Business Archives - Mass Business Blog

Biotechs and Robotics Pay Off for Massachusetts

By Mass Business Blogger December 18, 2015 December 18, 2015 Biotechnology, Business, Technology

A law passed in 2008 that provides subsidies to biotech and robotics companies in Massachusetts is helping to grow these industries in the commonwealth. Some say the biotech and robotics industries in MA are beginning to rival those of Tokyo and California, which have long been considered the global leaders in this type of business.

Massachusetts Received One Third of Seed Stage Funding

One of the reasons for this growth in the commonwealth is the Massachusetts Life Sciences Act of 2008. This legislation authorized $1 billion in investments, grants, loans, and tax breaks over the next decade to be given to local biotech companies. The government is following through with their promise; they have presented over $761 million in seed-stage funding for these businesses between 2009 and 2013. This has allowed nine of the ten largest drug manufacturing companies to set up research and development laboratories in Massachusetts.

Foundry robotics.

Homegrown vs. Tax Incentives—Paying Twofold

One of pivotal stipulation of the MA incentive package is that it focuses on local businesses who have already been working in the industry. Legislation hoped to unlock the commercial potential of research already being conducted at state universities including Harvard, MIT, and the University of Massachusetts. By attracting smaller companies on the cutting edge of research, Massachusetts has found that large companies tend to migrate to states where those small companies are thriving.

Massachusetts Grows Connections—And Keeps Them

Attracting smaller companies that draw the interest of larger companies has helped Massachusetts become a leader in the biotech and robotics industry. The new financial incentives attract companies and talent to the commonwealth. As the biotech and robotics industries continue to grow, investors have become more motivated to provide additional seed money for growing companies. Larger companies have spent more time mentoring startup companies after seeing their industry swell; the success of large and small companies comes as a benefit to the state.

Atlas, a humanoid robot from Boston Dynamics.

The Future of Robotics in New England

Since 2008, at least twenty robotics companies have sprouted up in Massachusetts; venture capital in the robotics industry has also grown to more than $60 million, up from $20 million in 2008. Technology giants like Amazon and Google have provided millions of dollars in startup funds for robotic-focused companies through acquisitions and other forms of investment.

Unfortunately, trends have shown that smaller companies often sell to larger firms before they can grow to a significant size. This has prevented Massachusetts from becoming a true powerhouse in robotics. The international robotics industry saw $15 billion in 2010; it is expected to see $65 billion by 2025. Experts say that special focus will be given to robotics that provide everyday utility, including those that help clean and maintain homes.

Massachusetts has implemented incentives that have helped the state grow the robotics and biotech industries, but many experts say there is still significant room for growth.

Is It Legal for Hospitals to Ban Nicotine-Positive Employees in MA?

By Mass Business Blogger November 6, 2015 November 6, 2015 Business, Employment, Healthcare

In 2011, UMass Memorial Marlborough Hospital adopted a tobacco-free policy for its property. Recently, the same hospital announced that they would be establishing a nicotine-free hiring policy for all new employees as well. Nicotine will join amphetamines, benzodiazepines, cocaine, and others on the list of prohibited chemicals. Hospitals test for these drugs following the interviewing and application process; it is often the last step before an applicant becomes an employee.

Marlborough Hospital Leads Nicotine-Free Hiring

According to Steve Roach, president and CEO of Marlborough Hospital, the decision to hire exclusively nicotine-free applicants is meant to encourage employees’ healthy decisions. He expects his employees to abide by the same health advice they give to their patients—to lead by example, essentially. All hospitals in the UMass system have smoke-free and tobacco-free campuses, but Marlborough is the first in the commonwealth to establish a nicotine-free hiring policy.

Is Banning Smokers Illegal?

There is no federal law that protects smokers from these regulations, as the Equal Employment Opportunity Commission does not recognize tobacco smokers as a protected class. However, individual states have their own approaches. Some states say that companies cannot refuse to hire someone simply because he or she is a smoker. Massachusetts is obviously not one of those states. Even some of the states that protect smokers tend to be more strict with the healthcare industry and nonprofit organizations.

Some experts say that this ban will unravel a mess of additional issues. They argue that discriminating against smokers is the same as discriminating against those with diabetes or high cholesterol. There is also the concern that a tremendously well-qualified applicant will be turned away for what some deem to be a trivial issue.

