For Immediate Release

Tuesday, December 30, 2003

10 a.m.


Dr. David G. Tuerck

617-821-7698 (cell) or

Frank Conte

617-573-8050, 617-573-8750

Beacon Hill Institute releases Metro Area and State Competitiveness Report 2003: Boston slips to 4th place. Massachusetts continues to hold 2nd.

Is metropolitan Boston slipping? Should business and government leaders be worrying about a decline in the hub's competitiveness? A new study from the Beacon Hill Institute at Suffolk University finds that the Boston metropolitan area has slipped a notch in its ability to compete with other major metropolitan areas in its ability to sustain a high standard of living for its residents.

In its third annual Competitiveness Report, BHI authors Jonathan Haughton and Cagdas Sirin found that Boston slipped from 3rd place last year to 4th place this year, as Minneapolis rose from 5th to 3rd.

Some of the reasons for Boston's decline:

· Reduced personal security: The number of murders per 100,000 inhabitants rose from 1.8 to 2.4.

· Reduced "openness": The number of air passengers per capita fell from 2.6 to 1.9 (suggesting that Boston was hit particularly hard by 9/ll).

· Rising electricity costs: The cost of electricity per million BTUs rose from $27.37 to $28.49.

·BHI also ranked the 50 states according to their competitiveness. Massachusetts held on to its 2nd place ranking for the third year in a row. Said David Tuerck, Executive Director of the Beacon Hill Institute: "While Boston and the state remain near the top in terms of their competitiveness, the fact that Boston fell to 4th in our rankings is a warning sign for both state and local officials."

The Boston metropolitan area consists of seven Massachusetts counties and three New Hampshire counties with a population of about 6 million people. Rankings for both the metro areas and the states were determined by aggregating some 50 variables into nine "subindexes" and then by aggregating these subindexes into an overall index of competitiveness. The subindexes are (1) government policy, (2) security, (3) infrastructure, (4) human resources, (5) technology, (6) finance, (7) openness to trade, (8) robustness of competition and (9) environmental policy.

The annual study has become widely recognized for its importance in measuring competitiveness. In October 2003, Governor Ruth Ann Minner of Delaware cited her state's 1st place ranking as evidence of its ability to "sustain high personal income and long-term economic growth." The governors of Iowa and Colorado likewise heralded the study as measures of their success.

The Beacon Hill Institute for Public Policy Research

News Release

8 Ashburton Place

Boston, Massachusetts 02108-2770


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