Co-founded by MIT professor Yet-Ming Chiang and electrochemist Leah Ellis, Somerville clean cement startup Sublime Systems plans to build a manufacturing facility at a former mill site along the Connecticut River in Holyoke as the real estate industry tackles the problem of decarbonizing building materials. Photo courtesy of Sublime Systems and Engine Ventures

Emerging industry clusters such as agriculture research and clean energy provide an opportunity to pull western Massachusetts out of the economic doldrums, according to a report that asks state leaders to commit $500 million toward the Pioneer Valley region.

Public policy institute MassINC said the Pioneer Valley region needs an injection of public funding to catalyze the growth of high-paying jobs and overcome obstacles preventing companies from expanding in former mill towns.

Companies seeking to expand and commercialize in western Massachusetts face obstacles including a shortage of suitable development sites, MassINC Research Director Ben Forman said.

“These are older industrial sites and they have a lot of problems, especially in cities with older mill buildings. Demolition is expensive and reconfiguring them for modern uses is even more expensive with the current building codes,” Forman said.

The study, in partnership with Northampton-based consultants Cambridge Econometrics, recommends a $500 million economic development fund be established to nourish growing industries such as agricultural research and clean energy.

The food products and agricultural research sector grew by over 50 percent from 2012 to 2022, representing 1,600 jobs including startups spun out of University of Massachusetts-Amherst’s food science and advanced materials programs.

The industry’s growth represents a rare bright spot. The Pioneer Valley’s gross domestic product per capita remains half that of Greater Boston, and median household income lagged the entire Bay State by 12 percent over the past decade, the report noted.

“The economic fundamentals of the region are concerning, and it shouldn’t be lagging so far behind,” Forman said.

Clean energy represents another opportunity to reactivate dormant industrial sites. Sublime Systems is planning to build a factory in Holyoke to manufacture cement using low-carbon technology developed at a Somerville incubator.

In 2022, Holyoke-based Clean Crop Technologies received $6 million in venture capital funding and is developing carbon-free methods of boosting crop yields and reducing food waste.