A string of recent announcements promising jobs and private investment have raised hope that Hartford will become a hub for innovation in financial technology.
Stretching from one of the city’s oldest companies, Aetna, which is evolving into a digital health company, to a New York firm that plans to bring blockchain technology to West Hartford, to an Indian software giant that has selected Hartford for a regional headquarters, the developments offer a vision of a different future for a state mired in a stagnant economy that has largely failed to create jobs and attract new investment.
In the latest news, Seven Stars Cloud Group, a digital financial technology company, said last week that it would spend $283 million over the next five years to create a tech hub at the former UConn regional campus in West Hartford to develop services around artificial intelligence and blockchain, a secure tool for storing and sharing data. In the spring, Infosys announced it would create a regional tech and innovation hub in Hartford and hire 1,000 employees for its information technology and consulting business. Both companies will receive millions of dollars in state incentives.
Political and business leaders say the companies have the potential to build upon the state’s mainstay insurance and manufacturing industries, helping them remain competitive in the global marketplace of the 21st century.
The arrival of Seven Stars and Infosys comes as other area companies have staked out tech innovation in the Hartford area:
Stanley Black & Decker is opening an advanced manufacturing center in downtown Hartford to develop its smart factory initiative.
CVS Health Corp., which announced it would purchase Aetna late last year, will keep the insurance company’s headquarters in Hartford as its pivots to managing health care through data analytics.
EIP LLC is creating banks of servers in an abandoned factory in New Britain to process and store data for a wide range of businesses.
Hundreds of new jobs — many of them with attractive salaries — could be created in a new and emerging market that up to now has largely left Hartford and Connecticut in the past. Meanwhile a nascent next-generation tech industry in Connecticut, mostly start-ups starved for a trained workforce, stands to benefit from a growing financial technology sector.
The challenge will be to keep the momentum rolling when the hoopla around the announcements fades. Experts say that may rest heavily on a cultural change requiring the state to embrace, say, the blockchain industry, even if many people don’t now know exactly what a blockchain is: a digital chain of blocks of data, capable of tracing everything from Bitcoin transactions to the farm-to-table journey of a tomato.
“Economic growth involves change,” said David Souder, associate dean of graduate programs at UConn’s School of Business. “Change is not necessarily bad, but it also involves uncertainty that comes with new industries, and people are uncomfortable with that.”
Souder adds: “You can’t hang on to what made sense a generation ago, but what makes sense a generation ahead. That’s a little bit of a mind shift. It’s certainly within our grasp, but there has to more comfort with that.”
The stakes are high in getting it right in a state that is still struggling to recover all the jobs it lost in the last recession — let alone add more. The state also has to be attractive for retaining and recruiting workers for these developing industries.
Gov. Dannel P. Malloy said part of the answer lies in getting the word out about recent wins, such as Infosys choosing Hartford for one of four innovation hubs across the country, or the data processing project in New Britain.
“Anyone who understands the potential of the data center in New Britain and how important that’s going to be appreciates it,” Malloy said. “Now, with the Seven Stars Cloud announcement, you know, it’s going to sell itself in many ways. But this is not an overnight success. It’s something that’s taken the better part of seven years to bring about.”
Bruno Wu, executive chairman and chief executive of Seven Stars Cloud, sees his company as a valuable addition to the region, with the potential to spur next-generation ideas even outside of the technology industry. Investing in artificial-intelligence and blockchain is still a risk, but it’s the kind that can help Hartford build a reputation as a center for innovation.
“We want to be one of the enabling forces and first pioneers to come help the state of Connecticut,” Wu said. “To add some new blood and DNA into its legacy and become part of its history going forward.”
David Noble, director of UConn’s Peter J. Werth Center for Entrepreneurship and Innovation, said he is working on a blockchain startup himself, a platform called Gunclear that would track firearm transactions and close the loopholes in buying and selling guns.
Just a few years ago, he says, nobody wanted to hear him talk about cryptocurrency and blockchain, the ultra-secure, ultra-powerful ledger that powered it. Now, friends and colleagues lament that they didn’t buy Bitcoin when he did.
Noble hopes the state doesn’t miss its own opportunity to invest.
“I’ve been preaching that we need to look to the next frontier of technology, to see where we want to place ourselves,” Noble said. “I think digital capabilities have to be at the core of that and we have to really be thinking about what the digital world looks like five, 10, 20 years from now.”
The U.S. lags far behind the rest of the world in blockchain technology, but is catching up. Connecticut has just a handful of start-ups in the industry space, making the Seven Stars Cloud deal a bit of a coup, experts said.
Most pieces of the blockchain “ecosystem” are already in Connecticut. They range from Stamford-based Information Services Group, which includes blockchain advisers, to a digital community of programmers in New Haven growing up around a shared interest in blockchain, digital currency and so-called smart contracts — negotiations encoded in blockchain, making them easy to track, verify and enforce.
In Hartford, a group of blockchain experts have begun studying the technology as part of a legislative working group. The group will submit a report by Jan. 1, 2019 on their master plan for fostering the expansion of the state’s blockchain industry.
Bringing an Infosys or a Seven Stars Cloud to Connecticut required a collaborative effort. In the case of Infosys, Greenwich businessman Ned Lamont — a Democratic candidate for governor — first approached Infosys about expanding into Connecticut, and the state arranged meetings with executives at key Connecticut companies.
The effort culminated with a letter signed by The Hartford, Travelers, United Technologies Corp., Cigna, Hartford Healthcare and Stanley Black & Decker touting the benefits of Connecticut’s economic climate and its academic institutions. They pledged to be partners with Infosys if it established in the Hartford region.
David Griggs, president and chief executive of the MetroHartford Alliance, the Hartford area’s chamber of commerce, said this is the model other regions of the country successful at economic development have pursued.
“One of the key things we need to do is integrate them into our business culture,” Griggs said. “We need to embrace them and they need to be part of our future decision-making, the direction of our economy and our cities. So we need to have their voice at all the regional tables.”
A growing tech presence provided by companies such as Infosys and Seven Stars Cloud could benefit start-ups such as Aureus Analytics. A creator of artificial-intelligence platforms that help insurers and bankers work with large amounts of data, Aureus said it can find top insurance and financial talent in the area.
But it’s been more of a struggle to find the best tech hires, and workers outside of Connecticut have been reluctant to relocate, says Anurag Shah, Aureus’ chief executive and co-founder,
Infosys, Shah hopes, will make Hartford a magnet for top tech talent.
“That could bring in a lot of work for us as well,” Shah said.
Wu said he knew Connecticut would require higher taxes, and other U.S. locations he considered offered better tax packages and incentives. But no other state offered a better quality of life, affordability for workers and access to major metro areas, he says.
“The greater Hartford area won our hearts, hands down,” Wu said. “There wasn’t much competition with others.”
Seven Stars Cloud and other businesses attracted to Connecticut and the Hartford area have appreciated investment in education, options for downtown living and transportation alternatives, such as CTfastrak and the new Hartford Line railroad, Catherine Smith, commissioner of the state Department of Economic and Community Development, said.
Smith said Connecticut is a little “off the beaten path” between Boston and New York. “The cost is a little lower” than in those cities, she said.
Joe Brennan, president and chief executive of the Connecticut Business & Industry Association, said Infosys was certainly looking for smaller-city options as it announced hubs for Providence, Raleigh, N.C., and Indianapolis.
“Now, more and more companies are looking for opportunities where there isn’t as much competition among companies for workers as there might be in a New York or Boston,” Brennan said.
