Connecticut’s public and private sectors are working together to encourage innovation within the state in order to benefit the local economy. One way that Connecticut’s government is encouraging innovation and therefore trying to spur the local economy is by providing new avenues for funding CT companies.
However, in 2016, the state’s innovation rank by Bloomberg fell two spots to seventh in the nation, while neighboring Massachusetts ranks first. Bloomberg cites that Massachusetts has excelled due to factors such as tax incentives and research partnerships between local universities and businesses, while CT companies have faced some business environment challenges, such as with tax increases spurring General Electrical to leave the state and move to Boston in early 2016.
Yet late last year and so far in 2017, Connecticut has made several moves to create a better business environment that can encourage further innovation amongst CT companies, including a proposed budget from the Governor that does not rely on major tax increases like in years past.
Innovation Funding
One way that Connecticut’s government is encouraging innovation and therefore trying to spur the local economy is by providing new avenues for funding CT companies.
Last fall, Connecticut Innovations, the state’s own venture capital fund, chose the winners for its first VentureClash contest, which took place at the Yale School of Management and awarded $5 million divided amongst six global early-stage digital health and fintech startups, with the requirement that they establish a presence in Connecticut. This year, the contest has expanded to include Internet of Things and insurtech companies.
Investment in these types of companies can have a ripple effect, such as with insurtech helping Connecticut’s existing insurance industry modernize, so the state can maintain its status as the nation’s insurance capital. Similarly, more IoT-related businesses can help CT companies adapt to the growing trend of automation, while providing additional data that can be harvested to fuel further growth.
In addition to innovation contests, Connecticut Innovations is trying a new approach of investing more in other venture capital funds which then invest in CT companies, as The Hartford Courant reports. Doing so could help grow Connecticut’s venture capital industry, thereby creating a stronger base for local businesses to gain funding.
Creating an Ecosystem
Private businesses are also making a push to foster innovation and help CT companies grow, such as the case with Innovate Hartford, a new coworking space with a tech incubator for robotics and wearables developers. The space aims to have 100 companies join in its first year, creating an ecosystem that can ultimately lead to more jobs and revenue for the state, as the Hartford Business Journal reports.
As Hartford innovates, other areas of the state are also seeing changes. In New Haven, for instance, a new incubator called Hub55 just opened. The hub aims to attract Brazilian companies in areas such as information technology, aerospace and medical equipment that want to gain footing in the U.S. by coming to the city, reports the New Haven Independent.
The space is spearheaded by a Brazilian named Ariane da Silva who first came to New Haven to attend the Yale School of Management. By partnering with city and state economic development officials in Connecticut, as well as groups in Brazil, she was able to make the incubator a reality.
Now, with Hub55 located within the former New Haven Savings Bank Building, the building owner has also gotten involved in innovation efforts by making millions of dollars in investments to spruce up the property to make it more attractive to startups, as the New Haven Register reports.
Through these types of efforts, Connecticut can improve its economic competitiveness, and existing CT companies can benefit from the products and resources that these new businesses offer. As companies shift more toward being technology driven, an innovative ecosystem in Connecticut can have far-reaching effects.
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