Mediocre, Mass.
We're not nearly as special as we like to think we are.
Massachusetts -- and Boston -- continue to have many strengths, of course. Start with the universities and the hospitals. We have Harvard and MIT, the state's two most valuable assets. We have 65 colleges in the Boston area alone. Boston is the nation's only city with two hospitals on U.S. News' list of America's best hospitals, and Massachusetts is second in grants from the National Institutes of Health. Massachusetts ranks second in the country in personal income. We have the world champion Boston Red Sox and the world champion New England Patriots.
But in some important ways we once used to measure our advantages -- our job-machine of a mutual fund industry, our innovative technology sector, our powerful congressional delegation -- the world is catching up with us. Let us count the ways.
Mutual funds. Nowhere is Boston's slipping position more evident than in the mutual fund business, an industry born in Boston. In 1994, roughly 42 percent of the money US investors put into stock and bond funds went to Boston firms. Last year that share plunged to about 3.5 percent, according to data from Financial Research Corp. The decline largely reflects the fortunes of Boston's two dominant players, Fidelity Investments and Putnam Investments. Fidelity has become an also-ran in attracting new investor money compared to powerhouse companies like American Funds and Vanguard. Putnam has become a disaster since getting whacked for front-running its own customers. The fund industry has been a critical economic engine for Boston; a long-term slowdown has profound implications.
Technology companies. We still have Route 128, America's Technology Highway; it is only big tech companies we lack. There is EMC Corp. -- then what? Analog Devices and Teradyne are nice companies, but hardly giants of the industry. What Massachusetts has proven adept at is growing innovative companies to a certain size and then selling them to larger companies based elsewhere. Another warning sign: New England, traditionally number two in attracting venture capital, recently slipped to third behind Silicon Valley and New York.
New companies. Name the last exciting company to come out of Massachusetts. None of the hot, new companies like Google and eBay and Yahoo were invented here. Biotech companies like Genzyme and Biogen Idec are the hope of the future, but together they employ just 5,000 people in Massachusetts. If life sciences is the future, it is a future we can lose as well as win. Meanwhile, Massachusetts' home-grown base like Fleet, John Hancock, Gillette, and Reebok are getting swallowed up by more successful players. We've become a franchise town like everywhere -- exactly the point.
Education. Harvard and MIT aren't going anywhere; no state has a higher percentage of residents with a college degree. But others are catching up. According to a study by Northeastern University's Center for Labor Market Studies, Massachusetts has lagged well behind the nation in expanding the number of college graduates since the mid-1980s. Nationwide, the number of college-educated people rose 63 percent between 1984 and 2001 compared to just 37 percent in Massachusetts. The Commonwealth ranked 45th among the states in increasing college graduates in its population since the mid-'80s, the report found.
Political muscle. Once Massachusetts could count on a congressional delegation that included Tip O'Neill, the speaker of the House, and Joe Moakley, the chairman of the Rules Committee, who in a Democratic-controlled Congress could bring home the bacon no matter who was in the White House. We still have Ted Kennedy, but the Democrats control nothing in Washington these days. Last year we had the distinction of being the only state to lose population, a scary omen.
Vacation is over; an election is just ahead. And there is plenty to talk about. Our slipping competitiveness is the place to begin.
Steve Bailey is a Globe columnist. He can be reached at bailey@globe.com or 617-929-2902. 
