Recession Aftermath: CT Unveils Long-Term Plans to Boost Economy

The national recession that began at the end of 2007 is “very likely over,” according to Federal Reserve Chairman Ben Bernanke. Recovery, however, may be a long way off. Because states were affected differently by the economic downturn in both timing and impact, recovery for state and local economies is likely to occur at different times. Moody’s Economy.com predicts, according to an MSNBC article, that job growth will return first in five states: Colorado, Idaho, Oregon, Texas, and Washington. Four of those states benefit from high-tech industries, and the fifth, Texas, has a strong base of energy industries, the article notes.

Re-examining policy and priorities in the early aftermath of the national recession, governors and business leaders in three states that are likely to be at the tail end of the recovery recently unveiled long-term economic development plans to position their respective states for sustained growth in the new economy. Following is an overview of strategic plans and recommendations unveiled in Connecticut, Michigan and Wisconsin.

Connecticut Gov. Jodi Rell outlined last week a comprehensive strategic plan for Connecticut encompassing more than 60 strategies and initiatives intended to grow jobs, streamline government, and create a more business-friendly environment. The 550-page report spans several TBED areas important to growing the state’s economy, including access to capital, technology transfer, workforce development, and support for higher education.

Pointing to the tremendous success and impact of Connecticut Innovations (CI), the state’s 20-year-old public venture capital program, the authors describe an immense need for continued support of technology companies to ensure Connecticut’s leadership in the new economy. To accomplish this goal, the strategy calls for the state to implement the following initiatives:

  1. Create a new public/private venture capital CTech Fund for the 21st Century to accelerate growth of the technology sector and position the state as a high-technology center. The fund would be a subsidiary of CI, with board members composed of those members who contribute to the fund, and seeded with $20 million in public funds with the goal of leveraging an additional $40 million to $80 million in private funds.

  2. Implement an angel investor tax credit of 25 percent to individuals, corporations and institutions investing in qualified, early-stage enterprises in targeted core competency areas of biotechnology, IT, digital media, and green technology. To encourage investors to make investments in high-risk, startup companies, a tax credit to cover a percentage of the loss over a three-year period for investments made in qualified enterprises also should be provided.

  3. Create a $20 million Technology Working Capital Fund Program to extend working capital loans and lines of credit to technology companies in Connecticut. With CI’s experience in evaluating these types of companies, the fund would be self-sufficient after 10 years, the report notes.

  4. Expand the SBIR mission to build collaborative connections for tech-based businesses with universities, large, mid-tier, and small business. Dedicate $5 million to SBIR for matching grants to SBIR recipients and provide seed-funding to startups in the targeted sectors. Expand SBIR’s matching engineers program to include digital media, IT, and green technology.

Additional recommendations for maintaining a competitive, world-class workforce focusing on the science, technology, engineering, and mathematics fields also are included in the report, which is available at: http://www.ct.gov/ecd/lib/ecd/connecticut_esp-final.pdf.

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