William Weld was probably one of the most popular governors in the history of Massachusetts. He first took office amidst the state’s turbulent economic times; yet when he sought reelection in 19994, he won with an impressive 71% of the vote. His coming to power as well as his outstanding performance introduced the golden age of Republican governorship in the Commonwealth.  It lasted for sixteen years until 2007 when Democrat Deval L. Patrick took over.

The “real miracle” was credited to Weld, who resolved Massachusetts’s fiscal crisis and handled a staggering deficit of 800 million dollars he inherited from Dukakis. The Wall Street Journal and the liberal Cato Institute respectively named him as the “most courageous” and the best governor in America. He fulfilled the promise he made during his 1991 inaugural speech about “a leaner and more entrepreneurial state government.” When he left office in 1997, the number of state employees was downsized by 15, 000 from that of 1988. It was during his term that the Massachusetts economy as represented by Route 128 gained new life, which took the academia and business world by surprise. While propaganda about the “Massachusetts Miracle” did not survive its namesake book in 1988, scholarly prediction of Massachusetts’s decline failed in a similar manner in 1994. Route 128 must have embarrassed quite a few politicians and economists.

However, perhaps even to his own surprise, Weld’s political life following Massachusetts was unusually rough. It almost seemed like he had exhausted his good fortune in the Bay state. Soon after ending his governorship, Weld was nominated United States Ambassador to Mexico by President Clinton. Yet he never made his trip, for the Senate simply disregarded the nomination. This was mainly due to opposition from Chairman Jesse Helms of Senate Committee on Foreign Relations, who disapproved Weld for his moderate stance on several social issues. It was also partly attributable to a long-standing grudge Weld generated when he served as U.S. Attorney of Massachusetts. In 2005, Weld officially announced his candidacy for governor of New York in an effort to return to politics. Unfortunately, he was persuaded to withdraw one year later because he had picked the wrong partner, the candidate for lieutenant governor. From then on, Weld resigned himself to the private sector, and occasionally flirted with thriller novels and acting.

From endorsing Obama to backing Romney, Weld finally returns to the Republican family

(From http://www.wbur.org/2012/08/28/weld-romney-convention)

Maybe Helms, a fellow Republican, did have sufficient reasons to doubt Weld’s political inclination. In the 2008 presidential election, Weld initially supported Romney in the Republican primaries and later endorsed Obama for presidency. The two people he had voted for are both in the final race this year. Who would Weld choose? The suspense was just announced: he formally expressed his backing of Romney at the Republican National Convention! In fact, United States parties do not have hard and fast rules on their members. It is generally a matter of personal choice to decide on whom to vote, and the choice would not affect one’s public image. A once most promising politician in Massachusetts had resort to such means to gain public attention— what a pity!

          *               *              *

       Mitt Romney’s political path can be described as “rocky and bumpy”. After losing the 1994 U.S. Senate election in Massachusetts, he “exiled” to Utah where he successfully managed the 2002 Winter Olympics and Paralympics in Salt Lake City.  In 2003, he returned to Massachusetts as governor and served one term. His 2003 presidential campaign had a good start, but failed to beat McCain. Since early 2011, he has withstood a variety of challenges and devoted himself to the 2012 election. Will he realize his dream this time at last? The result is to be revealed in a few weeks.

Romney defeated his democratic opponent and became the 70th governor of Massachusetts in 2003, continuing Republican’s governorship record in the state. There was a bit of luck in it- Romney did not actually attend the primary. Then incumbent female Republican governor, Jane Swift, was plagued with political missteps and personal scandals, and thus opted out of the party’s nomination. Romney, in contrast, was enjoying boosting reputation and popularity thanks to the success of the Salt Lake City Olympics. With the support from both prominent party figures as well as the White House, he was inarguably the best choice for Republican nomination. It is notable that Swift, being the only female governor in the state history, was reported to be pregnant during her campaign. Much controversy as the news invited, it turned out unexpectedly a favorable element for her election. Working mothers loved her! However, the child issue also incurred plenty of criticism. She asked her staff to babysit her daughter, and on one Thanksgiving, she used a police helicopter to fly home to care for her sick child. When these personal matters were exposed, women voters who had supported her went outraged so much so that toward the end of her term, she had “the dubious honor of a single-digit approval rating.” Ironically, for Swift, both success and failure boil down to “the child”.

There was nothing remarkable during Romney’s governorship in the Commonwealth. Confronted with attacks from his predecessor Dukakis and his successor Patrick, Romney intentionally distances himself from Massachusetts. During his term, the state showed weak economic performance and saw a surging unemployment rate. His personal success in business and previous contribution to the Olympics did not bring much benefit to the local economy. Romney’s financial expertise is undeniable, which he maneuvered skillfully to solve Massachusetts’ fiscal problems. Instead of raising taxes, he increased a number of fees. Although he avoided following Dukakis’ steps and kept his inaugural words, criticism raved. Anyways, he was running out of choices to fix the state’s colossal fiscal deficit, and he did manage to balance the book. However it was done, it was done.

 Will the swaying Romney stabilize himself after the official nomination?

(From http://www.thehindu.com/news/international/article3843341.ece)

Romney’s greatest political achievement is the Massachusetts healthcare reform. Popularly known as “Romneycare,” it has transcended partisan politics in essence. As Romney himself acknowledged, “There really wasn’t Republican or Democrat in this. People ask me if this is conservative or liberal, and my answer is yes. It’s liberal in the sense that we’re getting our citizens health insurance. It’s conservative in that we’re not getting a government takeover.” Ironically, Romney was reluctant to claim the credit when Massachusetts celebrated the sixth year anniversary of the reform. Apart from its obvious contribution to improving people’s healthcare standard, the reform has boosted rapid developments in at least two industries—health care and health insurance. Massachusetts has become the global leader in biomedical researches, and the second-time host for the Biotechnology Industry Organization convention since 2007. Renowned European companies flocked in to base themselves in Greater Boston, as a direct result of the successful health care policies. Well-equipped with six years’ rich experiences, two big local insurance companies– Tufts Health Plan and Harvard Pilgrim Healthcare—are planning to explore new markets in other states. However, because of its striking resemblance with Obamacare, Romneycare has to be excluded from Romney’s trump cards, the action itself provoking ridicule and challenges. Is it a shrewd tactics or a miscalculation? Any judgment is too early to pass.

