Steering Mill Towns Closer
To Tech-Boom Riches

The technology boom has been kind to the Boston area, but downright hostile to the historic mill towns of Massachusetts, which have been rendered almost irrelevant by the knowledge economy.

But now those once-thriving manufacturing centers are being touted as an answer to the dark side of Boston's success: congested highways and workers who can no longer afford to live there.

In a report to be released today, the Brookings Institution and Boston think tank MassINC suggest that the old mill towns could provide the Boston area's high-tech employers with needed workers, affordable housing and a model for growth that doesn't involve suburban sprawl. More broadly, their findings make a case for directing more of the nation's high-tech investments beyond hot spots like Silicon Valley to lower-cost locales, including older manufacturing centers like Detroit and Cleveland, which offer the potential for more-sustainable growth.

Consider Haverhill, Mass., an industrial town on the Merrimack River 35 miles north of Boston. The median home price is $266,000, 38% less than in Greater Boston. Rezoning in Haverhill has allowed for the redevelopment of shuttered factories into residential loft space, as well as the city's first big-box retail development, which features a Target store. The town has good rail and road connections to Greater Boston and is positioning itself to attract biotechnology and pharmaceutical companies. "We're hoping we'll be next in line," says Mayor James Fiorentini.

That the mill towns haven't shared in the tech boom defies the notion that in the knowledge economy location doesn't matter. In fact, much as the film industry is centered around Hollywood, technology companies tend to spring up near research universities and suppliers -- clustering in places like Silicon Valley, San Diego and Boston.

"It's all about how to bring the best people in the world together to turn ideas into business," says Joseph Cortright, an economist at Impresa Consulting, in Portland, Ore.

Massachusetts shows how unevenly distributed a high-tech boom can be. According to the Brookings and MassINC report, the Boston area's share of the state's technology companies has grown to 60% from 53% in 1994. The area added 467,000 jobs between 1970 and 2005. Today, it is home to 40% of the state's population and 50% of its private-sector jobs and generates 60% of the state's payroll.

During the same period, 11 Massachusetts mill towns -- Brockton, Fall River, Fitchburg, Haverhill, Holyoke, Lawrence, Lowell, New Bedford, Pittsfield, Springfield and Worcester -- lost more than 11,000 jobs. Today they account for 15% of the state's population, 13% of its private jobs and less than 10% of its public payroll.

The wealth gap is correspondingly large. The mill towns, with sizable groups of immigrants and minorities, account for 30% of the state's residents living in poverty, according to the report.

Between 1994 and 2005, real median home prices in Boston more than doubled to $429,000, complicating the area's effort to recruit workers. Residential development in Boston consumed nearly 90,000 acres of undeveloped land between 1985 and 1998, contributing to road congestion.

Taken together, the report says, these trends represent "a serious threat to the overall economic competitiveness of Massachusetts."

Brookings and MassINC acknowledge transforming the mill towns into realistic alternatives for high-tech employers will be a challenge. Many of the towns have spotty track records for delivery of basic services, and are plagued by troubled school systems and fiscal uncertainty. Several years ago, Massachusetts bailed out Springfield, 90 miles west of Boston, with a $52 million loan and imposed a finance control board to oversee city operations.

Mr. Cortright, the economist, wonders whether such towns will ever share in the spoils of the state's technology boom, given the cluster phenomenon. None are closer than a 30-minute drive from Boston. "Once you're beyond 20 minutes, it doesn't matter if you're a mill town or India," he says.

But the report suggests the state needs to try to make the mill towns more economically attractive. Among its recommendations: linking state aid to local governments' cost-control efforts, establishing data systems to track local spending and making city budgets more transparent.

The report also urges private-public partnerships to expand investment in education and offer more school choices, as well as closer ties between English-language classes and work-force development efforts. In addition, it proposes a push to provide the southeastern Massachusetts cities of Fall River and New Bedford with commuter rail connections to Boston, develop the mill towns' broadband and wireless infrastructure and strengthen their collaboration with local colleges.

While admitting there is "no silver bullet," Mark Muro, director of policy for the Brookings' Metropolitan Policy Program, says the towns offer "potential solutions to some of the toughest problems facing Massachusetts."

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