In November 2024, Massachusetts Governor Maura Healey signed the Massachusetts Leads Act into law, committing over $1 billion in state investment to accelerate and scale economic activity in key sectors across the state.
The bill raises the question: where exactly does Massachusetts lead, and more importantly, where should it lead to tackle the many challenges facing society? And where will the impact of the new law be felt, both in terms of spurring breakthrough technologies and building regional economies?
To answer these questions, Massachusetts policymakers, scientists, corporate leaders, entrepreneurs and investors will converge on June 10th for a series of panel discussions at Make it in MA 2025, an annual gathering presented by The Engine, The Alliance for Climate Transition, MassBio, and MassINC.
The event is a must-attend for founders looking to build in the Bay State, their corporate partners, and policymakers shaping high-impact sectors like climate tech, biotech, and advanced systems. To set the stage for this event, this post will take a closer look at the new Mass Leads Act and highlight examples of the state’s leadership in catalyzing innovative solutions to the world’s most pressing challenges.
To be a part of the conversations at Make it in MA 2025, request to join here.
The Massachusetts Leads Act: A Catalyst for Tough Tech Transformation
Massachusetts has long been a hub for emerging technologies, a place where science and entrepreneurship converge to address urgent global challenges. With the Mass Leads Act, the state reaffirms its commitment to fostering a robust ecosystem for Tough Tech entrepreneurship, bolstering cutting-edge industries such as climate tech, life sciences, and artificial intelligence.
The Act sets aside over $1 billion to stimulate job creation, support business growth in critical industries, and expand workforce development programs in the state. Key provisions include:
$200 million for the Clean Energy Investments Fund to stimulate research and development, innovation, manufacturing, commercialization, and deployment of climate tech technologies across Massachusetts.
$500 million for the Life Sciences Capital Fund to execute on the state’s vision for pursuing health equity ventures, research and development, and capital eligible initiatives to support collaboration across ecosystems.
$100 million for the Applied AI Hub for grants to facilitate the application of artificial intelligence (AI) across the state’s ecosystem.
$99 million for Advanced Manufacturing for flexible grants to support advanced manufacturing initiatives.
$95 million for the R&D Matching Grant Fund for capital investments in research and development projects that leverage collaboration between higher education, research institutions, and industry to bolster the state’s innovation economy.
$25 million for the Robotics Investment Program for capital grants to advance the state’s leadership in robotics through research, commercialization, and training.
$25 million for Small Business Technology Grants to help early-stage companies commercialize new and innovative technologies developed in Massachusetts.
Permitting Reform to streamline the approval process, expand opportunity and improve predictability for new developments.
Tax incentives for climate tech and life sciences, including a new $30 million annual tax incentive for climate tech companies to spur economic development.
This funding will not be limited to the urban centers where innovation economies typically concentrate. With the Rural Development Program and Seaport Economic Council each receiving $100M in funding, the Act ensures that the benefits of innovation extend across the state, from rural Western Mass to the Cape and the Islands.
The state has a long history at the leading edge of technology, home to some of the best research universities in the world. But when it comes to Tough Tech, where profitability often extends beyond the time horizons that conventional private capital providers are willing to accept, the sustained support of the state can be critical to crossing the chasm between idea and impact.
Building on a Legacy of Tough Tech Leadership in Massachusetts
At The Engine, we’ve seen firsthand what can happen when the public sector collaborates with the entrepreneurial ecosystem to nurture breakthrough technologies in Massachusetts. In fact, some of the state’s greatest Tough Tech success stories were made possible with the active support from the Massachusetts government.
Take Moderna Therapeutics, for example. Before it became a household name in the COVID-19 pandemic, Moderna was awarded tax incentives in 2011 and 2012 from the Massachusetts Life Sciences Center (MSLC). This public sector support allowed the company to significantly expand its R&D capabilities at a critical time, enabling it to move into its former headquarters in Cambridge’s Kendall Square where it would develop the revolutionary mRNA vaccine.
More recently, in 2024 the state awarded over $10 million in grants to 13 companies to support sustainable alternatives to traditional manufacturing. Among the recipients was Circe Bioscience, a resident at The Engine, who will use $1.5 million in grants to build out its first carbon-negative bioindustrial manufacturing facility. The funding will allow the company to produce essential molecules at a lower cost while removing CO2 from the atmosphere.
Both of these initiatives were expanded in the Mass Leads Act: The annual life sciences tax incentive increased from $30 million to $40 million, encouraging more startups like Moderna to develop life-saving technology in the state. Meanwhile, the $90 million committed by the law for advanced manufacturing will enable more Tough Tech ventures like Circe to scale from the lab bench to their first pilot facilities. These ventures will build a more sustainable and resilient industrial supply chain in the state — while creating thousands of jobs.
Does Massachusetts Lead in Tough Tech?
When you combine the active support of the state government, the steady pipeline of research and talent coming out of the state’s world-class universities, and the broad ecosystem of Tough Tech-focused investors, incubators and accelerators like The Engine, Massachusetts emerges as a clear leader in Tough Tech nationwide.
The data backs it up. In climate tech, Massachusetts is home to 11% of the top 250 sustainability-focused companies in the US, second only to California. If you adjust for the size of the states, Massachusetts has a higher concentration of climate tech companies than any other state. With the support of the Mass Leads Act, the UMass Donahue Institute estimates that the climate tech sector will add between 1,440 and 6,670 jobs over 10 years and grow the economy by $16.4 billion.
However, the climate sector is still catching up to Massachusetts’ role as a global hub for life sciences. According to MassBio, Massachusetts makes up 15.2% of the US drug development pipeline. In 2024, the state attracted 21% of all VC dollars invested in the US biopharma industry. Biopharma also accounted for 17% of overall job growth in the state and $35 billion of the state’s GDP. With an extra $500 million committed by the Mass Leads Act for life sciences, the state’s lead in the sector will only continue to grow.
The question is, does the reality live up to the data for the practitioners that work on Tough Tech every day? More importantly, where does the state fall short? How can we make sure Tough Tech companies not only start here, but scale here? And how can stakeholders align to drive the regional Tough Tech economy forward?
For answers, join us at Make it in Mass to hear directly from people working across the state’s Tough Tech ecosystem, including Lieutenant Governor Kim Driscoll, leaders at National Grid, Alexion Pharmaceuticals, Savills, Mass Tech Collaborative, Massachusetts Competitive Partnership, Engine Ventures, Boston Metal, Vaxess and current and former residents of The Engine, Robigo and Lydian.