A recent report projects that the Connecticut economy will grow jobs at a paltry 1 percent per annum over the next five years, the slowest rate of any state in the entire country. At the same time a summary report from the Governor Malloy’s team points out that among Connecticut state employees the ratio of managers to workers is 1 to 6 vs. 1-12 in the country. It is time for strong actions to address the issues which have already cost Connecticut over 100,000 jobs.
Here is some of what Governor Malloy must do:
1. Personally take on the job of chief economic development officer.
2. Hire a local business leader to head the Department of Economic and Community Development.
3. Review and re-organize the structure and functions of Connecticut Innovations, the Connecticut Development Authority, and the Connecticut Economic Resource Center.
4. Expand DECD’s International Department.
Governor Malloy knows from his days as mayor of Stamford the key role that the CEO of a city or state can play in opening doors to potential business opportunities. I see four dimensions to this job:
• Continue to consult regularly with CEO’s of small and large Connecticut companies. The image of Connecticut is one of being unfriendly to business. Real or perceived, this is a major issue and only an ongoing effort on the part of the governor can slowly change this perception.
• CEOs know that only the governor can make certain decisions and/or bring the full resources of the state to bear on specific issues. As such, I would encourage the governor to meet with CEOs of companies interested in moving to our state. Being received by the governor is an intangible element which plays a major role in the decision making process.
• The governor must lead commercial delegations to foreign trade events. How valuable would it be, for example, to have the governor lead the next trade delegation attending either the aerospace show in Paris or the Medica meetings in Germany? And while in Europe, why not visit some of the local companies with operations in Connecticut, thank them for their confidence in our state and possibly leverage them to recruit more companies!
• Finally, the governor must show full confidence in and support for the state’s DECD commissioner.
Governor Malloy is conducting a national search for a new commissioner of economic development. This position, more so than any other, will determine the future of our state. A close working relationship between Malloy and this new hire is not only necessary but required. The governor should select a local business or political leader in whom he has a high degree of trust for this position. Bringing in an outsider would force delays in key decisions which simply cannot be postponed.
Reorganizing the economic development functions will be the first important test faced by the new commissioner. Consolidating independent authorities may result in substantial expense reductions while giving the new commissioner the ability to directly manage all aspects of job creation. I would call on the next commissioner and the Commerce Committee of the General Assembly to review the operating structure and administrative functions of CI, CDA and CERC. Can these agencies be consolidated into one authority and thus eliminate redundancies in management layers and support functions? Or should these agencies be merged into DECD to give the governor and commissioner the ability to more directly impact the workings of these agencies? Would these units be more responsive to the governor and the General Assembly if managed by appointees rather than permanent employees?
The time is now for us to consider these issues, discuss them and make needed changes. The cost savings could be significant: duplicate positions could be eliminated; marketing, business development, financial supervision could be consolidated; loan systems shared.
Would such consolidation have a negative impact on the ability of these agencies to perform their functions? I don’t think so and such a move might actually strengthen their missions: for example, when it comes to financing, one structure would support multiple forms of lending just like financial institutions do in the real world. Consolidation would make these units more efficient, effective and responsive.
Finally we must make investments in key areas. Start by expanding the international department within DECD. Over the past several years, the resources allocated to International have been reduced to the point where we have only one person supporting these functions. I would allocate some of the savings resulting from the above restructuring to bring on board a seasoned International manager, re-staff the unit and restore a travel budget so that this team can play a role in bringing jobs to our state.
Specifically we should continue to focus on key trade shows such as the aerospace and medical instrumentation; we must expand the number of inbound trade missions with special focus on new and green technologies; we must re-energize the recruitment of foreign companies into Connecticut by leveraging foreign companies based here already; we must place heavy emphasis not only on manufacturing but also on service industries such as insurance.
The next few years will be especially challenging as we seek to grow our economy while downsizing state government. I believe that we can achieve both goals and the above steps are a good starting point.
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Paul Pirrotta is president of Paul Pirrotta International in Glastonbury. He writes frequently on international trade issues. Reach him through the company’s website at: http://italy-usatraderep.com/aboutus.htmlÂ
