The state of Connecticut developed a magnificent vision and plan in its effort to attract Amazon’s second headquarters, HQ2. Now that we know it wasn’t successful, here is plan B for how Connecticut can build its own technology sector.
There are over 6,000 technology companies in Connecticut. We only need to grow 10 jobs in each to exceed the number of jobs Amazon is offering over 10 years, and we can do it much less expensively and more quickly. And we can start tomorrow.
The first step is to get an understanding of what these scaling companies need. The Connecticut Technology Council (CTC) conducted a survey of CEOs of local tech companies. Of course, these companies need funding, but investment alone won’t help them grow. These companies need better ways to source talent, connections to local large corporations and state government, marketing guidance to increase sales, and networking opportunities with other growth company CEOs and entrepreneurs who have successfully grown companies.
These are not insurmountable issues and they can be addressed through the development of a strong growth company network in Connecticut. Some of this network already exists, but we need to coordinate and curate it. If that sounds difficult, remember we have millions of dollars that would have otherwise gone to Amazon to attract them here.
For a fraction of that budget, we can create an accelerator program for each of Connecticut’s major industries. This accelerator can be created and supported by the industry itself and designed to attract companies that are on the bleeding edge of that industry’s technology, or at the intersection of multiple industries (think healthcare IT).
In this way, our leading industries aren’t waiting for disruption to happen to them. They are encouraging it while they prepare to adopt the new ideas. The CTNext Innovation Places program has funded an InsurTech accelerator in Hartford, a MedTech accelerator in New Haven, and a FinTech accelerator in Stamford.
This is a great start. However, Connecticut has a history of funding programs and projects at a sub-sustaining level. Instead of allowing these accelerators to falter due to lack of resources, let’s adequately fund these accelerators and bring in operators with a track record of success.
Following the best practices of others, Connecticut can create a concierge service to connect scaling companies that need support to grow with resources in the network. We already have great examples of how successful this can be in different parts of the state, but by having them disconnected, we aren’t getting the opportunity for critical mass and network sharing. Fully funding this opportunity would get more companies growing faster.
Of course, a piece of this puzzle has to be addressing financing issues that are unique to scaling companies. Let’s design programs that recognize that uniqueness and respond to it. For instance, large corporations often pay invoices after 90 days, yet expect delivery long before that. Companies that want to supply to these large corporations need to have working capital to allow them to bridge that 90-day gap. Even with invoice in hand, banks are unwilling to provide the funding needed.
Simply by coming up with a loan guarantee program, Connecticut can allow many of its small companies to grow based on new business for which that company can now compete. There are many examples like this, if we decide to look for them.
Once we build a healthy scaleup environment, we will be attractive to the thousands of companies that have started in Cambridge, MA, and Brooklyn, NY, and are thinking about their next stage of growth. Think of the sticker shock for those companies as they contemplate lease rates while growing from five to 50 employees. Hartford has space that is one-third to one-half the cost. Let’s get this program in place now, so when those companies that are less than two hours away are looking for a new place to grow, they only have to look as far as Connecticut.
After years in the economic development business I still root for the “big bang” if possible, but have found that slow and steady will always win the race. It takes longer, it requires vision, patience and persistence, and fortunately, we capitalize on what we already have in place. Let’s get started.
About the Author
Bruce Carlson is president and CEO of the Connecticut Technology Council (CTC), the only statewide association of technology-oriented companies and institutions, providing leadership in areas of policy advocacy, community building, and assistance for growing companies since 1994. Speaking for 2,500 companies that employ some 200,000 residents, the mission of the CTC is to spark innovation, cultivate tech talent, foster business growth, advocate for industry-beneficial law and policy, expand the scope of industry networking and professional development, and celebrate industry achievements in the state. The CTC seeks to serve Connecticut’s technology ecosystem by providing leadership, support, mentoring, and advocacy to companies across every industry and at every stage of growth.
Learn more about Bruce Carlson and the Connecticut Technology Council