*               *              *

        Needless to say, Massachusetts’s economic performance and industrial development have been closely related to the economic policies of the federal government in different periods. This could be a deserving reward for its active role as a major state and its continuing support for a strong federal government ever since the founding of America. Taking the building of high-tech Route 128 for example, much of the construction was funded by the federal government. The R&D funds of MIT and other scientific institutes came from the defense expenditure and basic research investment. The present governor Patrick, a close follower of Obama, also obtained generous funding for education, science and technological development. In retrospect, the federal government’s timely windfall also explained the two Republican governors’ (Weld and Romney) seemingly effortless solution of the fiscal crises. Yet Massachusetts’s statesmen certainly have greater ambitions than gaining support and benefit for their own state; rather, they aim at a larger stage to showcase their talents.

Aspiring Patrick has been gaining momentum

(From http://www.bostonglobe.com/metro/2012/09/04/deval-patrick-tells-convention-mitt-romney-failed-massachusetts/o9iVjIOIBx5WNNTPXNsZsL/story.html)

Looking at the remorseful Dukakis, disillusioned Weld, undecided Romney, and triumphal Patrick, I was wondering just how far the Beacon Hill is away from the white house. The reflection put me in mind of a chat I had with a middle-aged white businessman in Newton two years ago. He raised a direct challenge about Obama: “Has he (Obama) ever run a government, or a business?” When I answered no, he smiled, “ then how on earth can he become a good president?” After a moment’s silence, he added jokingly, “our present mayor (Setti Warren) and governor (Deval Patrick) are both African Americans and they are doing pretty well. Perhaps Obama is just not dark enough.” His vote will definitely go to Romney this year, but the increasingly more conservative Romney has a slim chance in Democrat-dominated Massachusetts. Having always kept a close eye on the presidential election, I could not help thinking: success or failure, what is really at stake for Obama or Romney?

How far is it from the gold dome on Beacon Hill to the White House?

 It is fair enough to say that an American political post, be it the president, the governor or the mayor, does not grant much power but is always subject to balances and checks. Such, though, never discourages elites from eagerly going for it when the election season draws close. The competition is extremely fierce. Once the election is over, the winner takes office whereas the loser returns to a peaceful life after congratulating his old rival. They either resign for good or start preparing for the next run. In both scenarios, they would have a proper and decent placement. Although U.S. elections at all levels have been scandalized by “money game” and mutual attacks between candidates (on which Obama offered a surprisingly honest reflection in his acceptance speech at the Democratic National Convention: “I know that campaigns can seem small, and even silly.  Trivial things become big distractions.  Serious issues become sound bites.  And the truth gets buried under an avalanche of money and advertising.  If you’re sick of hearing me approve this message, believe me – so am I.”), to contend in campaigns as such means intensity without violence, and to engage in “officialdom” like this means occasional disappointment but not permanent failure. Politics can become a choice for life– one can advance in full force or retreat with full honor. Triumphs or defeats, which could have made a roller-coaster trajectory of experience for politicians of other countries, are thus becalmed and consoled for the candidates in the United States. It is what I call: a political life filled with ups and downs yet never in lack of ready exits. We can well speculate: Individually, what one pursues has gone far beyond power itself. Is it pride, honor, duty or self-fulfillment? One can hardly know for sure unless being part of it.

Last weekend, I took my daughters to Gloucester for a folk art event. When driving through the north portion of Route 128, I could not help but think of the several political figures aforementioned. All of a sudden, my elder daughter asked me, “Dad, where are we going?” “To the White House.” I blurted out. Both she and I paused at my response and then laughed out at the same time!  The hearty and loud laughter lingered long over the 128 highway…

 

References:

 Center on Women and Public Policy Case Study Program. “Jane Swift: Motherhood in the Massachusetts’ Governor’s Office.” Humphrey Institute of Public Affairs, University of Minnesota. <http://www.hhh.umn.edu/centers/wpp/pdf/case_studies/jane_swift_motherhood/janeswift_case.pdf.> September 7, 2012.

Cooper, Michael. “A Candidate’s Sudden Turn from Prospect to Dropout.” June 7, 2006. <http://www.nytimes.com/2006/06/07/nyregion/07weld.html?_r=1&ref=williamfweld>. September 4, 2012.

Epstein, Jonathan. “Dukakis Speaks on Political Climate.” October 11, 2011. < http://www.thejustice.org/news/dukakis-speaks-on-political-climate-1.2641138#.UEai-UQ739B >. September 5, 2012.

Gaines, Richard and Michael Segal. Dukakis: the Man Who Would Be President. New York: Avon, 1988, c1987.

Hayek, Friedrich A. von. The Road to Serfdom. Chicago: University of Chicago Press, 1944.

Jacoby, Jeff. “Bill Weld’s Revolution that Wasn’t.” City Journal. Winter 1996. <http://www.jeffjacoby.com/6043/bill-welds-revolution-that-wasnt>. September 4, 2012.

Kenney, Charles and Robert L. Turner. Dukakis: an American Odyssey. Boston: Houghton Mifflin Co., 1988.

Kilborn, Peter T. “In His State’s Success, Dukakis Seeks His Own.” The New York Times. August 5, 1987.

Kranish, Michael and Scott Helman. The Real Romney. New York: Harper, 2012.

