Connecticut’s economic limitations must be resolved

Connecticut’s years’ of stagnant economic growth/employment amidst the nation’s most vigorous economic post-War recovery means there are serious structural problems that will likely take many years and even decades to resolve. We’re the nation’s only state with a decade-long stagnant economy. That we are sandwiched in between two of the nation’s most vigorous states — New York and Massachusetts — amplifies the problem.

We’re poorly positioned to participate in the developing high-tech economy. Only one of our seven major cities — Stamford — is a well functioning modern city and is largely an adjunct to the thriving New York City economy. As cities go, all of ours are small with populations under 150,000. So Connecticut is largely a suburban/rural state in a world where economic growth increasingly is concentrated in cities.

New York and Massachusetts thrive because they have large cities, well developed arrays of major industries, especially high-tech with world class high-tech engineering, science, computer and high-tech universities and colleges. Connecticut has few of these features although it does have Yale with its world class medical school. It does have a modest-sized defense industry employing about 50,000 (Electric Boat, Pratt & Whitney and Sikorsky).

So with half a dozen small cities without prominent high-tech industrial development and lacking world class high-tech colleges/universities, Connecticut has major handicaps. We are further handicapped by our high state and local taxes and our reputation for being a state with a high cost of doing business. Connecticut’s largest industry in terms of its labor force are its public state and local unions spread out among 169 towns and small cities.

So what to do in a state of only 3.5 million people that has fallen behind? A good start is focusing on our half a dozen largest cities with surrounding populations that together comprise about 1 million people or a third of our population. Those areas need be targeted for government assisted economic development. That requires state subsidies  and also “smart development” targeted towards building/enhancing existing industries/firms that offer good prospects of increased employment/income. For Connecticut to grow its cities must grow with new jobs and income.

Another major challenge is reducing the costs of state and local supplied public services spread across 160 odd towns and cities. Our  reputation for high costs developed over decades. So it’s not a quick fix. But unless we can shed it, our prospects for future growth of income and employment are grim.

Let’s remember it’s not required to re-invent the wheel here. Virtually all states from time to time have launched economic development programs — some more successful than others. And the more successful states have learned from others and make use of a central repository of economic/business information centers. New York in particular has been especially successful in recruiting outside investment and its Rockefeller Center is well known.

Even with a well thought-out and well-funded business development program targeted to the most promising industries and areas, we still face the issue of our perpetual billion-dollar budget deficits. Unless resolved, a program to encourage new business investment will not succeed. However, resolving state budget problems that have accrued over decades might well be our ultimate challenge. Without successful resolution of state an local budget issues our population will likely decline as the Exodus grows more pronounced.

 Peter I. Berman  lives in Norwalk.