Economic Development


Life Sciences Innovation as a Catalyst for Economic Development

By Barry Bluestone and Alan Clayton-Matthews

This report provides an up-to-date, independent evaluation of the $1 billion, 10-year Massachusetts Life Sciences Initiative and the Massachusetts Life Sciences Center (MLSC) charged with the responsibility of carrying out its mission. The initiative was established in July 2008 by Governor Deval Patrick’s Administration and the Legislature to encourage the growth of discovery and production in the life sciences, including biotechnology, pharmaceuticals, medical diagnostics, medical devices and bioinformatics in the Commonwealth. 

Based on the region’s existing comparative advantage in life sciences research and development (R&D) emanating from the laboratories of its leading universities and medical institutions, this substantial infusion of public funds was undertaken with the ambitious goal of
making this cluster of industry sectors the most successful in the world. This evaluation comes at a propitious time, given the state of fiscal affairs in the Commonwealth and the nation. Virtually every unit of government is scrutinizing the use of each tax dollar to ensure that public revenue is being spent effectively and efficiently. Put simply, our goal in this evaluation was to gather as much data as possible to assess whether the Commonwealth’s sizeable commitment of public resources is paying off in the form of a life sciences “super cluster” capable of attracting massive amounts of investment dollars, generating well-paying jobs for Massachusetts residents and yielding additional tax revenue for the Commonwealth.

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Staying Power II

By Barry Bluestone, Anna Gartsman, Don Walsh, Russ Eckel, James Huessy
with Alan Clayton-Matthews, Yingchan Zhang, Dierdre Judge

September 13 – The Dukakis Center released our latest report on the manufacturing sector in Massachusetts. Staying Power II is a follow-up study to our first study on the manufacturing sector conducted back in 2007. As with the first report, what our research found is that the manufacturing sector is more robust and resilient that is commonly perceived. Productivity continues to increase at a rate much faster than the rest of the economy. Manufacturing remains the sixth largest sector of the state’s economy and yet represents the second largest sector in terms of size of payroll.

Also, as we uncovered in 2007, we forecast that there will be over 100,000 job openings in the manufacturing sector over the next decade in Massachusetts based on the plans of firms to grow along with projected retirements in the workforce.

And yet we cannot take the positive news for granted. There remain a number of challenges, particularly the ability of firms to recruit skilled craftsmen and other critical positions. We need to do more to improve training in order to provide a sufficient workforce for the current and future needs of manufacturing. The Commonwealth’s Advanced Manufacturing Collaborative has engaged hundreds of industry leaders along with government and nonprofit leaders to address the set of most important challenges and opportunities facing the sector.

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Reviving the U.S. Rail and Transit Industry: Investments and Job Creation

By Joan Fitzgerald, Lisa Granquist, Ishwar Khatiwada, Joe McLaughlin, Michael Renner, and Andrew Sum

This report reveals that the country could gain more than 79,000 jobs in rail and bus manufacturing and related industries under an investment scenario sufficient to double transit ridership in 20 years. If the United States were to invest at even higher levels—similar to those of China—this would yield more than a quarter million jobs.

The United States needs urgently to revive its rail and transit industry. The nation’s manufacturing sector accounts for over 10 percent of GDP, but manufacturing has seen job losses in the millions in recent years. And the U.S. trade deficit continues to rise. The country needs new manufacturing jobs now to address the trade deficit and to put unemployed Americans back in well-paying jobs.

While the United States has lost its competitive edge in producing many high-tech goods, it is not too late to follow the strategy of European nations and China in building a strong transit vehicle industry.

The United States, for the most part, has abandoned its domestic passenger rail and transit bus industries. The loss of these industries in the 1970s and 80s was largely a function of unstable demand rather than of high labor costs. As domestic demand for transit vehicles waned, U.S. companies did not keep up with state-of-the art transit technologies.

The American Recovery and Reinvestment Act of 2009 (ARRA) has made a down payment on rebuilding the U.S. transit infrastructure.

This report uses three scenarios to estimate the job creation potential from increased federal investment in rail and transit. A “Business-as-Usual” scenario would invest $2.7 billion in rail vehicles and $2.8 billion in bus purchases. An “Increased Domestic Investment” scenario would invest $7.2 billion and $4.8 billion, respectively, toward these purchases. And an “International Competitiveness” scenario would invest $24.4 billion and $12.8 billion, respectively—a level that is comparable to China’s investment in rail and bus vehicles.

To download the full report, click here.

After the Recovery: Help Needed
The Coming Labor Shortage and How People in Encore Careers Can Help Solve It

Barry Bluestone and Mark Melnick. Civic Ventures. March 2010.