Romney, Mitt. No Apology: the Case for American Greatness. New York: St. Martin’s Press, 2010.

Saxenian, Annalee. Regional Advantage: Culture and Competition in Silicon Valley and Route 128. Cambridge, MA: Harvard University Press, 1994.

Senne, Steven. “Palin’s regard for Jane Swift changed in a swift manner.” June 12, 2011.http://www.boston.com/news/politics/articles/2011/06/12/palins_regard_for_jane_swift_changed_in_a_swift_manner/. September 9, 2012.

Taylor, John B. “The Road to Recovery.” City Journal, 22.3. (Summer 2012). < http://www.city-journal.org/2012/22_3_friedrich-hayek.html>. September 5, 2012.

 

Chinese version of the article can be found at Sina Financial and Economics Blog.

Boston Route 128’s Past and Present (1)

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Boston Route 128’s Past and Present: Tracing the Roots

           Miracles are propitious accidents, the natural causes of which are too complicated to be readily understood.

                                                                                                                                                                                                         —— George Santayana

         The 1 -2 -8 number combination had made its appearance on the road map of Massachusetts as early as late 1920s. Without any scientific verification or painstaking conceiving, such an auspicious number – in the Chinese eyes – was no more than a result of the brainstorm by a few staff members of the Massachusetts Department of Public Works. At that time, the Boston Metropolitan District Commission confirmed the plan of expanding the Boston city traffic to a circumferential network of transportation. In order to cater to “the superior leadership,” these people haphazardly assigned Route 128 to a chain of existing local streets with various capacity and names that connected the main towns in Boston’s suburban area.

Today, “Route 128” is a loaded term with rich connotations. It has grown into a key high-tech region in the United States second only to Silicon Valley, and it has become the gauge of innovation and economic development for not only Massachusetts and America but the world at large. 128 High-tech Road, 128 High-tech Industrial District and 128 Innovation Corridor, altogether summarized as “the Route 128 Phenomenon,” have captured the attention of numerous policy makers, leaders from universities and research institutions, entrepreneurs and researchers. In the 1980s when “Massachusetts Miracle” was all the rage, visiting groups streamed in with the hope of learning and replicating the experiences and model of Route 128. Later on, following the decline and resurgence of the regional economy, there has not been a single moment when Route 128 does not affect the sensitive nerves of the global high-tech industry. All such, I fear, must have been way beyond the wildest imagination of the original code makers.

In fact, what we call Route 128 nowadays is not the road under its original name (that one still exists and is referred to as “Old Route 128”), but a relocated highway mainly rebuilt in 1950s. When we trace back the growing fame of Route 128, special thanks are due to two key figures. One is William Callahan, commissioner of the Massachusetts Department of Public Works, who fought against all odds and withstood the pressure to have the road built. The other is Gerald Blakeley, then young and ambitious employee of a Boston-based real estate development firm, Cabot, Cabot & Forbes.

*               *              *

       Callahan served his first term as commissioner of Massachusetts Department of Public Works between 1934 and 1939. At that time, the department, headed by Callahan, had begun to design a new and modernized Route 128 outside the dense town center. Restricted by scarce highway funds, the construction did not start until 1936. When Callahan was removed from office in 1939 by the Republican governor, Leverett Saltonstall, only two short sections of the new Route 128- one between Lynnfield and Peabody, and the other around the Dedham and Westwood area- were finished. For the next two years, Route 128 floundered and stumbled, growing merely a few miles, and brought to a complete standstill as the United States entered into World War II in 1941. When Democrat Paul Dever was sworn in as governor of Massachusetts in January 1949, he set highway building on top of his policy agenda. With the support of a Democratic-majority House of Representatives, Dever soon secured a $100 million bond bill, earmarked exclusively for statewide major highway projects. How to get around the bureaucratic red tape of the Department of Public Works and to speed up the road plans? Dever thought of Callahan who was known for his prolificacy and efficiency, and reinstated him to the post of commissioner in March 1949. Callahan had always dreamed of managing a few large projects, and was eager to have Route 128 completed during his tenure. To his great surprise, Callahan, this time round, was blessed with strong political backing and abundant financial support. Statistically, a total of $400 million highway construction fund was passed by the state legislature between the years 1949 and 1952.

During his new term, Callahan mainly planned and constructed two high-budget projects: the Boston Central Artery, which would cut through downtown, and the unfinished new Route 128. The former gained universal support, as people believed that a central expressway would significantly ease the downtown congestion. In stark contrast, Route 128 was exposed to ruthless criticism and doubts, while positive responses were few and far between. The major reason for objection was, “What is the point of spending the hugest sum of money in the road history of the Commonwealth to build ‘a road to nowhere’ in the sparsely populated and poor rural area? ” Confronted with various interrogations and censures, Callahan insisted, “This new highway will bring about the relocation of business establishments and open new residential sections. ” Just like that, the construction of Route 128 resumed in early 1950. Of course, Callahan conceded to reduce the original plan of a six-lane highway to four-lane. Once again, Callahan showed his competence and efficiency: he selected the route to be along the outskirts of town centers where demolition work was relatively light, and subcontracted the project to nine small constructors. The work went under way with a fanfare, and eighteen months later, on August 23, 1951, Governor Dever cut the ribbon for the 22-mile north section of the new highway.

