The "Magic Semicircle": The Future of the Route 128 Corridor

“Route 128 is more than a highway…It is, as the blue signs posted for many years, ‘America’s Technology Region.’”

--Alan Earls, Route 128 and the Birth of the Age of High Tech, 2002

This week, the Martin Institute for Prosperity published a new report, “Start-up City: The Urban Shift in Venture Capital and High Technology.” Written by University of Toronto/NYU Professor Richard Florida (author of The Rise of the Creative Class), the report finds that while “[s]uburban high tech is not going away…the newest and most innovative developments in the industry are likely to emerge from urban and urban-like locations.”

While the 128 corridor remains, in Florida’s words, a “classic suburban nerdistan,” the highway once known as “the road to nowhere” has lost share of VC funding in recent years to Cambridge and Boston.  Indeed, while the “978” remains the 15^th largest recipient of VC funding—with 42 deals worth nearly $350 million in 2012—there is room to grow VC funding on the 128 belt—particularly in Essex County, as shown in the map below.

Source: "Start-up City" Report, Martin Institute, p.25

How then can Massachusetts poiicymakers ensure that the “Massachusetts Miracle” of the 1970s, which witnessed the establishment of Route 128 as one of the nation’s leading tech hubs does not fade into the Massachusetts mirage? [for a terrific primer on Route 128’s history, check out “Silicon Valley and Route 128: The Camelots of Economic Development,” in the May 2013 issue of the Journal of Applied Research in Economic Development].

We can start to answer that question by defining what cities and towns in Essex County cannot do: become dense metropolises like New York City. The infrastructure of the North Shore won’t allow it and the proud history of the Essex County National Heritage Area precludes communities from tectonic shifts in development priorities.

To state the obvious, Northeast Massachusetts can’t compete with New York and San Francisco on the playing field of the “global city.” Instead, our region must leverage its unique assets to drive growth in a way that shows fidelity to history and takes advantage of new modes of suburban living that emphasize mixed-use, sustainable neighborhoods.

We already have models of what these walkable suburban centers can look like. Salem and Lynn earn relatively high scores from WalkScore, but when you drill deeper into the mapping, it is clear that the downtowns of these ancient cities are extremely walkable. Not coincidentally, these downtowns are located near train stations that can whisk residents to Boston in about a half hour.

In recent years, development throughout NE Mass has focused on walkable neighborhoods and live-work environments. As stated in the 2009 Bridge Street Revitalization Plan prepared for Salem, “The Bridge Street Neck neighborhood should be an active mixed-use neighborhood, incorporating lively commercial and residential areas. The neighborhood should have a safe and enjoyable pedestrian environment that connects its different amenities and serves its residents and businesses.” The City of Beverly has also promoted its walkable downtown in its effort to woo business to the home of the Panthers.

Governor Deval Patrick must have been listening. Three years later, he announced a plan called the “Compact Neighborhoods Policy” which calls for the construction of multi-family homes, rental apartments, and starter homes near jobs, transit, and city and town centers. Providing incentives to cities and towns to engage in such “smart growth” is one of the keys to ensuring the continued vitality of the suburban ring, not just the entrepreneurial engines of Boston and Cambridge.

In addition to embracing smart growth and walkable, mixed-use neighborhoods, Essex County also needs to do more to capitalize on the creativity of our college students. Gordon College in Wenham, Endicott College in Beverly, Salem State University in Salem, Northshore CC campuses throughout the region, Merrimack College in North Andover—each of these institutions of higher learning should be nodes for innovation on the North Shore.

Public-private partnerships that position incubators and affordable housing near campuses (linked to downtowns with free/low-cost bus/van transportation) can help to ensure that graduates not only see Essex County as a great place to learn, but also as a prime location to start a business and raise a family. Salem State’s Enterprise Center is a terrific start, but more can be done to harness this enduring asset. In particular, universities should actively partner with existing private sector incubators with proven results, from Newburyport’s CleanTech Center to Beverly’s North Shore InnoVentures.

