New Economy cities: Boston is magnet for high-skilled workers

With world-class universities, Boston lures companies eager to tap its high-skilled graduates.

Northeastern University students chat between classes outside the library. The high number of world-class colleges in Boston is one reason economists think the city will thrive in the New Economy.

Melanie Stetson Freeman/Staff

November 20, 2009

Stu Haber has seen the future and it is trash. His employees at Infoscitex, a Boston-area start-up, built a machine that can transform everything from carpet to yesterday’s lunch into electricity or heat without any hazardous waste.

The Green Energy Machine that Mr. Haber and his engineers call “the GEM” was originally developed to reduce the military’s waste in Iraq and Afghanistan. But in recent months the company has received inquiries from more than 1,000 potential buyers, including local towns, Caribbean hotels, and even the White House. “It eliminates 95 percent of waste,” says Haber, president of the company, noting that three tons of trash will power a 200-unit apartment complex. “You don’t need trucks to come to the site to take trash away.”

Boston is known for its world-class colleges and universities, and one reason Haber established his company here is because of the highly skilled engineers he can recruit in the area. The lead engineer on the GEM, Matt Young, received his degree from nearby Worcester Polytechnic Institute. “We have engineers who have come out of Harvard, MIT, WPI,” Haber says. “Having that brainpower available and the ability to hire from these great institutions is a great base for us.”

That’s why many economists say Boston will continue to do well in the future. According to an analysis released last year by the Atlanta Regional Council for Higher Education, Boston leads the country with the greatest number of physical science degrees awarded every year and is in second place for degrees in engineering and biological sciences.

Educational services make up an important component of the city’s economy. According to Tim Consedine, an economist at the Bureau of Labor Statistics in Boston, 5 percent of Boston’s workers are employed in educational services – more than double the national average.

Educational services, together with the healthcare sector, provide jobs for more than a fifth of Boston-area workers. Both colleges and hospitals continued hiring workers during the economic slowdown, with 9,000 new jobs added in these two sectors since last year, says Karl Case, an economist at Wellesley College near Boston.

One indication of the strength of the local economy? Housing prices did not decline as drastically in Boston as elsewhere.

Yet therein lies a problem for the city’s future: The relatively high cost of housing makes it harder to attract young workers.

“If people go elsewhere, businesses will go elsewhere,” says David Trueblood, a spokesman for the Boston Foundation.

Maybe. But a lot of those young engineers are attracted to the “creative class” culture that runs deep here.

For example, at Infoscitex, young engineers are already working on the next projects: a baby bottle for infants who have difficulty breathing and swallowing at the same time, and an Army uniform with a built-in electronic network.

And they’re hoping the Obama administration will purchase one of their GEMs for the White House.

Other cities:

1. Fort Collins, Colo., builds on clean tech

2. Houston aims to move beyond the oil age

3. Huntsville eyes next launchpad for growth

4. A Seattle slew of advantages

5. The next boom cities overseas

Main story: Five cities that will rise in the New Economy
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