Massachusetts Ranks 1st in Competitiveness

Gov. Deval Patrick with report co-authors Gurumani Manish,  Rawan Barri, and Frank Conte.


The Beacon Hill Institute’s Eighth Annual Competitiveness Report shows that Massachusetts ranks first among all state in terms of its economic “competitiveness” -- its ability to attract and retain business and to provide a high standard of living for its residents over the long run. 

The Bay State moved up from last year's second place due to its strong showing in human resources, technology, business incubation, and security. 

Health coverage

Massachusetts rose from ninth to first in the measure that tracks the proportion of residents with health insurance coverage. The state also improved its ranking for security, thanks to a decrease in crime.

Gov. Deval Patrick introduced the report at a conference at Suffolk University.  Massachusetts Undersecretary for Business Development Greg Bialecki; John Regan, vice president of the Associated Industries of Massachusetts; and Michael George, CEO of OatSystems, Inc., held a panel discussion about the report.

Tops in technology

Massachusetts also continues to outperform all other states in technology, as measured by grants from the National Institutes of Health, new patents, and its high tech workforce. The Commonwealth ranks 1st in venture capital per capita, making it, by that measure, the most attractive state in the union for startups. 

New Hampshire slips

Eight of the states that made the top 10 last year remained in the top 10 this year.  Oregon and Montana moved up. South Dakota dropped out, as did New Hampshire, which slipped from ninth to 17th as a result of falling scores for security, fiscal policy, and business incubation.  New Hampshire ranked third just two years ago.


The study was prepared by Assistant Professor Jonathan Haughton, senior economist at the Beacon Hill Institute; Frank Conte, director of communications and information systems at the Beacon Hill Institute; G.P. Manish, a PhD candidate in Economics at Suffolk University; Suffolk University student Rawan Barri; and Tufts University student Bradley Dreisbach.


The Beacon Hill Institute competitiveness index is based on a set of 43 indicators divided into eight subindexes – government and fiscal policy, security, infrastructure, human resources, technology, business incubation, openness, and environmental policy.  The overall index is an average of the eight subindexes, each of which is itself an average of the indicators making up that subindex.  The index ranges from “1” to “10,” with “10” indicating the best state in a category and “1” indicating the worst, and is centered on 5.  The breadth of the BHI index distinguishes it from more narrowly focused measures of competitiveness that target only taxes, high tech, or economic freedom.

“The current economic turmoil forces state policymakers to respond with short-term solutions,” said Jonathan Haughton, Beacon Hill Institute senior economist and lead author of the report. “The key, however, is to pay attention to the factors that contribute to a state’s economic growth over the long term. The index continues to show that improvement in a state’s ranking can translate into a higher standard of living for state residents. Thus, if a state gains a point in the index, it will also gain $1,546 in real per capita income per year.”

The Institute will release its rankings of the top 50 U.S. metropolitan areas in February 2009.

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Frank Conte