Massachusetts Business Czar Greg Bialecki’s Innovation Agenda: The Xconomy Interview, Part One

Xconomy Boston — 

From his corner office on the 21st floor of the MacCormack State Office Building on Beacon Hill, Gregory Bialecki has what is probably the best view of any state official in Massachusetts. To the south, the floor-to-ceiling windows peer over Boston Common, Downtown Crossing, the South End, and South Boston; to the east, they look toward Back Bay, the Charles River, and MIT.

But if any official can benefit from such an expansive view, it’s Bialecki. As the secretary of the Executive Office of Housing and Economic Development, after all, his job is to help all the people he looks out upon find homes to live in and jobs to go to. Because his office includes the state Department of Business Development, he’s also in charge of attracting new employers to Massachusetts and making sure that existing employers stay here and grow. And that means he’s the point man in Governor Deval Patrick’s administration for all efforts to build on the commonwealth’s track record of high-tech innovation, through efforts like the Massachusetts Life Sciences Center, the Massachusetts Clean Energy Center, and the new MassChallenge business plan competition.

In the inaugural post of his “Mass Innovation” blog in July, Bialecki argued that innovation gives Massachusetts its fundamental competitive advantage, but that the state still needs “a deliberate innovation agenda” to improve collaboration between industry, academia, and government. A Newton, MA, resident and Harvard-trained lawyer, Bialecki replaced former Cabinet secretary Daniel O’Connell in January. He invited Xconomy to his office last week for our first formal interview; the questions we covered ranged from Bialecki’s background to non-compete agreements, data privacy regulations, and the role of state government in funding early-stage commercialization work. We’ve condensed and edited this far-ranging conversation. Part 1 follows here; we’ll publish Part 2 tomorrow.

Xconomy: You’ve practiced law with big firms like Hill & Barlow and DLA Piper. What kinds of work did you do for them?

Secretary Bialecki: Over the years, the vast majority of my clients were in real estate development. There’s a lot of moving parts in real estate development. Your clients are buying land, designing projects, getting permits, getting tenants, getting financing. Within that broad outline, my specialty was permitting and land use regulation. So I tended to work with clients who had chosen projects that, by either their size or their location, involved very significant land use issues. For example, with the Fan Pier site in Boston, I represented the Pritzker family at the time they acquired the property. The zoning had been the same for decades, and was consistent with the history of South Boston’s waterfront—there were warehouses and parking lots and an old industrial neighborhood, and Fan Pier itself used to be a trainyard. So if Fan Pier was going to be redeveloped and brought into the current generation…a critical element was to work with the city and the state, because in Massachusetts, waterfront property is subject to very significant state land use regulations. So advancing that involved working with the city and the state to come up with new zoning and land use regulations that would accommodate a new generation of uses for that site [which is now home to a convention center, several hotels, a federal courthouse, and the Institute of Contemporary Art].

X: How do you feel this sort of work prepared you for your current role helping the Patrick Administration interface with the business community?

GB: In permitting and land use work, even when you’re representing private clients, you’re very involved with the public sector, because you’re working very closely with city and state officials on how to change the rules. So the work that I did over the years was always essentially at the intersection of the private sector and the public sector. For example, I represented the town of Belmont for several years in a major rezoning of the McLean Hospital site. Even though I’m now in the public sector for the first time in my career, I don’t see myself as working on a different set of issues. It’s the same set, just from a different perspective. In some cases this is literally true, at a very technical level: I was recognized as having an expertise in Massachusetts zoning law, so the Governor asked me to think about rewriting the state’s zoning laws. I have a 20-year knowledge of the details of how our zoning laws work and how other states’ laws work differently, but I also bring the perspective at a higher level of how we strike a good balance. We love business, we like jobs, we like the taxes, we like development. But how do we balance that with the very legitimate needs of the public for environmental protection, protecting the quality of life in our communities, and consumer protection?

X: What about your innovation portfolio—did your work with real estate developers expose you to issues around technology and entrepreneurship?

GB: I know a lot of the technical aspects of zoning law and that’s been helpful, but on innovation and non-competes and so forth, that was not part of my private practice, so I don’t profess to be the expert on the details. But I do think that in the bigger picture my experience is still very relevant, because the biggest question is what is the appropriate role of state government with respect to the business sector, and what is state government doing that supports business or holding business back. I understand the different sides to that question. I understand the ways in which businesses feel that regulation can hold them back, and I also understand the reasons why regulations have made Massachusetts a better place to live and work.

