NEWS RELEASE
Media Contact for the Chamber:
Erin Murphy
, 617.557.7324
March 28, 2007
Greater
Boston
Chamber, Mass Insight Call for Coordinated State Strategy for Financial Services Growth
GREATER
BOSTON
CHAMBER, MASS INSIGHT CALL FOR COORDINATED
STATE STRATEGY FOR FINANCIAL SERVICES GROWTH
Massachusetts
is a worldwide financial services hub but the lack of a coordinated state
strategy and fierce global competition threaten the industry’s 180,000 job base, according to a
new report released today by the Greater Boston Chamber of Commerce and Mass Insight
Corporation’s Global Mass 2015 initiative.
The report, “Securing Massachusetts’s Leadership Position in Financial Services,” identified
nearly $40 billion in annual economic activity and 180,000 jobs in financial services, many
for middle to upper-middle income workers earning $50,000 to $100,000 annually. But it
predicts that
Massachusetts
will not reach its full job growth potential – and certain jobs will
continue to leave the state – unless it implements a specific strategy for the financial services
industry based around talent development, innovation and enhanced collaboration between
industry, academia and state government.
“The
Massachusetts
financial services industry, like our economy, is at a tipping point,” said
Paul Guzzi, president and CEO of the Greater Boston Chamber. “Our state’s overall record of
job growth lags that of the nation, and looking ahead, our financial services industry is
projected to create a lackluster 3,000 new jobs by 2010. We need collaborative leadership
from business, government, and academia to combat the local and global forces that threaten
our jobs and our position of strength in financial services.”
“
Massachusetts
must capture the next round of financial services innovation and talent to
compete and grow jobs in the competitive global landscape,” said Mass Insight President
William Guenther. “As the first installment in the Global Mass 2015 initiative, this report
outlines a coordinated strategy for
Massachusetts
to remain a top-tier financial services hub
while laying the foundation for a comprehensive, sector-based economic strategy.”
The report, produced with the assistance of McKinsey & Co., shows that
Massachusetts
has
the natural resources to become a top-tier global financial services center focusing on asset
management, asset services and insurance. However, the absence of a coordinated strategy
caused
Massachusetts
to miss out on a potential $50 billion share of managed assets from the
growing hedge fund market and to struggle in retaining critical middle income back office and
support jobs.
The report predicts that without collaborative state, college, and industry action,
Massachusetts
will at best create 3,000 new financial services jobs by 2010 – a rate well
below the anticipated growth of our competitor states. If
Massachusetts
grew at the same rate
as other leading states during that period, it would benefit from 15,000 new jobs and $12
billion in additional economic output. But recent news reports have shown that financial
services firms are shifting jobs to more low cost areas across the nation and world.
The report outlines three key initiatives to help
Massachusetts
unlock its job growth potential:
1) Preserving and expanding our diverse employment base by creating a Talent
Development Bank to match workforce needs of industry with talent development
programs delivered by public and private higher education institutions; expanding
state government outreach to leading in-state and out-of-state employers; and adopting
a statewide strategy to create regional economic opportunities.
2) Transforming
Massachusetts
into a global center for financial services talent and
innovation by sowing formal linkages with area universities, like a financial services
resource center, to position the state on the cutting edge of financial services
innovation.
3) Creating a more stable, predictable and competitive tax, permitting and regulatory
structure for all employers, including financial services firms. While
Massachusetts
has made progress on permitting reform, other competitor states, such as North
Carolina
, have made significant economic gains by fostering a more competitive business climate, including a more stable tax structure.