This last element leads me to my final ingredient for the success of the Route 128 corridor—preserving the natural treasures and community assets that make Essex County such a sought-after place to live. This means protecting our beaches, from Salisbury and Crane to Good Harbor and Preston, as well as taking advantage of our history to drive tourism.

But it also means continuing to invest in our schools, many of which consistently rank among the best in Massachusetts. Salem Academy Charter School ranks 5^th in the State and 139^th in the nation, serving a diverse student body where 2 in 5 students are economically disadvantaged. And last year, Masconomet Regional High School ranked in the top 15 in statewide testing on math and science.

Route 128 may no longer be known as “America’s Technology Region,” but on the North Shore, it remains a critical job corridor in the modern innovation economy—one that can and should be exploited to transform the ancient industrial cities and shipbuilding ports of Essex County into engines of creative class growth.

Workforce Training: A Public AND Private Duty

“Your workforce is your most valuable asset. The knowledge and skills they have represent the fuel that drives the engine of business.”

-- Harvey Mackay, 2010

As previously discussed in this space, the Harbor power plant in Salem, Mass. is transitioning from coal to natural gas. As a result, most of the plant’s 105 workers will be laid off at the end of May.

Last week, the Boston Globe discussed the next steps for many of these workers, including how both public and private actors have roles to play in workforce training and redevelopment.

On the government side, the Worker Adjustment and Retraining Notification Act is designed to give families “transition time” to find other employment or seek additional training to make them more competitive on the job market. Furthermore, the Workforce Training Act of 1998 established “One-Stop” career centers for displaced workers to seek out new opportunities and resources (one such center is located right in Salem, with others in surrounding communities).

There is a clear need for improvement in government-sponsored workforce development training. All too often workforce development dollars are poorly coordinated and only tangentially linked to long-term economic trends in particular communities.

As former Speaker of the New York City Council Christine Quinn noted last year, NYC’s system is a “disjoined mess” where workforce development is viewed as little more than an afterthought. “First we create the jobs, then we make sure New Yorkers have the skills to do the jobs. That’s looking at it backwards.”

Indeed, as the Center for an Urban Future reported, while 56 percent of all new job openings in 2012 in NYC required a post-secondary degree, only 42 percent of adult residents possessed one. This state of affairs has led many, including the Partnership for New York City, to call for an overhaul of workforce development in NYC.

As a result, taxpayers are right to question whether the billions of dollars in workforce training dollars are truly being spent efficiently. We’ll dive into this issue more and seek out solutions in future posts.

Today, however, I want to look at how private industry has a duty to play a role in workforce development as well—not only by growing opportunity within their own company, but in helping those workers displaced by the creative destruction inherent to market economies.

Salem Power Plant: Site of "Creative Destruction" and Renewal?
Photo by flickr user "massmatt" (Creative Commons license)

In Salem, the company taking control of the plant, Footprint Power, has “made $500,000 available to help workers train for new jobs…Some workers already have started to retrain as truck drivers, fuel burner technicians, or in the heating, ventilation, and air conditioning field.”

Footprint is setting a great example for other companies who want to do more than just issue pink slips and wash their hands of the real world effects of corporate change on the lives of everyday Americans. But more can and should be done to integrate public and private efforts at workforce training and redevelopment.

In the Bay State, the Workforce Training Fund is designed to provide training and technical assistance grants to small and medium sized businesses. The Fund is 100 percent funded by Massachusetts employers and overseen by the quasi-public Commonwealth Corporation. Money is distributed through a competitive grant process that prioritizes projects that will create jobs, improve productivity, and increase the competitiveness of the Commonwealth’s workforce.

In FY 2013, the Fund distributed over $12 million in grants to 147 applicants in cities and towns throughout Massachusetts. North Shore companies that benefitted include Danvers-based XTechnology Global (specialized computer training for 16 workers), Lynn-based Traditional Breads (managerial and safety training for 50 workers), and Newburyport’s Crystal Engineering (technical training and certification for 25 workers).

By ensuring that employers can exercise direct control over projects, the Workforce Training Fund encourages a much tighter “fit” between workforce spending and the needs of the business community. However, as with many workforce development tools, the Fund still needs additional procedures/follow-up to determine the efficacy of its spending using measurable metrics.

