Making “Love to Our Entrepreneurs”: Public R&D, Venture Capital, and the Forging of Postindustrial Policy, 1972–95

As politicians and civic leaders across the Rustbelt considered their atrophying industrial bases, many looked South with envy. As one Massachusetts Congressman put it, “We don’t have a lot of . . . John Connallys in our region.” Inspired by the South’s many regionally-based industrial policies (run through universities or organizations like the Research Triangle or the Southern Growth Policies Board), leaders in the Midwest and Northeast began creating their own institutions. This paper focuses particularly on the Massachusetts Technology Development Corporation, a public venture capital fund that drew upon experts at MIT and brought the state into equity partnerships with emerging high tech businesses. More broadly, the paper illuminates the explosion of state, regional, and local industrial policy in the 1980s and early 1990s – perhaps better termed post-industrial policy for their overwhelming focus on spurring a high tech, knowledge economy. Indeed, by 1988, 45 states had initiated over 250 technology development programs. The paper concludes, however, by arguing for the importance of political scale. When the Clinton administration proposed formalizing a national system of regional post-industrial policies, it inadvertently resuscitated the industrial policy debate, long the third rail of American development politics.