That’s one reason I enjoy working for Governor Patrick, because I think his diversity of prior experience reflects the same. In other words, he has had a number of experiences in the private sector, where he understands what businesses’ needs are, and yet he’s also had the experiences in the public sector to understand that there are values other than making a profit that are important. His charge to me is to find the places where we can do things that advance the “multiple bottom line,” not only making Massachusetts a better and easier place to do business, but doing it in a way that’s not at the expense of other public values.

X: Since you brought it up—exactly what is the appropriate role for state government in accelerating innovation? Should it be a leading role or a supporting role? What levers do you feel that state government has at its disposal for supporting innovation?

GB: The short answer is that it’s a partnership role. When you talk to business people in different industry sectors, there is tremendous variation about how they view government. For a lot of businesses, the basic perception of the relationship between government and business is that it’s adversarial. The business view is that government is going to tax me more or tax me less; they’re going to regulate me more or regulate me less; but there is not a lot of common ground. But there are other sectors that have a very different view, which is that if things go well and are done right, government can be a great partner in supporting business. So, for example, in the life sciences and healthcare, everybody who is involved understands that it’s an industry that is very involved with government, which approves drugs, licenses hospitals and doctors, pays a lot of the medical bills, and has supported basic research for decades. So the question is, is government going to be involved in a way that’s more useful or less useful. Whereas, to take another example, the IT industry does not have a history of close involvement with government. If you come up with a new piece of software, you don’t have to go to a federal agency to get it approved before you can sell it to the public, and the IT industry typically isn’t looking for a lot of public dollars to grow its business. So we are at a different starting place when we have conversations with folks in the IT industry.

Working with folks in the life sciences industry, from Day One it was a given that state government could be productively involved and could be a useful partner. In the IT industry we’ve had to start with the very basics, which is, [finding out] is there a sense in which government could be a useful partner in promoting and supporting the industry. But we have started a real dialogue, and it has proceeded quickly. Folks in the IT industry have said, “Well, okay, why don’t you tell us some more about the kinds of things where you say you have a constructive role as a supporting partner in the life sciences.” We said, for example, that we are advocating that the educational system in Massachusetts support young people with the talents, skills, and knowledge that are going to support the life sciences industry. For example, we’re making a big push on the importance of STEM [science, technology, engineering, and math] education. And the IT people said, “Well, we would want that too.” And similarly, when we said we are going to do something to make sure that the young people who go to college here are aware of all the great companies and job opportunities here, so they’ll at least give a hard look at staying here and not go back to other states or countries. And the IT industry said, “We’d like that too.”

So it turns out, over the last couple of years, as we have been having conversations with different folks in the life sciences, clean energy, IT, financial services, manufacturing, and trying to understand what they want from state government, there is a common thread, and I think it can be described as an innovation agenda.

If you look at how manufacturing has evolved in Massachusetts over the last 20 years, the low-cost, low-value manufacturing is gone. What kind of manufacturing is still here? It’s making very sophisticated products like robots and Patriot missiles and implantable medical devices and radar systems. So the education required tobe a production factory worker in Massachusetts today is totally different from what it was 20 years ago. So actually having an educational system that teaches young people about math and science and computers is as important as having a manufacturing workforce. We also heard time and time again from business that the basic research being done here at our universities is terribly important. There are lots of great ideas coming up, so how do we support them? It’s a common goal of state government and business to make sure that our universities and private center of research continue to do a lot of work and that we get as much federal funding as we can for them, and make sure that K-12 education works well for all those folks. There are probably very few of those things where we are going to be able to single-handedly change the way things are. So part of the conversation with the business and academic community is, let’s talk about and understand the most significant opportunities and challenges to tackle, and how to tackle them together. There are some things we can do better than other folks, and some things that business can do better than we can.

Coming tomorrow in Part Two: Bialecki speaks about the state’s role in technology transfer, how it can help the IT sector as well as the life sciences and clean energy sectors, why the Patrick Administration hasn’t gotten behind proposed reforms in employment law to restrict non-compete agreements, and why it’s taking so long for the state to issue new consumer data protection regulations.

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