Massachusetts Aims to Set Healthy Example

A Swedish study found that smokers take an average of 7.67 more sick days every year than people who have never smoked. Additionally, even if the smoker does not have other medical conditions such as diabetes or obesity, they typically have higher medical costs than the average nonsmoker. If you’ve ever been around a smoker, you know how tightly the smell of smoke can cling to clothing and hair; this new rule will help prevent patients from being exposed to those fumes. Each year, smoking or exposure to smoke causes 443,000 premature deaths and costs over $170 million in healthcare costs and loss of productivity.

Most employees who receive the “quit smoking or quit your job” ultimatum choose to leave tobacco behind. While Marlborough Hospital’s ban doesn’t affect current employees, it will hopefully nudge future employees to kick the habit.

As Housing Booms in MA, Residents Push for Even More Construction

By Mass Business Blogger October 28, 2015 October 28, 2015 Business, Construction, Real Estate

August 2015 marked the third straight month of increased housing sales in Massachusetts. This continued spike has lawmakers worried about the availability of affordable housing in the commonwealth—housing units are being swooped up faster than they are being built. The goal is to make sure that, as MA continues to compete to bring in workers, it also competes to provide sufficient housing for those workers. A bill, sponsored by the Housing Committee co-chairs, Senator Linda Dorcena Forry (D) and Representative Kevin Honan (D), has been proposed that would increase the amount of housing stock in the commonwealth.

Housing Partnership Directors Testify

In early October, advocates for the bill testified before the commonwealth’s Housing Committee. Somerville Mayor Joe Curtatone, among others, have stood behind the bill. MA Housing Partnership Executive Director Clark Ziegler testified that the average single-family home in metropolitan Boston takes up over one acre of land, which is about equal to one NFL football field. The size of these properties has less to do with what people want and more with what local zoning restrictions demand. Even though most buyers prefer homes on smaller lots in neighborhoods that are more walkable, zoning laws make these homes more difficult to put together. Many communities ban the building of multi-family homes altogether.

It isn’t news to say that the cost of renting housing (or the cost of taxes on owned property) in Massachusetts continues to spike. We’re still picking our jaws off the floor after reading this article about wages and rental costs. Even short-term rental properties face increased regulations and pricing. Residents statewide are feeling trapped—some areas are simply becoming too expensive for people to afford.

Moderate and Low Income Residences

One of the goals of the bill is to address the lack of low- and moderate-income housing stock in Massachusetts. If passed into law, the bill would require communities to report the ratio of employed residents and available, reasonably priced housing. It will also help measure the negative effects of certain kinds of development in particular communities (e.g., building football-field-sized properties in low-income neighborhoods). The bill represents hope for an increasingly difficult housing market, but advocates have had trouble prioritizing it over short-term-agenda items like neighborhood safety and the energy efficiency of housing units.

Massachusetts Housing Boom

The average MA home sale price in August were $359,000, three percent higher than it was in 2014. Despite these concerns, The Warren Group reported in early October that there had been more than 6,000 single-family home sales in August—more than any month since August 2005. Home sales were up 16% from August 2014. Many expect the number of sales to continue to increase into autumn.

The Housing Committee is reviewing a total of six bills related to housing. The bills cover topics such as the expedited construction of multifamily housing (buildings with 20 or more units); the general increase of lower-income housing; and the investigation of the shortage of accessible homes for people with disabilities, veterans, and the elderly.

The real question is, where do you stand? Are more housing developments the answer to the increased need for housing in Massachusetts?

Everything You Need to Know about a Styrofoam Ban in MA

By Mass Business Blogger October 23, 2015 February 14, 2018 Business, Economy, Food Service

Two legislators in Massachusetts have sponsored a bill that would eliminate the use of Styrofoam containers in the commonwealth. The bill has been endorsed by eighteen other lawmakers who agree that Styrofoam is harmful to the environment and should no longer be offered to consumers.

Styrofoam Bans Across the United States

Many national chains, including McDonald’s and Dunkin’ Donuts, have already eliminated the use of Styrofoam in their food containers and started using more recyclable materials.

In 2014, Washington, DC, banned the use of Styrofoam, joining many cities who had already done so. Cities and counties in California, Florida, Maine, Maryland, Minnesota, New Jersey, Oregon, and Texas have all banned the use of Styrofoam.

