🔒Private sector must lead innovation economy

State government-backed programs aimed at developing a more vibrant startup and entrepreneurial culture are smart policy because small businesses are the lifeblood of the economy, creating the majority of new jobs.

But while the investment the state of Connecticut is putting into some of these ventures is helpful, ultimately it's the private sector that will need to drive the effort to make it successful. Yes, policymakers can provide seed funding to create “innovation ecosystems” and startup mentor networks, but it's the intellectual capital inside Connecticut companies, hospitals, colleges and other non-governmental entities that will ultimately dictate whether Connecticut can better compete with cities like Boston and New York for leading-edge companies and talent.

Government can, and should, play the role of convener, but the private sector must be the doer.

And such state government-backed efforts must be done in conjunction with reforms that improve Connecticut's overall business climate, which continues to be a weak spot. The state will never be able to reverse its lackluster economic growth by passing incentives for small businesses on one hand and new taxes or employer mandates on the other.

The continuing budget crisis isn't helping either.

Businesses, whether they are startups or Fortune 500 companies, take a holistic approach when weighing where to invest their capital.

The state's innovation ecosystem program is an example of a potentially good policy idea that could make a dent in reversing the state's brain drain — if the private sector gets on board.

In this week's issue, Hartford Business Journal's focus section includes a Q&A with Glendowlyn Thames, director of small business innovation and CTNext, the state's small- and startup-business promoter, about the inception of innovation places, which aim to develop certain areas in Connecticut into magnets for talent.

The five-year, $30 million program is just beginning to accept applications and will provide funding for entities that support innovation and entrepreneurship in their communities and/or regions and create a common strategy to make their community a sought-after location for people and companies. Creating high-density innovation clusters is a similar strategy that's helped West Coast's Silicon Valley, Boston and New York City attract some of the best, highly educated talent in the world.

For Connecticut to even come close to replicating the success of those regions, the private sector must play a critical role, actively forming partnerships with local colleges and entrepreneurial networks that provide mentorship and seed innovative ideas. Much of that already goes on in pockets of the state, but this effort is about creating such a high intensity of organized activity that a Yale or UConn graduate with the next “big idea” refuses the temptation of Boston or New York in favor of lab or office space in Hartford or New Haven.

Luckily, it seems some of our state leaders understand the importance of private-sector leadership in growing the state's innovation ecosystem. As Thames said in her Q&A, “This program will not reach its full potential unless there is private-sector involvement. In all successful entrepreneur communities, the private sector plays a big role.”

Now the onus is on the state to encourage and facilitate industry involvement. Business leaders too must take a more active role in promoting innovation and entrepreneurship beyond their companies' walls, because a more vibrant economy can lift all boats.

That, along with other policies that make Connecticut's business climate more competitive, could start to move the needle back to a time when the Nutmeg State was among the most innovative, economically successful states in the country.