Building a labor force that can successfully compete in a global economy requires an all-hands-on-deck approach and a commitment, from both public and private sectors, to carefully define the skills gap and make targeted investments to improve workforce readiness.

Industries will rise and fall. Companies will come and go. Jobs will be created and destroyed. But the bills families must pay are ever-present, and providing the opportunity for people to pull themselves up in times of struggle is one of the core promises of America.

Climate and Community: Solarize, Mosaic, and Economies of Scale

“Economies of scale are a good thing. If we didn’t have them, we’d still be living in tents and eating buffalo.”

-- Jamie Dimon, Chairman and CEO, J.P. Morgan, 2010

This weekend, the Globe highlighted Solarize, a pilot program that encourages development of residential and business solar arrays by taking advantage of economies of scale to drive down cost.

Since Beverly High School installed solar panels in 1981 (see image), the North Shore has been at the cutting edge of renewable energy installation. It comes as no surprise, then, that Round 2 of Solarize includes the North Shore communities of Salem and Swampscott, which together have signed up so many people that they have reached “Tier 4” (of 5) status, meaning additional savings for participants in the program and an even greater snowball effect to encourage neighbors to join the movement. Other cities and towns across the Commonwealth are also taking part in the current round, from Andover to Egremont.

In 2011 and 2012, Solarize Mass led over 900 residents and business owners in 21 communities to install over 5.6 megawatts of solar electricity. The 10 cities and towns that participated in Round 1 of 2013—including my beloved Lee, Mass.—added another 3800 kilowatt hours of solar capacity.

This type of community-oriented green energy strategy has emerged with force in recent years. In particular, Mosaic, an investment platform that uses a crowd-funding model to finance solar farms across the country, has showcased the incredible potential of leveraging the pent-up demand for renewable power by bringing individuals together.

From the installation of 47 kWh of solar through Oakland, California’s Youth Employment Partnership (6.38 percent yield) to powering New Jersey’s Wildwood Convention Center (4.5 percent yield) and creating a solar roof on a school in Connecticut (5.5 percent yield), Mosaic has already provided a mechanism for thousands of Americans to directly invest millions of dollars in solar projects in their backyards and across the country.

The uptick in community-based economies of scale is not only spurring green energy (and in turn, reducing carbon emissions), it is also being used by Google to promote high-speed fiber Internet connectivity in cities across the country. Google Fiber expands to “fiberhoods” if/when communities secure enough signups to make the construction of the infrastructure economically viable.

Of course, this model has its pitfalls, particularly when it comes to ensuring access to new technologies across the income spectrum. As Newsweek noted last month, when Kansas City’s fiberhoods were unveiled in 2012, “the online map of fiber-hoods was largely divided by lines like Troost Avenue,” a street that for generations has separated affluent white families to the west and poor families of color to the east.

This outcome was not for lack of trying on Google’s part. As Newsweek stated, the company offered lower-speed broadband service on a monthly payment plan, partnered with community organizations on outreach, and hired people to canvass poor neighborhoods, sometimes with free ice cream. And yet, the divide remained.

This fact should not dissuade us from using community-based economies of scale to nudge neighborhoods toward taking up innovative technology. Rather, it simply highlights the fact that the State must do even more to subsidize the use of green tech in poor communities, many of whom stand to benefit disproportionately from its effects (such as reduced emissions).

In Massachusetts, this means expanding Solarize from the relatively wealthy communities that it has targeted thus far, to communities across the income spectrum—from Lawrence and Lynn to Springfield and Southbridge. It also means changing regulations to allow individual investors to pool resources through platforms like Mosaic.

While Congress dithers on climate policy (and tries to block the President’s historic regulatory efforts related to power plant emissions), communities across the country are hungry to support grassroots efforts to rid America of dirty energy and do their part to make the U.S. a leader in the green tech economy of the 21^st century.

