The 18th annual “Development Report Card for the States” awarded straight A’s to Connecticut for 2004, making it the only state in the nation to receive a perfect score.
Issued by the Corporation for Enterprise Development, a national nonprofit organization concerned with economic development, the report recognized some of Connecticut’s strengths in earnings and job quality, competitiveness of existing businesses, and human resources.
“These grades should be no surprise to anyone who has spent any time in Connecticut,” Gov. M. Jodi Rell said in a press release Thursday. “No state in America has smarter, better-trained or more dedicated workers, no state is more willing to do what it takes to make businesses prosper and jobs grow, and no state has a higher standard of living than our beautiful home.”
As one of Connecticut’s biggest and most developed cities, New Haven played a significant role in shaping the results of the report. A hub for higher education and home of a booming biotech industry, the Elm City leads the state in certain aspects of the economy. But the report card is not entirely reflective of New Haven’s current status, Economic Development Administrator Henry Fernandez said.
“It’s great to be able to point and say there are all these things that are indicators of the strength of the state as a whole, but a lot of that is because the state is so wealthy,” Fernandez said. “The report doesn’t get at the problems of diverse, urban areas and how to make lower-income and minority-owned businesses grow.”
The study looked at economic development from three different perspectives: people living in the state, businesses operating in the state and the economic future of the state. The report card’s three graded indexes include performance, business vitality, and development capacity.
CFED Senior Program Manager Lillian Woo said these categories allow the corporation to take an expansive look at economic development, covering areas that other studies might exclude, such as quality of life, health and home ownership, and educational measures.
“For Connecticut to get all A’s means it has to be very strong in all three areas,” Woo said. “It’s doing a good job in some places that might be overlooked in other studies, such as the ability to attain the American dream.”
Improving on last year, Connecticut increased its employer health coverage ranking from fifth to fourth. It also ranks first among all states in the strength of the traded sector and ranks fourth in lowest poverty rate.
Although often criticized for its poor income distribution, Connecticut received an A in the equity category, Woo said. The state proved extremely strong in all measures of human resources and displayed commendable education-related rankings, taking first in reading proficiency, fourth in math proficiency and seventh in college attainment.
Fernandez said he attributes these successes to the great colleges in the state as whole, and particularly in New Haven. But at the same time, he said the report fails to look at the educational disparity between the upper and lower classes.
“One would expect an entrepreneurial class to come out of not only the best universities but also the lower-class, minority neighborhoods,” Fernandez said. “So yes there is tremendous opportunity here, but the question for Connecticut is always whether this opportunity is spread to different ethnicities and classes.”
Even with a 4.0 grade point average, the report emphasized that Connecticut has much room for improvement. It recommended that Connecticut improve its long-term employment growth, where it is currently ranked 50th in the nation. The report also said the state is lagging in its creation of new companies — seeing only a modest job growth due to new businesses in 2004 — and cited mediocrity in Connecticut’s venture capital investments and loans to small businesses.
Because Connecticut’s greatest weakness is in both long-term and short-term unemployment, this shortcoming may be due to structural issues, Woo said.
“It could be that the traditional industrial base is shrinking,” Woo said.
But Fernandez said he believes this is an area where New Haven is ahead of most of the rest of the state. Because of its economic diversity, the city spends a significant amount of time examining how to keep unemployment rates down and helping support and develop small businesses.
“We continue to see major gaps in wealth across the state,” Fernandez said. “And until the rest of Connecticut starts investing in these kinds of small companies, I don’t think we are going to get much short- or long-term employment growth.”
[ydn-legacy-photo-inline id=”16574″ ]