MassLive, June 17, 2025
Boston faces its biggest economic threat since the industrial collapse
Boston University professor James O’Connell, author of a new book on the city, shares his take
By Scott Kirsner | SKirsner@masslive.com
James O’Connell’s new book may not be everyone’s idea of a beach read. But if you’re interested in how cities rise and fall, and how global forces impact a region’s economy, it could be the perfect page-turner for your lakeside lounging this summer.
O’Connell, a Springfield native and professor at Boston University, is the author of “Boston and the Making of a Global City.” He says he has spent roughly two decades exploring how Boston grew into an important global hub — and how the economy works today. (Early in his career, he ran the Springfield Redevelopment Authority under then-mayor Richard Neal.)
The book covers everything from the MBTA to housing costs to the recent growth in industries such as robotics and life sciences. But O’Connell finished writing the book toward the end of the Biden administration; it’s officially out in July.
I caught up with him last week to talk about how some of the early Trump administration policies are affecting Boston — and the rest of Massachusetts. (Full disclosure: the book includes a brief reference to a nonprofit organization I co-founded.)
Scott Kirsner: A lot has changed since January of this year, since the inauguration. How do you think these changes are going to affect Boston, which is the focus of your book?
James O’Connell: Oh, boy. It’s not good. One, you’ve got the cuts in the research funding, whether it’s at the university level, hospital level or the private-industry level, like Moderna losing a $600 million contract to develop [an] avian flu vaccine. That’s really, really tough. I know everything is being contested in the courts. But it looks like some of these monies are just going to be lost.
Kirsner: You touched on Moderna. Moderna is a company that manufactures a product in the United States, including here in Norwood and Marlborough. Sublime Systems, which is a company out of MIT that’s making a more sustainable cement, just had a Department of Energy grant rescinded, and they were planning to set up a manufacturing plant in Holyoke. The administration says it wants more manufacturing jobs in the U.S. Is their strategy just, “We think tariffs will create those manufacturing jobs, and don’t worry about these companies that are suffering from our cuts,” companies that were already manufacturing or planning to manufacture domestically?
O’Connell: It’s all performance. There’s nothing serious [from the Trump administration] about economic strategy, dollars and cents, Economics 101, and how you promote real industry and employment. It’s really, really discouraging.
Immigration key to healthy economy
Kirsner: Are there other things that keep you up at night, when you think about Boston’s future competitiveness and Massachusetts’ future competitiveness?
O’Connell: The whole thing about “immigrants are bad.” Forty-three percent of immigrants to Massachusetts have at least a bachelor’s degree. Yes, you have the people who are cutting your lawn, or washing dishes in a restaurant, but then you’ve got almost half the people who are here and have real training, whether in the medical field or business or research. And about a quarter of all founders of biotech companies are foreign-born, and we’ve welcomed that. Boston has really embraced globalization over the last thirty or forty years. That’s my argument. And what happens once you turn off that spigot?
Higher Education under attack
Kirsner: The book talks about higher education here, and the sheer number of universities we have. Right now, it does feel like Harvard, specifically, is under attack. But all the other universities — MIT and University of Massachusetts and Boston University — are they going to feel the effects of the State Department curbing visas of Chinese students, and the travel bans for particular countries? Some are predicting we are going to see thousands of jobs shed at universities over the next couple years.
O’Connell: At the higher-end schools, you’re going to be able to fill those [student] slots with people from somewhere [else], domestically or not, and maybe not throw off your enrollment that much. … [Other schools] like Clark University [may have challenges, and Clark has already been laying off employees]. Clark is a perfectly respectable school, and they’re down in their enrollment by several hundred students. … It’d be awful to lose a school like that. That would be a tragedy. Schools that are going to be impacted are the more middle-tier schools.
Kirsner: And when you say impacted, you mean potentially shuttering more colleges?
O’Connell: Put out of business, right.
High cost of housing
Kirsner: You talk about affordability, income inequality [and] housing affordability as just persistent challenges for Boston. How does that impact the city’s ability to attract and retain talent? They are all issues that everybody talks about when you get government officials and business leaders together, and nobody seems to be able to move the needle on them.