Essex County Health: A Data-Driven Look

This week, the Robert Wood Johnson Foundation and the University of Wisconsin Population Health Institute released its annual county-by-county health rankings in all 50 states. Today, we’re going to take a deep dive into—you guessed it—Essex County, Massachusetts, to analyze for trends, identify problems, and find solutions.

Essex County is ranked the 6^th healthiest county (of 14) in Massachusetts. The good news is that Massachusetts is one of the healthiest states in the country on a wide variety of metrics, from having the lowest percentage of uninsured residents to one of the highest immunization rates in the U.S. (on the other hand, Massachusetts has one of the worst records on binge drinking and health disparity based on level of educational attainment).

The bad news is that we still have a ways to go to root out preventable health dangers, provide all people have access to quality, affordable, preventive care, and arm Bay Staters with the skills and tools they need to keep their families strong.

The North Shore continues to suffer from high rates of impaired/drunk driving. Nearly 1 in 3 driving deaths involve alcohol, above the Massachusetts average of 28 percent and far higher than the national leaders at 14 percent.

           

Essex County also suffers from:

·      the third highest Chlamydia rate in the Commonwealth

·      a well-below average ratio of primary care physicians per capita

·      a high rate of single-parent households (nearly 1/3)

·      the most severe housing problems (overcrowding, high housing costs, or lack of kitchen or plumbing facilities) outside of Boston and the islands

·      long commutes (39 percent of commuters who drive themselves to work commute for longer than 30 minutes each way)

There are a number of steps policymakers should take to address these concerns. First, while only 3.1 percent of residents in the 6^th Congressional District (roughly continuous with Essex County) are uninsured, further outreach is needed to communities that remain underinsured.

In Lynn, over 11 percent of residents 18-64 are uninsured, the sixth highest rate in the state. In Salem, nearly 7 percent of 18-64 year-olds are uninsured. In Beverly, 4.6 percent of children are uninsured, the fourth highest rate in the Commonwealth. Furthermore, according to the Census Bureau, over one-third of all uninsured residents of Essex County are immigrants.

Getting these neighbors quality insurance is critical since Blue Cross has found that a significant percentage of the uninsured face a variety of unmet medical needs, from dentists and preventive care to prescription drugs.

Making the Bay State healthier goes beyond insurance, though. It also involves changing habits and encouraging beneficial behavior. Cities and towns in Northeast Mass. should canvass the country for pioneering public health initiatives. In New York City, calorie counts at restaurants have provided transparency to consumers about nutrition information. While evidence is mixed as to their effects, simply making people aware of the choices they are making is a step in the right direction.

In Chicago, Mayor Rahm Emanuel has banned the sale of tobacco products marketed to children in school zones and has taken concrete steps to keep e-cigarettes out of the hands of kids. 

Closer to home, on the South Shore, the Southcoast Hospitals Group has invested in a health van that serves community organizations at sites throughout Greater Fall River, New Bedford and Wareham and surrounding communities, providing free education and screenings to the community. Hospitals in Essex County should work together with local governments to sponsor a similar program.

The Bay State already provides a wellness tax credit for businesses. But Beacon Hill should do more to nudge people toward better health outcomes.

In particular, our sales tax is a mess. For instance, while running sneakers are exempt, cleated sneakers are not. We should exempt cleats, along with condoms and approved weight loss aids to encourage healthy behavior.

Lastly, our schools should be on the cutting edge of nutrition—going beyond was is required by the Mass. School Nutrition Standards, to help reduce childhood obesity that can lead to diabetes. While come students have complained about the lack of cookies, the benefits of healthy lunch in school far outweigh the costs.

Massachusetts has been a leader in public health for generations, ever since the Supreme Court upheld the Commonwealth’s mandatory vaccination law in the landmark case of Jacobson v. Massachusetts, 197 U.S. 11 (1905). It is our responsibility to remain a model for others to follow and, in the process, ensure a better life for our citizens.

An Eternal Asset: Making the Most of Essex County’s Waterfront

“She knew they were her woods by the smell of pines and the quality of the air, a scrubbed, cool, clean sensation that she associated with the Merrimack River. She could hear the river, distantly, a gentle, soothing rush of sound that was really in no way like static.”

