Massachusetts Secretary of Economic Development Yvonne Hao joined us for MFN’s official launch event on October 4, and generously offered us her perspectives on the strengths of our state, what Massachusetts needs to continue to prosper, and what it’s been like as an experienced business professional to settle into her first government job.
Our conversation with Secretary Hao was facilitated by Megan Marszalek, the Director of Entrepreneur Ecosystems at the Massachusetts Technology Collaborative’s Innovation Institute. Here are some excerpts.
Megan Marszalek: Could you shed light on your journey since joining the Healy administration and discuss your key focus areas as the secretary of economic development?
Yvonne Hao: This is my first experience in state government. Just a year ago, I could never have imagined this role for myself. My entire career has revolved around business. I’ve worked in large public companies, startups like PillPack, and have held positions as an investor, board member, CFO, CEO, and more.
Last year, around this time, I received an unexpected phone call. It was Governor Maura Healey. We met for lunch the following day, and by New Year’s Day, she invited me to join her administration. I was sworn in on January 17th, and the subsequent months have been nothing short of a whirlwind.
Every day, I’m deeply honored to serve our state. Navigating the state government has been educational. There are parallels with the private sector, but also distinct differences.
One of our primary tasks this year is the formal economic development plan, a strategy we’re required to update every four years. Our goal is to finalize and publish this plan by the end of the calendar year, with endorsements from the Governor, Lieutenant Governor, and the legislature. Beyond just creating a comprehensive report, our aspiration is to animate this plan through an economic development bill that ensures we have the right resources and support to make our vision a reality.
Megan Marszalek: Your experience is rooted in the private sector. How does this background influence your current role, especially in relation to entrepreneurship?
Yvonne Hao: I meet with lots of companies. Whether it’s a small local restaurant or a large public company, I emphasize two points.
Since I’ve been running businesses until recently, I understand the challenges, from managing cash flow to ensuring payroll. So my initial message is always one of gratitude. In today’s mobile world, businesses and individuals have choices about where they establish themselves. We deeply appreciate those who choose Massachusetts, and the governor echoes this sentiment frequently.
Secondly, I ask businesses how the state can assist them. I want to know the challenges these businesses face, and how we, as a state, can help. Can we enable them to resolve issues, to scale up, or to simply be the best version of their company here?
I initially thought that service in the Massachusetts government would come with vast powers and unlimited resources. While that’s not the case, the state does possess specific capabilities. I highlight five key areas where we excel:
- Convening Power: We can assemble industry leaders for problem-solving, like we did with the Silicon Valley Bank crisis or for the federal ‘chips and science’ initiative from the Biden Administration.
- Resources: The state offers various grants, loans, tax incentives, and workforce programs. It’s essential to use these resources efficiently for the maximum return on investment.
- Regulatory Changes: As businesses expand, they sometimes need regulatory adjustments. We have the power to effect those changes.
- Purchasing Power: As a significant buyer, the state can leverage its purchasing capability to influence the market.
- Messaging: We can utilize our governor’s communicative strengths to share essential narratives, both within our state and beyond.
A critical area of improvement is simplifying the interface between businesses and the state’s resources. Our goal now is to streamline access, making it easier for businesses to understand and utilize state resources at their disposal.
Megan Marszalek: The competitive spirit you and the administration display is commendable. How do you plan to foster a culture of entrepreneurship across the state, particularly in rural areas and among diverse populations?
Yvonne Hao: When crafting our economic development plan, our primary mission is clear: we want our state to be the best possible environment for individuals to begin and prosper in their careers and to raise families. We want it to be a place where every individual, regardless of background, thrives. Furthermore, our goal is to make our state the premier destination for companies, from inception to growth and success.
To achieve this, our plan encompasses the entirety of the state. While the success of urban centers like Boston and Cambridge is crucial for our economic well-being, we recognize that success cannot be limited to just these hubs. Every region in our state holds immense potential and talent pools that deserve nurturing and attention. A successful state requires all regions to flourish.
As we brainstorm and integrate various strategies, we’re constantly evaluating their applicability to different regions. We seek to tailor each strategy to fit the unique needs and potentials of each area. Engaging with local communities, we aim to identify which initiatives resonate most with each region. Not every idea might be universally applicable, but our ultimate goal is to work in close collaboration with local communities, leveraging their insights to ensure our plan’s successful implementation.
Megan Marszalek: Massachusetts boasts an impressive ecosystem of diverse industries and talents. Given this rich environment, what advice can you offer on harnessing this talent and furthering collaboration across different regions and sectors?
Yvonne Hao: I always say that we’re kind of this magical size in Massachusetts. Recently, I had dinner with my counterpart in Rhode Island. And they have lots of great things too. But they’re really, really small. We have so many resources, tons of different startups and research and types of companies and industries. We’re small enough that everybody has one or two degrees of separation. We’re big enough that we matter, but we’re not like California, or Texas or New York, states that are so big that it can be complicated to work together.
As we work on our economic development plan, we’re thinking about the plan in terms of all regions, all types of humans and really thinking about the Healy-Driscoll priorities, which are three things, affordability, equity and competitiveness.
If we don’t have the fundamentals, it’s going to be very hard to succeed. We really need to get more housing, and more affordable housing. We’ve got work to do on transportation. The other key fundamental is infrastructure. We want to continue to invest the state resources in things like dredging and sidewalks and lighting and making sure that dilapidated buildings, mill buildings can all get converted and revitalized. So it’s not sexy stuff, but it really matters.
We’re also thinking about talent. Our secret sauce is we have amazing talent, other states are so envious of us, and we have homegrown talent because of our K through 12 educational system. We have the world’s best brains being recruited by all of our colleges. So the question for us is, how do we keep them here?
The pandemic changed patterns of the state’s population, including remote work, housing, transportation, and more. The state’s rate of out-migration has doubled. And if you look at who’s leaving, the largest chunk of people are ages 24 to 44, and those are the people we need to keep. We need to do a lot more to retain that talent.
Massachusetts is a very unique place right now in the world. We have a combination of two really important things. One is we can be a super strong economy that’s innovation driven and mission driven, that is solving the world’s most important problems around climate, around curing disease, around advanced manufacturing, around taking care of each other. At the same time, Massachusetts is a human and humane place to live, where we care about each other. We believe in science, we believe in letting you love who you want to love. And we have great communities. And by the way, we also have mountains, we have ocean, culture, and great food. We have great sports teams. I think that’s a really powerful narrative.
When we think about the economy, I want to be very sector specific, because there are many different issues.We want to lengthen our lead in life sciences, and in health care, and in robotics, and advanced manufacturing.
I think AI is going to be pervasive, and Massachusetts is poised to win in AI applications in sectors that we already lead in like education, health care, life sciences,etc.
There are some other sectors where we have a chance to lead. One is climate tech. It is the existential crisis of our time, and we have all the ingredients of innovation. We can partner with all of our startups and our big companies and our universities to actually be the world leader in innovation and economic growth around climate tech.
Another area is culture, tourism, and the arts. I really believe in the MASS MoCA model, that culture and arts and tourism can be a big economic growth driver. We’re coming on the 250th anniversary of the founding of our country, which started here in our state. So if we can really get our act together, we can tell an incredible story around culture and art and history and tourism around the 250th.
