Boston is Reclaiming Its Tech Swagger

Dell’s acquisition of EMC is causing many in the Boston area to lament the loss of our tech sway. While that deal might signify the end of big iron for the area, Boston is actually re-inventing itself as a new tech leader. And it’s all about the web, mobile tech and vertical solutions.

Remember that Boston was America’s first technology hub, once leading in innovation and paving the way for the current high tech era. But with the rise of Silicon Valley, Boston has seen its tech glory days fade. It has felt like a long downward spiral. Cities such as Austin, Seattle and even New York <gasp> have seemingly eclipsed Boston in recent years. That’s all starting to change.

IBM recently selected Cambridge as the home for its new IBM Watson Health unit. And while Kendall Square has been the area’s tech magnet for years, attracting Google, Microsoft, and Amazon among many, Boston is starting to pull its own weight, attracting startups and established tech companies alike.

I’m not saying that Silicon Valley should be worried, but Boston has been quietly re-emerging as a new tech center. The city has been laying the groundwork for growth and is starting to reap the benefits. Call it the trifecta for tech development: institutions that foster entrepreneurialism, a highly trained talent pool and a business environment that enables growth are all coming together to give Boston a second wind.

1. Schools that Go Beyond Education

It all starts with higher education, which is what gave Boston its early tech lead in the first place, dating back to the 1940s. We are the country’s first college town and boast some of the best schools in the world. MIT and Harvard lead the pack, in part because they go beyond providing an education. Today, MIT, Harvard, BU, and Northeastern University are at the forefront of launching innovative start-ups by incubating business ideas right from the classroom.

Babson College has a venture accelerator and hatchery program for students and many other area schools are offering incubation services now too. In addition to introducing some promising new companies, this approach brings together tech knowledge with business experience and guidance needed to promote entrepreneurialism.

2. Top Talent Pool that is Finally Staying Put

And that advanced approach to education leads us to Boston’s second advantage – some of the smartest people in the world. The wealth of great schools in the Boston area creates a talent pool that is not only educated, but also highly diverse in skill sets. A successful tech company needs access to smart engineers, but also to accountants, marketing superstars and operational leaders.

The challenge Boston has faced in the past is retaining top talent after they graduate. While our universities do a fine job in preparing students for successful business careers, many flee the area right after college. A 2013 report from the Federal Reserve Bank of Boston found Massachusetts ranked 38th in states retaining recent college grads. After just one year, we lost nearly half with only 52 percent sticking around. Contrast that to 87 percent in California and you see how we’ve had a brain drain problem. That’s starting to change.

Many students move to the San Francisco Bay Area or New York City right after graduation. Lifestyle has been cited as a major draw. But since the Big Dig wrapped up, Boston has emerged as a highly attractive place to live. A compact city that in the early Fall feels like a college town, with great transportation, exciting restaurants, an abundance of bars, great sports teams, and a growing number of like-minded entrepreneurs is forging the new Boston ‘lifestyle.’ If the number of new startups in Boston is any indication, grad retention numbers must be climbing.

3. Boston is Open for Business

Massachusetts leads the nation on venture capital (VC) invested per capita and gets more than 10 percent of all VC money invested in the U.S., second only to California, according to a recent PwC report. While the Route 128 Tech Corridor and Cambridge have led the pack for the past few decades, Boston is suddenly in the pole position. In fact, Boston landed more VC deals in 2013 than Cambridge. We are even seeing companies move from Kendall Square into Boston. Objective Logistics made the move across the Charles River in 2012 and others are following.

Mayor Menino can be partially credited for Boston’s renewed tech focus when he transformed the South Boston Waterfront into the Innovation District. It’s been so successful that tech companies are now spilling out into other Boston neighborhoods, including Government Center, the Financial District and even the Back Bay. A few tech startups have even set up shop in the North End. It must be the access to good espresso.

And while some were concerned that new mayor Marty Walsh might not be as pro-business, he’s proven to be supportive of the burgeoning tech industry so far. Boston is starting to hit its tech stride.

Again, I don’t think the Silicon Valley has anything to worry about right now. There is plenty of opportunity and frankly, the U.S. needs multiple, diverse tech centers. While the Silicon Valley continues to focus on core infrastructure technologies, Boston area tech companies are emerging with vertical solutions that leverage our strength in technology, pharmaceuticals, retail and financial services.