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High Expectations for Biotech Plan
LOWELL ߞ; More than half of Massachusetts CEOs are somewhat optimistic about their own companies, but are concerned about the current state and national economies, according to a new statewide poll of 500 CEOs released today by the Massachusetts Economic Assessment and Analysis Project (MEAAP) ߝ a joint project of UMass Boston and UMass Lowell.
Fifty-four percent of those surveyed said their own businesses were growing compared to a year ago. While most projected no change in their number of employees over the next 12 months, 34 percent said they planned to hire additional workers and only 4 percent planned to decrease staff over the same period.
Expectations are high about the impact on the state economy of Gov. Deval Patrick’s $1 billion biotechnology plan, with 74 percent of the CEOs thinking it will be helpful to the state’s biotechnology industry. An equal number - 74 percent - thought the Patrick plan was likely to increase the state’s overall economic growth rate. Interestingly, while only 13 percent of CEO respondents said their companies were involved in any way in the biotechnology, pharmaceutical, or medical device or instrumentation industries, 38 percent said they thought the governor’s overall approach would be helpful to their companies.
“This survey confirms that the state ߝ and UMass Lowell ߝ are appropriately focusing on growing the biotech and life sciences industry,” said UMass Lowell Chancellor Marty Meehan. “UMass Lowell has nano-medicine, biomanufacturing, and medical device development initiatives that can spur additional job growth in these critical sectors.”
This is confirmed by 48 percent of the CEOs who indicate that the skilled workforce and proximity to research institutions are the state’s greatest competitive advantage.
David Terkla, an economics professor at UMass Boston, who is a member of the MEAAP analytical team, added that the survey results that “show CEOs growing optimism are encouraging and hopefully will be reflected in a continued strengthening of the state’s economy over the next year.”
One sign of a potentially improving business climate was the perception among CEOs of the growing availability of financing to their companies, with 49 percent viewing financing as readily accessible, up from 31 percent in the fall of 2005. Only 6 percent listed “not enough financing” as the most significant impediment to expansion of their businesses, compared to 12 percent viewing it that way in 2005.
In another sign of improvement of the business climate, government regulations were seen as less of a major impediment to business expansion than they were two years ago. In the current survey, only 5 percent of CEOs cited government regulations as the biggest impediment, down from 11 percent previously. And, while 41 percent of the CEOs still thought that government regulations were significant impediments, that result was a major improvement from the fall of 2005, when 64 percent cited regulations as significant impediments.
Nevertheless, 48 percent of Massachusetts CEOs said that their businesses experienced situations where government regulations were inconsistent with each other. State regulations were considered more of an impediment than federal or local regulations.
The survey of over 500 CEOs of companies with 20 or more employees is the largest survey of its kind in Massachusetts. The poll has a margin of error of 4.5 percent. Full results of the poll can be found on the MEAAP website at www.MassEconomy.org. MEAAP was established by the Legislature in 2003 to inform policy makers, the media and the public about economic trends in Massachusetts and to track the performance of economic stimulus programs enacted in Massachusetts.
Other key results of the poll included the following:
- Energy costs moved up as a perceived impediment to business expansion, with 23 percent citing those costs as the single largest impediment, up from 11 percent in the previous survey. Health-care costs were also cited by 23 percent of the respondents as the largest impediment.
- The CEOs were almost evenly divided over the likely impact of the state’s new universal health-care mandate on the state’s economic growth, with 35 percent predicting it will have a positive impact, 31 percent predicting a negative impact, and 24 percent predicting no impact.
- Of those CEOs that had taken advantage of state economic development incentive programs, such as workforce training programs, loans, grants, and tax incentives, 90 percent viewed those programs as important to their companies, and 79 percent said the programs were important in retaining or expanding their workforce.
UMass Lowell, a comprehensive university with a national reputation in science, engineering and technology, is committed to educating students for lifelong success in a diverse world and conducting research and outreach activities that sustain the economic, environmental and social health of the region. UML offers its 11,000 students more than 120 degree choices, internships, five-year combined bachelor’s to master’s programs and doctoral studies in the colleges of Arts and Sciences, Engineering and Management, the School of Health and Environment, and the Graduate School of Education. www.uml.edu.