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October 2, 2009

Innovation And Its Discontents

Livia Gershon Panel participants (left to right): Sheila Daly, Clinton Hospital; Ted Lapres, Nypro Inc.; Ann McDonald, Mount Wachusett Community College; Bob Paulhus, Clinton Savings Bank; Catherine Phillips, Phillips Precision Inc.

Speakers at this morning's State of Business breakfast sponsored by the Wachusett Chamber of Commerce pointed to the ways that employers are focusing on innovation to keep moving forward, but also to the limits of cutting-edge businesses as an economic driver.

Efforts to remain innovative include Clinton Hospital planning new services and Mount Wachusett Community College developing programs to prepare students for jobs in emerging industries. Meanwhile, the R&D group at Nypro Inc. is booming.

Ted Lapres, president and CEO of Nypro, the Clinton plastics manufacturer, said the company is facing its first year-to-year decline in sales. Since the start of the recession, it has frozen salaries and cut the pay of higher-level employees, reduced inventory to improve its cash flow and made other "dramatic cost measures."

Yet Lapres said Nypro is doing relatively well in some of its more high-tech business. He said the company's Clinton headquarters is in a stronger position than some of its locations elsewhere in the world because it houses R&D operations, as well as administrative offices that support its manufacturing for the medical devices market.

In the face of global competition, Lapres said, it's crucial to have good regulatory and quality systems, a strong customer focus and the ability to constantly use new technologies.

"You're in a constant battle to stay out of the commoditization rut," he said.

Mount Wachusett Community College in Gardner has seen a double-digit increase in enrollment this year, but it's also facing cuts in many of its funding sources, according to Executive Vice President Ann McDonald. She said one of the college's major strategies is to watch projections of future job growth so its offerings match up with the jobs that students will be able to find when they graduate.

One program now in development is an energy management program that would work with local vocational schools to help those going into the building trades learn about sustainable technologies, McDonald said.

Sheila Daly, president and CEO of Clinton Hospital, said small community hospitals have a tough time competing with the kind of cutting-edge "and profitable" procedures offered at big teaching hospitals. She said Clinton Hospital is working to offer new services, as long as they're needed by the local community and have the potential to pay for themselves within a reasonable period.

She said the hospital is also focusing on differentiating itself as a small hospital with a focus on individual patients.

"We try to play to our strengths instead of trying to compete where we can't," she said.

Keynote speaker John Regan, executive vice president of the Associated Industries of Massachusetts, spoke to both the significance and limits of innovation for the state's economy.

He said the state stands out for its high-tech industries, rating number one on the Milken Institute's technology index. But he said it's crucial for Massachusetts to also pay attention to more traditional employers, which tend to be more focused on the bottom line, by reducing costs like taxes and energy prices.

"The established part of the economy is where the bulk of the jobs happen to be," he said.

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