Life sciences firms are kings of the hill Business leaders see old tech edged aside

Most Massachusetts business leaders think biotechnology, pharmaceuticals, and life sciences companies have edged aside traditional technology companies as the primary sector that will propel the Massachusetts economy, according to the third annual survey of Globe 100 chief executives.

Leaders of the Bay State's most successful companies perceive China as the region's most powerful economic rival. Few say completion of the epic $14.6 billion Big Dig in Boston has done anything to help their business.

And three out of four think the state's economy will suffer from the acquisitions of FleetBoston Financial Corp., Gillette Co., and John Hancock Financial Services Inc. by larger out-of-state corporations. A total of 67 of 100 chief executives responded.

''It matters that there will be fewer strong voices for this economy, strong voices to deal with the cost of living and to deal with the education system that develops the talent of the community," said David Kenny, chief executive of Digitas Inc., a Boston online and direct-marketing company that landed at 21st place on the Globe 100. Subsidiary offices, he said, ''just don't have the same passion and activism."

Views like Kenny's ''reflect a deep concern about the outsourcing of the region's economic influence and decision-making," said Edward Cafasso, senior vice president of Morrissey & Co., a Boston corporate ''reputation management" firm that conducted the survey for the Globe. ''Many of the bought companies acted as the business community's tribal elders. They set the agenda. The anxiety you're seeing from local executives is about losing homegrown leadership and prestige."

''These are hard," said Norman Drapeau, chief executive of Bedford financial-services technology provider MRO Software Inc. Losing a headquarters company is ''one of those things where if it happens to your neighbor, it's not so bad, but if it happens to you, it's terrible."

But Drapeau and other chief executives said takeovers are the natural course of business. New technology companies, they said, are already replacing the old industrial giants.

''We whine too much about it," said William H. Swanson, Raytheon Co.'s chief executive. The Boston area's world-class health and medical industries, higher education, and emerging technologies all ensure the region will thrive, he said. ''That's a real strength, and we shouldn't lose sight of it," Swanson said.

One reason many Globe 100 chief executives praise the region's character is that two out of every five of them are natives of the Boston area, although Swanson hails from California. (Some other personal details: Just one in three chief executives surveyed wears a suit to work every day. And a low-tech hard-core one-third of them refuse to carry either a BlackBerry messaging device or an advanced wireless ''smartphone" with digital-organizer functions built in.)

The Globe 100 represents the top-performing public companies in the state, and so it stands to reason the firms' chief executives are bullish on their growth prospects. Nearly three-quarters of those surveyed said they are planning new hires during the next year. Almost half predicted the economy would be only ''about the same" next year. Another 44 percent see improvement, with only 9 percent forecasting a downturn.

The chief executives were less optimistic than they were 12 months ago. Then, 82 percent of those surveyed said they expected the US economy to be in better shape within a year. Now, 44 percent do. But the number who expect to increase hiring in the next 12 months has climbed slightly since last year.

''We're not going to see a booming economy," said Tim Vaill, chairman of Boston Private Financial Holdings Inc., a banking and investment firm with $21 billion in assets and 12 subsidiaries nationwide. ''On the other hand, it's puttering along, and it's more positive than negative."

The Massachusetts economy, said Peter Gyenes of Ascential Software Corp., is cyclical -- as in other regions. ''It's a good place to be, particularly in tech," he said.

Gyenes was among the 7 percent of chief executives who ranked the prospect of another terrorist attack on US soil as their top fear. About 10 percent surveyed were concerned with rising energy prices.

But many executives' concerns were more personal: 25 percent said meeting their companies' revenue and profit predictions kept them ''awake at night," while 16 percent worried about competitors. They aren't losing that much sleep, though -- over 90 percent say revenues and profits will rise, and none plans layoffs.

According to 53 percent of the survey respondents, the long-awaited completion of construction of a widened, underground Central Artery through Boston and third tunnel under Boston Harbor has been no help to business. Just one in seven said the Big Dig helped their company.

Still, Gyenes said the Big Dig made life easier. ''I can't tell you how many times I had major traumatic experiences trying to get into the airport on time," he said of his commute from his Brookline home or Westborough office to Logan International Airport. ''Now it's much less traumatic."

The high cost of local real estate vexes many chief executives seeking to recruit talent, particularly in technology fields. ''You try to recruit somebody from the heartland, and they get a little sticker shock," said Josef von Rickenbach of Parexel International Corp. of Waltham, which provides technical services to life sciences companies. About 74 percent of executives expect prices to remain high, despite concerns about an overheated market.

The majority -- 53 percent -- of CEOs described the state's business climate as ''fair" in the survey, and 60 percent said they were not sure whether Governor Mitt Romney has kept his promise to attract new businesses.

In interviews, they most often linked the state's difficulties in promoting business growth to a failure by public and higher-educational systems to train enough skilled workers.

''We don't have enough young kids who are interested in science and math," Swanson said. ''If Massachusetts put its shoulder to the wheel, it could figure out a way to really promote science and math to make sure we're graduating young kids in this field. We could have a competitive advantage against everybody else."

Drapeau said he would like to see more emphasis by Boston-area colleges to provide training or links between students and local businesses. ''We have a great talent pool," Drapeau said. ''The more these students can be connected to the companies, the more they're going to stay around."

Kimberly Blanton can be reached at blanton@globe.com.