Isenberg Professor Celebrates Economic Journal’s Twentieth Anniversary
February 15, 2018
“During my twenty years with MassBenchmarks, two themes connected with the state’s economy have figured prominently in our journal,” its Executive Editor and Isenberg professor Robert Nakosteen told a gathering of fellow economists, and leaders—business and political. “The first is the state’s dynamic mix of high-technology and education-intensive industries. The second has been the uneven sharing geographically of that prosperity.”
That disparate distribution, Nakosteen continued, has favored a Boston-centric economy with tight labor markets, high wages and salaries, and high levels of education. It has been a national success story, driven by innovative technology firms and world-class universities and medical centers, he emphasized.
In contrast, many communities beyond Metro Boston have come up short, plagued by high unemployment and fewer quality jobs and positive economic drivers and opportunities, remarked the Isenberg professor.
Nakosteen’s remarks graced a 20th anniversary celebration for the journal at the Federal Reserve Bank of Boston. (The program highlights the publication’s December 2017 issue.) A shared venture between the University of Massachusetts Donahue Institute and the Bank, MassBenchmarks mobilizes economists and data experts in reports, commentary, and analysis devoted to the state’s economy. The anniversary event included welcoming remarks from UMass President Marty Meehan and Housing and Economic Development Secretary Jay Nash. Nakosteen and senior contributing editor Alan Clayton-Matthews offered data-driven dissections of recent economic trends, and members of the journal’s editorial board explored economic issues in a panel discussion, “What Keeps You up at Night?”
Illustrating His Points
In his own presentation, Nakosteen employed bubble graphs depicting Location Quotients that compared the percentages of state employment in different industry sectors in Massachusetts with those for the nation as a whole. Employment in the Commonwealth was strong and growing in healthcare and social services; professional, scientific, and technical services; and educational services. It was strong and declining in information industries and weak and declining in manufacturing.
“Companies are likely to benefit when they operate in geographical clusters of businesses in the same industry,” notes Nakosteen. “Those clusters confer synergies from supply chains, labor force education, industry intelligence, and other factors. That’s also why former Massachusetts startups Facebook and Reddit moved to the west coast, with its stronger information industry cluster. And it explains in part why old line manufacturers left the state.”
Nakosteen also employed Location Quotient bubble graphs to depict the dominance of industry clusters in the Boston-Cambridge region versus the rest of the state. Beyond Boston-Cambridge, educational services and healthcare & social services were the only industry clusters to achieve strong and growing status.” “Viewed against the state’s exceptional prosperity [driven by its Boston-Cambridge performance], Massachusetts’ regional disparities are truly ironic,” Nakosteen told the gathering.
MassBenchmarks: Catalyst for Policy Making and Citizen Awareness
The Isenberg professor has excelled as MassBenchmarks’ executive editor since its first issue in 1997. In 2002, the publication began releasing quarterly Current and Leading Economic Indicators, a key barometer of the state’s economic performance. Several years later, inspired by the Federal Reserve Board’s “Beige Book” releases, MassBenchmarks’ editorial board (comprising academic, Federal Reserve, and industry economists) began issuing quarterly Notes from the Board discussions.
Those roundtables were a model for the Twentieth Anniversary Celebration’s panel discussion, “What Keeps You up at Night?” One takeaway from that discussion: The Bay State, panelists agreed, must improve coordination of its investments in middle- and lower-skill education and training that supports high-performing sectors. Well-educated professionals in the state’s stellar sectors have thrived, but others have been left behind. Leaving 45 to 55 percent of the state’s population in those straits is unacceptable, panelists insisted. We must plan for an economy, then, that invests strategically in complementary community college and vocational education.
Professor Nakosteen, who teaches economics and statistics to MBA and PhD students at Isenberg, also takes a cautionary tack: “Getting a handle on economic trends and tempering any wishful thinking with skepticism—that is my approach. I hope that my students can learn from that.”