MESSAGE FROM THE CEO: A view on the departure of GE to Boston

While fresh in our minds, I’d like to weigh in on the decision by GE to move its corporate headquarters to Boston.  This not good news for Connecticut, but rather than policy makers pointing fingers at each other and joining in the “blame game”, we should stand back and look at what GE is saying.

Let’s take the time to understand what GE is saying and not saying as it announce the relocation of it corporate offices.  GE is moving to Boston as much if not more than it is leaving Connecticut.  Let’s understand why this move is happening without succumbing to the political hyperbole.  Read more to see what CTC is proposing as a Public Policy Agenda for 2016.

  • They are moving to Boston because it is a Tech Hub, with 55 universities, a vital urban core that is attractive to millenials from around the world. Although there are 800 jobs at the Corporate Headquarters in Fairfield and they talk about 800 jobs in Boston, these are very different jobs.  The jobs in Boston are going to 200 Corporate jobs and 600 Innovation jobs.  These Innovation jobs are going to be the result of GE’s interaction with the academic researchers, start ups, customers, and innovative partners in the Boston area and using their new space to innovate and create new products.
  • GE said it has been considering the composition and location of its headquarters for over 3 years. Companies, particularly big companies, don’t make these types of decisions overnight, or even over 6 months.  This move is part of a larger repositioning strategy toward innovation.  So the elected officials that want to believe that all this started in June, don’t understand what is going on and simply want to point fingers. However, what did happen in June was probably the worst thing that could happen and that was the legislature’s middle of the night development and passage of a tax package.  Companies, particularly high tech companies need predictability in order to give them the confidence to invest in risky areas like research and development.  Eliminating that predictability, was the final straw.  In Jeff Immelt’s words, we evidenced that we did not “share in aspirations”.
  • It is also important to understand what was not said. GE didn’t decide to move to a low tax/low cost state.  They are moving to an area that has some of the highest taxes and housing costs in the country.  That tells me that if a State can meet the other criteria, taxes are not that important to tech companies.  I hear that many times from our CTC members.

Connecticut will not be Boston.  We will not have the scale or the critical mass.  But that doesn’t mean we can’t learn about what is important to companies like GE, and apply those lessons learned to our midsized companies.  Let’s understand what our scale and critical mass can support.

What we know we need to do based on GE’s announcement is:

  • We need to promote greater partnerships whether it is academic/industry interaction, start ups/large company partnership, or public/private that are meaningful to helping companies grow in CT.
  • We need to show that Connecticut will have the workforce in place to meet the demands of our tech industries.
  • We need to make our urban areas cool and attractive to the workforce we need to attract to fuel our companies’ growth.
  • We need to have a clear direction on economic policy and have our elected officials work in concert rather than engage in partisan politics at the expense of the rest of us.

Interestingly, if you go to the CTC Growth Agenda, the Public Policy Agenda for 2016, which was developed by the CTC Public Policy Committee under the leadership of Frank Marco and Frank Milone, you will see that we are already advocating for all of these issues.  CTC and others will have to redouble its efforts not only for the upcoming legislative session but for the year ahead.

Bruce Carlson
President & CEO
Connecticut Technology Council

 

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