Recession? Boston's 'electronic beltway' hasn't even heard of it
Boston — It doesn't look like an industrial boom town. There is not a belching smokestack in sight. Peeling off Boston's grassy and tree-lined suburban beltway, Route 128, one expects to find mostly golf courses, or some very nice girls' schools.
But the Route 128 area, home base of much of Massachusetts' computer industry , is, indeed, booming. The high-technology firms have really bounced back after recession of the mid-70s, which hit New England especially hard. In fact, the high-technology boom is expected to carry the region more or less unscathed through the current recession. And some local business people are even asking: What recession?
Take Computervision in Bedford, for example. Sales were up 84 percent, from recessionary impact, management is predicting sales growth of "only" 50 to 60 percent.
Computervision makes computer-aided design (CAD) systems, used for buildings, automobiles, industrial machinery, perfume bottles, or just about anything else. CAD systems automate the design process by replacing arduous pencil-and-paper drafting with a terminal screen, on which a draftsman "draws" with an electronic pen. The design on the screen can then be printed out like a conventional blueprint. Or it can be reduced to ticker tape-like "instructions" that program a computerized factory. The tape is run into the machine, and the manufactured gizmo comes out the other end, all according to specifications.
The two processes together, computer-aided design and computer-aided manufacturing, are known as CAD/CAM.
The Computervision people, who do 40 percent of the CAD/CAM business worldwide, estimate that their systems will increase designers' productivity threefold, on the average. The National Science Foundation's Center for Productivity has said that "CAD/CAM has more potential to radically increase productivity than any other development since electricity."
CAD eliminates having to go "back to the drawing board" and produce a whole new set of drawings whenever design changes are made in a product. The draftsman simply calls up from the computer's memory bank the original version of the product and makes the necessary adjustments with the electronic pen. If "hard copy" -- actual paper drawings -- are needed, they can be printed out with the touch of a button.
At a time when lagging productivity is a major concern in the national economy, it would seem that any manufacturer of CAD/CAM systems is about as recession-proof as possible. Actually, the main worry in the New England economy is a labor shortage. Computervision increased its personnel from 1,500 in 1978 to 2,500 last year. But not every firm has been able to increase its work force like that -- the engineers, especially, just do not exist in the numbers that are needed.
Unemployment in New England currently is below the national average, and Massachusetts, in particular, is well under -- a situation that would have been unimaginable five years ago. The Boston Sunday Globe each week is fat with help-wanted ads. Technical Marketing Associates, a Concord consulting firm, has estimated that high-technology firms will generate 64,000 to 124,000 jobs through 1982.
Ordinarily, low unemployment is something for state officials to cheer about. But George S. Kariotis, Massachusetts' Secretary of Economic Affairs, worries that if expanding firms cannot find the employees they need here, they will pack up and go elsewhere.
Many of the Sunbelt states have been very aggressive in wooing industry into their domain, with tax breaks and special technical education programs. South Carolina, for example, will set up -- at no cost to the employer -- special schools to train lathe operators, welders, or whatever a new employer moving into the state needs to get his operation off the ground.
Now Massachusetts has begun to fight back. Mr. Kariotis and Gov. Edward J. King recently announced the Bay State Project, which is intended to meet the labor shortage and enable the state to hang onto its industry. The Bay State Project will develop a supply and demand data base to let students and job-seekers know where the jobs are and what the competition will be like. And the Bay State Skills Corporation will help with special training programs to supply workers in areas where the need is acute.
Also, the Massachusetts High Technology Council has been lobbying for reductions in state income taxes for the brackets where most engineers find themselves and for lower local property taxes so that these highly paid specialists will not have to shell out so much to maintain their posh homes in the suburbs. The council admits this may not be the most utterly impartial way to give tax breaks but argues that "Taxachusetts" by such tax relief would themselves generate jobs and stimulate the economy -- to everyone's benefit.
But many observers feel that New England's place as a leader in high-technology industry is pretty secure. It's just that in years to come different industries will succeed computers as high-technology industries. Historically, the region has had people resources -- the university-based research establishment, the skilled labor force, and the financial management expertise -- rather than natural resources.