Boston Tech Agenda 2017: 5 Things to Watch For This Year
For Boston’s technology scene, 2016 was the year of GE, a new crop of local venture funds, ambitious initiatives to spark startups, another failed attempt to reform Massachusetts noncompete rules, a few billion-dollar-plus deals, and a pair of IPOs.
On a personal note, 2016 marked my first full year covering Boston tech for Xconomy. It was a trying year overall (as I’m sure it was for many of you), but it was also a rewarding and fun one. (Check out some of my favorite stories here, here, here, and here.)
So, with 2016 in the rear view mirror, what will 2017 bring for the local innovation community? Here are my top picks for what to watch for this year in Boston tech:
1. Will a new anchor tech company or sector emerge? Boston has several pillar companies in software and related sectors—such as Wayfair (NYSE: W) in e-commerce, HubSpot (NYSE: HUBS) in marketing software, iRobot (NASDAQ: IRBT) in robotics, and now of course GE (NYSE: GE) in, well, a bunch of industries. Who will become the next big Boston tech company to gather buzz and talent, and which sector will that firm come from? Or will GE quickly dominate the scene?
I’d argue artificial intelligence, cybersecurity, and digital health are the ripest sectors, given the region’s strengths and momentum in each of those fields. Some local observers say the Boston area is searching for an identity, outside of its status as the world’s leading life sciences hub. Perhaps that tech identity will start to crystallize in 2017.
2. Will we see more than two tech IPOs this year? Acacia Communications (NASDAQ: ACIA) and Everbridge (NASDAQ: EVBG) were the only two Boston-area tech companies to go public in 2016 (there were plenty of life science IPOs). That’s not a lot, but it’s one more than in 2015, and it came amid a continued weak market for tech IPOs. (It’s also worth noting that Acacia’s stock has performed the best of all the companies nationwide that went public last year, according to the Boston Business Journal, which cited Renaissance Capital.)
And, of course, there are sure to be plenty of mergers and acquisitions involving local companies. My money is on more local deal-making in cybersecurity in particular, partly because of all the industry noise, competition, and fear of cyber attacks.
3. What impact will the new local venture funds have? There are several new tech-focused VC firms in town, each taking a different approach to investing or focusing on a specific sector or sectors. The new players include Pillar, Underscore.VC, and Glasswing Ventures, and it should be interesting to see how they affect startups and more established venture capital firms in the area.
Speaking of those older local VCs, keep an eye on their activities as well. Many of them have shifted a lot of their investments to the West Coast in recent years. Will that trend continue, or will Boston companies recapture more of their attention?
4. There will be more collaboration, but will it bear fruit? One of the local tech themes of 2016 was the launch of initiatives aimed at forming and supporting new companies. Two prominent examples were MIT’s creation of The Engine, which will include a potentially $150 million venture fund and affordable office and lab space for startups working on hard technologies; and a digital health initiative that includes an accelerator-like program for startups ([email protected]) and a $26 million venture fund.
Those efforts involve collaboration between different types of entities and sectors, such as academia and venture capitalists, startup accelerators and large institutions, the private and public sectors, healthcare and tech, and more. How well will all those stakeholders work together? What tangible effects will the initiatives have on the tech scene, locally and nationally? We probably won’t be able to answer those questions by the end of 2017, but we should start to get a clearer picture of the initiatives’ potential impact.
5. Will Boston move the needle on boosting diversity in the tech community? The lack of women and underrepresented minorities in tech is a troubling problem for the whole industry. In Boston, organizations like Hack.Diversity, Resilient Coders, and the New England Venture Capital Association are among those trying to combat the problem. And local tech companies like EzCater have publicly committed to strengthening the diversity of their workforce, and are being transparent about the steps they’re taking.
Such efforts deserve to be lauded, but they take time. Here’s hoping that more tech companies in Boston and elsewhere pledge to make their staffs, C-suites, and boards more diverse; that they follow through; and that the industry’s diversity statistics improve by the end of 2017.