Innovating the Elm City

As mayoral hopefuls Toni Harp ARC ’78 and Justin Elicker FES ’10 SOM ’10 enter the final week of their campaigns, both candidates have rolled out platforms to combat one of the most pressing issues facing the Elm City — economic development.

In the 1950s, New Haven’s economy was concentrated almost exclusively within the manufacturing industry. Today, while manufacturing remains an important component of the regional economy, the focus of the economy has shifted to health care, business and financial services. Surrounded by institutions of higher learning, ripe with talent and an entrepreneurial spirit, New Haven has been labeled a city prime for economic growth, provided the new mayor effectively addresses the challenges facing the city. At 12.4 percent, New Haven’s unemployment rate is markedly higher than both the state’s rate, at 8.1 percent, and the national average, at 7.2 percent. In the past few months, total employment and the size of the region’s labor force have consistently declined.

The newly appointed mayor will be faced with a monumental task: developing a strategy to spur local businesses, grow the biotechnology industry, improve transportation systems and help foster a more attractive community for incoming entrepreneurs. Harp and Elicker have unveiled economic development initiatives, hoping to stimulate current businesses and lure new ones to boost employment in the Elm City.

Both candidates recognize the importance of providing better resources for startups, further developing the biotech industry and creating a more welcoming environment for entrepreneurs. However, Harp has focused efforts on creating more effective transportation options to cities such as Boston and New York, while Elicker centered his attention more on inner-city transportation improvements.

Elicker has focused on unlocking potential in three main areas — around the Union Train Station, where there is high demand for residential apartments and developments, near the waterfront, which has vacant spaces and empty factories and in neighborhoods such as the space along Whalley Avenue and Grant Avenue.

“If we can improve and invest along those corridors, we’re likely to see some of that prosperity downtown spreading to those neighborhoods,” Elicker said.

But Harp has differentiated herself through her focus on small-business development. She calls her approach a “Main Street” philosophy. By placing business incubators in neighborhoods and creating a central space for businesses to obtain resources, she hopes to spur economic development not only downtown, but on a number of city streets. She plans to work with city officials and community groups to develop a customized economic development strategy for each neighborhood.

CONNECTICUT’S ‘CITY OF INNOVATION’

New Haven has a storied history of innovation as the birthplace of the hamburger, the Frisbee and the bicycle.

The presence of research institutions in New Haven has led the city to be dubbed “Connecticut’s City of Innovation.” Yale and other local colleges together maintain a student base of nearly 50,000 and employ thousands of others, many of whom are working at the forefront of major research projects.

Elicker and Harp agree that current initiatives including the Yale Entrepreneurial Institute (YEI), one of the top rated incubators in Connecticut, and the Grove, a shared working space, have helped encourage entrepreneurs during their early stages of development. These establishments connect young business owners with mentors who advise them on how to best raise capital or develop business technology. While this initial network of connections has helped companies at the outset, Grove co-founder Slate Ballard said that the Grove does not have the resources to help make these businesses attractive to significant funds from outside venture partners.

Hasan Ansari SOM ’14, who worked with a team through YEI to create TummyZen, a brand of antacid, said he and his team struggled to raise money in the New Haven area to produce their pills and market the product online and in local pharmacies. Fortunately, using School of Management grants and YEI grants, Ansari and his team have developed a website and created the first batch of their product, but he said that other startups would be out of luck if they were not fortunate enough to secure a grant.

“Even if you have a great product idea, it’s very hard for a New Haven-based company to raise money and take the product mainstream without giving away a significant portion of the company,” Ansari said. “Many startups are forced to be beholden to investors outside of New Haven.”

For startups to better understand what resources are available to them, Harp intends to combine city and state resources in one centralized location for New Haven residents.

In addition to obtaining more resources, local entrepreneurs said that more collaboration between small-business owners would be beneficial to the city’s economy.

“New Haven has been a very supportive community, but I wish there was more matchmaking between people with different expertises,” Chairigami founder Zach Rotholz ’11 said.

Elicker and Harp have both recognized this Achilles’ Heel. Elicker said the Grove and YEI must be better connected so the city can entice local college graduates to locate their businesses in New Haven.

Harp emphasized specific plans for each neighborhood in the city, and supplementing economic development downtown with business incubators in neighborhoods throughout the city.

“It’s imperative that people in our communities who have entrepreneurial spirit have support from the city, as well as from the state government, to help build successful businesses,” Harp said. “We need to continue to make big business splashes, like Alexion [Pharmaceuticals], and also support small businesses and help them stabilize. ”

In addition to encouraging startups, both candidates recognized the importance of the biotech industry in New Haven.

