Fully 25 percent of the companies in the Hartford-Springfield region, dubbed “New England’s Knowledge Corridor,” have been approached by other states to consider relocation or expansion elsewhere, according to the 2011 Hartford-Springfield Business Survey.
Among manufacturing firms, 39 percent say they have received a recruitment pitch from other states. Perhaps most alarming, 50 percent of firms employing 50 or more said they have considered moving or expanding out of state in the past five years.
These and other findings underscore the pressures on the area’s businesses brought on by economic conditions in the aftermath of the recession, the survey found. This is the third time the survey has been conducted in the region (2007 and 2009, previously).
“It’s clear that the region must focus on reducing the cost of doing business to assure its ability to compete,” said Allan W. Blair, president and CEO of the Western Massachusetts Economic Development Council.
When asked about the greatest benefits of doing business in the interstate region, business respondents praised the area’s quality of life as its primary asset (43 percent). Other assets include its proximity to customers (30 percent) and the region’s skilled workforce (17 percent).
But fewer than half (45 percent) of the companies in the region plan to expand over the next year. Most cited “economic uncertainties” as the primary reason.
Another 60 percent said the cost of doing business was a primary barrier, while 37 percent said decreased consumer spending will thwart any expansions.
Also on the negative side, 46 percent of firms said the weak economy and another 34 percent said taxes were their greatest concerns about doing business here. Some 10 percent said the regulatory climate posed a problem.
“A major challenge to this region’s competitive ability is its tax and regulatory environment,” noted Oz Griebel, CEO of the MetroHartford Alliance. “Changes need to be made that support private-sector investment and job retention.”
The survey found support (58 percent) for transferring the governance of Bradley International Airport from the state Department of Transportation to an independent authority. (The General Assembly recently passed legislation that accomplishes this through the creation of the Connecticut Airport Authority.)
Notably, another 41 percent voiced support for the reestablishment of direct international service to Europe from Bradley. Sixty-three percent voiced support for upgraded, interstate rail service that will connect New Haven, Hartford, and Springfield, perhaps seeing the rail line as a way to reduce the traffic congestion and deteriorating infrastructure, seen by 45 percent as the most pressing transportation issue facing the region.
“Some promising developments will address the congestion that companies say is a major issue,” said Lyle Wray, executive director of the Capitol Region Council of Governments in Hartford.
“More than $1 billion will soon be invested to allow hourly direct trains to New York City, among other significant upgrades such as bus rapid transit.”
The survey found that many businesses are taking advantage of their proximity to the many higher education institutions in the area, looking to them for assistance in finding interns, hiring new workers, and retraining employees.
Still, 36 percent said they continue to have difficulty finding qualified workers, underscoring a skills mismatch with available jobs.
Regarding the attraction and retention of young talent, respondents said the plethora of recreational and cultural activities in the area is a plus. And a growing number of companies are offering flexible work options, including work at remote locations, to appeal to younger workers.
The survey was released in conjunction with the 2011 “State of the Region” conference of the Hartford-Springfield Economic Partnership, whose steering committee has helped coordinate planning, workforce and marketing activities in the interstate region since its formation in September 2000.
Connecticut Gov. Dannel Malloy served as keynote speaker at the conference, which focused on pending transportation developments and was held at The Sheraton at Bradley International Airport.
The survey was conducted in late March and early April 2011 by the Connecticut Business & Industry Association, in cooperation with the Associated Industries of Massachusetts (AIM).
Some 606 companies from the region responded– which included those doing business in Hartford, Tolland, and northern Middlesex counties in Connecticut, and Hampden, Hampshire, and Franklin counties in Massachusetts. The survey has a margin of error of +/- 3.5 percent.