The new section of Route 128 swiftly cleared all the accusations that had previously surrounded Callahan. On the opening day, certain portion of the highway witnessed 18,000 vehicles traveling by, and the number increased to 26,000 vehicles per day by 1954. After Callahan left office, the widening of the northern section from four lanes to six lanes soon began under the leadership of his successor, followed by the construction of the southern portion of the highway. Such results disproved the judgment of one of the most authoritative experts on transportation, chief Thomas MacDonald at the Federal Bureau of Public Goods. MacDonald had predicted that 15,000 vehicles per day on the highway would be an optimistic estimate for 1970. The Boston Central Artery project of Callahan’s was much less fortunate, however. Shortly after the road was put into full operation, many troubles ensued. Separating old downtown Boston, the project caused great damages to historic landscape of the city and generated negative impacts on urban commercial activities, thereby incurring lots of complaints from the residents. Worse still, the Central Artery quickly turned out to be the most congested road in the city, putting huge pressure on the transportation situation and environmental improvement. It got such nicknames as “the Distressway,” “the largest parking lot in the world,” and “Green Monster.” Although the artery was initially named after the paternal grandfather of President Kennedy as “John F. Fitzgerald Expressway,” it could not escape the fate of being demolished. In the “Big Dig” project of the 1990s, the expressway was torn down and moved to the underground.

Callahan’s whole life was inseparable from Massachusetts’ public transportation. Upon leaving Massachusetts Department of Public Works in 1952, he served as Chairman of the Massachusetts Turnpike Authority until his death in 1964. In 1961, a new underground tunnel beneath Boston harbor opened. It was named “Lieutenant William F. Callahan Tunnel” (commonly known as the Callahan Tunnel), a tribute to Callahan’s son who was killed in action in Italy just a few days before World War II ended. What a tragic loss! Every time I travel in the Callahan Tunnel en route to Logan International Airport, sadness and respect well up in my heart: Callahan and his son should be remembered now and by future generations for what they achieved and sacrificed.

*               *              *

      The rapid increase in traffic flow of Route 128 only partially realized Callahan’s prophecy. The subsequent commercial development activities helped him earn greater recognition. In 1948, the young and optimistic Blakeley became a new employee of Cabot, Cabot & Forbes. When he was studying the 1948 Master Highway Plan for the Boston Metropolitan Area, he noticed that a proposed Inner Belt project would link Route 128 with Cambridge and in particular, the Massachusetts Institute of Technology, thereby enabling a convenient access to areas along Route 128 from MIT and vice versa. Who does not want to be close to MIT? Blakeley pondered, and a tremendous business plan gradually took shape in his mind. I mentioned in my previous blog the interactions between MIT and Boston area’s regional economic development since the later part of World War II. In fact, the Bay state’s economy was going through a profound transformation at that time, despite its apparent recession. Light industry, garment, leather, machinery and alike were being outsourced to areas rich in energe resources and cheaper labor. The high-tech industry was still in its infancy and new industries driven by science and technology were seeking new space for development. MIT and Harvard’s strong research capabilities attracted new industries and R& D bases to settle in their vicinity. The areas along Route 128 possessed not only open space and inexpensive land, but also a large pool of unemployed workers with technical proficiency- left behind with the migration of traditional industries. Such a golden opportunity was not to escape Blakeley’s shrewd eyes. He recalled sneaking into the bathroom late one night and scribbling down a blueprint for broad commercial development around Route 128. In his plan, campus -like research facilities, offices and plants would be scattered along Route 128’s alignment, all with easy automobile access to MIT and downtown Boston. Blakeley also came up with a revolutionary model for the delivery of such projects. It is called the “package procurement” model, which can not only secure the maximum interest of his company, but also guarantee debt financing for the clients. Blakeley’s idea was quickly approved of and enacted by the top managers of Cabot, Cabot & Forbes, who took an active role in lobbying municipal governments to modify their local zoning so as to accommodate commercial uses. The lobbying was met with little opposition and projects carried out smoothly. It was not long before people witnessed the birth of a brand new industrial park, New England Industrial center in Needham, together with a novel business development model.

Soon enough, companies like Sylvania, Canada Dry, Clevite, and Polanoid came and built up offices and plants in the area. Between 1950 and 1957, Route 128 welcomed a total of nearly $100 million capital investment. The road once ridiculed as “Callahan’s folly” attracted $500 million within one decade. In 1955, there were 53 businesses along Route 128. The figure soared to 223 in 1959 and 729 in 1967, with 66,000 employed workers. The land price too had risen from the initial $450 per acre to $ 5000 per acre by 1957. In 1959, the Boston Globe issued a fair comment: “The Road to Nowhere has now become the hub of everything”. Non-surprisingly, Cabot, Cabot & Forbes rapidly grew from a local firm to one of the most renowned national real estate development company. Blakeley himself became one of its leaders, and was acknowledged as the father of modern industrial park. It did not take him long to join the billionaires’ club.

In the 1970s, the cluster effects of the high-tech industries along Route 128 began to gradually manifest themselves. During the second and third terms of governor Michael Dukakis (1983 to 1991), “Massachusetts Miracle” became a catchword. 128’s prestige reached its peak with the settling in of famous corporations and research institutes like the Wang Laboratory, Some media even claimed that “Route 128 opens America’s high-tech age.” Since the 1950s when the construction of the major portion of Route 128 first started, thirty years had passed before the Massachusetts economy finally ushered in a new round of prosperity, jointly achieved by government agencies, businesses and research institutes.

*             *               *

        If time could stop for a while in the 1980s, we see, through Route 128, not only a “miracle” created by high-tech development, but a classical case of benign interactions between infrastructure construction and commercial development. It was thanks to the vision and perseverance, insightfulness and patience, dedication and diligence, of all levels of government officials as well as all types of entrepreneurs, that an ordinary municipal project could have grown into a success story of regional development. From the 1990s till the present, countless new miracles have taken place on the “roller coaster” of the Massachusetts economy. When exploring the causes behind all that has happened, one finds bits of luck and serendipity, but more importantly, a materialized form of entrepreneurship and innovative spirit.

