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IAN BOWLES

Reinventing Boston's leadership

THE SPATE of sales of large local companies to out-of-state owners has been the topic of water cooler conversation for months now. Recent acquisitions of prominent Boston-based companies are producing concern about the loss of local identity as well as generating new anxiety about our economic vitality. As the civic spotlight scans for new people and entities to step forward and fill the perceived void in civic leadership, one wonders whether we are asking the right questions.

In MassINC's recent discussions with current and former private sector CEOs about the economic, philanthropic, and civic roles of business in a changing economy, some themes emerged. Public company CEOs have many more pressures -- from Wall Street analysts, global markets, and heightened competition -- than in previous generations, pushing local civic affairs down on the list of daily priorities; the ''headquarters effect" of greater commitment to the city and region where a company is based is real, but so too is the inevitability of corporate restructuring in response to global pressures; as the pool of big local corporate entities shrinks, it will be critical to engage a wider range of business leaders, including up-and-coming entrepreneurs and executives, in public issues; among those issues, none matters more than education and workforce development; and, finally, never forget that our core competitive advantages as a region are innovation and capital formation.

Harvard economist Ed Glaeser argues that creative destruction of corporate entities is inevitable, so our community should focus not on companies but on people and their creativity, diversity, and the capacity to stay at the cutting edge. To do so, our state needs to realign its training and educational resources to today's world in order to close the ''skills gap" and meet the challenge of competition.

So what is the role of state government in economic development? A 1998 analysis by MassINC grappled with this issue, picking the brains of a bipartisan group of former economic development secretaries. Their conclusion was straightforward: The state can and should do little to have a direct impact on private investment. Rather, the state should focus on laying the groundwork for economic growth: a sound infrastructure, an educated workforce and consistent, transparent, and predictable regulation, including taxes and zoning.

But what about replacing the civic leadership once provided by the heads of large local companies? One place to look for new nominees is in the large nonprofit organizations, the leading universities and hospitals that dominate the Boston-area landscape and are unlikely to uproot or sell to distant owners. Indeed, Massachusetts far outstrips the national average in nonprofit employment.

Such a large and growing segment of the economy should be a natural source of leadership as well as jobs (and, in the case of medical and higher-education institutions, spinoffs in the form of new companies), but there is reason to wonder whether even the largest of these nonprofit entities will ever fill the shoes of a large corporation. As ''charities" themselves, they are unlikely to perform the philanthropic role of large companies, doling out dollars for worthy causes. And their very rootedness in the community leaves them especially vulnerable to the vagaries of local politics. Unlike corporations, which can locate anywhere, hospitals and universities expand by spreading out; to do that, they need variances and approvals from local officials. Leaders of these institutions will never be as free to challenge the political community as a corporate CEO.

Perhaps we will have to put our expectations about civic leadership in the context of our region's constant reinvention. Venture capital, life sciences, and numerous other areas of invention are already producing the next wave of smart, entrepreneurial individuals, companies, and institutions. It's up to us to engage them in the future of the Commonwealth as a whole.

Ian Bowles is president and CEO of MassINC and publisher of CommonWealth magazine.


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