Jobs, jobs, jobs. That is the political chant of this election season. But Connecticut has a dismal 20-year record on job growth. Fewer people are employed today than in 1989. The Great Recession merely exacerbated an already bad record. We must address this economic malaise with aggressive state action to preserve existing jobs and to drive job creation in strategic areas.
None holds more promise than life sciences and biotechnology.
Connecticut is home to some of the nation's most exciting life science research, including its world-class leadership in stem-cell development. Animated through strategic state investments of about $10 million annually, Connecticut-based researchers developed new lines of stem cells among the first to be available for clinical trials and achieved breakthroughs that point to effective stem cell therapies.
In addition, Connecticut hosts a thriving private life-sciences sector, including firms such as Pfizer and Alexion. The challenge is devising an economic strategy that attracts the commercial development that will flow from this research, preventing it from relocating to other states.
The exciting growth in stem cell research fits within a larger framework of the powerful expansion of the Yale-New Haven medical complex one of the nation's leading recipients of National Institutes of Health funding and the promised expansion of the University of Connecticut schools of medicine and dentistry. Together with the continuing development of Yale's West Campus, these initiatives could generate upward of 15,000 new jobs in Connecticut. The UConn expansion is of special importance as it would dramatically reverse stagnation in the Hartford region.
Strong initiatives are crucial to restoring Connecticut's economic vitality. Connecticut faces enormous fiscal challenges; without restored economic growth, the state will confront long-term decline and virtually endless budget crises. In the next three fiscal years, the state Office of Fiscal Analysis anticipates on the basis of optimistic revenue projections deficits totaling a frightening $9.5 billion. More reasonable assumptions about revenue growth point to deficits of $11 billion; and if growth is anemic, cumulative budget deficits could swell to nearly $14 billion by July 2014. At the same time, there is little prospect for robust growth in jobs.
Connecticut has the assets financial and intellectual to reclaim its heritage as a leader in innovation, entrepreneurship and economic growth. Connecticut has demonstrated competitive strengths in several sectors, but only biotech has shown resilience in the face of the Great Recession. For example, employment in life sciences grew 1.4 percent in the first year of the recession.
Confirming investor faith in the future of this sector, in the first quarter of 2010 the Nasdaq stock market's biotech index reached an eight-year high.
To develop the biosciences, Connecticut should emulate successful strategies used in other states. One arresting example of how to link the intellectual capital of our universities with the private sector comes from the Pittsburgh Life Sciences Greenhouse. The University of Pittsburgh, Carnegie Mellon University, the University of Pittsburgh Medical Center and Pittsburgh's regional foundation community joined in 2001 to build the city's life biotechnology sector.
This mobilizes the collective expertise and resources of the universities to help life science firms develop sustainable business models and secure investments. Pittsburgh now leads the Midwest in the number of biotech companies receiving capital. Creating a similar model with the new angel investor tax credit, our public investment vehicles and the unleashing of more than $1 billion in currently unused and usable state research and development tax credits Connecticut could excel in the life sciences.
Building on this approach, Connecticut should push aggressively for comprehensive collaboration among our research universities in support of economic development. It was such collaboration among Duke University, the University of North Carolina, Chapel Hill, and North Carolina State University that was core to the amazing success of North Carolina's famed Research Triangle. It has attracted more than 1,000 firms, led to the largest per capita concentration of doctorates in North America and put North Carolina at third in the nation for the number of biotech companies.
Such integration and collaboration among a state's leading research universities is a magnet, pulling in talent, investment, firms and jobs.
Connecticut has the resources and assets to reclaim its historical leadership in innovation and economic growth; the question is whether the state's political leadership is willing to seize this manifest opportunity and meet the challenge.
Fred V. Carstensen is the director of the Connecticut Center for Economic Analysis at the University of Connecticut.
Reprinted with permission of the Hartford Courant.
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