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Malloy Tackles The Jobs Challenge

Governor must look to innovation, clusters and place

Hartford Courant Editorial

January 23, 2011

In addition to resolving a $3.5 billion deficit, Gov. Dannel P. Malloy has embraced the related and also herculean challenge of revamping the state's approach to economic development. With 170,000 residents out of work and job growth sluggish for years, he can't get started soon enough.

In an interview with The Courant's editorial board this past week, Mr. Malloy embraced the idea of supporting regional business clusters — financial services in Stamford, bioscience in New Haven and insurance in Hartford, among others. Enhancing the state's efforts to grow existing business clusters is the right move. Mark Muro of The Brookings Institution's Metropolitan Policy Program wrote last week that 95 percent of all annual job gains come from the expansion of existing businesses or the birth of new businesses, not from poaching other states' companies.

In helping to grow businesses that are here, the state needs to think strategically. For example, the presence of two major medical institutions in Hartford should be a lever for spinoff medical-related industries. If it made sense to have the University of Connecticut medical and dental schools in the city as part of the economic strategy, that should influence the university's thinking.

The Gazelles

In the area of new businesses, the key is to identify young, innovative ones and nurture them. Matthew Nemerson, president of the Connecticut Technology Council, observed that nearly half of new jobs come from very few "gazelles" — fast-growing companies in their infancy. The state needs to accelerate startups — in part with incubator projects such as Science Park in New Haven — and identify the gazelles and keep them happy here. Mr. Malloy should have the gazelles' CEOs on speed-dial. There are empty office buildings in downtown Hartford that could serve as business incubation space.

Mr. Malloy said he will take a hard look at consolidating the state's economic development infrastructure, as he should. He may well consider merging the related duties of the Department of Economic and Community Development, the Connecticut Development Authority and Connecticut Innovations, but he should look beyond that. If transportation, environmental protection, energy and other departments are ultimately about economic development, should they be under the same roof, as they are in some states?

In Massachusetts, for example, former Gov. Mitt Romney combined the departments of housing, transportation, energy and the environment into a super-agency called the Office for Commonwealth Development, which helped the Bay State halt sprawl and encourage smart growth.

Most of Connecticut's large cities — except Stamford — are plagued with high unemployment. The rate is more than 15 percent in Hartford. Instead of the business-as-usual approach — how many residents train for jobs that don't exist? — why not, with private-sector partners, build factories in cities to make things the state needs? For example, Connecticut has 60 percent forest cover. Why not a small factory that makes railroad ties, which will be needed as rail service is expanded?

Lively Places

Finally, in addition to a business strategy, Mr. Malloy should emphasize quality of place. Stamford and New Haven began to draw more business investment when those cites became livelier, more livable places. It's no coincidence that building housing and mixed-use commercial development near transit stops — connecting land use to transportation — has been key to this success in both cities, as Mr. Malloy, the former mayor of Stamford, well knows.

State investment (based on sound regional planning) in transportation, historic preservation, brownfield renewal and other smart-growth measures that make Connecticut's metropolitan regions more interesting and attractive — and more interconnected — will rebound in economic gain.