O’Connell: I’m not going to say that I’m some seer, but I’ve been reading about this, writing about this, teaching about this, for over 20 years here in Boston. … The number one thing for economic development, I’ve said all along, is housing. We’ve got what so many other cities want. We have the ecosystem of research and development, finance, venture capital, the patent attorneys, the advocacy organizations like MassBio. We’ve got all that in place, and that’s what the rest of the world wants.
But it’s so expensive to live here. The cost of housing, I would say, is the biggest single detriment. That’s why people are leaving. And I know a lot of people in suburban towns around Greater Boston — we don’t want to change the character of our community and allow in some apartment buildings. But that’s the engine that makes it go. We’re trying to do it, but it’s hard. You name the city anywhere in this country, and they’re having problems with affordable housing, but we have it acutely.
Kirsner: Do you have a favorite proposed solution? If we gave you a magic wand, what would you do to unlock more affordable housing?
O’Connell: With this MBTA Communities Act, the state is forcing communities to allow multi-family housing within a half mile of a transit station, the commuter rail, etc. I think if there are 170-odd cities and towns that are supposed to do it, 130 or 140 have complied. But the thing is, you can rezone something [for the construction of new housing], but the market conditions have to be in place. …The cost of construction is high, the cost of land is high, the cost of borrowing is high, and it’s just slow. It’s hard to wave that magic wand.
… Governor Healy got a bond bill passed last year [the Affordable Homes Act] to build and rehab tens of thousands of units of housing. But I don’t know how that’s playing out. The key is you have to prime the pump with some government subsidy, which, of course, our federal government today won’t do.
The MBTA needs to improve
Kirsner: You talk about the MBTA in your book, and you say, if Boston wants to be a world-class city, we need a better transit system. Are you seeing signs of improvement under the relatively new general manager, Phillip Eng? Are we on the right track, if I can be a little punny?
O’Connell: I think so. I think [Eng is] really serious. … He knows how to do it. He’s an operations guy. He rides the subways all the time.
The subway is problematic. It’s 125 years old. It hadn’t been maintained. He dealt with all these slowdowns, which I think is good. They’re still working on it. The buses seem to be working OK. They can improve. It’s the commuter rail system which really works pretty well. The trains are on time. Ridership is almost back, at least three or four days a week, to what it had been before COVID. I live in Newton, and I took a train [into Boston] this week from Newtonville — the eight o’clock train, and it was standing room only on a Wednesday. It was unbelievable. The commuter rails are working. They’re attracting customers. I think that’s a plus. It’s the subway that’s the biggest problem. It’s gonna take a lot of money to make it work.
The world outside Route 495
Kirsner: What about other cities relative to Boston? Most of these cities, like Springfield and Worcester and Holyoke, would like to have more vibrant economies. What do you see?
O’Connell: Boston has got the cost of housing issue, but once you get out to Worcester, Providence, Springfield, it isn’t cheap, but it is affordable. [Springfield had been] hoping to get this train service to Boston. It’d be nice if they do it. But it was a plan that was conceived before COVID and all this remote working. I think you can live in Springfield and work remotely [for a company] in Boston. So I don’t think it would make quite the difference that it would have under the older model, and it’s a big investment.
I think the real key is supporting clusters of businesses, and Springfield doesn’t have biotech, but it’s got machine tools and precision manufacturing. Are there ways to encourage that? Again, that takes a public subsidy, not coming from the feds, maybe from the state. [In Worcester,] I think the UMass Medical Center makes a big difference in biotech.
Manufacturing needs larger workforce
Kirsner: Let’s talk about manufacturing. You visit a factory anywhere in Massachusetts, and they will tell you it is hard to find people who want to stand next to a drill press all day. And those seem to be the jobs that the Trump administration would somehow like to will into existence. But they exist today, and these companies can’t fill them.
O’Connell: We don’t have a large enough labor force. There are jobs out there that just can’t be filled. And since 1990, any population growth Massachusetts has had has come from foreign-born people. … We are really reliant on people coming from other places to come here. Even if it’s expensive, people will come from countries to just try to make it here. So turning off that spigot, it just really kills our workforce.