The terms “entrepreneur” and “entrepreneurship” are often used interchangeably in western economics and management science. In recent years, scholarly translation and introduction have made them no longer foreign to both academia and business community in China. Notably, since the beginning of the 20th century, the various qualities and characteristics typical of entrepreneurs have been seen in diverse fields, and entrepreneurship has spilled over to governments, social organizations and non-profit institutes. As highlighted in Schumpeter’s definition of “innovation,” the soul of “entrepreneurship” is closely related to innovation, risk-taking, aggressiveness and responsibility. The people we just introduced, Dever, Callahan and Blakeley, were all great entrepreneurs ready and determined to “innovate,” and they all contributed to the promotion of “entrepreneurship.” In this sense, we do call for businessmen, politicians and scholars to embrace the spirit of “entrepreneurship,” whatever endeavor they choose to pursue.

Route 128 had been busy even since it first opened. According to Boston Metropolitan Planning Organization, the daily traffic volume on the route had reached 200,000 by 2010. In rush hours, the congestion can get extremely bad and the air would be filled with all kinds of complaints and horns. At such times, I cannot help but think of the “traffic jam prosperity” theory put forward by Mr. Liu Wei, professor of Economics from Peking University, which I believe may be able to soothe some of the most impatient drivers. The highway too reminds me from time to time of the multiple industrial projects along the highways of Beijing I had worked hard to advocate and advance as mayor and party chief of Changping District: the Future City of Science and Technology, the Zhongguancun Base of Engineering and Technological Innovation, the Life and Science Park, and the Shahe Higher Education Park, among others that formed the Corridor of Northern Beijing High-Tech Industrial Innovation. I have every faith that these projects will bring popularity and crowd, together with the hope of prosperity and progress!

Recently I read an article in the Boston Globe, which was about young workers in Massachusetts showing renewed interest in the colorful urban life and inclination to start businesses or look for jobs in downtown. Such a new trend has led a number of start-up companies to choose their sites and some enterprises along Route 128 to establish branches in the old city. What impacts would this have on the industrial parks along Route 128 and Interstate 495? Will new infrastructure and commercial development projects emerge as a result? It is still too early to tell. Yet there is one thing that we know for sure: the vast traffic with “the spirit of America” engraved on the license plates shall take the Massachusetts economy on to the next route of rationality and maturity.

 

References:

Bureau of Research and Statistics, Massachusetts Department of Commerce and Development. “Listing of Firms along Route 128.” Boston, 1965.

Earls, Alan R. Route 128 and the Birth of the Age of High Tech. Charleston, SC: Arcadia, c2002.

Hogarty, Richard A. “The Paradox of Public Authorities in Massachusetts: Massport and Masspike.” New England Journal of Public Policy 12.2 (2002): 18-37.

Kenney, Charles and Robert L. Turner. Dukakis: An American Odyssey. Boston: Houghton Mifflin Co., 1988.

Mass Moments. Massachusetts Foundation for the Humanities. August 22, 2012. <http://www.massmoments.org/moment.cfm?mid=246>

Rosegrant, Susan and David R. Lampe. Route 128: Lessons from Boston’s High-tech Community. New York: Basic Books, c1992.

Saxenian, Annalee. Regional Advantage: Culture and Competition in Silicon Valley and Route 128. Cambridge, MA: Harvard UP, 1994.

Tsipis, Yanni and David Kruh. Building Route 128. Charleston, SC: Arcadia, c2003.

 

Chinese version of the article can be found at Sina Financial and Economics Blog.

Innovation Economy and an Economic “Oasis”

2

Innovation Economy and an Economic “Oasis”

        If America wants to be a healthy, smart, rich, globalized, high-tech powerhouse, we arguably have no better model than Massachusetts.

—— Mark Vanhoenacker

       After the outbreak of the financial crisis, it did not take long for many U.S. economists and business leaders to recognize that innovation economy would be the key to brake recession and make possible a resurgence.  Paul Krugman defined the “great recession” as “the third depression” in the world’s history, and clearly stated that nothing but a new technological revolution that transforms the lifestyle and modes of production for all humanity could lift us out of the recession and usher in a new wave of economic growth.  Economist Tyler Cowen from George Mason University expressed a very similar view in his book, the Great Stagnation. Failing to accurately predict the crisis and defuse it in a timely manner, economists from various schools have been under great pressure. Yet while continuing to quarrel over the causes of the recession and short-term measures against it, few questioned or challenged the above positions. In the business arena, Warren Buffett have stricken home his point repeatedly: the value of the American system lies in innovation which unleashes human potential; innovation will lead America out of the predicament.  Steve Jobs also showed his confidence and believed that “as long as we innovate, we will be fine”. Gary Shapiro, CEO of American Consumer Electronics Association launched the innovation movement, a coalition of 100,000 citizens, wishing for a revival of innovation economy to spur America’s Comeback.

Winning the 2008 presidential election by advocating “change”, Obama has launched a series of policies and measures to promote innovation and economic development. In September 2009, he released “A Strategy for American Innovation: Driving towards Sustainable Growth and Quality Jobs”. In his 2011 State of the Union Address, Obama proposed “Startup America Initiative”. In February 2011, he announced the “Wireless innovation and Infrastructure Initiative” and “Better Building Initiative”. The “Government Reform for Competitiveness and Innovation Initiative” was established in his Presidential Memorandum in March 2011. Very recently in March 2012, Obama advanced manufacturing initiatives to drive innovation, create job growth and ultimately improve America’s competitiveness in global trade. For the Democratic Party and the Republican Party who have plunged into an unprecedented political fight, innovation has been one of the two issues on which both can easily reach consensus (the other is said to be criticism on China’s human rights situation). These initiatives, rekindling Americans’ hope and refreshing their commitment to innovation, increased investments in basic scientific research and proved effective in supporting clean energy development. However, the two parties diverge again when it comes to the intention and impacts of such initiatives. Hardcore Republicans see Obama’s policies as a continuation of the Bush Administration, with no novelty in content or effectiveness in execution. Obama’s followers, on the contrary, firmly believe that America has finally made its way back on the right path. For them, it was due to the lack of foresight and the mistakes of the previous administration that the present polices are taking longer to show their effects.

