Much of what was required involved changing state and local governments’ policies and operations.

That report (MassBiotech 2010) was issued in 2002. We can leave the debate to others about how much or how little has been achieved since then, or whether other states took these ideas and implemented them more effectively. But the insights from that report are still worth consideration for cluster-oriented development.


One of the recommendations pointed to financing, including the possibility of expanding beyond seed and venture funding to later-stage investments. Now, some seven years later, perhaps due to recent less-than-robust venture capital returns, there is growing interest in what has been called growth equity. Growth equity investments are not made with the hopes of hit-the-jackpot returns. Rather, the hoped-for returns are in the low to mid-teens, but the presumption is that there is less risk, since the portfolios will consist of companies that already have a bit of a track record and that they are poised for successful expansion.

Working with cities, states and countries, we have counselled that one way to help seed or strengthen a cluster would be to expand the scope of current investment programmes to include growth equity, but not just for local firms. Virtually every location has created seed and venture funds, and many have directed (where the law allows) their public pension funds to make economic development oriented investments. But few places have found their way to using growth equity as a means to strengthen a cluster by recruiting young companies from elsewhere – including, perhaps, Massachusetts.

Daniel Malachuk works with business and government leaders on global direct investment strategies. He has advised many of the world’s leading companies and served in the public sector as director of White House operations.