Bay State Leaders See Great 'Envirotech' Potential

MASSACHUSETTS government officials and state environmental business leaders say that the state and the New England region have the potential to become a world center for the environmental technology industry.A rapidly growing number of "envirotech" firms in a region that boasts a high environmental consciousness, abundant venture capital funds for start-up companies, and world-class universities, many of which offer environmental programs, help make it a hot spot for environmental businesses, industry boosters say. "We'd like to have Massachusetts, or at least New England, perceived as the Silicon Valley of environmental companies," says Rebecca Calahan, senior consultant at Rackemann Environmental Services Inc. in Boston. New England is home to an estimated 2,000 environmental businesses, with more than 1,300 located in Massachusetts. According to industry experts, northern California is the only other region that has such a concentration of similar companies. The field of environmental technology businesses in New England is diverse and includes small and large companies involved in solid and hazardous waste, pollution control manufacturing, law firms with environmental law practices, and energy engineering and consulting. It wasn't until last year that the region, and specifically Massachusetts, became aware of the growing number of environmental businesses. In July of 1990 a local environmental and energy export trade conference drew a larger than expected crowd of environmental companies, prompting questions about the industry's magnitude. The industry is "not brand new, but the problem was that nobody recognized it as an industry until recently," says John Driscoll, president of ENU Systems, a Newton, Mass., company that manufactures instruments for monitoring hydrocarbons, pesticides, and heavy metals in air, water, soil, and food. Last November, some individuals involved in envirotech formed the Environmental Business Council, a Boston-based organization that assists established and emerging New England envirotech firms. Massachusetts government is also working to promote envirotech in the state. Last spring, the Massachusetts Office of Environmental Affairs and the Office of Economic Affairs sent one of the first surveys in the nation to the state's 1,300 environmental companies to gauge the future of the industry. Of the 452 companies that responded, the survey (released today) found that: * Twenty-five percent of the firms were less than five years old. * More than 80 percent of the firms plan to expand their operations in the state during the next three years. * The industry as a whole is growing at an annual rate of more than 15 percent. It doubled its sales from about $6.4 billion in 1985 to nearly $13 billion in 1990 and projects sales of $19 billion by 1993. "The environmental industry is one of the bright spots in the Massachusetts economy," Economic Affairs Secretary Daniel Gregory said in a written statement released today. Observers forecast the envirotech industry will be bigger than biotechnology - an industry many hailed as Massachusetts' next economic saviour after the now soft high-tech industry helped catapult the state to economic prosperity and prominence during the 1980s. According to Ms. Calahan, whose company helped engineer the envirotech survey, the state's biotech companies number about 100 and employ about 10,000 people, while envirotech firms employ about 73,000. High-tech companies employ nearly 300,000, according to the Massachusetts Office of Employment and Training. Massachusetts Gov. William Weld (R) has stated his administration is excited about the industry's recent growth. He hopes to find new markets for the state's environmental firms when he heads to Asia on a trade mission this week. The industry exports only about 4 percent of its business overseas and is projected to increase that to just 8 percent over the next three years. But many in the industry say the export business has significant potential because of the vast environmental problems in Eastern Europe and Asia. Rick Defieux, a general partner of the Edison Venture Fund in Lawrenceville, N.J., invests in environmental companies around the United States. He says although many regions could make the case for being world environmental centers, Massachusetts and New England "has a good shot at it because of its excellent universities and research base." At the same time, he says the industry's growth rates are similar to nationwide figures. State government officials and industry leaders say the growth of companies despite the recession shows that envirotech is a viable and promising industry.