BPA and the Debated Sins of Styrofoam

One of the biggest concerns with Styrofoam, or polystyrene foam, is that—while cheap to produce and easy to shape—it contains a compound called bisphenol A (BPA). Since the 1960s, BPA has been the go-to ingredient for strengthening plastics like Styrofoam; its durability and simple production made it seem like a no-brainer. At one point, the FDA even declared it to be entirely safe.

However, a number of recent studies have challenged the infallibility of BPA and polystyrene. The two have been linked to hormonal balance, heart disease, diabetes, breast cancer, impotence, and developmental issues in fetuses and children.

The arguments from both sides of the BPA debate are admittedly a little blurry. Some experts are adamant that BPA is safe while others vehemently declare it to be a life-threatening compound. Patricia Hunt, a graduate professor and geneticist at Case Western Reserve University, along with a team of 36 other researches, dove into the data. What they found was that, of the hundreds of government-funded studies analyzed, “90 percent had concluded BPA was a health risk. It was the dozen or so industry-funded studies [ . . . ] that failed to replicate other BPA research.” These findings imply that human bias may have a significant effect on the data available to the public.

Some argue that BPA is only unsafe at extreme doses (doses higher than the ones received by eating takeout from a Styrofoam container). However, Hunt mentioned that BPA doesn’t necessarily “play by the rules.” At high doses, BPA may “shut down the body’s response”; smaller doses of BPA may actually be worse for us.

One incontestable fact about BPA is that it negatively impacts our environment. Harvard University writes that “Polystyrene foam is designed for a useful life of minutes or hours, but it continues to exist in our environment for hundreds or thousands of years.” It cannot be recycled (it costs more to recycle than it does to produce), so Styrofoam and Styrofoam products “fill up 30% of landfill space.” It is also manufactured using hydrochlorofluorocarbons (HCFCs), which are known to deplete the ozone layer. The EPA adds that 90% of floating marine litter consists of plastic or polystyrene products.

Polypropylene: A Better Alternative

Polypropylene represents a safer alternative to Styrofoam. It is a versatile, lightweight, heat-resistant polymer resin that is cheap to use and able to be utilized in all kinds of products. It can essentially do everything Styrofoam can. The kicker? Polypropylene does not contain BPA. So, since BPA may or may not be terrible for us (and no one can seem to agree), many would rather not risk it and just use polypropylene instead. Paper, which has been implemented in many Dunkin’ Donuts locations, including Somerville, MA, is another viable solution.

anti-styrofoam-massachusetts-law-lunch-bittwersweet

Birch Tree Bread Company, a restaurant based in Worcester, MA, prides itself on only using recycled and/or recyclable material.

Reactions to Styrofoam Bans

Despite the advantages of polypropylene and paper, some restaurants are reluctant to stop using their foam containers; naturally, the Styrofoam industry is also against the ban, noting the thousands of jobs it creates every year. Spokespeople for the industry argue that there are six Styrofoam recycling centers in Massachusetts and that more could be added in order to better handle Styrofoam waste in the state.

Effective January 2014, Amherst, MA, implemented a bylaw that bans restaurants from using Styrofoam containers, citing their environmental hazards and health risks. They also add that one of the key ingredients in Styrofoam, styrene, is a recognized carcinogen.

Amherst’s town website reports that, from a business perspective, the biggest issue with switching to polypropylene or other environmentally friendly materials is cost. The other materials do tend to be more expensive (though there are efforts to address that), so if the bill does become law, MA businesses will have to “absorb a few cents of additional cost for recyclable or compostable take-out containers.” While a few cents may not seem like much, it can add up for small businesses just getting off the ground.

New York City implemented their own Styrofoam ban on July 1, 2015. Mayor Bill de Blasio told MSNBC, “These products cause real environmental harm and have no place in New York City.” Opponents of the new rule in NYC have begun a petition against it, saying it is unnecessarily expensive and inconvenient for small businesses. A Long Beach, CA, school district that actually switched from biodegradable food trays to Styrofoam trays has since saved about $1 million each year.

Many cities in Massachusetts have joined Amherst and NYC’s effort to eliminate Styrofoam. Brookline, Great Barrington, Brookline, and Somerville, MA, have all banned Styrofoam in their communities.

