More evidence that your area is in decline. Boston's the place to be!
Mass. seen high-tech leader
State wins top ranking in 'new economy' study
By Kimberly Blanton, Globe Staff, 07/22/99
In the race with Silicon Valley to create the economy of the future,
Massachusetts has moved into the lead, according to a new study.
In a ranking of all 50 states on how well they are making the transition to
a ''new economy'' made up of dynamic, high-tech companies, the Bay State
surpassed its archrival, California, as the leader, according to the
Progressive Policy Institute, a Washington think tank affiliated with the
centrist Democratic Leadership Council.
The exhaustive study, which uses 17 economic indicators to compile rankings,
found that a bounty of professional and high-tech jobs, top-drawer
universities, and a prominent role in the global economy have propelled
Massachusetts ''farthest along the path to the New Economy.''
The study found that Massachusetts has achieved its top spot despite its
dismal rank of 34th among states providing Internet access and technology
training in its schools. Surprisingly, just 39 percent of Massachusetts
adults are on line - putting it eighth behind such states as Alaska,
Colorado, Maryland, Utah, and New Hampshire.
Massachusetts, the birthplace of Digital Equipment Corp., once one of the
world's biggest computer-hardware makers, has long been a center of
high-tech commerce.
But the study gave credence to a growing belief that a restructuring in the
1990s has fostered small, innovative companies - in software, the Internet,
telecommunications, and biotechnology - that may give it an edge over
California, the home of Silicon Valley.
''In so many rankings, people look at the absolute size'' of California
compared with Massachusetts, said Sara Johnson, chief regional economist for
Standard & Poor's/DRI
in Lexington. But Massachusetts, ''relative to the size of our state
population and land area, does extremely well in these areas.''
Another study focused on the Internet industry that was also released
yesterday showed that Massachusetts's success is owed, in part, to
California's problems.
While the second report ranks Silicon Valley as a leader in Internet
development, the region is losing ground to cities with flourishing Internet
industries, especially Seattle, New York, Austin, and Boston, according to a
Chicago consulting firm that conducted a study for Joint Venture, a group of
20 California firms and municipalities.
In Silicon Valley, there are 58 established, Internet-related firms,
compared with 25 in New York, 12 in Los Angeles, and nine in Boston, Joint
Venture said. Competition from other cities ''may jeopardize the Valley's
position as the geographic center of the Internet industry,'' the report said.
The high cost of housing in California and a slow-growing work force
threaten California's dominance in the Internet industry, the study found.
These problems also are a factor in the Boston area as well, where housing
prices have spiraled in recent years.
The Public Policy Institute took a broader look at the conditions necessary
to support the high-tech industries that are fueling growth in an
increasingly fluid, technology- and service-oriented US economy.
This ''new economy'' is ''a knowledge- and idea-based economy where the keys
to wealth and job creation are the extent to which ideas, innovation, and
technology are embedded in'' an area's economy, the study said.
Using 17 indicators, composite ratings were compiled for each state:
Massachusetts ranked first with a score of 82.27 and California was second
with 74.25, followed by Colorado, Washington, and Connecticut. West
Virginia, Arkansas, and Mississippi were on the bottom.
Among the strongest rankings for Massachusetts were in indicators for its
prime work force, a product of Boston's premier universities, such as the
Massachusetts Institute of Technology, as well as its concentration of
smaller colleges and universities.
The state, for example, has the highest share - 34 percent - of its total
work force employed in management, professional, or technical jobs. More
than 26 percent of all its jobs are in offices - second after Delaware, with
26.7 percent.
The state also did well in rankings for its concentration of ''.com'' firms,
high production of technology patents, and globalization.
Massachusetts, for example, has a higher portion - 22.7 percent - of its
manufacturing jobs dependent on exports than does California, and a larger
share of Massachusetts's work force - 5.4 percent - are employed by overseas
companies.
This story ran on page C1 of the Boston Globe on 07/22/99.
© Copyright 1999 Globe Newspaper Company.
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