N.H. needs a clearly defined strategy to maintain its economic advantages
For a long time, the state enjoyed relative prosperity without needing an economic strategy, but that’s no longer the case
What is New Hampshire’s strategy for economic growth? Does it center on high-tech manufacturing? Tourism? The “green” economy? Is it focused on attracting young professionals and families to the state? Or does it cater to our growing retiree population? What role should the state’s colleges and universities play?
For a long time, the state enjoyed relative prosperity without needing a clearly defined economic strategy. With high rates of in-migration, a clean environment, a comparative advantage in tax structure and proximity to the Boston metropolitan area, New Hampshire benefited from decades of strong economic growth. But with fewer people moving into the state in recent years, New Hampshire’s decision-makers realize they need to craft a conscious strategy to maintain our many economic and quality of life advantages.
With this in mind, the New Hampshire Center for Public Policy Studies has spent the past six months sifting through dozens of measurements of New Hampshire’s economy and business climate. Our goal: to devise a more data-based method of understanding the state’s strengths and challenges, and how those stack up to the rest of the country. We tried to cover a wide range of measures: college-going rates; real estate prices; bridge and road conditions; business taxes; energy prices; volunteering rates; health care costs; and dozens more.
And we compared New Hampshire to our New England neighbors, as well as a handful of competitor states that are faring well in the post-recession world.
As a snapshot of current conditions, our numbers indicate that New Hampshire is doing quite well in many measures of economic health. But many of the areas where New Hampshire excels -- high levels of homeownership, high levels of educational attainment and high rates of health insurance coverage, among others -- point to past or current conditions. In other words, they are the result of policies and trends that have been in place for some time but don’t necessarily guarantee much about the economy of coming years.
By contrast, in many of the more “future-oriented” measures – average student debt loads, growth in the 35-to-44-year-old share of the population, housing costs and the rate of college-going among high school graduates – New Hampshire rates much less favorably.
Why is this worrisome? Many of these measures are directly linked to the state’s ability to attract and retain young people and arm them with the skills needed to compete for good jobs in coming years.
In addition, and perhaps more troubling for short-term economic planning, New Hampshire ranks poorly on several measures of business costs, including energy and health care expenses.
Any economy is a complicated system of shifting, inter-related factors and reducing it to a handful of data points oversimplifies matters. But this data should help provoke discussion around the question of what New Hampshire’s economic goals and priorities should be. The answer to that, in turn, will be determined by figuring out how and against whom New Hampshire is competing for economic growth and human capital.
Do we want to emphasize luring businesses with our highly-educated, flexible workforce, despite high business costs? Do we want to cast a wider net, and compete against states like Colorado, Utah and Virginia, which are attracting skilled young professionals looking for places that offer high wages and a high quality of life? And what specific industries might offer us the best competitive advantage?
At the same time, policymakers will want to focus on indicators specific to the state’s local economies, as some measurements may tell a more useful story when measured at the regional level.
For instance, the statewide data about college attainment levels obscures vast differences across New Hampshire, with much higher rates of college attainment in the state’s southern tier and lower levels in the North Country and rural areas. If policymakers want to attract employers to particular regions of the state, they must acknowledge the specific challenges posed by these varying levels of education, among other factors.
There are several existing initiatives grappling with these issues, including attempts at developing stronger partnerships between community colleges and local employers, incentives to develop “green” startup companies, and efforts to increase the state’s homegrown science, technology and engineering workforce.
No one approach will meet all of New Hampshire’s economic needs. But identifying policies that address real needs as reflected in objective data is a place where any conversation about the state’s future needs to start.
Steve Norton is executive director and Daniel Barrick is deputy director of the New Hampshire Center for Public Policy Studies, Concord.