Where do you stand? Is Styrofoam worth banning or should MA keep it around?

WE BOS Supports Women Entrepreneurs in MA

By Mass Business Blogger October 12, 2015 October 12, 2015 Business, Economy, Employment, Entreprenuer

A new initiative in Boston seeks to close the gender gap in business ownership and success. In 2012, women owned about 36% of all small businesses in the US; however, men-owned firms average a 67.9% higher profit margin. Boston Mayor Marty Walsh recently announced WE BOS, a plan to help establish and grow women-owned businesses in Massachusetts with training, networking, and business counsel.

Problem #1: Massachusetts Lags in Female-Owned Mid-Markets

A recent report by American Express and Dun and Bradstreet examined women and minority ownership of “middle-market” businesses. These are defined as businesses with annual revenue above $10 million but below $1 billion. There are approximately 4,000 such businesses in Massachusetts. Only 5% of these businesses are owned mostly by women; a paltry 14% have female chief executives.

Problem #2: Obstacles Include Lack of Access to Funding

Women-owned businesses often face obstacles when trying to get the necessary funding and support to grow. About 2% of venture capital funding is dedicated to women-owned businesses. This may be a consequence of Problem #1—that there aren’t enough women in leadership positions to even receive funding. A recent study by Babson College found that only 6% of venture capital firms have even a single female partner. Over the past ten years, the number of women-owned businesses in MA (and their success rates) has steadily increased, but not nearly as fast we’d like it to.

Solution: WE BOS Seeks to Boost Women in Business

The news is not all bleak. The AMEX and Dun and Bradstreet survey indicates that women-owned businesses able to crack into the middle-market tend to have higher rates of both revenue and employment growth—they just need a little help getting through the door. Massachusetts leaders have taken the initiative to get women-owned businesses on their feet and put them in a position for growth.

The initiative is called Women Entrepreneurs Boston (WE BOS). The group, which will offer skill training, technical assistance, and other services to women-owned businesses, will be led by Kara Miller. Miller said “I am thrilled to expand our reach to women-owned businesses through WE BOS.” She mentioned that the organization’s goals are to both support and create women entrepreneurs in Boston.

WE BOS Becomes Part of Women Entrepreneurs Week in October 2015

Miller’s initiative has been up-and-coming for a couple years now and will finally launch on October 12th. The date also marks the beginning of Boston’s inaugural Women Entrepreneurs Week. Throughout the week, women entrepreneurs will be able to attend workshops, speakers, roundtable discussions, and will have the opportunity to meet and connect with others. You can find a full list of events here, many of which are free to attend.

WE BOS joins other local endeavors designed to assist women in business such as Innovation Women and the Women on Main Initiative. Although Massachusetts businesses—along with those of the rest of the nation—are still far less diversified as they should be, these recent efforts will hopefully move us in a better direction.

Are you interested in attending any of the events at Women Entrepreneurs Week? Do you have any advice for women-owned businesses in MA, or business owners in general?

Millennials and Manufacturing: Can They Work Together?

By Mass Business Blogger October 7, 2015 February 14, 2018 Business, Economy, Education, Manufacturing

An Incredible (and Daunting) Opportunity for Manufacturers

US manufacturing is an absolute behemoth of an industry. CNBC recently reported that manufacturers contribute over $2 trillion to the US economy each year, and remarkably, it’s still growing. Experts predict that over the next ten years, there could be more than 3 million jobs opening up in the manufacturing industry.

This is fantastic news for Massachusetts, whose manufacturing industry generates over $45 billion annually. The caveat, however, is that these 3 million new jobs need to be filled . . . fast. About 10,000 Baby Boomers retire every single day, and we’re now seeing the need for skilled workers to take their places. Who is going to step in?

Millennials.

No, we’re not kidding. This young generation, seemingly defined by selfie sticks and social media accounts, is rushing toward the workforce with skill sets and abilities we’ve never seen before. They’re no longer just kids, and like it or not, manufacturing companies need them—their futures depend on it. Companies in the manufacturing industry and elsewhere are realizing that the best (and possibly, the only) way to assure long-term success is to funnel Millennials their way. They’re now asking a few questions:

Why would we want to hire Millennials?
Why would they want to work for us?
How do we make it happen?

