The six-state New England region has a diverse economy that spans several key industries - from aerospace and defense to healthcare, financial services, environmental technology, and digital media, among others. "We always work to ensure that we encourage investment in a variety of sectors in an effort to maintain our diverse economic base," says Kiersten Bourgeois, director of special projects for the Vermont Agency of Commerce and Community Development.
A Highly Educated Work Force
That same strategy is evident across New England. Another link that unites the New England States is a highly educated work force. The region is known for its extensive base of universities and colleges that has spawned a world-class research and development community. For example, Connecticut alone is home to 45 colleges and universities, while Massachusetts has the highest percentage of advanced degrees in the nation.
Communities throughout New England are leveraging that vital resource, i.e., an educated work force, as a means to attract and grow their base of innovative businesses. Case in point is the "Knowledge Corridor," a term often used to refer to the Hartford, Conn.-Springfield, Mass. metropolitan area. The MSA is home to 1.9 million residents and 120,000 higher education students taking courses at some 32 different colleges and universities based in the area.
Rhode Island also is promoting its own "Knowledge District" - a business-ready infrastructure hub in Providence. Rhode Island is focused on creating a vibrant, mixed-use environment within the Knowledge District that will drive innovation along the industry spectrum and foster the growth of second-generation spin-off companies. In fact, Rhode Island currently ranks second in the United States for its volume of university spin-off ventures.
One early success story has been the relocation of 38 Studios' corporate headquarters and 450 jobs to downtown Providence in April. The entertainment and IP creation company is hoping that its move will help to spawn a video game cluster within Rhode Island.
"The staff at 38 Studios is incredibly excited about our relocation to Providence, and we expect to be the first of many relocating knowledge-economy companies that will take advantage of the opportunities Rhode Island provides," says Jennifer MacLean, CEO of 38 Studios.
The proximity to talent from multiple universities such as the University of Rode Island and Brown University was a key factor in 38 Studios' location decision. In addition, the RIEDC Board of Directors approved a $75 million loan guarantee to assist the company in its move to Providence.
And work force development has been a key focal point for Vermont as well. "Vermont has consistently been innovative in its approach to work force training," says Bourgeois. "The flexibility of our programs allows training at all levels - ranging from internships to incumbent worker skills upgrade. We also offer specialized training for specific sectors and skill sets."
Improving the Infrastructure
Although each state is pushing forward with its own economic development strategy, one of the key initiatives under way is a move to upgrade rail transportation throughout the New England region. The U.S. Department of Transportation (DOT) recently awarded more than $800 million to Amtrak and to several New England States to make improvements to high-speed rail in the Northeast. The majority of funds ($795 million) have been allocated for improvements to the Northeast Corridor, which connects New England with economic centers in New York and Washington, D.C.
"The region will reap long-term economic benefits as [its] key economic centers are better connected within the region and throughout the entire Northeast," says James T. Brett, president and CEO of the New England Council, a group of public and private organizations that promote regional growth. Improved regional rail will also help encourage other transit-related development, such as clusters of housing and businesses around rail stations.
In particular, the DOT awarded $30 million to Connecticut to help complete double-track segments between Springfield and New Haven. This funding will improve intercity rail service along the Knowledge Corridor in western Massachusetts, Connecticut, and Vermont.
Incentives for Growth
Individually, states across New England are working harder to attract and retain companies and foster job growth as the economy continues to recover. States have clear strategies in place - ranging from cutting taxes to simplifying the regulatory process - aimed at fostering a pro-business environment.
One of the top objectives for Massachusetts has been controlling healthcare costs. "We really view containing healthcare costs and reducing the growth in healthcare premiums as a business competitive objective," says Eric Nakajima, senior innovation advisor in the Executive Office of Housing & Economic Development for the state of Massachusetts. Helping to contain healthcare costs, especially for small businesses, will help companies add jobs and get a fair platform in which to grow coming out of the recession, he adds.
Direct financial assistance was instrumental in Connecticut's ability to help one of its homegrown success stories to expand. The state's Department of Economic and Community Development (DECD) put together a financing package that convinced HigherOne to remain in New Haven, and ultimately helped to retain 165 jobs and create an additional 203 jobs. The DECD is providing $5.5 million in funds to help offset the cost of the redevelopment of a larger facility for the company at Science Park in New Haven. In addition, the DECD is proposing $18.5 million in Urban and Industrial Sites Reinvestment Tax Credits if HigherOne meets all of its job targets.
HigherOne provides higher education institutions and their students with efficient solutions to handle financial disbursements. The business is another great example of the region's knowledge base at work. The company is the brainchild of three Yale students who developed their idea while undergraduates at the university in 2000. Since then, the company has been growing rapidly, most recently earning a ranking of 148 on the 2009 Fast 500 list of fastest-growing companies.
The challenge for many states is keeping taxes low and government small during a time when state governments are tempted to increase taxes to cover their large deficits and unfunded mandates. New Hampshire, for example, has the seventh-lowest overall tax burden in the nation. Rhode Island also is pursuing an aggressive course to continue to lower the cost of doing business through tax and regulatory reform. Rhode Island's proposed budget for fiscal 2012 includes a phased reduction of the corporate income tax to 7.5 percent and a restructuring of the corporate minimum tax from a flat $500 to a fairer, graduated tax based on gross receipts. Such initiatives are helping to encourage business expansion and job growth throughout New England as the economic recovery continues to gain momentum.