WATERTOWN /Massachusetts Newswire/ — University of Massachusetts Donahue Institute study underscores technology sector as key component of state’s innovation economy. Governor Deval Patrick today joined leaders from the state’s digital technology sector to discuss the findings of “The IT Industry: Hub of the Massachusetts Technology Economy,” a report from the University of Massachusetts Donahue Institute. The event took place at the Communispace Corporation and was attended by more than 150 technology industry leaders.

The study, commissioned by a consortium of corporate, industry association and government leaders, reflects that the Commonwealth’s IT industry continues to grow well beyond its roots, creating a strong and competitive technology hub in Massachusetts that also facilitates growth in other emerging arenas. Emerging sectors in robotics, digital media, digital gaming and mobile communications are transforming established markets, opening new business and job growth opportunities enabled by digital technology. Venture capital investment in the Massachusetts IT industry ranks second only to California, at $10,257 per IT worker. Between 2006 and 2008, half of all venture capital investment in Massachusetts went to the IT industry.

“This study is further proof that the digital technology sector is a cornerstone of our economy, and a catalyst for innovation across all of our industries,” said Governor Patrick. “We are committed to supporting IT’s growth and vitality, and harnessing its transformative contributions to the Commonwealth.”

The report also underscores the economic impact of the Massachusetts IT industry, quantifying it as the state’s second largest knowledge-intensive industry cluster second only to health care. The sector is home to 10,300 firms with more than 178,000 workers. The industry directly expended $65 billion in Massachusetts in 2008, a figure that is comparable in scale to nearly 18 percent of state’s Gross Domestic Product. Linkages to the health care, life sciences, financial services, and defense and energy sectors are catalyzing new opportunities for growth, demonstrating the importance of this sector as a vehicle for innovation and economic growth.

In January, Governor Patrick called for the establishment of an IT Collaborative, bringing together industry, academia and government to advance policy and an action agenda to enhance the IT sector’s competitiveness. Since then, this collaborative has mobilized and focused on several key priority areas, including doing research and analysis to understand the current state of the IT industry in Massachusetts. The Massachusetts IT Study Group, co-chaired by Donna Cupelo, Verizon Region President of New England, and Paul Bosco, Cisco Vice President and General Manager, Video and Wireless Products, commissioned the UMass Donahue Institute to perform an in-depth research exercise to better understand the state of the Commonwealth’s IT industries.

“Industry leaders came together because we wanted to better understand the composition of the technology industry and how it is impacting the state’s economy,” said Donna Cupelo from Verizon. “The industry has clearly transformed from its Route 128 mini-computer days. The study gives us a better understanding of the scope and the impact of the diversified and innovation-intensive businesses all around us. The technology industry is strong and provides growth opportunities for emerging segments and other industry sectors.”

“The IT industry is critical to Massachusetts’ entire innovation ecosystem,” said Michael D. Goodman, an Associate Professor at UMass Dartmouth, who led the team that prepared the study results. “The Commonwealth’s global leadership in sectors like financial services, health care and defense is significantly enhanced by the presence and expertise of IT firms and the thousands of IT professionals working inside and outside of the industry.”

At the event, Housing and Economic Development Secretary Greg Bialecki also moderated a roundtable dialogue with industry leaders that examined transformative trends in digital technology, and the prospects for future growth of the Massachusetts innovation economy.

To view the report, go to .