The economic situation of our state in many ways mirrors what so many countries are facing: years of excessive spending, unrealistic commitments to expensive employee’s health and pension benefits, and slow growth, which have led to increased outlays, lower revenues and higher deficits.
Question now is what to do about it. Substantial cuts to government spending has been the prevailing course of action supported by conservative economists and justified by a Harvard study which purported to show long term benefits from such actions. However, even before the recent disclosure about possible inaccuracies in the calculations within the study, questions were being asked about the wisdom of a cuts only fiscal policy. In Europe that approach has led to lower growth rates, rising unemployment and no signs of an economic turnaround.
Our nation has fared somewhat better. The economic stimulus introduced by President Obama in 2009 helped stabilize the economic situation while the aggressive monetary policies of the Federal Reserve are helping economic growth, albeit at a lower rate than required to generate full employment.
In Connecticut Gov. Malloy has made substantial investments in biotech and UConn concluding that these two activities will lead our state out of current no-growth, or at least slow growth environment.
But Connecticut does suffer from continued elevated spending at the state level. Such expenditures are indeed a major drag on our economy as more and more resources are needed to fund operating expenses like salaries, health care and pensions. The next governor, Malloy or a challenger, will have to deal with this issue in a forceful and comprehensive way. We simply cannot afford to postpone tough decisions again and again.
But cuts alone will not help economic growth; they may actually temporarily dampen it.
We need to adopt economic development policies that: can bring Connecticut into the global economy; bring in substantial new investments to our state; identify and focus on the one area of clear competitive advantage that will produce synergistic benefits; establish our state and the city of Hartford in the global business map.
Aerospace manufacturing can be the engine to lead our state out of the no growth mode we are enduring. Pratt & Whitney, Sikorsky, General Electric, and the hundreds of aerospace component manufacturers that support them give us a strategic competitive advantage in an area that has been, and will continue to be, a major source of growth. Furthermore. the precision manufacturing techniques and related labor skills can be utilized in other growth areas such as medical components manufacturing.
To leverage this competitive advantage we must make substantial investments in two key areas. First we need to upgrade Bradley International Airport. I am talking about a project of several billion dollars that would establish our airport as a convenient and easier alternative to Logan and JFK. An airport that can support international flights, allow the dormant free trade zone to come to life, and make it easier for tourists to come to our state. The projections for growth are significant. It was recently reported, for example, that aviation supports some 56.6 million jobs and $2.2 trillion in economic activity. By 2030, that is expected to grow to 82 million jobs and $6.9 trillion in economic activity. Airport development in the United States is very challenging and it can take the best part of 20 years to get new aviation infrastructure built here. Now is the time to make this investment.
Concurrent with a long term development plan for Bradley, we need to take actions that will lead to more usage of the airport now. Actions that will play to our strengths and that bring us back to aerospace. Our state is one of two or three aerospace manufacturing centers at the avant-garde of this activity. Why not plan for a major global aerospace trade show in Hartford? The intent here is not to compete with London or Paris, but we should compete with cities like Turin, Italy. A global trade show has several major benefits including showcasing our companies to the world and bringing an influx of visitors and potential investors to our state. It can also establish Connecticut as the center of a globally competitive aerospace / precision manufacturing cluster.
Aerospace manufacturing and Bradley Airport are the two economic engines that can lead our state out of its economic doldrums. It’s time for our state to make the necessary investments to realize this potential.
Paul Pirrotta is president of Paul Pirrotta International in Glastonbury. Reach him through paulpirrottainternational.com.
