2014 Survey of Connecticut Businesses


BlumShapiro and CBIA proudly present our 2014 Survey of Connecticut Businesses. Now in its 13th year, this collaborative research effort details business leaders’ views on the economic outlook, hiring expectations, business technology, international trade, and public policy priorities.

2014blumThis year we heard from 460 companies throughout the state, averaging 43 years in business and representing more than 20 industries.

Respondents included woman-owned, veteran-owned, and minority-owned companies; family businesses; S corporations; and LLCs.

Aside from a sharp, weather-related winter bump that impacted travel, forced business closures, and hurt consumer spending, Connecticut’s economy saw sustained moderate growth since our last statewide survey.

Key Findings

2014blum1We queried executives about seven major areas: business challenges, growth, innovation, investment, exporting, workforce, and the state’s economic competitiveness.

Key findings include:

  • Three times as many companies are growing (35%) as contracting (11%).
  • Innovation is strong. Nearly half of the surveyed companies added a new product or service, and at least as many expect to do so within the next 24 months.
  • Investment in technology and employee training is strong. Businesses are also investing in facilities/properties and other capital assets.
  • Three-quarters of manufacturers surveyed are exporting.


  • One in four respondents faces a wave of retirements over the next decade, with at least 40% of their workforce aged 55 or older. Consistent with our survey findings in recent years, there is a slightly greater forecasted demand for mid-level employees than entry-level or line workers.
  • Many companies employ apprentices (34%), interns (57%), and temps (58%), and 79% plan to hire these workers for permanent positions.
  • The state’s economy remains the single greatest business challenge.
  • Respondents say that to improve Connecticut’s standing across a range of national business climate rankings, the state must address its high taxes and regulatory burden.

lnvesting: Growth and lnnovation

While most businesses surveyed (54%) are holding steady, the ratio of companies growing to contracting is more than three to one.

In a changing economy, and in a high-cost state such as Connecticut, innovation is critical to growth and profitability.

Over the past year, 46% of Connecticut businesses surveyed added a new product or service, and 47% expect to do so in the next year.

2014blum3Nearly one in three businesses investing in research and development (29%) say tax incentives factor into their decisions to invest—an important finding for policymakers.

Among manufacturers in particular, lean and continuous improvement processes are business-critical. Most widely used are Kaizen (62% of manufacturers), 5S (56%), Kanban (54%), cellular manufacturing (51%), and Six Sigma (37%).

Twenty-seven percent of businesses overall say their greatest single investment is technology, and 30% identify technology as the single most important area of investment over the next two years. Employee training and business property/facilities are tied for second, with 23% of companies saying these are their greatest investment priorities now.

Over the next two years, however, employee training takes on slightly greater significance (28% of respondents), and property/facility investments become somewhat less of a priority (20%).

As part of the Jobs Bill passed during the 2011 special legislative session, Connecticut’s Department of Economic and Community Development created the Small Business Express Program (EXP), which provides loans and grants that allow businesses with fewer than 100 employees to expand, hire workers, and make capital investments.

The program is aimed at helping companies that are creating new jobs within Connecticut’s economic base industries, such as precision manufacturing, bioscience, business services, green and sustainable technology, and information technology.

While 11% of the businesses we surveyed this year say the EXP does not apply to them, 13% report that it has been somewhat or very important to their company.

More than two years after its launch, however, two-thirds of Connecticut businesses surveyed are unaware of the program.


Although businesses2014blum4 are confident about their future, they are not nearly as optimistic about Connecticut’s economy overall.
Indeed, the business community’s overarching concern is the state’s economy (34% say it is their single greatest concern), followed by U.S. economic conditions (18%), healthcare costs (16%), the tax burden (11%), and the cost of regulatory compliance (10%).

A weak lending climate dropped off the list as a top concern.

More than one in five respondents indicate that their company is considering moving or shifting significant production to another state within the next five years, and 29% are considering expanding elsewhere over that same period.

These findings underscore the need for Connecticut policymakers to focus on making the state more competitive and more responsive to the business community.

Move Connecticut Up: CT20x17

For Connecticut to become more economically competitive and move up in national business climate rankings, our government leaders must do a better job of embracing policies that will make the state a leader for business investment, a place where companies want to locate, expand, 2014blum5create jobs, and become vital contributors to their communities.

We asked executives in an open-ended question to name the most important thing policymakers can do to increase Connecticut’s economic competitiveness. Responses were very strong in two areas: reduce taxes (52%) and pass regulatory reform (24%).

