“Connecticut is open for business, and we’re going to compete,” Governor Dannel P. Malloy emphasized on November 7th during a presentation at the Graduate Business Learning Center in downtown Hartford, Connecticut. He was speaking to an audience of over 100 business leaders, community members, and University of Connecticut students and faculty members at the UConn Financial Accelerator’s latest premiere event, “Building for Connecticut’s Success.” The audience gathered with an interest in the Governor’s insight on the role of financial services in Connecticut’s economic future, and the Governor was eager to address the multi-dimensional issue.
Building on Connecticut’s strengths
Governor Malloy posited questions to the audience, “Who are we?” as Connecticut and “what are our strengths?” Looking to the past, Connecticut has been a financial services-driven state since the industrial revolution, and Malloy envisions a re-industrialization of the United States. “If we didn’t build it, we financed it!” repeated Malloy, describing the nature of our state economy as one built for investment and high-volume and precision manufacturing. In particular, he noted that the areas of biosciences, insurance, aerospace, hedge funds, and insurance are growth industries for the state. By defining our strengths, and with a focus on technology and innovation, we can work to create a state that nurtures these industries to bring economic development and job creation to Connecticut.
With location and proximity as key factors in encouraging business and innovation among industries, it would be remiss to mention Connecticut’s advantageous position between New York City and Boston. Also within the state, we have top institutions in higher education, including Yale and the University of Connecticut, which has recently been ranked as a Top 20 research institution by U.S. News & World Report. Malloy underlined that “universities have to be part of our economic development as a state,” as the universities can act as economic drivers themselves.
The Bioscience Connecticut Initiative is a prime example of this partnership between government, higher education, and innovation, as it is poised to make the UConn Health Center a leader and a hub of research and clinical work in bioscience. Malloy stated that he was able to deliver upon his promise by taking the opportunity to pursue Connecticut’s partnership with Jackson Laboratories. Maine-based Jackson Laboratories will construct a research facility at the UConn Health Center and partner with higher education in order to foster the State’s reputation as a leader in the growing industry.
In addition, Malloy recognized the importance of new business, particularly in the realm of technology and innovation. The State has invested in creating the UConn Technology Park at the Storrs, Connecticut campus, which will house flexible-use laboratories for collaborative research and business services. Other key initiatives include the Connecticut Center for Entrepreneurship and Innovation and the IP Factory, which both support what Malloy termed as the “monetization of invention.” Malloy stated “I understand innovation and education,” as he warned that it would be a flaw in our economic development plans to not capitalize on the partnership of universities and government. By encouraging this partnership, we encourage investment in the state of Connecticut. “We need better support for invention,” stated Malloy.
Repositioning Connecticut
Competition with other states is a common theme for economic development, and repositioning the state is paramount to attracting new business and keeping current industry. As one audience member noted, Connecticut has a reputation for being a high-regulation and high-cost state in which to do business. While our cost of living in the state is difficult to address, Malloy noted that we could address regulation.
In response to the issue of state banks, a question another audience member posed to the Governor, the Governor responded that competition is critical. The fact is that we have lost state banks to buy-outs from out-of-state banks. Also, due to given regulation and the current model of the banking industry, he’s unsure if we can still be a player. However, by changing regulation and the lending environment to attract banks here, having state banks revisit old clients and lend to them again, lending to small businesses, and creating an environment of large investment, we can be competitive.
One particular example that Malloy raised was that of the hedge fund industry. There has been a significant movement of hedge funds into Connecticut, and Malloy notes that it isn’t by accident. Hedge funds are in a uniquely difficult situation in the post-Dodd-Frank climate which makes it challenging to create new enterprises. Competition for establishment is keener. Connecticut has an advantage by having an environment where hedge funds are taxed less than the neighboring states. By focusing on bringing hedge funds into the state and giving them an environment to grow here, we will be able to carve and keep our niche in that industry. The Governor expressed a will to fight to keep the tax advantage over other states as well.
Not only do we need to reposition the state to bring in new businesses, we need reposition the state to bring in and retain our workforce. As one audience member commented, there has been a trend of college graduates of Connecticut institutions leaving the state after graduation. The Governor countered that although this may be true, the State has been doing better at the retention of our college graduates, and in fact, the State is doing even better when it comes to importing graduates from neighboring states. To encourage our Connecticut-educated workforce to stay in Connecticut, Malloy noted that we need more vibrant cities. Stamford and New Haven have made great strides, but we need to be more urbanized and support education and investment. We can succeed with a sustained commitment to monetary investment in and around universities.
Where do we go from here?
We want people to move into our state and grow industry, and in order to do this we need revenue for supporting who we are and what we want to be. Malloy noted that he and his administration are currently focused on job growth, job creation, and job retention. He stressed an importance of bipartisan agreement to continue to support angel investment, corporate investment, and reshape regulation. Malloy spoke about new tools available for small businesses, which include subsidies for hiring and a portal for growing business. In order to rejuvenate our economic industry, we need to build a supporting infrastructure and physical infrastructure, such as transportation.
About the event
This event is the fifth in a series of UConn Financial Accelerator Premiere Events. Previous events included topics on the municipal debt crisis, the idea of too big to fail, Dodd-Frank legislation, and the Peter Principle as applied to the healthcare industry. This event, “Building for Connecticut’s Success” was sponsored by the University of Connecticut’s School of Business, The Phoenix, and the Hartford CFA Society.
The UConn Financial Accelerator is a financial, educational, and analytical research forum for the University of Connecticut’s School of Business and a pipeline of talent that enhances the local business community. As a laboratory for project analysis, the Financial Accelerator utilizes a combination of students and highly trained faculty with access to cutting edge technology to develop timely solutions for complex, real-world business cases. For more information about the Financial Accelerator, please visit http://accelerator.business.uconn.edu/ or contact Dr. Chinmoy Ghosh at 860.486.4431 or via email at cghosh@business.uconn.edu.