Addressing the Stereotypes: Do Manufacturers and Millennials Even Want Each Other?

There is a huge elephant in the room, and it’s name is “The Age Gap.” Many manufacturing executives are Baby Boomers (born 1946–1964) and Generation X-ers (born 1965–1980); Millennials are those born between 1981 and the early 2000s. What this means is that the age gap between existing employees and new hires can stretch forty years or more. Bridging that gap in the workplace presents discernable challenges. As reported by ThomasNet, some employers are standing at one side of the divide and are about ready to give up completely; 81% of manufacturers “have no explicit plans to target Millennials as potential workforce replacements.”

But here’s the cold, hard truth of it all: Yes, you are different. Yes, you are stuck with each other. A successful business in any industry can and must consider the values, strengths, and weaknesses of each of the three generations; as Baby Boomers fade out of the workforce and Millennials fade in, cohabitation becomes more important than ever. By 2025, up to 75% of the global workforce will be populated by Millennials. It’s time for manufacturers to recognize this inevitable shift or end up watching from the sidelines.

How Hiring Millennials Can Benefit Manufacturers

The most obvious service a Millennial can offer a manufacturing company is that he or she can fill an open position. In 2014, MA manufacturing companies saw a 67% increase in jobs created, which is a wonderful piece of data . . . if there are people willing to work those jobs. Millennials are here and ready to work.

Millennials also provide the intrinsic ability to reach other Millennials—they are fluent in the heavily trafficked pathways of social media, telecommunication, and technological innovation; they offer invaluable insight on how to make a company more attractive to others like them. This is especially important considering the fact that Millennials will soon not only make up the lion’s share of the workforce, but also that of the consumer and B2B market as well; if manufacturers fail to connect with them, their companies will continue to be understaffed and unable to grow.

With regard to “going green” and reducing a company’s carbon footprint, Millennials are proving themselves to be the most informed generation yet. Many Millennials dedicate their educational careers studying in fields that that didn’t even exist when the Boomers and the Gen X-ers were in school, like the philosophy of sustainability, sustainable development, and the art and science of sustainability. Millennials are able to both fill the available positions in the industry and skillfully rejuvenate manufacturing to better align it with the times.

The US government published a report in 2014, “15 Economic Facts about Millennials,” that says Millennials have not only been “shaped by technology” and are therefore better prepared to help companies adapt to new technology, but are also more likely to stay with their early-career employers than previous generations. Despite those who say Millennials tend to bounce from employer to employer, they have actually held on to their jobs longer than Gen X-ers (see page 29 of the above report). This means more security for employers, improved worker productivity, and fewer resources spent on training new employees.

How Manufacturing Can Benefit Millennials

Money is on the mind of most Millennials these days—their lack of it, their paralytic fear of it, and the debt they have to chip through before they can begin to save any of it. The Wall Street Journal reports that students in the class of 2015 are the most indebted ever; each faces about $35,000 of student-loan debt. Even when adjusted for inflation, this blisteringly high figure has grown every year for as long as anyone can remember, and it’s reasonable to assume the trend will continue as we move forward. The good news? There is money in manufacturing. A lot of it.

In Massachusetts, the average median wage for a manufacturer hovers around $70,000. This is about the same salary as a software engineer, executive chef, or a seasoned firefighter. We can also compare this to the average salary of those who graduated with liberal arts degrees and have accumulated 10–19 years of experience. Entry-level manufacturing engineers make $50,000–$60,000 annually, markedly more than many employed in other industries. There are secure, well-paying, benefit-wielding careers waiting for Millennials to come pick them up.

In addition to terrific pay, manufacturers are now focusing their efforts on reaching Millennials and keeping them around. From internships, grants, and one-on-one workplace training to optimized, revitalized vocational programs and collaborative guides to help reach members of the community, the industry is shaping itself to be more appealing to the younger generation.

Using Manufacturing Day and Other Initiatives to Connect Millennials and Manufacturers

In 2012, a group of sponsors initiated Manufacturing Day, a project intended to attract young people to manufacturing, better define the industry, and address some misguided assumptions. This year, it was officially held on October 2, though there are events held throughout the year. One of the MA events included the Worcester Regional Chamber of Commerce’s event, “Made in Central Mass: Manufacturing Matters,” a panel that invited representatives from local manufacturers to brainstorm ways to market the industry to a new workforce.