Along with the increasingly raucous party brawls, America’s recovery has been full of twists and turns. The revolutionary breakthrough in science and technology, much longed for by everyone, seems unlikely to take place in the near future. The economy has not fared well in the past few months: high unemployment rate (risen to 8.3% in July 2012), slow growth rate (1.5% for the 2nd quarter of 2012), persistently low consumer confidence (latest reported to hit the bottom in July 2012) …… All of these not only fogged the prospects of the nation’s economic recovery, but also cast a heavy shadow on Obama’s efforts to seek reelection. Some have even begun to question if America’s competitive advantage, centering on innovation, is gradually lost. The 40th Republican National Convention, closed just this past Friday, not only made official the nominees for the 2012 Presidential election, but tirelessly hammered the Obama administration’s poor economic performance, especially when it comes to job creation and innovation.  Fortunately, there remain a few unyielding oases in the largely devastated desert, which somehow represent and indicate the future hope of a 21-century “innovation America”. Massachusetts is among the most convincing ones.

*         *         *

       Although Massachusetts has to bear the same troubles and miseries brought by the recession, it was able to buck the trend and had a couple of good shows. In comparison to the nation’s flagging economic situation that has lasted for a while, Massachusetts’ performance, if not outshining all others, has certainly been eye-catching.

  • Massachusetts was eleven months later than the nation to enter recession (recession in Massachusetts started in November 2008 vs. December 2007 for the nation); in March 2010, Massachusetts took the lead into recovery. Its economic growth rate is over twice the national average (growth rate 4% in Q2, 2012).
  • Unemployment rate in Massachusetts has been far lower than the national average (June 2012: US 8.2%, MA 6%); it created the record of a consecutive 16-month job growth during the recession.
  • In March 2012, Massachusetts regained the top spot on 11th Annual State Competitiveness Report, issued by the Beacon Hill Institute at Suffolk University (it was the third in 2010).
  • Massachusetts ranked the first on Kauffman Foundation’s 2010 State New Economy Index. Washington came in second with an obvious gap.
  • Boston, Massachusetts’ capital city, successfully broke into Economist magazine’s Global City Competitiveness Index, ranking top 10.
  • In October 2010, American Council for an Energy Efficiency Economy placed Massachusetts as the most “energy efficient” state, replacing California.
  • According to Massachusetts Divison of Health Insurance Finance and Policy, the state’s insurance coverage ranks first in the nation: the uninsured rate has dropped to 1.8%, and the uninsured rate for children is as low as 0.2%.
  • Massachusetts has the best schools in America. Education Week’s 2012 report ranks Massachusetts the second on the overall index; but on two of the index’s most important measures- a lifetime educational Chance for Success index and a K-12 Achievement index, the state leads the nation. According to 2011 Harvard survey, the reading skills of Massachusetts’ high schoolers is fifth worldwide, and math skills the ninth, ahead of both Japan and Germany.

 

Particularly noteworthily, Standard and Poor’s (S&P), in view of the state’s outstanding performance in fiscal control and budget balance for recent years, upgraded the credit rating for Massachusetts to AA+ from AA in September 2011. Previously, the state had gained ratings of Aa1 from Moody’s and AA+ from Fitch. Taken together, this set of ratings gave Massachusetts its highest credit standing in history, contrasting starkly to the fact that S& P downgraded the credit rating for America about a month earlier. Such hard-earned results truly made the government and state legislature leaders happy and excited for quite a while. Most importantly, it added new confidence and motivation to the future development of Massachusetts.

Aiming at promoting collaborative activities among government, industry, universities and research institutes as well as advancing the healthy development of a high-tech oriented knowledge economy, Massachusetts state legislature established a specific economic cooperation organization, Massachusetts Technology Collaborative (shortened as MTC). Ever since 1997, MTC has released Index of the Massachusetts Innovation Economy on a yearly basis.  Through a comparative analysis against other US technology leading states as well as other countries and regions with advanced science and technology, the Index makes an objective evaluation of the annual performance of Massachusetts’ innovation economy, clarifies the elements propelling or constraining innovation and economy, with the hope of providing some valid suggestions to policy makers, business managers and academic leaders. In 2004, MTC founded John Adams Innovation Institute, named after the second president of America, to lead the writing of the report. Beginning with a striking title, “Massachusetts USA leading the Innovation Revolution”, the preamble to the 2011 index fully recognized the state’s remarkable achievements in 2010 and further pointed out, “The Massachusetts Innovation Economy is one of the state’s key advantages in the global economy and an engine of prosperity for our citizens. It is also a source of resilience amidst national and global economic uncertainty.”

This preamble arouses one’s curiosity about the root causes and the historical origins of the economic prosperity and social progress witnessed in the Commonwealth.

      *         *         *

      When it comes to innovation in Massachusetts, almost all commentators would trace its history back to two or three hundreds years ago, or probably even four hundred years ago. Most of them would also be citing the many “best”, “No.1” and “leading place” that the state and the Greater Boston area have created in the history of America in order to reinforce Massachusetts’ position and image of an “innovator”. From the moment in the early seventeenth century when the pilgrims set foot on the continent of North America, settlers of the New England region, those in Massachusetts being the most representative ones, have begun their long journey of arduous pioneering. The dream and efforts of these early colonists to build a “City upon the Hill” reaped rich fruits on this not-so-fertile piece of land.

