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GE and the promise of the new Boston economy

As recently as a few decades ago, this was a much different city and Massachusetts a much different state.

Construction in January in the Seaport District, where GE plans to move.Bill Sikes

When General Electric announced earlier this month that it had chosen Boston for its new world headquarters — over Providence, Atlanta, and New York — the city came out looking pretty good. "We want to be at the center of an ecosystem that shares our aspirations," GE's chairman and CEO Jeff Immelt said in a press release. "We are excited to bring our headquarters to this dynamic and creative city."

With all due respect, the words "ecosystem," "dynamic," and "creative" didn't used to describe this place.

As recently as a few decades ago, Boston was a much different city and Massachusetts a much different state. GE had a large presence in the western part of Massachusetts but was actively plotting its escape. In 1986, the company began closing its large transformer plant in Pittsfield, a move that would ultimately mean the disappearance of thousands of jobs.


"At first, people were in disbelief that GE was going to leave," recalls 70-year-old Thomas Hickey, who has lived in Pittsfield his whole life, served as a city councilor, and worked at GE for 19 years. "For a lot of time, they thought, What did we do wrong? Why are they leaving us?"

What Pittsfield did wrong in the decades preceding GE's departure was the same thing Boston did wrong: It relied too much on large companies to drive its economy. In many ways, we were like a company town: a region of big corporations, but too few of them. It was a period defined by strong economic growth owing to just a handful of large high-tech companies in the area, such as Digital Equipment Corp., Data General, and Wang Laboratories (those three alone employed close to 200,000 people at one point). Jobs were plentiful, things were humming, and we got content.

Before the early 1980s, there wasn't much in the way of a culinary scene here, at least for those expense-account types looking to book business dinners somewhere other than Anthony's Pier 4, the dining room at the Ritz-Carlton, and Locke-Ober. Culturally, Boston's most visible art institutions were largely limited to the big three — the Boston Symphony, the Museum of Fine Arts, and Boston Ballet. We had long been a sports town with great colleges and health care, but that wasn't enough.


When the large high-tech companies failed, were sold, or moved, Greater Boston's job market went with it. In the recession year of 1991, Massachusetts's unemployment rate was a horrible 7.9 percent, when the US average was 6.8. It was a wake-up call: Boston and the region realized survival meant a lot of little industries overlapping to create something larger than the sum of their parts. We knew we needed more arts, more startups, more young people.

Yes, as Harvard economist Ed Glaeser will remind us regarding Boston's long history of innovation and reinvention, we've always known how to shift gears. But to truly be a place that would attract new businesses and people, we needed to do more than just adapt.

When the story of Boston's revival is finally told — the highest population since the 1960s, a place where more than 1 in 3 residents are between the ages of 20 and 34, a city that was chosen to potentially host the Olympics (insert snark) — it will have nothing to do with pinning our hopes on a single company and everything to do with the fact that we created an ecosystem that was both dynamic and creative, to use Immelt's words.


It also doesn't hurt that our neighbors in Cambridge and Somerville have been absolutely killing it.

Boston's transition was spurred in part by a massive investment in new housing. It was also driven by a willingness to step out of our parochial comfort zone, through liberalizing government regulations, increasing cultural resources, and investing in an innovation economy that focused on creating jobs rather than waiting for them to show up.

In this region, we continue to build both world-class food and arts scenes and entire new neighborhoods where people work, live, and have fun. Pittsfield is diversifying, too, investing in arts, creating catalysts for startups, and focusing on a business climate that can create many small companies, rather than hoping to attract one or two large ones.

Boston's challenge is to continue along its path of innovation and creativity, in order to keep the city affordable for the average worker and to harvest from the ecosystem that draws new people and businesses to the area. That, rather than concentrating on a handful of big corporate players, will be what secures the region's future for another 30 years and beyond.

Mike Ross, former president of the Boston City Council, is a frequent contributor to the Boston Globe. Follow him on Twitter @mikeforboston and send comments to



> 1991 — 7.9%

> 2015 — 4.2%

Source: Bureau of Labor Statistics