Bill DiBenedetto, president of Lampin, a critical component manufacturer based in Uxbridge, MA, said this of the industry’s trajectory:

Manufacturing is a very robust and advanced industry in Massachusetts. I believe that it is incredibly important for us to collaborate with local educational officials and get more students interested in pursuing careers in manufacturing, where they have the opportunity to learn advanced engineering skills while earning a livable salary.

Lampin and other participants in Manufacturing Day, along with the STEM Education Coalition and the “30 Under 30” Rising Supply Chain Stars Recognition Program, are all hoping to funnel younger people into the industry. These organizations and others strive to show Millennials how much personal and professional growth can be achieved through manufacturing.

How Can You Get Involved?

If you or someone you know is entering the workforce, consider manufacturing. Sure, it isn’t for everyone out there, but it is a multifaceted, dynamic industry at least worth your research. A great way to start is to find a Manufacturing Day event near you. Find and follow manufacturers on social media, too—who knows, you or someone you know might be a perfect fit.

MA Welcomes Fall Festivals and Foliage, Expects Rush of Tourism

By Mass Business Blogger September 24, 2015 September 25, 2015 Business, Economy, Hospitality

Fall in New England has always attracted crowds of hikers, bikers, zipliners, wine-drinkers, leaf-peepers, shopaholics, and anyone simply hoping to enjoy the crisp autumn air. However, over the past few years, seasonal sales have been better than ever. Some believe the region’s success can be linked to a growing interest in fall-themed festivals and the development of destinations like Salem, MA, nationally known for its Halloween-oriented history of witchcraft.

Massachusetts Businesses Benefit from Booming Tourist Industry

Many families and individuals vacation in the fall—traveling during the school year usually means fewer crowds, lines, competition for lodging, etc. This helps keep businesses profitable after the summer rush—hotels, restaurants, retail outlets, and others reap the benefits. Even athletics teams and associated companies (e.g., those responsible for ticketing, facilities maintenance, entertainment, food, etc.) have reported an uptick in “post-season” sales due to the longer tourist season.

History of Massachusetts Is Ideal for Autumn Holidays

Stories of the Salem witchcraft trials have long fascinated tourists traveling to Massachusetts. The town commemorates the trials every year with a fall festival known as Haunted Happenings, which kicks off with a parade on October 1. The event began in 1981 with a “Witches Weekend” and is now a month-long series of trolley tours, ghost tours, films, nighttime ghost stories, and walkthroughs of the House of the Seven Gables. The city is full of other attractions like museums and haunted houses designed to promote the “spooky” history of Salem while demonstrating top-of-the-line Massachusetts hospitality.

cranberry-farm-fall-tourism-boost-ma-business-industry

A tour of Makepeace Farms in Wareham, MA, is a popular activity during the annual Cranberry Harvest Celebration.

Fall Festivals Across the State

While popular, Salem is certainly not the only place in Massachusetts to partake in the autumn festivities. New Bedford offers the Working Waterfront Festival at the end of September, spotlighting one of America’s largest fishing ports. Visitors to Cheshire, MA, can view glass-blown pumpkins and other artisan crafts at the Fall Arts Festival. Families love the Cranberry Harvest Celebration in Wareham and, in Newburyport, the Great Pumpkin Lighting and Stroll is a must-attent event for anyone visiting in October. And, of course, visitors will still continue to pour in to the state to seek out the incredible turning of the leaves.

Pumpkin Flavors Fuel Food and Beverage Industry

A visit to Massachusetts in autumn would hardly be complete without some food-and-drink indulgence. The commonwealth’s food and beverage industry boasted a “banner year” in 2014, and the industry predicts $13.8 billion in sales by the end of 2015. Massachusetts, which some consider to be the birthplace of craft beer, has at least ten different pumpkin beers available throughout the season. Visitors can add Mercury Brewing Company’s Stone Cat Pumpkin Ale, Samuel Adams’ Harvest Pumpkin Ale, Blue Hills Brewery’s Pumpkin Lager, to their list of annual autumn rituals. Those headed to Western MA can enjoy a break at Shelburne Falls Coffee Roasters in Shelburne and a taste of their Pumpkin Spice blend.

