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Berkshire County is set off from the rest of the Commonwealth by the rolling Berkshire Mountains, whose wide valleys offer spectacular natural beauty. The region has been home to manufacturing plants that grew up in small industrial cities and towns along the Housatonic River.

The Berkshire Region is less integrated into the social and economic fabric of Massachusetts than any other in the state.

The natural setting provides a backdrop for a thriving tourist industry that draws heavily on a sophisticated, affluent audience, primarily from New York and Connecticut. They come each summer to hear classical music, see world-class dance, enjoy fine art, and rejuvenate in the spas. In the fall, people are drawn to the Berkshires as its landscape explodes in spectacular color. The winter offers cozy inns, skiing, and unique getaway attractions. More and more tourists own second homes here, especially in the southern part of the region, where property values continue to rise.

The Berkshire Region is less integrated into the social and economic fabric of Massachusetts than any other in the state. Television and radio stations broadcast from across the New York border. Pittsfield, the region's largest city, is typically included in a marketing region with Albany. With no major airport or rail transportation to tie the region to the rest of the Commonwealth, the Massachusetts Turnpike in the southern part of the county and Route 2 in the north are the major links to the rest of the state. Like the mountains and the river that define it, this region—and its economy—runs north and south.

The more recent industrial development of the Berkshires was based, in large part, on the invention and development of the electric transformer in the 1880s. Sprague Electric and General Electric were the region's major employers. When it was no longer practical or economical to build large transformers in Pittsfield or North Adams, these industries moved out, and the economy struggled to find a new base. Manufacturing for the plastics, paper, and defense industries then drove the local economy. With the end of the Cold War, however, the local defense business lost nearly 10,000 high-paying jobs, and manufacturing employment continues to decline.

The growth in business services, health services, education services, and trade over the years has not been able to replace the better-paying manufacturing jobs. Travel and tourism benefits the owners of many small businesses, but their employees tend to have low earnings that are absorbed by high housing costs. One bright spot has been in the establishment of companies in the software and information systems sector. But the collapse of the information technology bubble in the stock market has left the futures of these companies uncertain. As the national economy recovers, the core of small IT firms in the region may survive and flourish, but that remains to be seen.

Employment Trends
Employment patterns in the Berkshires are dominated by the sharp cutbacks in its old-line manufacturing industries. Although one would expect both the workforce and employment to grow during the expansion stage of the business cycle, the Berkshires saw both decline over the past decade. In 1990, the region had a labor force of 69,900 people, 65,170 of whom were employed.

In 2001, at the end of what was the longest period of sustained economic growth in our nation's history, the workforce was approximately 64,350, with roughly 62,000 employed. This contrasts dramatically with the pattern of growth—especially after 1995—across the Commonwealth during the same period.

Since 1999, employment in the Berkshires has fluctuated down and then up again within a narrow range. The unemployment rate has performed similarly.

Sectoral Analysis
Services and retail trade are the largest sectors in the Berkshire region, comprising over 43 percent and over 22 percent of employment, respectively. In 2000, manufacturing represented approximately 14 percent of all employment. None of the other major divisions accounts for more than 5.1 percent of employment in the region.

Other than the small agricultural sector, employment in the public sector (government) and construction exhibited the fastest growth from 1993 to 2000 (both near 40 percent). Manufacturing continued to shed employment and, in fact, was the only major division in the region to do so.

The most important sectors in the economy in terms of employment are health care, education, business services, and other general services. Retail trade provides many jobs that are related to the flow of tourist dollars into the region. Manufacturing is most heavily concentrated in plastics and paper manufacturing.

Population
The region's population declined by 3.2 percent in the 1990s. A picture of the population becomes clearer with an examination of age distribution and racial composition. The average age of the region's residents rose over the decade. This is due partly to out-migration of the younger generation and partly to the aging of those who stayed. A lack of high-paying jobs, social opportunities, and affordable homes makes the retention of young people particularly difficult.

Since 1990, the size of all age groups younger than 45 has declined. The most dramatic change has been in those between 19 and 24, which declined by 25 percent. Those between 25 and 44, often cited as the group being the most economically dynamic, declined by more than 14 percent. The loss of significant numbers of working-age residents represents a serious workforce development challenge and a long-term obstacle to growth. As older members of the regional workforce begin to retire in coming years, the significance of these population losses will become more apparent.

Natural beauty, a fine reputation among upscale consumers, and a steadily declining industrial base all suggest that it might be wise to recruit firms that can find a competitive advantage in the region's idyllic environment and loyal base of well-to-do consumers.

While the region's population has a smaller proportion of minorities than does the rest of the state, this is changing. In fact, the entire decline in the Berkshire population occurred among Whites. All of the non-White racial groups grew, including a sizable increase in the Hispanic population.

Outlook
"Bigger is better" might not be a cogent premise for Berkshire County. This may be an ideal place to achieve a smaller, well-diversified economy based on sustainable development. Natural beauty, a fine reputation among upscale consumers, and a steadily declining industrial base all suggest that it might be wise to recruit firms that can find a competitive advantage in the region's idyllic environment and loyal base of well-to-do consumers. Evolving regional collaboration will help define a common vision and the coordinated actions needed to implement sound regional solutions.

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