How ‘Innovation Corridors’ may help create 15K jobs
After winning $64 million in legislative support for the “Innovation Places” initiative created by his predecessor, Gov. Ned Lamont is moving ahead with a $100 million “Innovation Corridor” initiative with loftier goals to match Connecticut and federal funding with private-sector investment.
Lamont projects the Innovation Corridor initiative will support 15,000 new jobs over five years in higher-paying industries like artificial intelligence, life sciences or advanced manufacturing. The state Department of Economic and Community Development estimates Connecticut shelling out $9,000 for each job gained.
Under a tandem program called the Connecticut Communities Challenge, DECD will disburse another $100 million to support real estate development and improvement of public spaces, in city centers or near transit hubs that could elicit interest from fast-growing employers.
DECD is targeting up to half of the Connecticut Communities Challenge money to municipalities defined as economically “distressed,” but without guaranteeing that split. Projects could include real estate development near rail hubs or in city centers; pedestrian and bike paths; or otherwise improving public spaces, including through art and lighting.
It is the next step in a $345 million “Economic Action Plan” the Lamont administration has been working up since last summer, on how to allocate funds received under the American Rescue Plan created by the White House to hasten the economic recovery during the COVID-19 pandemic.
DECD is targeting $670 million in accompanying investments from the private sector in the Innovation Corridor and Connecticut Communities Challenge programs.
Alexandra Daum, deputy DECD commissioner, cites the example of the 101 College Street life sciences industry incubator under construction in New Haven as one example of the kind of activity Lamont hopes to spur. Yale University has committed to be an anchor tenant along with Arvinas, a developer of drugs for rare diseases with a stock valuation exceeding $4 billion.
“There’s money — which should help people really get started and have partners take them seriously because there is state money that is officially out there,” Daum said. “We
“We have a lot of different tactics to try to make sure that we’re making investments that will really stick and really make a difference, but one of the key ones is to make sure that the capital ‘stack’ and the private commitment is already at the table to begin with.” Alexandra Daum, deputy DECD commissioner
have a lot of different tactics to try to make sure that we’re making investments that will really stick and really make a difference, but one of the key ones is to make sure that the capital ‘stack’ and the private commitment is already at the table to begin with.”
Project applications are due in mid-November, with awards to be announced in April 2022.
Connecticut has seen success in promoting growth at other startup incubators, including the BioCT Innovation Commons in Groton in partnership with Pfizer where some two dozen companies are tenants; and Jackson Laboratory for Genomic Medicine in Farmington.
Since taking office in 2019, Lamont had pledged repeatedly to reduce Connecticut’s debt obligations. Daum said DECD deemed the Innovation Corridor as meriting the necessary borrowing to couple with private funds and money from the American Rescue Plan.
It is only the latest attempt at “place making” in Connecticut to promote the idea of similar companies clustering in close proximity to increase the skilled labor pool in those areas, and increase the odds of spinning off startups that could grow into major employers in their own right.
In 2017 under former Gov. Dannel P. Malloy, Connecticut committed to distributing $30 million to support business accelerators in New Haven, Stamford, Hartford and New London under the Innovation Places program.
Last April, the state Bond Commission approved nearly $7.3 million in borrowing that would be used partially to support Innovation Places in the current fiscal year. The Connecticut General Assembly authorized $64 million to fund the program for an additional four years.
Four organizations were created from the initial Innovation Places funding in Launch Hartford, the New Haven Innovation Collaborative, StamfordNext and the Thames River Innovation Place in Groton.
New Haven remains Connecticut’s
best success in promoting cluster development, with Yale University researchers having created a succession of startups in the past decade that have raised large sums to develop new drugs and medical devices.
But other past efforts have yet to create self-sustaining engines of growth, most notably Connecticut’s attempt to draw TV and digital media companies to Connecticut more than a decade ago through industry tax credits. Connecticut had some early successes with the relocation to Fairfield County a decade ago of NBC Sports and Blue Sky Studios, but no other major studios have followed since though ESPN and WWE have continued to invest in their existing studios.
“We’re trying to create dense networks where entrepreneurs and innovators have an abundance of opportunity and resources right at their fingertips — in many cases, literally right around the corner to help them in developing new ventures,” said David Steuber, speaking to members of the Connecticut General Assembly last April while CTNext’s head of the Innovation Places at the time. “It’s a place where entrepreneurs will start a business and either succeed or fail, but will come back and they’ll start a new one right in the same community.”