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Economy

SUMMARY

Boston’s expanding knowledge economy—since the last economic downturn in 2003—has spurred job growth but created and exacerbated economic inequities and disparities largely based on educational attainment.  Resulting from the 2008 economic recession, economic growth has given way to record job loss and unemployment across nearly all sectors, declines in household income and sharp reductions in public revenue.  With cuts in services as all levels, the region’s low-income families with children.

Print the Economy Summary

WHAT IS THE ECONOMY SECTOR?

Boston anchors a regional economy of more than five million people that extends from Southern New Hampshire to Worcester and Cape Cod — making up the nation’s 7th largest metro area. At slightly more than 600,000 inhabitants, Boston is the 22nd largest US city, yet it has one of the nation’s highest concentrations of jobs and income, doubling its population each day as commuters flow into the city to work.  Boston’s competitive advantages lie in research and development emerging from the area’s institutions of higher education and health care, and in financial, governmental, business, professional and human services, a beautiful physical infrastructure, culture of innovation, a skilled workforce, and strong Inner City economy built on Small Business.  Boston is also the economic hub of Massachusetts with great influence over the Commonwealth’s fiscal health: with just 9%of the state’s population, Boston drives the state economy with 16%of total employment, 19%of tax revenue and 24% of Gross State Product.

Key Trends

Massachusetts' and Greater Boston's economy continue to shift from manufacturing to innovation, particularly in the wake of the recession, and cross-industrial innovations are building the infrastructure for the 21st century economy

Accomplishments & Developments

Massachusetts has made considerable investments in growing a green and sustainable economy

Challenges

Income inequality is growing even in the recession, particularly along lines of race/ethnicity and eudcational attainment

Innovations
Applying the Community Supported Agriculture (CSA) Model to Fisheries
Trawler
  Boston Metro Innovations

National/International Innovations
New @ Indicators
Effects of the "Great Recession" on low-income workers
This report by Northeastern University's Center for Labor Market Studies finds the nation's lowest income workers have been those most adversely affected by the "Great Recession," with unemployment rates at 30% and combined under-employment rates topping 50% for those in the lowest income decile (02/2010). 

Milken Institute Jobs For America Report & Data
Jobs for America
 Jobs for America: Investments and policies for economic growth and competitiveness   finds that changes to U.S. economic and tax policies can add 2.9 million jobs by 2019 and more than 3.5 million jobs can be created in each of the next three years by supporting investment in 10 key infrastructure project categories. 

Boston About Results
Mayor Menino has released Boston About Results, a new online tool that provides access to key budget and performance data and reports to increase accountability and transparency in the current economic climate.

Homefield Disadvantage
Boston Bound Home Fiield Disadvantage
The Boston Foundation & the Boston Municipal Resarch Bureau, Boston Bound, Homefield Disadvantage: Boston and Massachusetts Hamstrung by Limited Home Rule(01/2009): Finds that excessive state restrictions prevent Boston from maintaining a balanced revenue stream.  After calculating tax receipts, reimbursements and expenses, the City of Denver gained $940,365 as hosts of the 2007 Major League Baseball playoffs, while the City of Boston ended up out of pocket $649,084—a differential of more than $1.5 million.  In Denver, collections were enlarged by local hotel, sales and meals taxes, 63 percent of which went directly to the city. In Boston, sales and meals taxes flowed to the state, as did the bulk of the hotel tax.

The Future of Manufacturing in Massachusetts
Staying Power Cover
Northeastern University Center for Urban and Regional Policy,  Staying Power: The Future of Manufacturing in Massachusetts (07/2008): Reports that though Massachusetts has experienced dramatic manufacturing job losses, those that remain are technologically sophisticated and competitive, providing work for 300,000 in Massachusetts.

Young Adults: A Key to Massachusetts' Economic Future
MassINC,  Great Expectations: A Survey of Young Adults in Massachusetts  (07/2008, free log in required): Provides a demographic breakdown of those 25-39, distinguishing between "homegrowns", "imports" and "boomerangs." Taxes, housing costs and job opportunities top the concerns of this group.

Beacon Hill Institute Assesses Metro Area Competitiveness
Beacon Hill Institute,  Metro Area Competitiveness Report 2007  (05/2008): For the second consecutive year, the Boston metropolitan area ranked second in a measure of interstate economic competitiveness, behind Salt Lake City.

State Report on the Massachusetts Biofuels Industry
Executive Office of Energy and Environmental Affairs, Massachusetts Advanced Biofuels Task Force,  Advanced Biofuels Task Force Report  (04/2008): Provides a strategy for Massachusetts to become a leader in Advanced Biofuels, particularly in the area of research and development.

Beacon Hill Institute Recommendations for State Corporate Tax Reform
Beacon Hill Institute,  Business Taxes in Massachusetts: Toward Fundamental Reform  (04/2008): Analyzes the closing of a number of corporate tax loopholes, which would allow for an overall reduction in the corporate tax rate.

Economy Pipeline Report
The Boston Indicators Project,  Economy Pipeline Report (03/2008): Created by the Boston Indicators Project for the LaWare forum, this report provides data on Massachusetts employment, office vacancy and cost of living.

Chamber of Commerce Analysis of Casino Gambling
Greater Boston Chamber of Commerce,  Casino Gaming in Massachusetts: An Economic, Fiscal, & Social Analysis  (03/2008): Creation of 3 casinos would result in $2 billion to $2.3 billion in annual revenue, and approximately $400 million annually for state government, as well as creating 17,000 to 21,000 permanent jobs.

2007 Index of the Innovation Economy
Massachusetts Technology Collaborative,  2007 Index of the Massachusetts Innovation Economy  (02/2008): This annual analysis of Massachusetts's high-tech economy for the first time compares Massachusetts not only to other US states, but also to high tech regions around the world. While Massachusetts technology economy is strong, it faces new, global competition.