The sheer quantity and range of fall activities in MA (see more here), makes it a wonderful destination for just about anyone. What do you and your family like to do every fall? Send us recommendations in the comments section below and we’ll read them while sipping our pumpkin spice lattes!

How Legislation Is Fighting Airbnb in Massachusetts

By Mass Business Blogger September 23, 2015 September 23, 2015 Business, Hospitality, Politics

Airbnb is an online community that connects short-term renters to people with space to rent. The company began in 2008 as “Air Bed and Breakfast” and was imagined after its founders rented out airbeds in their home. Six years since its humble beginning, Airbnb has shortened its name and inflated its offerings to include small rooms for international travelers, villas for high-end business travelers, and just about everything in between. The company makes it easy to find both simple spaces and those with all the comforts of home. Hosts can post pictures and descriptions of the spaces they have available; travelers can then reserve those spaces on Airbnb’s secure website.

Airbnb Offers an “Authentic Experience” for Travelers

basic-hotel-room-doesnt-compare-to-aribnb airbnb photo

There are many benefits to using a service like Airbnb, including the opportunity to meet people from around the world without having to pay for an expensive hotel room. Airbnb hosts also tend to provide more personalized services (e.g., welcome baskets and access to cooking- and crafting supplies) that outclass those offered by most hotels. Airbnb is becoming a popular resource for small towns around the world that hope to attract tourists but have limited lodging options. Building a new hotel can cost between $300,000 and many millions of dollars, so smaller towns simply can’t afford lodging for the tourists they hope to attract. Airbnb and other short-term rental companies offer a less-expensive alternative to hotels.

Short-Term Rentals Prompt Legislative Concerns for MA

Despite the benefits of the service, some legislators are expressing concerns about Airbnb. In Massachusetts, state representatives Aaron Michlewitz and RoseLee Vincent have tried to introduce legislation that would be among the strictest in the country for short-term rentals. The measures would legalize the rental process but impose strict safety and registration requirements, as well as a 5% tax on rentals (to match the tax for hotel rooms). The taxes collected would support the tourism industry. The bill would also allow cities and towns to run inspections of short-term rentals to enforce safety codes. San Francisco, Portland, and the state of New York have begun to introduce similar regulations on short-term rentals, though many have found these rules to be ineffective.

New Hospitality Regulations Increase Massachusetts Tax Revenue

In 2011, Massachusetts collected $562 million in hotel tax revenue; individual cities in the commonwealth collected an additional $358 million. In 2014, short-term rental sites in the city of Boston alone collected over $10 million in sales . . . and the industry shows no indication of slowing. In fact, as discovered by Rich Vetstein on The Massachusetts Real Estate Law Blog, “A recent Boston Globe article [found that] Airbnb’s website currently lists nearly 3,500 properties for rent in the Boston area—a 63% increase since July 2013.” That number continues to spike. Because traditional lodging such as hotels is so closely monitored, legislators feel that the short-term rental industry should see similar regulations.

Airbnb offers a valuable service to travelers, but it is critical that the service be safe and reliable for all who use it. By implementing laws that increase the safety of short-term rental units and require Airbnb to improve the state’s economy through tax revenue, Massachusetts is taking a step to regulate an industry that, to date, has seen little regulation in the United States.

What Do You Think?

Have you used Airbnb, or are you somehow involved in the hospitality industry? Do you think these regulations are necessary?

Common Core Standards Are Questioned in Massachusetts Education

By Mass Business Blogger September 17, 2015 September 21, 2015 Business, Economy, Education, Politics

A spirited group of MA citizens, End Common Core MA, hopes to eliminate Common Core standards from the commonwealth’s education system. The MA state attorney general has officially declared the potential vote to be constitutional—a significant leap toward End Common Core MA’s goal. The group’s next (grueling) step is to gather 65,000 signatures for their cause, which will guarantee their question a spot on the November 2016 ballot.

Common Core Standards for College- and Career-Readiness in Massachusetts

The Common Core State Standards (CCSS) are a set of academic standards for kindergarten through 12th grade; they specify what students should be able to do by the time they reach each specific grade. The history of the CCSS can be traced back to 2008, when former Arizona Governor Janet Napolitano made it her goal to initiate a set of national educational standards.

Napolitano and her team had two primary objectives in creating the CCSS. First, they hoped to make American students career- and college-ready; the theory is that students who meet the CCSS will be prepared for both paths. The second objective was to use the CCSS to compare US student achievement against that of the rest of the world.

