Economy

Buildings of Kendall Square, center of Cambridge's biotech economy, seen from the Charles River

Manufacturing was an important part of the economy in the late 19th and early 20th century, but educational institutions are the city's biggest employers today. Harvard and MIT together employ about 20,000. As a cradle of technological innovation, Cambridge was home to technology firms Analog Devices, Akamai, Bolt, Beranek, and Newman (BBN Technologies) (now part of Raytheon), General Radio (later GenRad), Lotus Development Corporation (now part of IBM), Polaroid, Symbolics, and Thinking Machines.

In 1996, Polaroid, Arthur D. Little, and Lotus were top employers with over 1,000 employees in Cambridge, but faded out a few years later. Health care and biotechnology firms such as Genzyme, Biogen Idec, Millennium Pharmaceuticals, Sanofi, Pfizer and Novartis have significant presences in the city. Though headquartered in Switzerland, Novartis continues to expand its operations in Cambridge. Other major biotech and pharmaceutical firms expanding their presence in Cambridge include GlaxoSmithKline, AstraZeneca, Shire, and Pfizer. Most Biotech firms in Cambridge are located around Kendall Square and East Cambridge, which decades ago were the city's center of manufacturing. A number of biotechnology companies are also located in University Park at MIT, a new development in another former manufacturing area.

None of the high technology firms that once dominated the economy was among the 25 largest employers in 2005, but by 2008 high tech companies Akamai and ITA Software had grown to be among the largest 25 employers. Google, IBM Research, and Microsoft Research maintain offices in Cambridge. In late January 2012—less than a year after acquiring Billerica-based analytic database management company, Vertica—Hewlett-Packard announced it would also be opening its first offices in Cambridge. Around this same time, e-commerce giants Staples and Amazon.com said they would be opening research and innovation centers in Kendall Square. Video game developer Harmonix Music Systems is based in Central Square.

The proximity of Cambridge's universities has also made the city a center for nonprofit groups and think tanks, including the National Bureau of Economic Research, the Smithsonian Astrophysical Observatory, the Lincoln Institute of Land Policy, Cultural Survival, and One Laptop per Child.

In September 2011, an initiative by the City of Cambridge called the "Entrepreneur Walk of Fame" was launched. It seeks to highlight individuals who have made contributions to innovation in the global business community.

Top employers

The top ten employers in the city are:

# Employer # of employees 1 Harvard University 10,718 2 Massachusetts Institute of Technology 7,604 3 City of Cambridge 2,922 4 Novartis Institutes for BioMedical Research 2,095 5 Mount Auburn Hospital 1,665 6 Vertex Pharmaceuticals 1,600 7 Genzyme 1,504 8 Biogen Idec 1,350 9 Federal Government 1,316 10 Pfizer 1,300