--Joe Hill, NOS4A2 (2013)

As the story goes, in 1004, Thorewald the Norseman, a seafaring fellow meandered down the New England coast in search of the perfect dwelling place. Upon laying his eyes on Cape Ann (or, as others assert, Nahant), Thorewald declared, “It is beautiful; and here I would like to fix my dwelling.”

Whether he was steering his vessel around the jagged cliffs of Rockport, the brilliance of Dolliber Cove, or the tiny peninsula of Nahant, the truth is that Thorewald couldn’t go wrong. Indeed, with nearly 500 miles of coastline, not to mention flowing rivers from the Merrimack to the Ipswich, Essex County is a beautiful a place to fix a dwelling as it was a millennia ago.

It goes without saying that much has transpired since Thorewald’s voyage. In particular, how we engage with our coastline has undergone a series of shifts—from the pre-industrial economy of the colonial era, to the industrial economy of the 19^th century and now, as we forge ahead in the 21^st, a hybrid of commercial and recreational uses.

Twenty years ago, in a profile of Cape Ann for the New York Times, Suzanne Berne wrote that “[w]hile Gloucester maintains a fishing industry and a palpable grittiness, Rockport has cleated its future to galleries and craft shops.”

The tension between a “working waterfront” and the importance of tourism to Essex County’s economy is an important element in how policymakers and communities approach reshaping waterfronts as part of an integrated economic development strategy.

The future of Essex County’s rivers and shores is one of mixed-uses, fighting to protect fisheries and ports, while simultaneously welcoming people to engage with the water in new ways. This model is on display today in Haverhill, where a plan forged through a public-private partnership is in place to reconnect residents with the Merrimack River by literally tearing down a block of buildings that close off the waterfront and rebuilding downtown with office and retail space, apartments, restaurants, a boardwalk, and—most importantly, perhaps—a new satellite campus for UMass-Lowell.

While Haverhill appears ready to pull shovels in the ground this fall, Lynn’s Master Waterfront Plan is now six years old and progress has been frustratingly slow on the 305-acre site which sits a mere 10 miles north of Boston. 2014 may be the year things speed up, though, as ferry service from Lynn to Boston may finally arrive (thanks in no small part to the efforts of State Senator Thomas McGee). Nothing is more important to jumpstart the private-sector investment that is essential to the plan’s success than the creation of transit links like the ferry and the extension of the Blue Line to Central Square.

Despite delays in getting its master plan off the ground, Lynn’s embrace of mixed-use plans along the waterfront, just like that of Haverhill, Gloucester, and communities throughout Essex County, promises to create an “active” street life that promotes business development and reconnects our communities to their historic roots.

Innovative waterfront development must also exploit modern technology and antiquated infrastructure to draw people to the water and teach both tourists and natives alike about the County’s history.

In Gloucester, Mayor Carolyn Kirk has embraced technology as a way to support both critical economic drivers. In 2012, Mayor Kirk launched the Gloucester Harborwalk, 1.2-mile stroll full of stories about Gloucester’s past and present history and fully integrated into a mobile app.

Similarly, the 4.3-mile Danvers Rail Trail (a grassroots project that has transformed an old, unused rail line into an active recreational space) has used technology to link recreational and commercial opportunities, even creating a hide and seek type game with gift cards from local businesses hidden along the trail that require visitors to download a mobile app (as a sidenote, another unused rail spur stretches from Downtown Salem to Peabody and Danvers, allowing for a potential extension of the Danvers Trail to Cedar Pond and the Crane and Waters Rivers).

Other efforts, like the 1.3-mile Amesbury (or Powwow) Riverwalk (part of the Coastal Trails Network linking Amesbury, Salisbury, Newbury, and Newburyport—see map), hold similar promise.

As one of only 49 National Heritage Areas, Essex County’s many historic assets will continue to play a key role in our economic future. However, more eternal and more vital than any colonial home or ancient artifact is our waterfront. It is essential that our cities and towns work together to make the most of its potential for generations to come.

