02/06/2004: 
Urban Archaeology
State May Face 'Brain Drain' If Businesses Aren't Retained
from Banker & Tradesman
BOSTON, MA- Massachusetts faces a crippling ripple effect if it doesn't do more to keep its businesses here in the Bay State, Liberty Mutual President and Chief Executive Officer Edmund Kelly said last week at Meredith & Grew's 25th annual "Trends in the Real Estate Market" event.
"If we don't do anything, there will be a brain drain out of Boston," he said. "Barring any significant action, it will be evident in 10 years ... In short, the stakes are high."
Kelly spoke before more than 400 commercial real estate professionals, a crowd that also included a surprise visit by Gov. Mitt Romney. The governor took to the stage at the end of the event, emphasizing his own concerns about the regulatory burdens, taxation and housing problems that harm Massachusetts' ability to attract and keep companies.
Liberty Mutual, founded in Boston in 1912, employs 37,000 people in more than 900 offices around the world. The company, ranked 129th on the Fortune 500 list, remains based in Boston. However, Kelly said the hurdles in Massachusetts makes doing business in Boston difficult.
"It's much easier for Liberty Mutual to do business in China or Venezuela than in Massachusetts," Kelly said. "Most of the country's top insurance companies won't sell in this state because it's not profitable. The reality is that the internals of the state make doing business difficult ... Right or wrong, it's viewed as unfriendly to business."
Liberty Mutual opened a new office this month in Chongquing, China, a city of 31 million people. The office will provide property and casualty insurance to businesses in western China with hopes to provide coverage for private automobile insurance over the next few years.
Kelly said companies are faced with two choices - they can continue migrating business and jobs to other states and countries or they can make Massachusetts more business-friendly. He's hoping that other business leaders will join him in the quest for reform.
Romney said he too remains concerned about Massachusetts' ability to hold onto business. Too many people, he noted, simply assume that businesses will remain in Massachusetts for the long haul.
"There's a long-term sense of inevitability ... a feeling that every company that's here will stay here," Romney said. "It's [a situation that's actually] fragile - companies and employers have every opportunity to outsource jobs. We have to do more to bring employers here."
In other news, local Liberty employee IBNR has been transferred to Chongquing where he will use his new degree to insure birds against human flu.
