The decision by General Electric Company to base its headquarters in Boston underscores a coalescing of economic activity in major global cities, a development that simultaneously benefits Massachusetts and challenges leaders to spread the benefits beyond Route 495.
GE’s blockbuster announcement was topic number one this morning as business and government leaders gathered for the annual Associated Industries of Massachusetts Economic Outlook Forum in Waltham.
AIM President and Chief Executive Officer Richard C. Lord said metropolitan areas like Boston, with its rich array of universities, hospitals and financial resources, enjoys its own economic gravitational pull in a rapidly changing economy. That pull, he said, raises two important questions for Massachusetts.
“First, as anyone who sits in Expressway traffic or waits for the T in January will tell you, rapid growth strains the physical and financial resources of the state and its citizens. And then talk to young people trying to afford housing close to their jobs in a city where the Alston-Brighton triple decker in which Ted Williams once lived now sells for more than $1 million with units that rent at more than $2,000 per month,” Lord told more than 250 people who attended the forum.
“Second, and most important, what happens to the economy outside Boston? How do we as a “common wealth” address the widening imbalance between the economically thriving ‘eds and meds’ economy of Greater Boston and the more traditional economy that dominates the commonwealth from Route 495 to Berkshire County?”
Secretary of Housing and Economic Development Jay Ash compared the importance of GE’s move to the Celtics’ acquisition of all-star forward Kevin Garnett in 2007.
“The Celtics were already a good team, a playoff team, but when Kevin Garnett came, he was a Hall of Famer who put the Celtics over the top,” said Ash, who led the commonwealth’s efforts to land GE and its 800 headquarters and research jobs.
The key to the deal, Ash said, was cohesive approach adopted by Governor Charlie Baker, a Republican, and Boston Mayor Matry Walsh, a Democrat.
“I’ve been in politics all my life and I’ve never seen two leaders working so closely together, let alone leaders from different parties working so closely together,” he said.
Ash made his comments during a panel discussion on prospects for the Massachusetts economy in 2016.
Martha Sullivan, Chief Executive Officer of Sensata Technologies in Attleboro, said developing engineering and other technical talent remains a priority for her century-old company, which makes many of the sensors that are the basis of what GE and others call the “industrial Internet.”
Sullivan said that companies must have a vision that attracts talent.
“You have to have a culture that is welcoming, with a diversity of talent, thought and background,” she said.
Dr. Howard Grant, President and Chief Executive Officer of Lahey Health in Burlington, said the Massachusetts economy is being held back by health-care costs that run 36 percent more than the national average. It doesn’t have to be that way, Grant said, if employers and consumers seek treatment in moderately priced community hospitals where medical outcomes match those of expensive academic medical centers.
“We need to do something about that,” Grant said.
Lord said in his annual State of Massachusetts business address that it’s good to be Massachusetts at the dawn of 2016:
- The commonwealth is likely to approach full employment this year.
- Massachusetts employers added almost 68,000 jobs during the first 11 months of 2015.
- Economic output grew 25 percent faster than the nation as a whole, and per-capita personal income remains the second highest in the United States, 128 percent of the national average.
- AIM’s widely followed Business Confidence Index remains solidly optimistic, despite a marked slowdown in foreign export markets.
- Massachusetts posted a record-breaking year for venture capital funding in 2015, with $7.4 billion invested across 531 deals.
- And Bloomberg just named Massachusetts the most innovative state in the nation.