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The
Greater Boston Chamber and Mass Insight have released a report that
outlines Massachusetts' continued strength in the financial services
industry, but warns that the lack of a coordinated state strategy
and fierce global competition threaten the industry’s 180,000 job
base.
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.
Produced with the assistance of McKinsey & Co., the report 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.
Without collaborative state, college, and industry action, the
report predicts that 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:
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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.
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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.
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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.
To
read the report, click on the link below:
Securing Massachusetts’s
Leadership
Position in Financial Services
Press Coverage
Chamber Press Release
Boston Globe (3-28-2007)
Boston Herald (3-28-2007)
Boston Business Journal (3-28-2007)
Bloomberg
(3-28-2007)
Financial Times (3-28-2007)
*Subscription Required*
For more information on the Chamber's efforts to enhance the
region's financial services industry, please contact
Tim Sweeney.
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