North Shore Taxis Must be Accessible to All

“With today’s signing of the landmark Americans for Disabilities Act, every man, woman, and child with a disability can now pass through once-closed doors into a bright new era of equality, independence, and freedom.”

-- President George H.W. Bush, 1990

This week, as reported by the Salem Evening News, the Peabody City Council unveiled a compromise for new taxi licenses, dividing the 15 new permits equally among three cab companies. However, the article buried a truly distressing piece of news—none of the new taxi licenses would be for accessible taxicabs. 

Peabody Councilor Tom Walsh rightly grilled taxi owners on their failure to provide this service, saying that if restaurants and hotels can do it, certainly a critical element of the North Shore’s transportation network should be able to as well. Nevertheless, North Shore Taxi’s lawyer, James Mears Jr., described the accessible taxis as “cost-prohibitive,” requiring not only a special vehicle but also a trained driver.

This is a completely insufficient excuse for failing to provide service to people with disabilities on the North Shore (not to mention thousands more who do not technically qualify as disabled, but whose limited mobility makes the features of accessible taxis essential to comfort and accessibility).

Indeed, when Congress passed the Americans with Disabilities Act nearly 25 years ago, it was indicative of a commitment made by the American People to share the costs of making our society—its public institutions, places of accommodation, and, yes, transportation networks—available to all users. Just as we pay slightly higher property taxes to retrofit our schools and Town Halls, so our transportation system must absorb the expense of full and complete access into the cost of doing business.

(as a sidebar, let’s not forget the groups who lobbied aggressively against the ADA—the same groups that have continued to fight landmark legislation to improve conditions for workers and their families, including the U.S. Chamber of Commerce and the National Federation of Independent Businesses)

Furthermore, technology offers several ways of making the system less expensive for business and more convenient for users.  As I noted in a letter to the Boston Globe last year, cabs in Massachusetts should embrace tech-savvy services such as Accessible Dispatch, which serves New York City and allows people to digitally hail accessible cabs through mobile apps or over the phone.

London has a 100 percent accessible taxi fleet. Given the density difference between the North Shore (where a significant portion of cab service is by pre-arrangement) and cities like New York and London (where most cab service is by hail), having a 100 percent accessible fleet may not be necessary to ensure an equivalent level of service for all users in our area.

However, I believe it is essential that every cab company operating in the Bay State have at least one accessible cab on the road 24 hours a day, 7 days a week (or whenever the cab company is serving customers). Taxi passengers, taxi operators, and taxpayers should share the costs associated with this service. For instance, in New York, which recently agreed to adopt regulations requiring that half of the City’s yellow cabs be accessible to people with disabilities within six years, the City and State are providing tax credits to aid companies in converting old cabs to accessible cabs or purchasing new vehicles. 

In the end, if the ADA’s eternal promise is, as President Bush declared, that “people with disabilities are given the basic guarantees…[of] independence, freedom of choice, control of their lives, [and] the opportunity to blend fully and equally into the rich mosaic of the American mainstream,” surely we can do better on the North Shore of Massachusetts than to simply throw up our hands and say that honoring this promise is too expensive.

Comcast, General Electric, and The Role of Government in America

“The winners…will be those who…insist on being number one or number two in every business they are in. Don’t play with businesses that can’t win. Businesses that are number three, number five in their market—Christ couldn’t fix those businesses. They’re going to lose anyway.”

-- John “Jack” Welch, CEO, General Electric

Last week, Comcast announced its intention to buy Time Warner Cable in a $45.2 billion deal that will unite the nation’s two largest cable providers. According to the New York Times, the resulting company will operate in 43 of the 50 largest metropolitan markets, and will serve nearly 30 percent of paid television subscribers and about one-third of all broadband Internet subscribers.

Outcry about the anticompetitive effects of the merger has been strong—not only from consumer groups, but from politicians on both sides of the aisle—an unsurprising result given that Americans pay more for worse service than most countries in the developed world.

A 2011 study by Pando Networks found that U.S. Internet speed was 26th in the world and a 2012 study by the New America Foundation found that Tokyo residents enjoy speeds that are eight times faster than New York’s for a lower price. And Hong Kong residents enjoy speeds that are 20 times faster, for the equivalent price.

