New England has assets – but we have to use them

The other morning I was pinned in a corner (figuratively) until I stated what I thought the regional economy would do in the next six to 12 months. I weaseled! “More of the same,” I said. (I really wanted to say, “How do I know?”)

There are dozens of things happening that make prognosticating difficult. Sometimes we simply have too much data and freeze up with paralysis by analysis.

I do know that I routinely am asked to give an opinion of market value (not an appraisal, but a broker’s price opinion — BPO) for industrial and manufacturing properties. I am often quite taken aback when I walk in and see an old-line business assembling products largely by hand. My first thought is, where have these people been in the past 20 years? My second thought is how much longer can their business survive in the global economy?

A large number of bankers (eight out of the last 12 I chatted with) tell me their manufacturing customers are doing well. I am slightly skeptical, but when I ask them to elaborate, the themes are similar. They are talking about small and medium-sized businesses, many privately held or family businesses. They may not be high tech, but they have identified a niche and continue to mine it each and every day. They need lines of credit, equipment loans, and sometimes real estate loans. They have adapted to rising health-care costs and energy prices. They have dropped unprofitable projects and focused on profitable ones, squeezing manufacturing costs out year after year.

I just finished reading, “The Elephant and the Dragon: The Rise of India and China and What it Means for All of Us,” by Robyn Meredith. The theme is that China and India, each with over a billion people, will be global powerhouses. China is focused on manufacturing and India on services. They both graduate millions of well-educated students each year, while the U.S. graduated 60,000 to 70,000 engineers last year.

We still hold an edge, but it is narrowing quickly. Our small entrepreneurial firms can still outmaneuver the foreign competition, but global firms are wired, connected, smart and hungry! They are quick learners and are emulating our strengths.

The University of New Hampshire, the chambers of commerce, the Department of Resources and Economic Development and the governor’s office recently collaborated to host a Tech North Summit in Manchester.

The theme was to identify opportunities to incubate and promote small and medium technology companies. This is critical. We have to figure this out ourselves because there is no imminent technology that will suddenly emerge and drive another economic boom in New England.

There are themes — nanotech, biotech, green tech, hydrogen, etc. — but we have no lock on any of them. Tom Friedman is right – the world is flat! Any group of friends with access to boot strapping capital can start a business anywhere. Some countries and economies are more hospitable than others, but the U.S. no longer is THE player in the global economy.

New Englanders pride themselves on their thriftiness, tenacity, inventiveness, creativity and business acumen. It is time to stop talking about our assets and start applying them.

My daughter Emily is a senior in college this year, majoring in economics with a minor in psychology. She is working very hard and her GPA shows it.

Now she is thinking about what comes next. Emily is lucky because she had a good, solid education. She has traveled abroad, speaks Spanish and been able to mix academics with photography and other creative pursuits. While she feels anxiety about the future, she will do just fine because she is hard-working, global, energetic, bilingual and entrepreneurial.

Having the Emilys stay and contribute their talents to our regional economy is one critical component of our near-term competitiveness.

Bill Norton, president of Norton Asset Management, is a Counselor of Real Estate (CRE) and a Fellow of the Royal Institution of Chartered Surveyors (FRICS). He can be reached at wbn@nortonnewengland.com.