Boston again near the top in economic vitality index

Boston Business Journal - by Jesse Noyes Boston Business Journal

For the second consecutive year, Boston took a top spot in a list of the most competitive metro areas in the country.

Greater Boston ranked second in level of competitiveness, beat out by Salt Lake City, among 50 city regions in 2007, according to the annual "Metro Area Competitiveness Report" compiled by the Beacon Hill Institute at Suffolk University. It was the second year Boston held the position, beating other regions such as Denver, Portland, Ore., Seattle and San Jose, Calif.

The rankings are put together by measuring various factors, such as technology, infrastructure and human resources, and then providing an overall index of each region's overall competitiveness.

For 2007, the Boston area received an index of 7.38, behind Salt Lake City's 7.57. Each year since the report began being compiled in 2001 Boston has managed to stay "fairly systematically at or near the top," said Jonathan Haughton, a professor of economics at Suffolk University and an author of the report.

What pushes Boston to a top spot in the rankings are its competitiveness in the technology field, where it ranked first, and human resources, for which it ranked second behind Minneapolis. Technology rankings are configured by looking at research funding, patents issued and the number scientists located in the area, while human resources largely looks for a skilled workforce that is not abundantly expensive.

Where the region lags is in areas like infrastructure, which includes issues like commuting time, energy costs and affordable housing. Boston falls near the bottom of the list in the infrastructure category with a ranking of 47.

Brian Gilmore, a spokesman for the Associated Industries of Massachusetts, called the Suffolk University report "good news" and "bad news." Problems, such as high rents and taxes, could drag on Boston's rankings, especially as regions off the West and East Coasts position themselves as competitors for large businesses outside traditional technology centers, he said.

"All regions of the country are trying to reinvent themselves," Gilmore added. "We haven't got the whole playpen to ourselves."

But despite Boston's old structure and struggle with major public transportation development such as the Big Dig, the area is going through a positive transformation, said Paul Guzzi, president and CEO of the Greater Boston Chamber of Commerce. "When you look at the link now that is being created between the downtown Financial District, the Greenway and the Seaport District, that opens up incredible opportunities," he said.

The strangest occurrence might be Boston's finishing behind Salt Lake City in terms of competitiveness. Haughton said despite Boston's higher ranking in human resources and technology, Salt Lake City does well across almost every category. Salt Lake City took the top ranking for infrastructure and bested Boston in the business incubation category.

"What Salt Lake City has done, though its strengths are quite different (from Boston's), is that it doesn't really do badly on anything," Haughton said.

Jesse Noyes can be reached at jnoyes@bizjournals.com.