ViewPoint
BOSTON BUSINESS JOURNAL | October 4-10, 2013
———| Editorial |———
The cradle of
ObamaCare
CONNECT WITH US |
————————————| Business Pulse |————————————
THE QUESTION: Who do you like for Boston’s new mayor?
21%
11%
Undecided
at this point.
W
48%
John Connolly.
His education
message resonates.
ial
erc
mm
for
co
VOTES CAST: 380
Marty Walsh. He has
the unions behind him.
-N
ot
20%
als
NEXT WEEK’S QUESTION: What’s your reaction to the U.S. government shutdown?
Go to: boston.bizjournals.com
urn
————————————| Business View |————————————
ine
M
ss
Jo
Opening the floodgates for the water industry
Am
eri
c
an
C
ity
Bu
s
assachusetts has historically
fully embraced different sectors of the economy to rapidly expand employment and
business opportunities in the
state and beyond. One only needs to look
to the health care and life science industry in the state to recognize the impact
state-funded initiatives have on burgeoning industries. The next wave of innovation and entrepreneurship, at least according to
many key policymakers
in the state, will be found
in the water industry.
It was only a little more than one year
ago that the Massachusetts Executive
Office of Energy and Environmental Affairs began its efforts to centralize the
discussion on water technology and engineering by organizing the Symposium on
Water Innovation in Massachusetts, an
event that is likely to become an annual
occurrence. The goal of the symposium
was to bring business, academia and government to the table to discuss how Massachusetts can position itself as an international leader in the ever-expanding
water industry. As a result of the event
in 2012, organizers identified hundreds
of companies and organizations in the
water industry that were either based in
Massachusetts or somehow contributed
to the industry in the state.
Once these entities were identified, it
became evident that a commonality existed and a need arose to develop a water
cluster in Massachusetts.
©
ith much consternation,
confusion, political agitation and excitement,
the Affordable Care Act
has arrived at an online
health exchange near you. ObamaCare,
as it’s commonly called, derives from
many of the core principles of the 2006
Massachusetts health care reform effort, famously championed by then Gov.
Mitt Romney. Some of its fundamental
in-state flaws will soon be writ large
across the nation. A program that a relatively wealthy state like Massachusetts
has been able to absorb, at considerable
cost, already promises to be a whopping
drain on the national economy.
Our complaint with universal health
care, as manifested by the Massachusetts plan and now trumped by ObamaCare, is not that it isn’t desirable for
every man, woman and child to have
health insurance. And especially, to
be able to buy health insurance affordably with preexisting health conditions.
However, we’ve looked in vain for an
honest assessment of its costs, and the
inevitable impact on the average middle-class family. There are trade-offs
here, and let’s be candid about them.
The Massachusetts example is instructive. When it was enacted here
over seven years ago, it was supposed to
pay for itself and also put a damper on
ever-rising health care costs. It did neither. The state’s additional spending on
its reform is pegged at about 1.4 percent
of the budget, or upwards of $550 million.
But the same political mythology is
at work with ObamaCare. Insure everyone, provide better primary care, (and
cut Medicare abuse) and you’ll save big
money at the tail end of the health care
system, when costs are the highest.
Massachusetts claims success with its
program all the same, for now approximately 98 percent of its residents are insured. Its insurance exchanges have run
fairly well. There wasn’t a revolt against
the individual mandate. Nor has there
been political backlash against the incremental cost to taxpayers.
But that is Massachusetts, which began its reform with 94 percent of its residents with health insurance.
The task on a national level will be
massive, and cost far more than most
have anticipated. The initial tax targets,
medical device companies (a 2.4 percent
tax), “the rich” and fees on health insurers to the tune of $60 billion next year,
will not be enough.
Many of those taxes and fees will filter
down to the average Joe, for an entitlement this large can’t be borne by corporations and the rich alone.
Casting a write-in
vote for Menino.
us
e
34
Fast forward to the present day when
legislative leaders are poised to take the
next step in encouraging the development of businesses and others involved
in the water industry. It is expected that
the Legislature will consider legislation
this fall designed to pump funding into
municipal and state projects, including
wastewater and infrastructure needs.
This initiative will likely be implemented
in conjunction with the
Massachusetts Clean
Energy Center, a quasigovernmental agency
that has prioritized the development of
a Massachusetts-based water technology
cluster.
Other states — like Colorado, North
Carolina and Ohio — and countries
around the world have taken steps to
recognize the importance of the water
industry by developing their own water
clusters of environmental and economic
activity. Although it is somewhat unclear
how Massachusetts will measure its success in developing a water cluster, there
is no doubt that the state is ready to make
a significant investment in water-related
companies and projects. It will be crucial
for water industry leaders to take advantage of the opportunities that will be presented through the bond legislation and,
in particular, the funding that will be authorized by this initiative.
Steven A. Baddour &
Daniel J. Connelly
———| Feedback |———
Raising the bar for
entrepreneurs
C
ongratulations to the team that
successfully opened Boston’s
first Ice Bar, Frost, last month.
The project is unique for its
brand equity and planning approaches.
Frost is a de facto expansion of the
Boston Duck Tours franchise, where
cross-selling opportunities from its existing tourism brand, along with its new
entertainment venue, will collectively
expand the overall customer base.
John Donne wrote
in 1624 that “no man
is an island.” Teamwork is quintessential
for startups, but often
Lecturer at
Boston College more to capitalize on
operational scale economies than for business planning. By
the time formal preparatory processes
are concluded, the idea risks being obsolete, or other “me-too” type products (or
direct substitutes), might have already
garnered precious market share. Beleaguered firms then must use 20/20 hindsight to catch up.
In a perfect world, nascent ventures
should begin testing promising technologies or new ideas well before they need
to be launched. Frost’s team first did
this in 2009 and successfully learned
like others have, that returns from analytical rigor and prospective investor
feedback are often on par with actual
financial returns.
Frost’s team also bucked the current
trend by putting most of its planning
work in writing. I still believe a written
document forces more precise planning,
not necessarily possible with executive
summaries or creatively formatted
PPTs. The additional degree of detail
makes pivoting easier when, not if, market conditions change.
For each of the past 13 years, I’ve used
old-fashioned networking, and recently,
original content on print, TV and radio,
in order to develop a universe of diverse
entrepreneurs needing planning assistance. After being vetted and selected,
20 entrepreneurs a year work with graduate business and law students, faculty,
and industry mentors at Boston College
in a competitive format. Frost is just one
of several of the program’s successful
alums.
No business can be created in a vacuum and, for every one successful launch,
I know most ideas never come to fruition.
But it’s exciting to see a team use an academic institution not only to test a concept or a technology, and then to launch
an actual business using its results.
Greg
Stoller
Steven A. Baddour is a partner and Daniel
J. Connelly is legislative counsel at McDermott
Greg Stoller is a lecturer and helps build
Will & Emery.
business programs at Boston College.
entrepreneurship and international MBA