The Dukakis Center conducted this research report for Civic Ventures and the MetLife Foundation examining key job opportunities for individuals seeking an “encore career.”

The key finding of the research is that not only will there be jobs for experienced workers to fill, but the nation will absolutely need older workers to step up and take them.

“With nearly 10 percent of the American labor force unemployed and another 7 percent so discouraged by their job prospects that they have either dropped out of the labor force altogether or are working at parttime jobs when they would prefer full-time employment, it may come as something of a surprise that within less than a decade, the United States may face exactly the opposite problem — not enough workers to fill expected job openings.”

To download the full report, click here.
To download the research brief, click here.

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The Urban Experience

Barry Bluestone, Mary Huff Stevenson and Russell Williams. Oxford University. July 2008.

The Urban Experience provides a fresh approach to the study of metropolitan areas by combining economic principles, social insight, and political realities with an appreciation of public policy to understand how U.S. cities and suburbs function in the 21st century. The book is grounded in the real life experiences of students and their families on the premise that there is a fascination about one’s own surroundings. It uses a great deal of historical and comparative data to explore the wide variation in how we experience urban and suburban communities. It addresses the changing role and function of U.S. metropolitan areas in an age of growing global competition and focuses on key contemporary problems facing cities and suburbs. The book introduces analyses from economics, sociology, and political science as useful tools to understand the evolution and current status of the nation’s urban areas.

The book will be a valuable text for urban scholars, public officials, and all those interested in understanding urban dynamics.

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Staying Power: The Future of Manufacturing in Massachusetts

July 2008

NOTE: the following is an excerpt of a press release by the Boston Foundation

Conventional wisdom may relegate manufacturing to the ash heap of earlier centuries, but new research undertaken by the Center for Urban and Regional Policy (CURP) and the School of Social Science, Urban Affairs, and Public Policy at Northeastern University and released today by the Boston Foundation establishes not only the importance of manufacturing as a potent part of the regional economy but its role as a catalyst for future growth. Today, almost 10 percent of the state’s workforce is employed in manufacturing, creating almost $40 billion worth of goods annually. The sector retains more than 8,600 firms that are technologically sophisticated and well positioned to compete successfully in the emerging global economy.

The report, entitled Staying Power: The Future of Manufacturing in Massachusetts, reviews the history of manufacturing in the state, from before World War II through recent decades of decline and renewal. In addition, surveys of more than 700 businesses were completed and separate interviews with more than 100 business leaders in the sector were undertaken by the research team, headed by Barry Bluestone, Dean of the School of Social Science, Urban Affairs and Public Policy and Director of CURP, and Don Walsh, a Senior Research Associate at CURP. Lauren Nicoll and Chase Billingham also contributed to the writing of the report.

The report was commissioned by the state’s 2006 Economic Stimulus bill. Partners in the publication included he Manufacturing Extension Partnership, the Massachusetts Alliance for Economic Development and the Commonwealth of Massachusetts, in addition to the Boston Foundation.

To download the full report, click here.

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Moving Up in the New Economy: Career Ladders for U.S. Workers

Joan Fitzgerald. Ithaca, New York: Cornell University Press, 2006

“The United States used to be a country where ordinary people could expect to improve their economic condition as they moved through life. For millions of us, this is no longer the case. Many Americans today have a lower standard of living as adults than they had in their parents’ homes as children. . . . This book is about restoring the upward mobility of U.S. workers. Specifically, it addresses the workforce-development strategy of creating not just jobs, but career ladders.”

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Sustaining the Mass Economy: Housing Costs, Population Dynamics, and Employment

May 2006

The Federal Reserve Bank of Boston’s New England Public Policy Center and The Rappaport Institute for Greater Boston at Harvard’s Kennedy School of Government hosted the release of Sustaining the Mass Economy: Housing Costs, Population Dynamics, and Employment on May 22, 2006 in Boston.

According to the report’s findings, employment dropped by over 160,000 since 2001; the population has fallen for the past two years in a row, mostly as a result of rapidly rising out-migration to places like New Hampshire, Arizona, and North Carolina; and the loss of population was disproportionately among young workers and their families. We also know that housing prices skyrocketed by 144 percent in Greater Boston between 1995 and 2004 so that the median single family home sold for $376,000 at the end of this period. Meanwhile, Class A apartment rents in the Boston metro region were the most expensive in the country, save those in New York City. Price and rents have stabilized in the past two years, but they remain among the highest in the country.

“This report attempts to use statistical methods to test whether or not this conjecture about the adverse economic development effects of housing costs is valid and whether the survey responses of former state residents represent a real trend”, according to Director Barry Bluestone.

To download the full report, click here.

