Regional strategies can aid New England
With New England facing concerted competition from the southeastern United States for jobs and skilled workers, the need for a regional economic strategy becomes more important than ever.
While New Hampshire retains its competitive edge in New England with one of the lowest tax burdens in the country, the Granite State is still facing challenges with changing demographics and overall competitiveness with the south.
Rising structural costs, including housing and labor, were cited as one of New England’s weakest links and may be causing the region to lose its competitive edge, according to a report to The New England Council prepared by global management consulting company A.T. Kearney. In addition, the report found that New England is losing skilled workers and companies to states in the southeast which are more aggressively working to attract business.
As New England competes with states such as North Carolina, Georgia and the Baltimore/Washington, D.C. region, the study underscores the need for the region to support strategic policies to enhance investment in growth industries; bolster support for public higher education; build the region’s “brand”; and strengthen networking and collaboration.
New England is already benefiting from some thoughtful regional strategies. The energy mix is more diverse than it has been for years. Nurturing the creative economy has developed a workforce with a higher concentration of innovative professionals than the nation’s share as a whole, and strong networks in the health care and life sciences areas are driving substantial growth.
New England also has a fair share of today’s growth industries including professional services, engineering, biotechnology, health services and financial services.
A.T. Kearney’s report identifies engines of economic growth where New England is facing significant challenges.
Consider education. New England makes the smallest investment in public higher education of any region of the country. North Carolina spends $81 per capita for community colleges and vocational education, while New Hampshire spends $18 per capita. This effort is a factor in North Carolina’s ability to attract medical device companies and biotech manufacturing.
The Census predicts that New Hampshire will exceed the rest of New England in population growth over the next three decades, with an increase of 33.2 percent by 2030. This growth is on par with projections for Maryland, but lags behind other competing states such as Virginia and North Carolina.
New England’s population is also consistently older than competing regions. According to the 2003 Census, 11.4 percent of the population in New Hampshire is 65 yeas old or over. The national average is 12.4 percent. That total in New Hampshire is expected to grow significantly, according to the Census – 138.4 percent by 2030.
Another significant trend is that recent graduates of our higher education institutions are leaving. New England appears to retain a lower percentage of graduating students than its competitors in the Southeast. From 1995 to 2000, New Hampshire had a net loss of more than 2,300 graduating students.
Comparing the cost of doing business, the study found that there is a significant differential in New England versus North Carolina, for example. While New Hampshire exceeds Massachusetts, Connecticut and Vermont in competitiveness, it is still more costly to do business here than in Rhode Island, Georgia and North Carolina.
New England is only “average” in terms of wealth creation. Adjusted for the cost of living, New England has a lower wage than the national average. The New England “brand” is not that distinctive across the country and the region has not been as aggressive at advertising in site location publications.
As changes in the economic landscape continue to expose our region’s strengths and weaknesses, now is the time to harness public-private cooperation to find common solutions to many of these challenges.
James T. Brett is president and CEO of The New England Council.