Entrepreneurs at Scale Up Phase

March 2, 2016

Boston MA possesses the most dense concentration of the best universities in the world. These universities include some of the best facilities and talented faculties anywhere – not to mention huge endowments . This produces an incredible wealth of talented students and graduates that provides a resource boom for area businesses and attracts them to remain in the Boston area. This caliber of talent also produces brilliant innovative concepts and business plans for the next generation of new businesses and industries.  Keeping them in MA when scale up is needed represents a challenge.

 

These universities have existed for many years and a support system has developed in the area. The support network is available to advance business plans, associate and connect resources to provide advice, mentoring, support, and eventually start up seed funding. MA has also contributed to this start up support through business plan competitions and grants usually associated with specific industries. The next phase for these businesses is to advance to scale-up.

 

MA does not provide support mechanisms to facilitate scale-ups, however.  A recent MIT study confirmed the existence of this scale up gap. Scale up is a necessary step in getting to revenue generation and where expenses grow extensively, and JOB creation occurs. One large category of expense is real estate costs – particularly with hardware related to manufacturing businesses. It is a sensitive time for companies to conserve their seed capital using whatever means are available to extend the life of their available capital for as long as possible and achieve revenue. MA has been a center for the development of new businesses and even industries for centuries. The concentration of talent and industries also resulted in high labor and real estate costs. Building infrastructure developed to support these earlier businesses and developed new industries through their build out. These buildings did not support high volume and cost effective manufacturing. MA is also not centrally located in the US producing effective distribution capabilities and costs throughout the country. This formula resulted in businesses relocating to other parts of the US and then the world.

 

Specialty manufacturing of highly engineered products producing extensive margins and requiring highly skilled employees remains a great fit.  High volume growth and manufacturing will continually migrate to lower cost locations in this ‘flat’ world.  The further advancement of technologies and specialty products can remain in this talent rich marketplace even at higher labor and production costs.  These new products and industries will continue to emerge and develop as long as the talent pool remains.

 

 

 

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