2011: Should We Hope Or Worry?

Initial reports from retailers on sales receipts for our end-of-the-year holiday spending spree suggest that cash registers are ringing in the New Year, sparking hope that 2011 will bring the start of the long-awaited economic recovery. Whether this hope is just so much New Year’s evanescence remains to be seen, but it is true that 2011 will be a make-or-break year for so many businesses and individuals operating dangerously close to the solvency/insolvency line. Where this community, this state, or this nation come down in relation to that line will not be a matter of happenstance or luck, but of sheer effort and sharp focus. We do not know, at the start of another year, whether to hope or worry.

Connecticut’s legacy of educational excellence should give it some advantages, especially when it comes to fostering high-tech companies. A six-month study released last week by the Connecticut Technology Council concluded that high-tech companies could ignite the state’s economic recovery, but Connecticut’s lackluster showing in the growing competition between states and nations to attract such firms may squander whatever inherent advantages the state’s highly educated workforce offers. The lost opportunities may be felt in every city and town across the state, especially Newtown, which is working hard to secure the environmental and land use approvals it needs to develop a tech park off Commerce Road. All that work will count for nothing if the tech firms that might settle in Newtown find that the grass (and economic environment) is greener in Pennsylvania, North Carolina, Florida, Singapore, or Shanghai.

One interesting insight of the technology council’s study is that the CEOs of successful firms are not just weighing tax incentives when deciding to move a company to one place or another. The lead researcher in the study reported that these entrepreneurs view business environments as “ecosystems” where “networks are like blood vessels, carrying ideas, talent, money, and support they need to grow.” Those executives trying to make a go of it in Connecticut told researchers that the state desperately needs a better transportation network, citing specifically the need for more direct flights from Bradley International Airport, and better rail and bus connections to Boston and New York. (Connecticut’s Transportation Strategy Board had calculated that the state’s congested highways cost businesses $670 million a year in productivity losses, increased operating expenses, and less effective employee recruitment efforts.)

To its credit, the administration of departing Governor M. Jodi Rell made some efforts to upgrade the state’s transportation network, purchasing 342 rail cars to replace some of the rickety rolling stock on the Metro-North and Shoreline-East lines. But earlier this month, Democrats succeeded in blocking her from getting the votes she needed on the state Bond Commission to finance $81 million for the purchase of 38 rail cars for commuter service in the shoreline communities. Then, just two weeks later, Gov Rell helped some of those same Democrats who thwarted her to get needed approvals for $21 million in pet projects in their home districts.

Governor-elect Dan Malloy was propelled from the mayor’s office in Stamford to the state’s top administrative office based in large part on his avowed ability to attract businesses to that city. It remains to be seen whether he has the political fortitude and skill to lead the Democratic legislative majorities to create and support the economic networks and infrastructure in Connecticut that address the wider competition — between states and nations starved for high-tech economic development — over the special interests of a few favored assembly districts. If we quickly see evidence of his sheer effort and sharp focus on this front, then we will have more hopes than worries for 2011.