The lessons of Rte. 128

BYLINE: Steve Bailey

Downtown

Jonathan Kraft is one smart guy. As chief executive of the Kraft Group, an impressive family enterprise that includes the New England Patriots, Kraft knows a lot about the paper business, the football business, and a lot more. He could, however, use a refresher course on local history. He is surely not alone.

Last week, with the entire Massachusetts business and political establishment applauding, Deval Patrick unveiled his plan to invest $1 billion to help the state maintain its preeminent status in the life sciences. Our governor knows symbolism, and in including the Kraft family in his announcement he was highlighting a potent symbol of home-grown excellence. Kraft's message: We lost our competitive edge in computer technology to California because "the public sector in California embraced high tech and the public sector in Massachusetts disregarded it."

"We're not going to let these other places pull our researchers out of here," Kraft added. "We're going to get more aggressive."

The problem with this telling of the story is that it is almost entirely a fiction. Silicon Valley did roar past Route 128 in the 1980s, and has never looked back. But it had virtually nothing to do with what government there or here did or did not do. It is worth considering as government wades into a biotech arms race.

AnnaLee Saxenian, a professor at the University of California, Berkeley, wrote the book on why Silicon Valley trumped Route 128. Not that there isn't interesting stuff happening on America's one-time Technology Highway. There certainly is in software, the Internet, robotics, to name three areas. But the big companies are there - Google, Cisco, Apple, Oracle. Our signature player, EMC, makes for a solid second-tier company by West Coast standards.

In her book, "Regional Advantage," and in an interview, Saxenian argues that Massachusetts lost out because its tech industry was organized around a handful of large, vertically integrated, insular minicomputer makers (R.I.P. Digital, Wang, Data General, and Prime) whose structure proved too inflexible and slow to keep up with California's more decentralized and collaborative approach. For instance, Silicon Valley's job-hopping culture created an open exchange of information and learning within the region, a process that was impossible in the secretive and self-contained hierarchies of Route 128.

And the role of government? "State government had almost nothing to do with Silicon Valley's greater flexibility and innovation capacity, or with Route 128's failure to adapt to new markets and technologies," says Saxenian, who is no West Coast homer, having studied at both MIT and Harvard. "The difference was rooted in the structure of firms and industry and the openness of the boundaries of firms and other local institutions."

We complain a lot here about the high taxes, the high cost of housing, our transportation problems. But it is even worse there. California ranks 12th in state and local tax burden compared to Massachusetts, which is 28th, according to the Tax Foundation. The median price for a home in the Boston area is $387,000 compared to $748,000 in the San Francisco area, reports the National Association of Realtors. And you think Boston traffic is bad.

Saxenian thinks there are lessons for government in what happened in the `80s. Those lessons have nothing to do with playing venture capitalist of last resort but with creating an environment for learning between companies and between industry and universities. "Government can't mandate openness," she says, "but it could create incentives for collaboration."

Yesterday Kraft told me it would be a mistake to take our biotech lead for granted. And he is right, of course. But ultimately government played almost no role in Route 128's decline. It is unclear how much help it can be in biotech's future.

Steve Bailey is a Globe columnist. He can be reached at bailey@globe.com