From the establishment of “Mayflower Compact” to that of the first state constitution, from the first shot in the Independence War to the United States Declaration of Independence (documents record five Massachusetts residents signed it), numerous founding fathers dedicated themselves to the Great American Experiment, drawing the blueprint and laying the rudiment for a future America. By founding Harvard University and opening the first public school in the nation (Boston Latin Grammar School), through building the first free public school (Dorchester Mather School) and opening the first public library (Boston Public Library), Massachusetts has been brave in educational innovation and reforms, finally growing into a world-renowned intellectual city. Inventions in Massachusetts are simply impossible to enumerate: the electric light, the telegraph, the telephone, the computer, the sewing machine, the typewriter, the microwave and the razor; the initial clinical applications of the smallpox vaccine, the anesthetic ether and the penicillin; the first email successfully sent out and the smooth launch of liquid fuel powered rocket- the list goes on and on. Hundreds of thousands inventions and creations as such revolutionized the lifestyle and mode of production of Americans and of people around the world. Besides, Massachusetts was home to the first lighthouse, the first railroad, the first motorcar, the first man-made canal and the first subway line. It also took the lead in introducing the park, the cemetery, the seaside bathing spot, the countryside golf club and other public facilities alike. It was in Massachusetts where the first Thanksgiving was celebrated and the first Christmas card was printed. People in Massachusetts also had the privilege to watch the first basketball and volleyball matches as well as the marathon in 1890s. The “American system of manufacturing”, featured by interchangable parts, later sweeping the world and preceding Ford’s assembly line, claims Massachusetts as its cradle, so does the modern industrial park and venture capital. In one word, invention and innovation are inseparable from the Massachusetts history and have become an engrained cultural gene, unique to the region.

American English has a special word to describe the innovative characteristic of residents in Massachusetts and in the New England region as a whole: Yankee Ingenuity. Merriam-Webster Dictionary defines it as “the self-reliance of early colonial settlers of New England, United States”. The phrase is further elaborated as an attitude of make-do with materials on hand: it is “inventive improvisation, adaptation and overcoming of dire straits when faced with a dearth of resources”. I find it not fairly hard to locate an accurate equivalent in Chinese to fully bear the wealth of implications. Indeed, “Yankee ingenuity” is in fact where the nowadays much-lauded  “entrepreneurship” and “innovativeness” derive from. In the Bay state, one sees everywhere the upholding of tradition by the “politically-oriented” Massachusetts people. They not only have “the Spirit of America” engraved on their license plates, but also composed a song with “the Spirit of America” as its title and sing it widely as the unofficial state song.

With a deep understanding of and a warm respect for the history and culture, incumbent Massachusetts governor, Deval L. Patrick, stated proudly so in his first inaugural address: “Massachusetts invented America. American ideals were first spoken here, first dreamed about here… In so many ways, our struggle, our sacrifice, our optimism shaped the institutions and advanced the ideals of the nation.”  “Massachusetts invented America”, how boldly declared! This declaration, causing statewide and lasting resonance in the Commonwealth, was spread and eulogized broadly.

      *         *         *

       It took a long process of gestation and development before the “innovative spirit”grew into an “innovation economy”. With indomitable entrepreneurship, early pilgrims survived the many hardships and promoted the prosperity of business. Massachusetts and throughout the New England region have been leading America’s industrialization ever since they became the birthplace of the nation’s First Industrial Revolution in the mid-nineteenth century. As early as 1920s and 1930s, Massachusetts had witnessed economic transformation and industrial restructuring, both of which quietly carried on during the Great Depression. Starting from the latter part of World War II, as traditional industries accelerated outward migration and the federal government increased R & D investments, high-tech industries began to burgeon and grow in the Bay state. In 1950s and onward, scientists and engineers from the Massachusetts Institute of Technology set out one after another to found high-tech enterprises in suburbs along Route 128, and a variety of resources that had long been stored up in the Greater Boston area swiftly integrated. A large number of entrepreneurial scientists and science-minded entrepreneurs embarked on the journey to open up the brand new field of “innovation economics” with innovative practices.

The thirty years from 1950s to 1980s steeled Massachusetts and got it well prepared for a powerful display of high-tech economy in mid 1980s. Overnight, Route 128 was known as “America’s Technology Highway”, and “Massachusetts Miracle” became a buzzword. However, such happy days did not last long. In late 1980s, Massachusetts once again sank into recession and stagnation. Compared to the shower of praises on Silicon Valley, Massachusetts and Route 128 were mourned by many. It was a moment when the Massachusetts people showed extraordinary courage and calmness. Self-collected, they adhered to a unique path of development and meanwhile, looked to other regions for successful experiences. A desperate counterattack was going on under a seemingly tranquil surface! From the birth of “Massachusetts Miracle” and its disillusionment, to the economy’s resurgence in late 1990s and finally to its prominent position nowadays, the ups and downs are worth a careful study.

Innovation economy has taken on new features in Massachusetts. Firstly, the industrial structure shows a tendency of diversification. Massachusetts’ high-tech industry, commonly viewed as being dominated by computer, information technology and the defense industry, actually includes other areas like financial services, bio-medicine, medical equipment, precision machinery, robotics industry, clean energy, architecture design and social media, all of which have achieved a leading place in the nation. Secondly, a multi-polar industrial layout has developed in Massachusetts. Route 128 remains the core location for high-tech industries, but has extended to Interstate 495. Areas along the subway Red Line and the Innovation District in South Boston have also attracted a considerable number of enterprises and research institutions. In addition to Boston and Cambridge, such satellite towns as Springfield, Worcester, Bedford and Woburn too formed industrial parks with distinctive functions. Thirdly, multilateral collaboration constitutes the impetus for econimic development. While solidifying its own edge, Massachusetts draws on development lessons from other emerging high-tech industrial clusters, Silicon Valley being only one of them, and has nurtured a positive cooperation mechanism made up by universities, research institutions, financial and consulting agencies, enterprises and the government. Cross-industry, cross-sectoral and interdisciplinary scientific and industrial development projects came up in an endless fashion, contributing to the regional economic prosperity. These new trends and features are all built upon innvation economy; in other words, the innovative practices carried out by the various economic elements on all level of economic activities are the fundamental driving force. Put differently, economic growth relies primarily on knowledge creation, technological innovation and entrepreneurship. Scott Kirsner, an active Massachusetts economist and columnist on innovation economics, articulates in his article “Innovation City”, “Boston is a city that attracts people who want to work in industries that have existed here since Massachusetts was a British colony; it is also the city for those who believe that the only industry worth working in is the one they’re about to create.”  Referring to Boston, these words are in fact a true portrayal of the entire Commonwealth of Massachusetts.

