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Greater Boston: a world-class hub of entrepreneurship

Posted by Chad O'Connor  December 14, 2012 11:00 AM

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As the British Consul in Boston, I had the privilege to work on strengthening long-standing business connections between Britain and New England, and was always impressed with the hub of innovation in which I was based. From a diplomat's global perspective, the world of innovation is not flat: there are a few spikes of truly world-class innovation that soar above most other places on the planet. Greater Boston is one of those special places.

Having finished my tour as Consul, I have now spent a semester at MIT's Sloan School of Management studying this and other innovation ecosystems. I now see more clearly that Boston is also a major hub of entrepreneurship. This is important, and I wish to share some of my initial observations. Although science and innovation are necessary, they are not sufficient for an economy to prosper over the longer term. Also necessary is entrepreneurship - especially the human agency of individual entrepreneurs who see opportunities from innovation, create teams to commercialise the science and build new enterprises that create value, wealth and jobs.

Entrepreneurs and their new companies matter, as it is such 'small- and medium-sized enterprises' (SMEs) - especially the subset of 'innovation-driven enterprises' - that will drive growth in our post-Recession world economy. It is in entrepreneurial cities - and the literature specifically suggests that it will be cities - that one will find the most sought after jobs, drawing on innovation and attracting the highest wages. Enrico Moretti's "New Geography of Jobs" (2012) advises that these high value tech jobs in turn support five other jobs in the ecosystem. There will clearly be increasing benefits to being an entrepreneurial hub, for all those who live in one.

Greater Boston is extremely fortunate both to be home to institutions that train future entrepreneurs, attracting talent from around the world, and to have a wide range of entrepreneurs within the city region. MIT, Babson, Northeastern, and now Harvard (among many others) are systematically developing entrepreneurs, teaching them the skills to build new enterprises. In this sense, Boston is still benefitting from those original English settlers, whose Puritan 'start up' of Massachusetts privileged eduction from the start, with the founding of Boston Latin (1635) and then Harvard (1636) in its first decade.

Boston's ecosystem also benefits from successful entrepreneurs who give back through time and mentorship, as well as capital investment. They contribute to a continuum of investment finance - from angel and seed funding for start-ups, through well established institutionalised venture capital, to early stage debt financing for scaling-up. Linking the wider business community back into the universities, it turns out that good business schools - like MIT Sloan, and its Trust Center for Entrepreneurship - have a key role to play in the ecosystem.

Political leadership also matters, and Boston is once again fortunate. Mayor Menino's commitment to Boston has long been beyond doubt: his new vision for an 'Innovation District' down on the waterfront looks like an inspired move. Governor Patrick demonstrated his pro-entrepreneur credentials in his first term with his Life Sciences Initiative, and then with his overseas trips linking Boston to other hubs of the 'Innovation Economy' (like London) early in his second term. His support of programs such as MassChallenge also signaled to the entrepreneurial community his commitment to creative approaches to entrepreneurship.

At the end of the day, what makes Greater Boston such a world-class hub of entrepreneurship is its people, including its political, educational and business leaders, as well as its many entrepreneurs. As such, there is much that the rest of the world can learn from Boston, as I have tried to do with these initial observations.

Dr Phil Budden is formerly British Consul General for Boston and is currently Visiting Scholar at the MIT Sloan School of Management.

This blog is not written or edited by or the Boston Globe.
The author is solely responsible for the content.

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