Report: Financial Services Sector A Major Driver Of Mass. Economy
Life sciences and information technology companies may generate more buzz, but they still lag behind the financial services sector when it comes to economic impact in the Bay State, according to a report issued by PricewaterhouseCoopers and Boston consulting firm Mass Insight.
The report, titled “Massachusetts Financial Services Sector,” compared the financial services industry to others identified as key sectors, including information technology, life sciences, health care, education and government.
Commissioned by the Boston Financial Services Leadership Council, it found that five percent of the state’s jobs, or 165,900, are generated by the financial services sector, compared to 4.7 percent in the technology sector and 2.1 percent in the life sciences sector. And financial services jobs in Massachusetts offered an average 2012 salary of $113,943, compared to the state average of $55,600.
Financial services companies are the biggest job-creating, for-profit industry in the Bay State. But nonprofit sectors lead the way in terms of job creation, with health care and social assistance agencies accounting for 15.9 percent of state employment, and educational services organizations comprising 5.9 percent of the state’s jobs.
Financial services companies also generated 9.2 percent of total state economic output, while life sciences and technology companies generated 7.9 percent and 6.7 percent respectively.
The latest Massachusetts Financial Services Sector report is based on 2012 data, and shows continued progress for the financial services sector after an initial report was issued in 2010. For example, mutual fund assets in Massachusetts grew 9.8 percent in 2012, while total venture capital invested in Massachusetts increased 27 percent.
The report identified Boston as a global financial sector along with a handful of other cities, including Chicago, New York City, Shanghai, Hong Kong, Tokyo, Singapore, London and San Francisco, fed by world-class business schools in the Greater Boston area. The report noted that Boston is home to three of the top 10 money management firms in terms of assets: State Street Global Advisors; Fidelity Investments, and Bank of New York Mellon Asset Management.
“The complete portfolio of diverse financial services has positioned Boston, in particular, as a leading global finance center,” William Guenther, CEO and Founder of Mass Insight, said in a statement. “As the region’s window on the world, our historic strengths in asset management and risk management have solidified our role in the U.S. and expanded global opportunities for the firms who base their business in Boston and across the Commonwealth.”
Image source: Freedigitalphotos.net
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