Fueling the Region’s Economy

An economic impact report on the Technology Park at Springfield Technical Community College reveals that the facility has generated more than 2,000 jobs, directly and indirectly. The report’s author says, however, that the real return on the significant investments made in the park will come perhaps 10 or 20 years from now, when its various job-creation initiatives bear fruit across the Valley.

John Mullin calls it the "Silicon Valley effect."

That’s a term that some of those studying the nation’s technology sector use to describe the free exchange of ideas, or "cross-pollination," as Mullin described it, that goes on when technology professionals work in the same office complex or even the same community. That exchange helps generate new breakthroughs and, therefore, growth within that technology cluster — or so the theory goes, he explained.

This phenomenon, as hard to quantify as it might be, is just one of the tangible and intangible economic benefits that have resulted from the creation of the Technology Park at Springfield Technical Community College, said Mullin, director of the Center for Economic Development at UMass and one of the authors of a new report on the park’s economic impact on the region.

While the Silicon Valley effect may be hard to measure, most other benefits from the creation of the park are not, he said, noting that the facility has created 860 jobs in direct employment (a number that was higher when the tech sector was healthier) and another 1,223 jobs generated indirectly. Meanwhile, the 18 companies in the park have a total payroll of $22.5 million and annual purchases of $17 million.

The economic impact study was commissioned by Appleton Corp., the company that manages the park, to gauge the contributions the facility has made to the local economy, said Mullin. When put on the drawing board, the park was envisioned as an economic engine that would put valuable industrial real estate back on the tax rolls and facilitate growth of the technology sector. The report has concluded that those goals have been met or exceeded.

"I think that this is a great success story, not because the college quickly filled the park or because they immediately had a return on investment," he explained, "but because they put a major industrial/office facility to a highly imaginative and productive use, and made the thing work.

"The real return on this is not today or in five years; it’s going to be in 10 years or 20," he continued, referring to the park’s many programs aimed at job creation, including the Springfield Enterprise Center.

STCC President Andrew Scibelli agreed, but he said there may be more good news coming out of the park in the next few months. There is one vacant building remaining in the complex, and it may soon become the focus of efforts to grow the biomanufacturing sector in this region.

He said that intiative, still in its formative stage, would, like other components of the tech park, create synergies with programs at the college. Such relationships are perhaps the most important aspect of the facility, he said.

"We didn’t want to be just a landlord," Scibelli said at a press conference to announce the report’s findings. "We’ve had hundreds of students who have affiliated with companies across the street."

BusinessWest looks this month at the grades the tech park earned on its first report card, and what might happen next at the award-winning facility.

Crunching the Numbers

Mullin said that maybe the best thing about the attractive statistics compiled on the tech park (see box, below) is that they were tallied during what he called the "rock bottom" of the current economic slowdown.

Indeed, the direct employment figure of 860 is well below the high-water mark at the tech park of more than 1,000 jobs, recorded when the tech sector was much healthier, he said. Meanwhile, the number of indirect jobs created by the park — a figure derived using a standard multiplier that assumes that each job in the park creates an additional 1.4 jobs in the community — has also been higher.

Mullin, who has studied a number of old mill complexes in the Northeast that have been converted into tech centers, said most companies in that sector have seen employment dip 20% to 25% over the past few years, a number that is consistent with what he found at the STCC facility. Many of those companies are now poised to grow.

Thus, the already impressive numbers could look better in the years ahead, he said, adding that, while the quantity of jobs is an important statistic, the quality is also of note.

He said it is likely that the Digital complex, which had been largely vacant since the company moved out in June 1993, would have been converted to warehouse use if the technology park had not been created with the help of state and federal funding. And warehouse positions would pay considerably less than the manufacturing and management jobs that currently exist in the facility, he noted.

While the technology park has not replaced all the jobs that existed in that location when Digital was at its height, Mullin explained, the more reasonable yardstick when gauging economic impact is what the next probable use of the complex would have been. In that respect, the tech park has become an asset for that area of Springfield and the region as a whole.

Its benefits take a number of forms, said Mullin, adding that while it is reasonable to assume that some of the tenants in the park would have located in other office buildings and manufacturing complexes around the region if the facility had not been created, the combination of attractive lease rates (well below area Class A rates), the resources of the college across the street, and synergies created by having tech companies clustered together made Springfield more attractive to some companies.

"I don’t think there’s any doubt that the technology park made the Springfield market more attractive to some people," he said. "I think this project definitely helped to grow the tech cluster in this area."

Down to a Science

Looking to the future, the college is now training its sights on another emerging sector of the economy — biotechnology and, more specifically, what is now known as biomanufacturing.

As Scibelli explained, companies that are creating new pharmaceuticals and medical devices need trained employees to produce those products. The remaining undeveloped building in the tech park, known as 103B, could be targeted for existing and startup biotechnology companies that would benefit from the college’s associate’s degree program in biotechnology and the students that graduate from it.

Such a program, Scibelli said, would complement the Baystate Medical Center-University of Massachusetts-Amherst Biomedical Research Institute by providing both the physical space and the workforce needed for companies that will be spun off by that initiative.

Meanwhile, another component of the tech park, the Springfield Enterprise Center (SEC), is creating new jobs by fostering entrepreneurship. The center includes a small business incubator, which has already graduated several tenants that have relocated to other sites in the Valley. It also has a student incubator and houses the college’s Entrepreneurial Institute, which includes programs for area elementary and secondary school students, as well as a college degree program.

The SEC model has become so successful that the college is now attempting to sell it — in both a figurative and literal sense — to community colleges across the country.

To that end, the school has formed the National Assoc. for Community College Entrepreneurship (NACCE) and has scheduled a conference for this October to introduce other colleges to the STCC model and educate them on how to emulate it, said Scibelli.

The various educational and job-creation programs at the tech park have earned it several honors. These include the U.S. Department of Commerce’s 2001 Excellence in Urban or Suburban Economic Development Award, as well as the International Economic Development Council’s 2002 Excellence in Economic Development Award.

More important than the awards, said Scibelli, are the jobs the park has created and the promise of more employment opportunities down the road. "When we first conceived the Technology Park, we did so with the firm belief that it would become a source of jobs and act as fuel for the region’s economic engine," Scibelli said. "The economic impact report quantifies what we already knew — that this tech park has become one of the cornerstones of regional economic development."

Technically Speaking

Mullin told BusinessWest that he was not immediately sold on the concept of the Silicon Valley effect. "Let’s just say I needed some convincing," he said, adding that he got it when he listened to a report on how the phenomenon has impacted the growth of the Route 128 corridor in the eastern part of state.

He didn’t need any convincing on the impact of the tech park, however. He said the numbers — and the programs behind those statistics — speak for themselves.

And the best news is that they will only get better.