What role should government play in developing business success within a state?

It’s the subject of two new studies by the National Governors Association (NGA) that point to how state governments can create more powerful environments in which businesses can grow and create jobs.

Government can help create those positive conditions, says the NGA, but ultimately the responsibility for job creation and growth is on the shoulders of businesses that “must make the decisions and take actions to grow and compete.”

That is, private-sector employers will drive job growth but the question is, where and when will they take the risks to do it? For example, what would make businesses pick Connecticut or some other state?

Focus on the fastest

Both of the new NGA studies (“A Policy Framework,” and “Twelve Actions”) boil down to identifying general and specific ways states can help create more high-wage jobs to drive their economies.

“The short answer is this,” says NGA: “Focus on businesses that are growing the fastest … to have as many innovative, productive, and globally competitive businesses and workers as possible reside within a state’s borders.”

States have to create the proper conditions that emerging, high-growth-potential companies will find irresistible. Every state’s tax, spending and regulatory policies, the NGA suggests, can be honed to improve conditions for job creation, by focusing on:

  • Promoting entrepreneurs—the people “who  seed, grow and renew businesses”
  • Encouraging innovation and technology—to allow growth industries to blossom
  • Unleashing private capital--to finance all stages of business formation
  • Connecting to global markets--to fully capture rapidly expanding opportunities
  • Cultivating industry clusters--to help businesses develop through critical mass of education, training, finance and marketing services
  • Improving education--to produce new waves of higher skilled workers

Connecticut’s been tackling many of these over the past several years with varying levels of success—from enhancing angel investor programs to fixing our public schools.

Most recently, the state’s First Five program has helped lure a new international construction technology firm that will move into a former printing plant in North Haven and bring 400 jobs to Connecticut in the next four years.

Yet more has to be done. In the latest CNBC business rankings, Connecticut actually fell several places since last year.

And Governor Malloy acknowledged that we “continue to battle national and international headwinds” in the quest for jobs.

Which is why, as candidates campaign this summer, they must keep addressing how state government can create a more competitive private sector that enables employers to increase job creation.