Economic development: N.H.’s biggest challenge
It’s time to initiate new ‘Advantage’
New Hampshire has been facing a crossroads for some time now about its economic future. Not addressing the issue and standing still means stagnation and certain atrophy; continuing along the current road means going backward.
What are the economic challenges facing New Hampshire? First and foremost, we are losing our young people. The in-migration of past years has become out-migration. In fact, between 2000 and 2010, New Hampshire ranked 48th in the country for percent change in its 35-to-44-year-old population. Meanwhile, the state is becoming older – one of the oldest demographics in the nation.
In addition, New Hampshire's workforce growth is stagnant, and it has been estimated that some 125,000 Granite Staters commute out of state for work daily.
In addition, the state ranks low in terms of companies attracted to the state as well as expanding here. Our capital investment in the state – private capital – is relatively low, and, as has been well-discussed these past several months, we have not been adequately maintaining our transportation network, leaving us with some of the worst-maintained rural roads in the nation.
New Hampshire is falling behind, and the trend lines are not encouraging.
It will take creativity to change direction. But we have an educated and resourceful workforce, a strong work ethic and a tradition of stick-to-itiveness
What can we do? In its 2013 study of the economy, the New Hampshire Center for Public Policy Studies mentioned ways policymakers could foster and maintain advanced manufacturing and high-technology jobs, including lowering health care costs, encouraging workforce development and education, investing in infrastructure and implementing tax policies that promote manufacturing and high growth.
But how does that translate into action?
We need to retool. New Hampshire is now competing with other states for high-tech and advanced manufacturing jobs. It has been shown that the so-called multiplier effect of these types of jobs is quite high, meaning an estimated five more jobs are added for each high-tech and manufacturing position created here. And each tech and manufacturing job pays, on average, $81,000 and $52,000, respectively, compared to $25,000 and $16,000 for retail and hotel jobs, which offer no meaningful multiplier job impact.
Attract more manufacturing and tech companies and the trend line will indeed shift – to the better. And out-migration will once again become in-migration.
We need targeted educational investment in voc-tech and community college programs geared toward what companies like Albany International and Safran Aerospace are doing, with the help of Great Bay Community College on the Seacoast, and what West High in Manchester is offering in its STEAM (Science, Technology, Engineering, Art and Manufacturing) NH program.
This is all happening now. We need to encourage it more. We also need to support UNH and the entire university system, but this doesn't mean just providing dollars – public support should be targeted and measures established for academic output and performance in STEAM curricula and STEAM graduates.
We also should examine our business profits tax system and recalibrate it to attract the kind of companies that will get New Hampshire back on a brighter path. The BPT needs to help and not hurt business startups, as can be the case now in New Hampshire. New York and other states have been changing their business taxes so as to attract new business capital.
It will take creativity to change direction. But we have an educated and resourceful workforce, a strong work ethic and a tradition of stick-to-itiveness.
What it will take is a collaboration of state government and the private sector, working together to identify ways to develop a new "New Hampshire Advantage," one built on innovation, a skilled workforce, brainpower and entrepreneurship. We have the quality of life. Let's build on our native advantage. It is now time to choose the correct road forward.
Mark Connolly, principal of New Castle Investment Advisors, Portsmouth, is the state’s former director of securities.