Indicator 1: Industry Sector Employment and Wages
How Does Massachusetts Perform?
Among the LTS, California, Florida, Minnesota, New Hampshire, Texas and Wisconsin were the only states where Innovation Economy growth exceeded that in the economy as a whole. In Massachusetts, Innovation Economy employment grew at a similar rate as the state employment figures as a whole (1.4% vs 1.5%). Scientific, Technical & Management Services and Business Services were the leading innovation sectors, in terms of employment growth, expanding at 4.6% and 3.7% respectively. Overall, there has been a growing trend of jobs shifting from manufacturing sectors to service-oriented ones, particularly software and scientific/technical services. Multiple factors contribute to this, including outsourcing manufacturing to places with cheaper labor, as well as automation and the rising tech industry.
The Defense Manufacturing and Instrumentation Sector experienced employment declines from Q1 2015-Q1 2016 in 10 out of the 15 LTS, including Massachusetts. This sector has struggled with reduced federal funding, resulting from Department of Defense cost-cutting measures, and the winding down of major overseas deployments. Defense Manufacturing and Instrumentation, along with two other sectors (Computer & Communications Hardware and Diversified Industrial Manufacturing), have experienced declining employment in at least half the LTS since Q1 2012.
Wage growth has been particularly strong in several Massachusetts Innovation Economy sectors since 2011. These include Financial Services, Biopharmaceuticals & Medical Devices, and Scientific, Technical & Management Services. The Commonwealth’s fastest growing sector in terms of wage growth, Financial Services (7.7%), experienced mild employment growth relative to 2011 (2%). Biopharmaceuticals & Medical Devices, saw an average wage increase of 6.8% and employment growth of 9% since 2011.