What is the Massachusetts Economy? • Well here are some things that it is NOT. • Natural resources • Agriculture • Heavy Industry • Cheap
What the Massachusetts economy is; • A Thinking Economy -- Educated • Persistent Innovation • Traditional • But we are not good at keeping the companies we develop. Only 5 of the NASDAQ 100 are in MA (Biogen Idec, Genzyme (Acquired by Sanofi in 2011), Hologic, Staples, & Vertex Pharma). We have 16 in the Fortune 500
There have been hundreds of inventions come from here, some major, some not. • The telephone, • the guidance system for Apollo at Draper Labs at MIT • The Internet was born here (BBN started a Government network called ARPANET), • The first e-mail.
The sewing machine, • Manufacturing processes, • Medicines, Anesthesia, • Education, • Cranberry juice, • The universal light bulb socket, • the first Spreadsheet (Visicalc) which was later perfected by Lotus Development in Cambridge. • The Ponzi Scheme,
From Worcester alone • First Beatles song played in the USA on WORC-AM in 1961 • America’s first Nobel Prize to Albert Michelson of Clark U. for measuring the speed of light • Monkey wrench invented • Typewriter & Ball point Pen • Man-drawn Lorry = Rickshaw • Shredded Wheat • Boston-Worc. RR was the first to charge fees in 1833
We are a major exporter. The USA does over 50% of its exports with the 7 countries it has Free Trade agreements with. $28.7 B in 2010 10% of that to China. Most US Exports are manufactured goods and MA is not a Manufacturing state.
Massachusetts has had a very well known economy in the past. But in recent years our sports teams have gotten us the most attention. • We have a huge education sector. • We have big names in Manufacturing, Finance, Health Care and more.
We are a state of innovation, a state of small industry, not one dominant industry even though some are the biggest in their industry. • We are among the biggest per capita consumers of Ice Cream in the world. • Think of some of the companies that call MA home…
Zildjian Cymbals • EMC – The largest computer storage company in the world. • Raytheon one of the largest Defense contractors • Erving Industries—turns waste paper to recycled products • Boston Scientific
St Pierre – the leading maker of horseshoes in the world. • Genzyme (New Name) • Biogen-Idec • Staples – Largest Office supplier in USA • WB Mason the #4 Office supplier. • Smith & Wesson • LoJack • Friendly Ice Cream in Wilbraham
Sam Adams Beer • Iron Mountain World’s largest Records Storage Co. • Clean Harbors • Butterick Patterns • State Street Corp. – The largest securities trustee in the world with > $1.8 Trillion • Draper Labs
Polar Beverages – in Worcester that also makes Nantucket Nectars • Quabaug Corp. that makes Vibram soles for shoes • A growing Robotic industry • We are leaders in Medical Instruments • A large and growing Biotech and Pharmaceutical industry. • TJX
We used to be home The Mini Computer Industry, of Gillette, John Hancock Ins., First National Bank of Boston and many more, but so many have been bought, we are not HQ state anymore.
Much of the early history information was gained from James McWilliams book, “Building the Bay Colony”. Mr. McWilliams teaches at Texas Tech of all places.
There were explorers who saw and touched Massachusetts as far back as the mid 1500’s. But they passed by. They wanted warmer climates to hunt in.
But by the early 1600’s more and more Europeans were disgruntled and wanted out and were making the dangerous decision to leave the mother country.
It was a 3 month Voyage across the North Atlantic. Dangerous. Uncomfortable. And who knew exactly what you would find.
They were shopkeepers, tradesmen, farmers and religious leaders and they were unhappy • And their elders wanted to get rid of them.
Do you know why the Pilgrims stopped here? They were heading for Virginia, you know. They ran out of ?????
That is what they drank on ships then. Water could not be kept pure, wine was too expensive, but beer was just the thing.
When they got here, they found the farming to be very difficult because of the poor soil. In many ways we have our economy the way it is because of bad dirt.
Explorers who had come to America before the Pilgrims had found the waters rich with fish, big stands of timber, and lots of fur animals.
To survive in the early years, the settlers were forced to grow what they could, and also to work other crafts, and work together to keep the community alive.
They did not have the luxury of having a good growing conditions and a high profit staple crop like they had down south with Tobacco in MD, VA & NC, Rice in SC and cotton in the deep South.
These settlers were smart enough to work together because they knew if they did not they would die.
The early settlers came here to start a new life. They probably did not recognize the hardships that they would encounter when they got here. • The voyages were funded by investors who had paid for the boats and provisions that were needed to come to the new world.
The investors recognized that they were leaving England to find religious freedom but they wanted the colony to provide a return on the investment.
After all, that is what a colony was supposed to do, increase the riches of the mother country. • The settlers knew they had to produce a return too or risk not getting more provisions.
The Pilgrims of Plymouth and Puritans of Boston were soon joined by other settlers in coastal areas who were sent to do business. They were fishermen, merchants, trappers, and woodsmen.
Towns such as Salem, Gloucester, and Portsmouth, NH, which was part of Massachusetts in the early days and others all up and down the coast were settled for this purpose.
In the early years, the settlers barely produced enough food to survive, and still needed a lot from Europe, so they were constantly waiting for the next vessel to arrive with more food and tools etc.
After being there a while the settlers sent for more men to fish, more men to cut trees and cut them into boards to export and barrels in which they could send back more fish.
However, frequently in the 1620’s, 30’s and 40’s the returning ships came back empty or next to empty. The colonists, and their own expanding population often required all of what could be produced. The investors did about the only thing they could do from 4000 miles away…complain.
The newcomers brought little except the cash they had brought from England and now had to buy the goods and timber they needed from established settlers. So a nice little arrangement started now. The folks who were here got cash and could buy things from England. They did not export goods or raw materials but cash.
This allowed them to buy goods from others and from England. They now became traders and merchants. The English merchants liked this arrangement too because they got cash back for their goods.
What they did do was build an infrastructure that would help them into the future. They raised livestock, built homes, made roads and transportation, and basically made a stable local economy from a wilderness.
But what the early colonists did have was raw materials that England needed. They had lots of fish, but needed salt to preserve it and boats to bring it back to England.
The investors in England could sell the fish to people in England or other countries. There was never an over-abundance of food in Europe.
The settlers had trees. England’s population was expanding and they needed wood to build houses, shops and barns. • The colonists had what England wanted.
The third valuable asset of the early economy was fur. Trappers went west and in addition to their own pelts bought more from Indian trappers. They even made agreements with the natives to buy more pelts.
But still, there were few if any exports of goods. • During the 1630’s and 40’s the demand for food and timber must have been huge in the colony. • They had to build homes, barns, fences to keep livestock in, boats, etc. all from wood.
As abundant as the fish crop was, it takes time to fish and the demand for that was huge too. Then the fish had to be salted to be preserved.
The men who went to sea did not go far rarely leaving sight of shore. They never went out more than a day at a time. They seldom went two days in a row. • Why?....
They had to return promptly to tend to their farms. Most everyone had two jobs, one of which was farming. • They were lucky to be able to find abundant schools of fish close to shore. The boats were not made well enough for rougher deep water.
Consuming fish became part of the diet along with the produce of the gardens everyone had. According to one observer, fish left the adults, “sweetly satisfied”, while rendering the children “cheerful, fat and lusty”. • Fish was needed for food but also for fertilizing fields.
In 1640’s started to look to the West Indies as a trade partner. The voyage was a lot easier to go down the coast than across the North Atlantic.
Among the cargos were timber, and fish, but also wine, sugar and salt that had been obtained in trade. Slaves were a regular cargo. This was because there were labor shortages in Massachusetts.