In the late 1990’s, biotech companies added 1,000 jobs to the regional economy. Today, Local healthcare and pharmaceutical firms, combined with the Yale Medical School and Yale-New Haven Hospital, account for 16 percent of jobs in New Haven County. The percentage has risen dramatically in the last decade due to investments such as one in the Smilow Cancer Hospital and will further increase with the impending move of Alexion Pharmaceuticals back to New Haven.

Elicker said New Haven has a great advantage because its two largest biotech companies will be in the city for many years. As mayor, he added that he would capitalize upon the opportunity by improving zoning in the hospital area to make it a more appealing place to invest.

Dean of the Yale School of Medicine Robert Alpern said jobs in the biotechnology industry are particularly important because they are high-paying. He added that biotech firms want to be near a good university, but the city must work on developing a critical mass of these firms to attract the more high-profile businesses.

“They key to biotech is that these firms want to be near each other,” he said. “That’s why you have hubs like Silicon Valley and Cambridge, because, if a person is starting a business, they know that, if it doesn’t work out, they can switch to another company without moving. When a biotech company chooses to not set up in New Haven, it’s because of the location and proximity to other companies.”

Alpern said that New Haven has started to build this necessary critical mass, but it right now many companies would rather start up in Cambridge or California’s Bay Region. He does not fault the city, but he noted that the city can provide a welcoming environment by continuing to provide businesses spaces, get zoning approvals and grant permits.

In order to foster this community for young entrepreneurs and business leaders alike, both candidates also stressed that improving the livability in downtown areas is key to attract entrepreneurs and retain students post-graduation.

New Haven Chamber of Commerce President Anthony Rescigno said that the city has a lot of retail, restaurants and cultural venues that can lure individuals to the area, but that it needs to continue to keep crime under control.

“People who are starting companies are looking for a place they want to live,” Elicker said, adding that “If we can’t address public safety issues, we will continue to drive people away.”

TRANSPORTATION SYSTEMS

Both candidates have touted improvements to transportation systems as critical for growing the local economy, but Elicker has focused on internal improvements, while Harp has looked to facilitating transportation between New Haven and other major urban areas.

Elicker said he believes transportation is a key economic development tool and has advocated for increasing the frequency of CT Transit routes, as well as potentially designing a streetcar system and integrating the Yale Shuttle system with CT Transit.

“When we consider people who want to move back into cities, that group of people is looking to live in places where there is reliable, safe public transportation,” Elicker said. “We don’t have that in New Haven right now.” He added that there is often increased economic development along reliable transportation routes.

The Greater New Haven branch of the NAACP released a report in March that said lack of public transportation is one of the primary barriers to the minority community in New Haven having access to jobs.

Mark Abraham ’04, DataHaven executive director, said he agreed the economy would benefit from more efficient transportation within the city itself, adding that it would make it easier for businesses to access the workforce and attract the most talented employees.

While Elicker has focused on these inner-city transportation options, Harp has concentrated on devising ways to improve the systems that link New Haven with major cities, such as New York and Boston.

“Those are the synergies that build New Haven and also build the entire state of Connecticut,” Harp said. Among her suggestions is creating a one-hour train ride to New York either by increasing the speed of trains or reducing the number of stops on the train’s commute. Although Harp acknowledges that Metro North has not yet found a feasible way to accomplish this goal, she said she will continue to push to find a quicker route from New Haven to New York.

Elicker said he believes Harp does not “do her homework” when it comes to pitching these types of economic proposals. “She had the idea that we could have a one-hour commute to New York, but a reporter did their homework and talked with folks and realized this was physically impossible to do,” he said.

Yale School of Management Professor Douglas Rae said he believes that the integration of the New Haven economy with the New York Tristate economy is critical, though he added that he feels candidates have dealt with the issue “superficially” during the election.

“The way things stand now, New Haven is an isolated and small market, which means, when an institution like Yale, wants to grab a first-rank professor who is married to another first-ranked professor or researcher, the odds of out-competing institutions in Manhattan or Cambridge will be a lot better if one can get from here to New York quickly and cheaply,” Rae said. He emphasized that the city must make this a priority, although it will likely cost billions.

Rescigno said that New Haven, if it can continue to capitalize on its strengths, can be a leader in innovation in the country.

“The potential is there today, and we are one of the key hubs around the country,” he said.

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