While the financial services industry grew an average of 3.5% between 2004 and 2005, it expanded only 1% in Massachusetts, Bloomberg reports, citing a new report from McKinsey. At this rate, the state is losing ground as one of the nation’s major finance hubs, the report concludes.
“This is a critical time for a very important industry,” said Paul Guzzi, president of the Greater Boston Chamber of Commerce, which co-commissioned the report with Mass Insight. “If we choose to do nothing, the trend lines are not positive.”
McKinsey suggests that fund giants such as Fidelity collaborate with colleges and universities to come up with a plan to bolster the industry. In addition, the state should improve economic development zones outside of Boston, McKinsey said. If these measures are taken, the management consulting firm said, Massachusetts will add 15,000 jobs to the financial services industry by 2010 instead of the 3,000 it is currently on track to offer.
In January, McKinsey issued a similar report that concluded New York is losing ground as the world’s No. 1 finance center to cities such as London, where the regulatory climate is more business-friendly.