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Revenue Sharing and the Future of the Massachusetts Economy

January 2006

Revenue Sharing and the Future of the Massachusetts Economy” determined that the future economic prosperity of Massachusetts is dependent on increasing the fiscal capacity of cities and towns.

The report acknowledges that certain variables, such as cost of living and climate, will continue to disadvantage the Commonwealth in its competition for workers and business investment. But this can be addressed by recognizing that economic development turns increasingly on the ability of local communities to compete in the regional, national and global economy by offering vital public services and high-quality public amenities.

It concludes that Massachusetts must re-craft the fiscal partnership between the state and local governments if municipalities are to play their critical role in economic development, and recommends three steps towards achieving this goal:

  • A new and enduring revenue sharing partnership,
  • Diversifying the local tax and revenue structure, and
  • Increasing local management authority.

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The Rebirth of Older Industrial Cities: Exciting Opportunities for Private Sector Investment

April 2004

This project, funded in part by the Massachusetts chapter of the National Association of Industrial and Office Properties (NAIOP), aims to identify impediments or “deal breakers” to development in five designated urban areas in Massachusetts. The research focused on sites identified by officials in Boston, Chelsea, Holyoke, Lawrence, and New Bedford, and on six key industrial sectors, all identified as strategic by the state government: health care/life sciences, biotechnology, information technology, financial services, traditional manufacturing, and travel and tourism. More than 50 business leaders and commercial real estate professionals were interviewed in order to determine the factors most important in location decisions. The Dukakis Center focused in particular on firms that had an existing or recently established urban presence in one of the study cities to determine what factors contributed to the decision to locate, expand, or remain in these urban locations.

Former Dukakis Center Associate Directo David Soule spearheaded this project, with assistance from director Barry Bluestone, and associate director Joan Fitzgerald. Three research associates, Jennifer Cabrera from the Harvard Law School, Shelley McDonough from the Sociology Department and Kennedy School of Government at Harvard University and Mark Melnik from the Sociology Department at Northeastern University also worked on this report.

To download the full report, click here.

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Building on our Heritage: A Housing Strategy for Smart Growth and Economic Development

October 2003

This report was developed at The Dukakis Center for the Commonwealth Housing Task Force, an ad hoc group of housing advocates, developers, business and civic leaders, and academics who began meeting in 2001 to develop solutions to the housing problem in Massachusetts. In this report, the Task Force made two recommendations:

  • The state should provide financial and other incentives to local communities that pass Smart Growth Overlay Zoning Districts that allow the building of single-family homes on smaller lots and the construction of apartments for families at all income levels.
  • The state should increase its commitment to fund affordable housing for families of low and moderate income.

Barry Bluestone, director of the Dukakis Center, worked with Eleanor White, a Research Associate at the Dukakis Center and president of Housing Partners, Inc. and Ted Carman, president of the Concord Square Development Company, Inc., to craft this proposal. This team, along with many others from the business, academic, and non-profit world, presented the proposal to the Massachusetts State Legislature’s Housing Committees in late November. The proposal was passed into law in 2004.

To download the full report, click here.

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Economic Revitalization: Cases and Strategies for City and Suburb

Joan Fitzgerald and Nancey Green Leigh. Thousand Oaks, CA: Sage Publications, 2002

A discussion of leading revitalization strategies in the context of both city and suburban settings, offering case studies of program development and implementation. The text incorporates social justice and sustainability into how we think about and practice economic development. It discusses how revitalization strategies are implemented in both cities and suburbs, particularly inner-ring suburbs that are experiencing decline previously associated only with inner-city neighborhoods.

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Economic Anchors and Vendor Contracting: New Barriers (and Potential Opportunities) for Small Minority Business in the New Economy

Russell Williams. Center for Urban and Regional Policy for the Community Enterprise Technical Assistance Collaborative, May 2001

To download the full report, click here.

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The Boston Renaissance: Race, Space, and Economic Change in an American Metropolis

Barry Bluestone and Mary Huff Stevenson. New York: Russell Sage Foundation, 2000

The culmination of nearly five years of research on the new Boston economy. It recounts the industrial and demographic revolution in post-World War II Boston and its impact on racial and ethnic attitudes, residential segregation, and the labor market success of whites, blacks, and Latinos.

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Growing Prosperity: The Battle for Growth with Equity in the 21st Century

Barry Bluestone and Bennett Harrison. New York: Houghton-Mifflin & The Century Foundation, 2000

This publication explores historical trends and current prospects for economic growth in the United States.

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The Great U-Turn: Corporate Restructuring and the Polarizing of America

Barry Bluestone and Bennett Harrison. New York: Basic Books, 1990

A sequel to The Deindustrialization of America, this book investigates how economic policies have contributed to growing inequality.

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