SUMMARY

Having made the transition from manufacturing to a knowledge economy, Boston’s economic dynamism is grounded in an almost unparalleled regional concentration of institutions of higher education and health care, research institutes, high tech companies, a highly skilled workforce and venture capital. The high cost of living, however, driven by housing costs, is squeezing the middle class and creating intense pressure on households headed by those with less education, and widening income inequality is reflected in persistent racial/ethnic disparities in education, health, and community safety. Despite these challenges, one in three Bostonians is between the ages of 20 and 34--a young workforce in an aging region--and the city’s population is increasingly diverse. Growing only due to newcomer immigrants, almost one-third of Boston’s residents are foreign born and almost half of its children live in a household headed by an immigrant. Despite unprecedented economic expansion in the late 1990s followed by a high tech bust, Boston’s economy today reflects both the positive and negative impacts of globalization. Rapid growth among regional competitors and emerging overseas economies led to the sale or merger of many iconic corporate headquarters and the loss of jobs, and Boston, Greater Boston and Massachusetts lagged the nation in recovery from 2001 until late in 2006, when the rate of local growth outpaced the nation’s. Today, Boston has entered a major new period of city building and collaboration, creating new opportunities, bold new physical icons, and hope for the future.

CONTEXT

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 US Census Bureau’s "Boston-Worcester-Manchester Consolidated Statistical Area," the nation’s 7^th largest metro area. At slightly fewer 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. Among US cities with populations between 500,000 and one million, Boston ranks 2^nd in its ratio of jobs to residents. With its historic character, world-class museums, reinvigorated cultural sector, vibrant neighborhoods, extensive public transit, new Convention and Exhibition Center, beautiful natural surroundings, international airport and deep-water port, Boston is a destination for immigrants, tourists and business visitors alike, and the gateway to New England.

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 and skilled workforce.  Revitalized neighborhood business districts reflect Community Development Corporation(CDC) activity, the City’s Main Streets Initiative and a spate of new supermarkets, while major new commercial and mixed-use development is transforming many parts of the city.

Key Trends

	The technological innovation that drove Greater Boston’s boom in the 1990s continued to evolve, creating a more competitive global environment. Boston experienced a boom and bust cycle but its economy is now strengthening. Consumer prices in Metro Boston are rising faster than the metropolitan average, making Greater Boston one of the most expensive regions in the nation and making it difficult for many households to make ends meet.   More »

Accomplishments & Developments

	Boston Main Streets are succeeding in creating new businesses and vibrant business districts in Boston’s neighborhoods. In 2005/2006, major initiatives included “Dining on Main Streets,” which encouraged the development of new restaurants. The Massachusetts Technology Collaborative’sRenewable Energy Trust funded over $87 million in FY2005 and FY2006. Privately-held, majority women-owned firms are projected to have grown by 49% in the Boston-Cambridge-Quincy, MA-NH MSA from 1997 to 2006. More »

Challenges

	Consumer prices in Metro Boston are rising faster than the average, making Greater Boston one of the most expensive regions in the nation, squeezing many households, and driving up businesses costs, costing the region many young and talented workers. Boston and Massachusetts have not fully recovered jobs lost in the 2001 recession. More »