*         *         *

      “Innovation economy” is a new term born from the unremitting exploration and successful practice of innovation in Massachusetts. The term makes most frequent appearances in innovation economy index reports and is largely promoted through the efforts of media and consulting agencies in the Greater Boston area. The academic discussion of “innovation”, however, needs to be traced to the classical definition in Joseph Schumpeter’s 1942 book Capitalism, Socialism and Democracy.  In Schumpeter’s opinion, “creative destruction”, as an intrinsic factor of capitalism, describes the phenomenon that commercial enterprises under capitalism destroy and eliminate old technologies and production systems through innovation competition (rather than price competition), break the original market equilibrium and establish a new production system and market order, gaining lucrative profits in the process. Such a concept opened the gate to innovation, from where a novel school of economics-innovation economics- emerged. Attending closely to knowledge, technology, entrepreneurship and the role innovation plays in economic growth, innovation economists, however, rarely use the term “innovation economy”. Similarly, the word “innovation”, in spite of being widely applied in the daily lives of ordinary Americans and broadly employed in the fields of politics, economy, culture and education, is in definition still mainly confined to the scope of technology and economic activities. When I was exploring a new regional development strategy for Changping in 2007 as mayor of the district, I looked extensively for the word “innovation economy” in the literature of innovation economics, but failed to find any. So I summarized my strategy as “ to vigorously develop laboratory economy and build an integrated regional innovation system of industry, academia and research”. As I did not have the access to documents in Massachusetts, I chose “laboratory economy” to carry my idea. Now thinking about it, “Innovation economy” would have been a more appropriate pick.

Guided by the “innovation prophet” Schumpeter, a series of glittering names such as Paul Romer, Elhanan Helpman, Brian Arthur, Robert Axtell, Eric Beinhocker, Richard R. Nelson, Richard Lipsey, Michael Porter and Christopher Freeman stand one after the other as signposts on the “innovation avenue”. The latest progress and breakthrough with innovation economics would have to be Michael Porter’s theory of national and regional competitive advantage. The aforementioned state competitiveness index issued by Suffolk University is exactly based on the measurement system put forward by Porter in discussing national and regional competitive advantage, i.e. eight groups of more than forty indicators altogether with a stress on per capita income and the capacity of sustainable economic growth. Schumpeter was a Harvard professor, so is Porter. From regional competitiveness to innovation economy index, the two reports echo each other, on both of which Massachusetts singles itself out. Can we conclude then, “innovation economy leading regional development” will be the next research subject for innovation economics?

No matter how the academic prospects of “Innovation economics” turn out to be, Massachusetts in THE place to feel the tremendous vitality brought about by “innovation” and “innovation economy”.  Thanks to my previous career experience, I have kept paying special attention to Governor Patrick’s political agenda and performance since I arrived here. His overall political agenda does revolve around “innovation economy” and his daily schedule is filled with innovation businesses: laying the foundation for innovation district, cutting the ribbon of school innovation laboratory, addressing at an annual student conference of history and innovation, proclaiming Massachusetts “innovation month”, writing an open letter to encourage student entrepreneurs and signing Social Innovation Compact with non-profit non-govrenmental agencies, to name only a few. Hardworking, pragmatic and full of pioneering spirits, the governor has won good wills and respect from his citizens. A vigorous advocate for the use of clean energy, an enthusiastic participator in the Race to Top program funded by the US Department of Education, a top leader in the social innovation program Pay for Success, Patrick has been faithfully practicing Obama’s innovation initiatives all along.

Deval Patrick, a Democrat, an African American, is rumored to have very close personal connections with Obama. Will this Democratic political star help Obama keep Mitt Romney, former governor of Massachusetts, away from the White House? How much would Massachusetts, as a preliminary manifestation of the power and significance of innovation economy, assist Obama with his final race in November? Let’s wait and see!

 

References:

Cowen, Tyler. The great stagnation: how America ate all the low-hanging fruit of modern history, got sick, and will (eventually) feel better. New York: Dutton, 2011.

Kao, John. Innovation Nation: how America is losing its innovation edge, why it matters, and what we can do to get it back. New York: Free Press, c2007.

Kirsner, Scott. “Innovation City”. The Good City. Ed. Emily Hiestand and Ande Zellman. Boston, Massachusetts: Beacon Press, c2004. 58-73.

“MIT’s 150 Ideas, Inventions and Innovations that Helped Shape Our World.” May 15, 2011. < http://www.boston.com/news/education/higher/specials/mit150/mitlist/ >

Porter, Michael E. The Competitive Advantage of Nations. New York: the Free Press, 1990.

Saxenian, Annalee. Regional Advantage: Culture and Competition in Silicon Valley and Route 128. Cambridge, MA: Harvard University Press, 1994

Schumpeter, Joseph A. Capitalism, Socialism and Democracy. New York and London: Harper & Brothers, 1942.

Vanhoenacker, Mark. “Don’t Mess with the Bay State” . May 14, 2012. <http://www.slate.com/articles/news_and_politics/politics/2012/05/massachusetts_is_the_best_state_in_the_union_.html >

 

A Chinese version of the article can be found at Sina Financial and Economics Blog.