In this past legislative session, the General Assembly did, in fact, pass a regulatory reform bill—HB 5049 (PA 14–187): An Act Eliminating Unnecessary Government Regulation—that cut 1,000 pages of arcane or redundant regulations.

Although this is a good first step, more work needs to be done to ease the regulatory burden on businesses, including streamlining and speeding the regulatory adoption process.

Other recommendations from survey respondents were to curb government spending (11%), increase tax incentives (7%), and improve infrastructure (6%).

Many independent national reports rank our state’s overall business climate among the bottom 10 in the U.S. This year, CBIA and its partners launched CT20x17, a multiyear campaign aimed at moving Connecticut into the top 20 states for business by 2017.

The campaign promotes a framework of commonsense policies to make the state one of the best places to do business by reducing costs where possible, ending the recent cycle of budget deficits, reducing the state’s massive long-term debt, improving our transportation infrastructure, and enhancing Connecticut’s strengths.

CBIA and BlumShapiro’s annual Survey of Connecticut Businesses will be an important tool as we measure progress in these areas.

lnterdependence: Large and Small Businesses

When it comes to innovation, information-sharing, supply needs, and financial and technical mentorship, neither small nor large businesses operate in a vacuum. Connecticut’s small, midsize, and large multinational businesses are interdependent, and our survey results bear that out—for example, 58% of respondents are somewhat or highly dependent on relationships with larger firms in the state.

“Each is deeply embedded in the overall U.S. economy with extensive connections to each other,” says Matthew Slaughter, associate dean at the Tuck School of Business at Dartmouth, on the subject of small and large businesses.

Research that Slaughter conducted with the Business Roundtable in 2010, for instance, shows that the average American multinational corporation buys roughly $3.27 billion worth of goods and services from more than 6,000 small U.S. businesses.


Three-quarters of the manufacturers participating in this year’s survey engage in exporting, and 14% have received state or federal export assistance.

2014blum6The greatest barriers to exporting are perceived costs and risks of expanding into new markets (identified by 20% of respondents), lack of knowledge of foreign markets (16%), and copyright/patent concerns (11%).

Forty-eight percent of manufacturers report no barriers to international trade, and 55% of exporters attribute more than 10% of their sales to exports.

Ninety-four percent of companies engaged in foreign trade export to countries in North America, which they also identify as the area with greatest export potential for the future.

Other markets include western Europe (56% of exporters responding), Asia/Pacific Rim (53%), South Asia (32%), South America (30%), eastern Europe (26%), and Australia/New Zealand (25%).


Imagine if two out of every five workers in your company reached retirement age within the next decade.

That’s the reality for 25% of the companies we surveyed.

In fact, 78% of executives who took our survey are over the age of 50; of those, half are 61 or older.

Among businesses of all types, workforce demand through 2015 is concentrated on mid-level employees (33% of companies say this is their area of greatest demand) followed by entry-level employees (29%), line workers (28%), managers (8%), and executive leadership (2%).

2014blum7Among manufacturers, advances in automation have not replaced manual labor or reduced the need for skilled workers in the majority of cases (63% of respondents).

To attract qualified workers, respondents offer competitive benefits packages (70%), good compensation (69%), training (45%), and growth opportunities (40%). While 38% offer flexible work hours, only 8% offer telecommuting.

One in four respondents also has specific practices or policies designed to attract and retain younger workers, including internships, tuition reimbursement, high entry-level wages, apprenticeships, and school/college recruitment programs.

More than half of the businesses we surveyed employ temporary workers (58%) and interns (57%), and one-third use apprentices (34%)—all of which provide sources of well-vetted permanent hires.

2014blum8Indeed, the vast majority of respondents (79%) use apprentices, temps, and interns with the intention of making them permanent employees.

In an open-ended question, businesses recommend that the state address its skilled workforce shortage through policies that reduce the cost of living and with investments in education, particularly in technical and vocational schools.


The 2014 Survey of Connecticut Businesses was distributed in June to 4,562 top executives of Connecticut companies across the state. We received 460 responses, for a return rate of approximately 10% and a margin of error of +/–4.3%.

All figures are rounded to the nearest whole number and may not total exactly 100%.

Nearly one-third of the businesses participating in this survey were manufacturers, the vast majority of which have production facilities in Connecticut (93%).

In addition, 23% have production facilities in other states, and 17% have facilities in other countries.


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