Many cities—from Lafayette, Louisiana to Chattanooga, Tennessee—have have launched municipal fiber networks in an effort to thwart the monopolistic behavior of the telecommunications industry. 

As Susan Crawford, visiting professor at Harvard Law School [my alma mater] and author of “Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age,” wrote in the Boston Globe this week:

The way to do this is to install a new wholesale fiber network controlled by the city…Cities do not have to be in the business of competing with private providers, but their control of the basic infrastructure is essential to make sure that competition emerges.

We’ll talk more about the nation’s connectivity problems in another post, but today, I want to use the struggle to find a solution for sluggish Internet to examine how we should outline the scope of government in the 21^st century.

For guidance, let’s go back 30 years to one of the seminal philosophies in American corporate history: Jack Welch’s effort to streamline General Electric into a capitalist juggernaut.

Welch—a native of Peabody, Mass. who grew up in Salem and later graduated from the University of Massachusetts—famously scribbled his philosophy on a napkin during an interview with Forbes Magazine in 1984 (see picture, left).

The picture shows GE’s three “core” businesses, from Welch’s perspective, as well as other non-core businesses that were either number one or number two in their respective fields. For businesses that failed to fall into one of those two buckets, the solution was brutal and short, "Anything outside the circles we will fix, close, or sell," Welch said.

This philosophy was anything but charitable. In his first five years as CEO (1981-1986), Welch slashed 130,000 jobs – 1 of every 4 workers at GE. However, those who remained were the beneficiaries of a more directed, stable, profitable company, which grew shareholder (and worker) value.

Welch’s leadership of one of America’s flagship companies provides meaningful guidance on how we should go about determining the size and scope of government in America, his misguided statements about the growing chasm between executive and worker pay notwithstanding.

Government, unlike private business, does not always have a legion of natural competitors (national defense, for instance). However, government does compete with the private sector in a variety of ways (public universities and the Postal Service just to name a few). I believe that defining the role of government starts by examining what you want government to do and placing it into one of the four boxes of the two by two matrix below:

 

          I.     Things government does well that private industry also does well

        II.     Things government does well that private industry does poorly

      III.     Things government does poorly that private industry does well

      IV.     Things government does poorly that private industry also does poorly

Like Welch’s three circles, we should examine everything that government does through this matrix to determine where to “fix,” where to “close,” and where to “double down.”

Let’s start with the easy stuff in boxes II and III.

We should be doubling down on government investment in functions falling into box II, not only because government excels, but also because there is no logical alternative. Many of these functions are so-called “natural monopolies” such as water and national defense (though there is admittedly some question as to whether government does well in these categories—more on that later).

We should completely eliminate functions in box III, where government is a woeful failure and private industry does fairly well. Venture capital (“picking winners and losers”) is perhaps the most obvious example of this, though others surely exist.

Now things get tricky. What do we do with box I? I believe that we should neither buy or sell, but “hold” our investments in these areas and take advantage of the private sector mechanism where feasible. For instance, few government investments are as beneficial as higher education and research and development. However, private universities (here’s looking at you, MIT) are incredibly successful at putting these dollars to work. Thus, government should continue to provide public higher education (particularly to provide low-cost alternatives to students of lesser means), while also pumping billions of dollars into R&D at America’s private colleges and universities.

Lastly, we come upon the bane of our existence: box IV. The first question to ask is whether the function need occur at all. Assuming that the answer is yes—and that someone has to do it—government has no choice but to fill the gap. However, given government’s terrible track record, legislators must be even more willing than usual to (a) experiment with innovative approaches to service delivery and (b) exercise unusually probing oversight.

A good example of this is the operation of commuter railroads. In Massachusetts, both the government (MBTA) and private enterprise (MBCR) have proven ineffective at keeping the trains on time and on budget. Thus even though optimism abounds that a new private carrier, Keolis, will succeed where others have failed, legislators should be on the lookout for waste, fraud, and failure.

