Mali R. Schantz-Feld (Location USA / April 2013)
New England touts a long history of tradition, independence, strong character, and academics. The slow but evident economic recovery of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont reflects the persistent determination of its citizens and their resilience in the face of adversity.
Ross Gittell, vice president and forecast manager for the New England Economic Partnership (NEEP), said that this region was not as negatively affected as other parts of the country by the most recent recession. He notes, “We have lower unemployment, especially in Vermont, New Hampshire, and Massachusetts, so when the national economy does start growing again, the region will be well positioned to grow along with it into a healthy economy.” The region’s manufacturing employment, Gittell notes, “is good news after a long period of extended decline.” He adds, “Vermont and New Hampshire are among the five states with the lowest unemployment in the country…they have fairly diversified economies, and fairly high percentages of adults with college degrees.”
Life Sciences’ Important Role
New England’s industry strengths are derived from professional business services, software and high-tech advanced manufacturing, product and component parts, and suppliers to the auto, computer, and aerospace and defense industry. Gittell says that in 2012, the fastest-growing sectors in New England on a percent change basis include high tech (2.1 percent), professional and business services (2.0 percent), and private education and healthcare services (1.7 percent). Employment “is driven by our highly educated population and higher education infrastructure, institutions that are world leaders in research and innovation,” he explains.
Doug Ray, development program manager/legislative liaison for the Maine Department of Economic and Community Development, notes that the Pine Tree State’s targeted industries are biotechnology; aquaculture and marine technology; composite materials technology; environmental technology; advanced technologies for forestry and agriculture; manufacturing, including precision manufacturing; information technology; and financial services.
Foreign direct investment is boosting a healthier economy in Brunswick, Maine. Sweden-based Mölnlycke Health Care is hiring approximately 45 employees at its new $14 million, 72,000-square-foot wound care products plant. The building will house manufacturing, quality assurance laboratories, offices, warehousing, and research and development. High-tech foam produced at the former Rynel plant in Wiscasset, Maine, will now be processed at the Brunswick, Maine, facility into several product lines of bandages. Mölnlycke acquired Rynel, one of its principal suppliers, in 2010. The finished products will then be shipped to Mölnlycke’s distribution complex in Anderson, South Carolina, and then to hospitals and clinics worldwide. Before the Brunswick facility, Rynel was shipping specialty foam to Mölnlycke’s processing plant in Finland to make wound care products, so completing the products at the Brunswick plant will save the firm both time and money.
Development officials from New Hampshire are spreading their news in foreign markets as well. In 2013, trade missions — coordinated by the New Hampshire International Trade Resource Center and the U.S. Commercial Service — hope to spur interest in specific industry niches. A mission to Mexico in April will focus on health technologies, and those jetting to Rome in June will hone in on the aerospace industry.
New Hampshire credits its low tax burden as an economic development advantage. The state has no broad base personal income tax — as well as no sales, use, inventory, capital gains, estate, Internet, or professional service taxes — and boasts a low corporate income tax.
In Connecticut, targeted industries include insurance and financial services, aerospace, biotechnology and biomedical research, medical devices, green and sustainable technology, digital media and entertainment, hospitality and tourism, and information technology. The Bioscience Connecticut initiative was designed to expand and improve Connecticut’s research and development capacity.
The Jackson Laboratory for Genomic Medicine has been launched on the campus of the University of Connecticut Health Center. The collaborative effort between Jackson Laboratory, the state of Connecticut, the University of Connecticut, and Yale University aims to accelerate the development of new medical treatments tailored to people’s unique genetic makeup.
“The State of Connecticut made a huge commitment to the Bioscience Connecticut effort at a time when most states are cutting their R&D funding,” says Mike Hyde, vice president for external affairs for The Jackson Laboratory. He continues, “Connecticut enjoys a great location between Boston and New York, great medical facilities and research universities, a highly educated work force, access to entrepreneurial talent and venture capital, and a determination to build a bioscience cluster. The central Connecticut area likely will be hiring more Ph.D.-level scientists than any other place in the U.S. in the next few years.”
Biopharmaceutical company Alexion Pharmaceuticals, Inc. will establish its global headquarters in New Haven, Connecticut, by 2015, relocating its existing Connecticut work force of more than 350 employees to the facility and creating an expected 200 to 300 new jobs by 2017. Other bioscience companies in Connecticut include Bristol-Myers Squibb’s facility in Wallingford, Boehringer Ingelheim’s U.S headquarters facilities in Ridgefield, and Pfizer’s global R&D headquarters in the New London area.
Massachusetts is also strengthening its biosciences sector, with Governor Deval Patrick’s 10-year, $1 billion life sciences investment that spurs research, investment, innovation, and commercialization. The life sciences industry in Massachusetts has experienced a more than 52 percent job growth in the biopharma sector since 2001. In June 2012, the Governor and seven global biopharmaceutical companies (Abbott, Biogen Idec, EMD Serono, Janssen Research & Development, Merck, Pfizer, and Sunovion Pharmaceuticals Inc.) announced the formation of the Massachusetts Neuroscience Consortium to fund pre-clinical neuroscience at Massachusetts academic and research institutions.
Jack Healy, director of the Massachusetts Manufacturing Extension Partnership (MEP) noted that the state’s manufacturing economy has also shown extraordinary growth of 23 percent since the financial recession of 2008 to 2009. This was twice the previous growth of the state’s GDP for the prior eight years. Part of this resurgence has been attributable to the continued globalization of the Massachusetts economy with the investment of international companies seeking to realize the benefits of declining energy prices, skilled workers, and good markets.
One such company, Austria-based Siemens Industry, Inc. located its metals technologies business in Worcester, Massachusetts, the center of a metropolitan area that ranks 15th nationally in the ratio of manufacturing jobs to total jobs in the local economy, according to Healy. Siemens, which employs over 500 people who design, manufacture, and install a wide variety of non-ferrous metal products, recently moved its headquarters to the Gateway Park, located on the Worcester Polytechnic Institute campus that also provides access to the ready pool of talented undergraduates.
Whether high-tech or low-tech, the development of a skilled, educated work force is an important objective for foreign or U.S. manufacturers. The Massachusetts State administration has established the state’s Work Force Training Trust Fund to meet this need. Canadian-based McNairn Packaging located in Westfield, took advantage of this training benefit by utilizing a work force training grant that enabled them to train all their 120 employees in lean manufacturing methodologies. The resulting productivity benefit of this training allowed McNairn to make an additional $5 million investment in its facilities.
In Rhode Island, Pawtucket shared some good global news regarding Tunstall Americas, a United Kingdom-headquartered firm with operations in more than 30 countries. The firm will relocate its data and medical call center operations to Rhode Island and is expected to create 250 jobs in the state over the next two years. Rhode Island was one of four states under consideration for the site relocation.
In Providence, Colin Kane, chairman of the I-195 Redevelopment Commission, says, “The 195 Redevelopment Commission is the ‘super-permitting’ entity, as well as the ownership entity, and looks forward to bringing pad-ready sites to the global market in the very near term.” He continues, “The 22 developable, downtown Providence acres created by the relocation of Interstate I-195 present an incredible opportunity for three million square feet of new buildings and public spaces.” The area is anchored by Brown University’s Medical School and Johnson and Wales University’s campus.