…Trade schools have really been limited in the state, and there’s a real demand for them, which isn’t being met. And these are people who do want to go to trade school. There aren’t enough trade schools. … And manufacturing is becoming more high-tech. It isn’t like it was in the old days, where you just press a button every 10 seconds.
Boston has to ‘get sharper’
Kirsner: Is there anything that makes you optimistic about the next couple of years for Boston’s economy, and Boston’s standing as a globally relevant city? Versus just, Boston will continue to be a punching bag for the Trump administration?
O’Connell: I think [the coming years are] going to force Boston to rethink where it’s been. Think of all the crises that Boston has gone through. Where did the American Revolution come from? It’s because the British government, in the 1760s and 1770s, started really leaning on the colonies, on Boston, to control their economy … and they had a revolution over that. Then you come up to the 1920s, 1930s, 1940s, and the mills were failing. We had to reinvent ourselves. The key is, you see this innovation happening around the world. Everybody’s in on biotech, you name it: China, Japan. … These places want to be competitive. They aren’t pulling back. They’re investing more. … We know how we can compete. I think we just have to see if we can get sharper or people [will] just say, “The hell with Boston. I’ll do my business in Toronto,” or, “I’ll do my business in Amsterdam.”
Kirsner: When you were in college, who was President?
O’Connell: Nixon
Kirsner: In that stretch from Nixon to Trump, has there ever been an administration that has been this much of a threat to the Massachusetts economy, and Boston’s economy specifically?
O’Connell: If you looked at all the presidencies in American history, none of them would purposely go after the economy of a city or state to hurt them or harm them or ruin them.
… He’s coming for California, for sure, but anything that’s heavily oriented toward science and technology, he’s coming for. And obviously, with us as the biotech capital, we’re very much high on his list. … He doesn’t mind sticking it to Boston, Massachusetts, blue states, etc.
Looking Ahead
Kirsner: Are you long on Boston? Or have you put your house on the market in Newton and you’re thinking, maybe you’ll get a job at the University of Miami or at the University of Texas, and move to a purple state or red state?
O’Connell: No, I’m here forever. Who wants to go somewhere else?
I have a son who lives in Austin. He’s lived there 12 years, and he likes it a lot. But a major reason he’s down there is the cost of living. He can live for a third less.
Kirsner: I wonder if we use the metaphor of a beautiful park, like the Boston Public Garden. Now, we’re going to get rid of 40% of the trees and 40% of the park benches, looking at just the cuts to National Institutes of Health funding proposed in the 2026 budget. It’s going to feel like a different place. Or, do you think that’s too much of a worst-case scenario? I just would posit that these federal funding cuts are going to be felt in some tangible way.
O’Connell: Absolutely. If you take hundreds of millions of dollars, if not billions, out of the economy, no matter how it’s spent … it’s going to have an impact. It’s going to be tough.
Massachusetts has not faced an economic crisis like this since the collapse of traditional manufacturing during the mid-20th century.
Kirsner: Does Boston have a future as a globally relevant city? Rather than just a university town that likes to think of itself as a big city?
O’Connell: The argument that I make in my book is that Boston is a global city, and has been considered one in recent years. Boston has achieved a metropolitan GDP of $650 billion — #13 in the world), according to Oxford Economics. … It is not simply a big college town.
I think that the case for federal funding of ground-breaking R&D is strong, and the scope of budget cuts will eventually be curbed. Boston’s great research institutions, particularly MIT, are so important to the national economy that business interests even beyond Boston will insist that Boston’s R&D institutions should receive support that leads to new products and services. Boston, along with San Francisco-Silicon Valley, Seattle, San Diego, Austin, Raleigh, Minneapolis, Pittsburgh … are important economic engines that should not be starved of federal support.
The key will be skillful strategic leadership from higher education, the business community and the government sector in Massachusetts, persuading the rest of the country that it is essential to the national economic health to support cutting-edge R&D.
James C. (Jim) O'Connell 