In the end, like Welch’s circles, the matrix I’ve outlined won’t hold all functions demanded of government or the private sector. However, it is an effort to get at one of the first principles of American democracy: how to determine the shape and scope of our government.

The Past, Present, and Future of Heating New England's Homes

“Natural gas, if extracted safely, it’s the bridge fuel that can power our economy with less of the carbon pollution that causes climate change.”

--President Barack Obama, State of the Union Address (28 Jan. 2014)

In 2011, the average American household using heating oil spent $2,298, compared with $724 spent by gas users and $957 spent by electricity users. Indeed, the price of heating oil has soared since the end of the Great Recession, continuing a long-term trend that has seen the peak price in Massachusetts rise 200 percent since 2000 (see chart, below).

The significant increase in cost is particularly troubling given ongoing cuts to the Federal Low Income Home Energy Assistance Program.

Nationwide, many households have responded to these soaring costs by taking advantage of both a boom in domestic natural gas production and federal subsidies for natural gas development, driving the percentage of homes that use heating oil from about 20 percent in 1975 to roughly 7 percent in 2012.

New England, however, remains a significant outlier in the home heating market. The latest data from the U.S. Energy Administration shows that more than 7 in 10 Maine households use fuel oil as their primary energy source for home heating—a higher share than in any other state—and in Massachusetts, one in three homes is heated primarily with oil.

One of the reasons for New England’s disproportionate use of oil is the lack of natural gas infrastructure—both production and pipeline capacity. As the Energy Department stated last week, “Since 2012, limited supply from…liquefied natural gas (LNG) terminals coupled with congestion on the Tennessee and Algonquin pipelines has led to winter natural gas price spikes in New England.”

A flashpoint in this drama is the proposed $800 million natural gas retrofitting of the Salem power plant. Last week, the latest protest against the proposed plant took place, led by leaders from the Massachusetts chapter of the environmental group 350.org, which views the construction of new natural gas facilities as a significant threat to global climate.

350’s Chairman and co-founder, Bill McKibben, has described America’s reliance on natural gas as “at best a kind of fad diet, where a dangerously overweight patient loses a few pounds and then their weight stabilizes; instead, we need at this point a crash diet.”

While the environmental benefits of natural gas relative to oil are undeniable (natural gas produces about 30 percent less carbon dioxide per Btu than conventional or ultra low sulfur heating oil, according to a 2009 study by Brookhaven National Laboratory), it is also clear that simply replacing oil and coal with natural gas for home heating and electricity production will not be enough to avoid potentially catastrophic climate change (not to mention the very real concerns of communities surrounding hydraulic fracturing).

Furthermore, as the Energy Department concluded, the capital intensive investments necessary to meaningfully expand New England’s pipeline network may not be financially viable, since additional capacity may only be necessary for short periods during the year.

Nevertheless, just as we must not bestow upon our children a despoiled planet, so we must not ignore the very real suffering of so many families in New England and beyond as a result of soaring heating oil costs.

In addition to dedicating resources at the State level to make up for draconian cuts to home heating assistance (perhaps via a temporary increase the share of Regional Greenhouse Gas Initiative proceeds dedicated to direct assistance), we must promote a truly progressive energy policy—one that draws on Massachusetts’ history of clean energy and the strength of our universities.

Cities and towns throughout the Commonwealth have historically relied on clean energy. For over 150 years, Lawrence has embraced hydroelectric power—from the Great Stone Dam in 1848 to the launch of a hydroelectric plant powering 7000 homes a year, in 1981. In Beverly, Salem, and Marblehead, windmills were grinding corn and bark as early as the 17^th and 18^th centuries.

In more recent years, the Bay State has continued to propel the clean energy economy. In 1979, the nation’s first modern wind turbine manufacturing company was founded in Burlington and in 2011, UMass and the Maritime Academy worked together on a trial of hydrokinetic energy—using the ancient tides of Buzzards Bay to power iPhones.

With an immense coastline, a regulatory environment supportive of renewables, and countless students committed to investing their futures in the field, Massachusetts is the perfect laboratory for the transformative energy technology of tomorrow.