Majority of businesses that chose Massachusetts would do so again
Concerns about continued success: housing, transportation, future supply of quality workforce
A large majority of companies that chose Massachusetts as a place to expand their business would do it again, primarily based on its innovative economy, industry clusters and skilled workforce, according to “Choosing Massachusetts for Business: Key Factors in Location Decision-Making,” an 18-month study commissioned by MassEcon, the nonpartisan economic development organization, and conducted by the UMass Donahue Institute’s Economic and Public Policy Research group.
A statewide survey of businesses that had expanded within Massachusetts found that more than three out of four (77 percent) would choose to locate or expand here again, if faced with the same decision, and 64 percent rated the state as a “good” or “very good” place to do business. Nearly all of the surveyed companies (96 percent) cited the state’s high-quality workforce as a key factor in choosing Massachusetts. According to survey respondents, the top three strengths of doing business in Massachusetts were workforce, superior industry clusters and the community environment.
“This report is a valuable tool for us to use to measure our successes in creating a business environment that supports employer growth and uncover opportunities to strengthen collaboration across the state to help our cities and towns increase jobs and investment,” said Housing and Economic Development Secretary Jay Ash. “I look forward to the solutions that we can implement with our partners across business, non-profit and government sectors to improve the business environment for the benefit of all Massachusetts residents.”
The comprehensive study was drawn from a multi-faceted survey and in-depth interviews of nearly 90 companies that had expanded or relocated within Massachusetts over the past 10 years.
“We are heartened by the validation of Massachusetts as an outstanding location for business expansion,” said Susan Houston, Executive Director of MassEcon, “but equally important, this study tells us that we can’t be complacent. For Massachusetts to maintain — and grow — its leadership position, we must continue to nurture our key assets and address the challenges that could undermine our economic competitiveness.”
In addition to noting strengths of doing business in Massachusetts, the study revealed challenges and concerns relating to the long-term health of the state’s economy. Survey respondents and individual interviews identified a number of areas that require attention if Massachusetts is to continue to enjoy its competitive edge. They include:
- Transportation. Companies in Greater Boston are concerned about highway congestion and public transit capacity, while businesses outside the urban core worry about a shortage of public transportation. MBTA reliability is vital to the ability to attract and retain workers, they said, expressing concerns that not enough is being done to accommodate a growing population.
- Housing. The availability and affordability of housing was a significant concern statewide, a challenge to attracting and keeping employees, especially younger employees. Costs in Greater Boston in particular are inordinately high, limiting options for low and middle-income workers.
- Business costs. In general, for companies locating in Greater Boston the advantage of skilled labor outweighed various higher business costs, but labor, health care and energy costs were identified as challenges to business in Massachusetts. Taxes and fees were cited as well, but business costs seemed to be of less concern to those companies that considered and compared other states than to those already doing business in the Commonwealth. Companies engaged in manufacturing, which tend to be spread across the state, were more sensitive to cost challenges of health care and energy than companies in Greater Boston.
- Quality of future labor supply. Although more than 90 percent of survey respondents said the availability and quality of the workforce were important to their decision to locate in Massachusetts, some companies are struggling to find enough technically trained workers and those with middle-level skills. Continuing to produce talented labor must be a priority for the state, respondents indicated.
- Economic development assistance. While over half of the businesses surveyed were solidly favorable about the effectiveness of economic development officials in helping them become established in Massachusetts, others reported that the system is confusing. Some said they sought a “roadmap” with which to navigate the various economic development organizations.
The MassEcon-UMass team plans to hold briefing panels on the report later in the year. The report can be found at http://massecon.com.
MassEcon, founded in 1993, is a nonprofit, nonpartisan entity that champions Massachusetts as the best place to start, grow and locate a business. Its services include the state’s only Site Selection Service, which helps expanding and relocating companies find a home in the Commonwealth; the Research and Information Service, which provides companies with the information they need to evaluate the Commonwealth as a location to grow; and the Massachusetts Ambassadors, a network of civic and corporate leaders who help market Massachusetts as a place to do business. For more information, visit www.massecon.com.
About the UMass Donahue Institute Economic and Public Policy Research group
The Economic and Public Policy Research (EPPR) group at University of Massachusetts Donahue Institute is a leading provider of applied research, helping clients make more informed decisions about strategic economic and public policy issues. The University of Massachusetts Donahue Institute is the public service, outreach and economic development group of the University of Massachusetts President’s Office. Established in 1971, the Institute strives to connect the Commonwealth with the resources of the University, bridging theory and innovation with real-world public and private sector applications. For more information, visit www.donahue.umassp.edu.