There is no explicit federal mandate to adopt CCSS, but the Department of Education has created incentives for states to adopt it by including Common Core as a criteria in applications for federal grants. Over forty states, including Massachusetts and the District of Columbia, have adopted some aspect of the CCSS since it was first offered.

Against the Common Core Standards

Opponents of the CCSS say that the standards represent a “one-size-fits-all” approach to education and focus too much on assessment and testing preparation at the expense of genuine learning. Valerie Strauss, for example, said in a letter published in the Washington Post:

When I read that math standard and others like it, I realized the claim of the creators of the Common Core—that the standards are clear, easy to understand and research-based—was simply not true.

For the Common Core Standards

Proponents of the CCSS argue that the mandates give students the education they need to succeed in the economy of the twenty-first century. They also note that although the CCSS sets the standards, states and local districts are free to develop their own methods by which to meet those standards. Robert Pondiscio wrote in the National Review that:

It’s hard to imagine a single education reform that would do more to improve the verbal proficiency of American children—especially low-income and minority kids—than for
[ . . . ] a rich, coherent elementary and middle-school curriculum to take deep and permanent roots in American schools.

People tend to swap sides, too—CCSS is obviously a complex solution to an even more complex problem. It seems difficult for many citizens to be wholeheartedly for or against the CCSS.

Business Groups Paying Close Attention

Massachusetts business groups are watching the progress of this debate closely. They recognize the need for a well-educated workforce that can fill the demands of increasingly sophisticated positions. They also recognize that a workforce lacking sufficient skills will require the assistance of government training (and financial aid), which will likely lead to higher taxes.

As a result, the Massachusetts Business Alliance for Education (MBAE) has come out in opposition to the proposed vote. MBAE supports the CCSS and claims that it would cost Massachusetts millions of dollars to repeal and replace the standards at this time. The MBAE spokesperson also noted that removing CCSS would make it highly burdensome to amend or replace standards in the future.

What do you think about Common Core in MA? Does Massachusetts need the Common Core to maintain a competitive economy?

How the Massachusetts Economy Is Weathering China’s Recession

By Mass Business Blogger September 16, 2015 September 16, 2015 Business, Economy, Education

China’s economic slowdown has affected countries around the world; many economies rely heavily on exports to China. In the United States, Massachusetts companies have begun to feel the impacts of China’s declining manufacturing industry.

China’s Manufacturing Decline Causing Losses for MA Businesses

In early September, several Massachusetts-based companies trading on the NYSE and NASDAQ showed price-per-share (PPS) losses. Dunkin’ Brands (the umbrella of Dunkin’ Donuts) was off-target by 2.89% and Eaton Vance Management was down 2.88%. Some publicly traded stocks were off by significantly higher margins, including American DG Energy, Inc., which was off 15%, and Collegium Pharmaceutical, off by 10%. Collegium has been plummeting for about a month now and American DG Energy, Inc. is at its lowest PPS since 2009.

Recession Concerns for Institutions of Higher Education

The suffering economy in China is also impacting the well-being of higher education in Massachusetts. Many universities in the commonwealth, as well as many others throughout the United States, depend on the enrollment of international students, especially from China. If the economic situation in China does not improve, Chinese students may not be able to afford the expenses of studying in the United States. Hundreds of US universities have Chinese programs; if schools are unable to fill them, there may be a resultant shift in the economic stability of these institutions.

Some Companies Benefit

Luckily, not all MA industries are facing losses from this turn in China’s economy. Less competition from China—a behemoth in each of the above industries—gives some US companies a chance to flourish. Two companies in Massachusetts actually showed recent gains. Ocata Therapeutics (a biotech- and cell therapy company) and Echo Therapeutics (a health- and lifestyle technology company) were up 6.97% and 4.1%, respectively. Technical Communications showed gains of 5.11%.

Monitoring Impact of China’s Recession on Businesses in MA

Clearly, the economic fluctuation of a country as massive as China has a number of effects on the commonwealth. Some Massachusetts companies swell while others suffer, and universities and colleges are left nervously awaiting the trickle-down effects. We will continue to monitor China’s impact on MA businesses in the coming weeks and months. If you have any personal insights on this topic, please share them below!