Regional Report: Northeast 2016

WHY WE’LL BE HERE / MASSACHUSETTS

WHO Jeff Immelt, President and CEO, General Electric

SITE HISTORY The “world’s digital industry company,” as GE dubs itself, traces its origins to Thomas Edison’s laboratory in New York City. GE was incorporated in 1892 when Edison’s company merged with the Thomason-Houston of Lynn, Massachusetts, then took headquarters space in Schenectady, New York. In 1974, the company relocated to Fairfield, Connecticut. After last year’s tax hike, however, Immelt went public with his disappointment, launching a well-publicized search for a new home in June. Lured to Massachusetts by a $120 million incentive program, GE will move to an as-yet-undisclosed location in Boston’s waterfront Innovation District by 2017.

WHY MASSACHUSETTS? GE builds on what is already a significant presence in Massachusetts, with nearly 5,000 employees across the state in businesses including aviation, oil and gas and energy management. In 2014, GE moved its life sciences headquarters to Marlborough. Last year, GE announced it was relocating its energy services start-up, Current, to Boston.

REASON FOR LOCATION “Greater Boston is home to 55 colleges and universities. Massachusetts spends more on R&D than any other region in the world, and Boston attracts a diverse, technologically fluent workforce focused on solving challenges for the world. We are excited to bring our headquarters to this dynamic and creative city.”

NEW HAMPSHIRE | #24 | LAGGING GDP
The economy is humming, but a tight labor market—and sluggish in-migration—hampers growth. After decades of luring Massachusetts residents annually by the tens of thousands, that pace has slowed to a crawl. An overhaul of “outdated” land-use and zoning policies could help attract new residents, says Dennis Delay, an economist with the New Hampshire Center for Public Policy Studies. Delay and other economists expect steady economic expansion through 2019. The New England Economic Partnership forecasts New Hampshire will continue to lag GDP growth and job creation in both New England and the nation.

NEW JERSEY | #47 | BIOTECH PROMISE
Northern New Jersey’s economic mainstays—telecom, professional services, pharmaceutical research and manufacturing—show moderate growth, while education and healthcare outpace the nation. Moderate job expansion has bolstered consumer spending, aiding the retail, entertainment and hospitality sectors.

Professional services, long a Garden State mainstay, show signs of recovery from recessionary doldrums. JPMorgan Chase’s decision to relocate to Jersey City from Manhattan yielded 2,100 jobs—and a jolt of optimism at a time when most corporate traffic was heading out of state.

While the Garden State is closely connected to both New York and Philadelphia metro economies, such local clusters as biotech and software development expect moderate growth, offsetting stagnation in pharmaceuticals, telecom and manufacturing. Infrastructure improvements, including port-facility upgrades, may fortify economic growth in the trade and transportation sectors. Regulatory changes from Washington have roiled the financial services industry, shrinking payrolls.

Native son site selector Dennis Donovan, of Wadley-Donovan-Gutshaw Consulting, praises the state’s incentive and subsidy programs, but wishes permitting could be sped up. Central-state MSAs, including Trenton and Edison, have grown fitfully; net growth lags behind the national pace.