CERC Report Shows Connecticut Maintains Strong Economic Position but Weak in Key Growth Areas

02/19/2008

Contacts:

Kristi Sullivan, 860.571.6213
Helene Kelly, 860.571.6214

A study entitled Benchmarking Connecticut 2007: A Comparative Analysis of Innovation and Technology - produced by Connecticut Economic Resource Center Inc. (CERC) and presented to the Legislative Commerce Committee today - shows that although there is a need to be concerned with the rate of growth in the state, it does not appear to be an insurmountable problem in every case.

Essentially, Connecticut's current standing, or "concentration," relative to the other 49 states is stronger than the state's "growth" compared to other states over the last decade or more. The state ranks 5th strongest in concentration, but its growth ranks the state 44th. While this disparity is not unusual in this region of the country, the study identifies areas where the state can take steps to improve its performance.

The report identifies five categories which measures Connecticut against other states: Technology, Financial and Capital Resources, Entrepreneurial and Business Vitality, Human Capital and Global Links. Between 2005 and 2007, Connecticut's rankings slipped in all categories except Financial Resources, where the state's position improved. In the majority of growth areas, Connecticut remains weak - with its best ranking at 34th in the Global Links category. However, the state ranks extremely high in both concentration and growth of industry R&D (2nd and 12th respectively). The findings also show these rankings for Connecticut:

Technology - 3rd in concentration; 40th in growth
Financial and Capital Resources - 5th in concentration, due largely to the current strength of IPOs and venture capital; 40th in growth, up from 45th in 2005 and 42nd in 2006
Human Capital - 6th in concentration, with the exception of its eighth grade NAEP math score where the state performs in the middle among other states; 40th in growth
Entrepreneurial and Business Vitality - 9th in concentration; 43rd in growth; the state ranks extremely high for both when 2nd for industry R&D); 12th in growth
Global Links - 10th in concentration; 34th in growth

"Some of the areas that show weak performance can be addressed by state action," said CERC President Robert Santy. "In fact, the report includes a list of initiatives undertaken in the past two years that helped maintain our rankings and clearly outlines a list of recommendations to address some of the state's deficiencies. With focused collaboration between business, the state and policymakers, we can continue to improve in those areas that are key to Connecticut's future standings."

The report notes that the state has made some progress following recommendations made in CERC's initial Benchmarking Connecticut report in 2005. For example, one recommendation was to work on a state-level economic development strategy inclusive of regional, local and private-sector players; the Department of Economic and Community Development began this process soon after newly appointed Commissioner Joan McDonald began in her role. An examination of activities in faster growing states was also reviewed, and the findings are highlighted in the report. Those states were Arizona, Colorado, Maryland, Virginia, Massachusetts and New Jersey.

"The timing of this report is opportune and should feed into the state's economic development strategy currently being developed," said Jeff Blodgett, CERC's Vice President of Research. "If you can't measure it, you can't manage it. We're trying to measure these critical areas so we can assist in better managing them," he said.

A copy of the full report is available at www.cerc.com/benchmarks.

About CERC
Based in Rocky Hill, the Connecticut Economic Resource Center, Inc. is a nonprofit corporation that provides objective research, marketing and economic development services to local, regional, state and utility entities and policymakers. CERC is a public-private partnership, funded primarily by utility and telecommunication companies, with a mission of making Connecticut a more competitive business location.

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