In the Hartford Business Journal article, “DECD Touts Connecticut Innovations Accomplishments” published on Feb. 1, it is represented that while Connecticut Innovations (CI) can be considered a success, its impact on the state and in job creation has been less than substantial. I believe the individual [Economist Fred Carstensen, director of the Connecticut Center for Economic Analysis] quoted in the story missed the point about the critical role CI plays in economic development in Connecticut and also may not have been aware that 10 of the companies that CI has invested in each went on to create 100 plus jobs in our state.
CI has a very specific mission — to support the development and growth of emerging technology companies in Connecticut.
To that end, CI has indeed been successful. Success is not measured solely by how many CI portfolio companies have become “major employers.” Other factors are just as, if not more, important to the economic well-being of our state.
Company creation is one such factor. Small businesses are the foundation of any sustainable economy and typically are the creators of most new jobs in an area. CI’s investments support company creation at the very earliest stages.
In fact, most of the companies CI has invested in would never have been created but for CI’s initial investment. Over 20 years, CI’s investments have supported the very backbone of Connecticut’s economy by leading to the creation of over 90 small technology businesses.
Critical mass is another factor. CI’s investments have resulted in Connecticut developing a core of emerging technology companies that collaborate, support one another and provide high-quality jobs to Connecticut’s highly educated work force. A good example of this concept is evident in the state’s biotechnology sector. CI has been an early institutional investor in a majority of the state’s biotech companies.
By making capital available for early-stage investments and providing funding for laboratory space, CI anchored several startup biotech companies in Connecticut. Their success attracted others, leading to a critical mass of biotech companies that now exists in the Greater New Haven area.
Another factor in CI’s success lies in fostering a culture of entrepreneurship. Simply put, entrepreneurs attract other entrepreneurs. Leaders of startup firms want to be around other innovators and want to live and work in an entrepreneurial climate. By creating CI 20 years ago, the state of Connecticut made a statement that this was a good place for entrepreneurs to establish and grow their businesses.
This is still true today. During fiscal year 2009, CI invested in five companies that were introduced to CI by entrepreneurs who had previously done business with CI.
Had CI not existed, it is likely that most, if not all, of the 10 companies launched by these five innovative entrepreneurs would have been started somewhere other than Connecticut.
CI plays an important role in economic development, and recent analysis reinforces CI’s contributions to Connecticut’s economy. I would encourage readers of the HBJ to visit www.ctinnovations.com to learn more about CI and its success in fostering technology innovators in Connecticut.
Joan McDonald is the chair of Connecticut Innovations and commissioner of the state Department of Economic and Community Development.
