As CT leaders woo companies, ‘social capital’ increasingly playing a role
Last Friday, Gov. Ned Lamont called on businesses in states that limit abortion access to consider relocating to Connecticut. By Tuesday, after the holiday weekend, Connecticut’s business development organization, AdvanceCT, was already fielding new interest.
“We have received at least one inbound inquiry from a company in Ohio, owned by a woman, who said, ‘We’re outta here,’” said Peter Denious, chief executive of Advance CT. “‘The governor’s message was awesome, and we want to learn more about Connecticut because we’re seriously considering moving.’”
Recent U.S. Supreme Court decisions, including last month’s ruling in Dobbs v. Jackson that eliminated the constitutional right to abortion, have curtailed federal authority on issues from women’s health to environmental protection and vaccine requirements. State policies on those and other issues could soon vary widely around the country, turning what Denious calls “social capital issues” into bargaining chips for each state in their attempts to woo businesses and create economic opportunities for their residents.
When AdvanceCT talks to businesses about expansion or relocation, Denious said, his team focuses on industry sectors with a strong presence here, like insurance, finance, technology and advanced manufacturing. In its pitches to those companies, the organization often highlights things like Connecticut’s highly educated and productive workforce.
But increasingly, those conversations are getting into topics like diversity, equity and inclusion, and the state’s commitment to clean energy — issues Connecticut has prioritized that may align with the corporate goals of certain companies, Denious said.
“This most recent decision by the Supreme Court just gives us yet another criteria to add into that list of social capital issues that allow us to be targeted,” he said.
Jayme Stevenson, former first selectman in Darien and Republican candidate for U.S. Congress in Connecticut’s 4th district, expressed skepticism about the approach.
“Social policies and social justice issues have been so divisive for America in general over last several years,” Stevenson said. “I really wish the governor would be proud of, and be able to brag about, all of the other incredible benefits that the state of Connecticut can provide.”
Stevenson listed the state’s proximity to New York and Boston, its many towns and cities, the waterfront, higher education and health care.
“The one thing we cannot brag about is a tax system and regulatory system that supports business growth,” Stevenson said.
Connecticut is often knocked for having high energy costs and higher labor costs relative to other states, as well as a stricter regulatory environment for many companies. And the state’s relatively high income taxes and a higher cost of living are cited as reasons some former residents have chosen to live elsewhere.
“I would like to see the governor and his leadership team really focus on those things, because those are the foundational to decisions about where businesses want to locate,” Stevenson said.
Site selection consultants, who assist companies in deciding where to locate major operations and corporate offices, said a company’s perspectives on environmental, social and governance factors do play a role in where they choose to do business.
“These social considerations are operationally and financially important for many reasons, including the impact on employee attraction and retention,” Gregg Wassmansdorf, chair of the Site Selectors Guild, said in an emailed statement.
But the extent to which companies consider these factors varies, he added.
“The importance of diversity, equity, and inclusion factors — including state policies on reproductive rights — differs greatly between site selection clients based on company size, industry sector, public or private ownership, brand sensitivity, the company’s national place of origin, and management philosophies.”
To the team at AdvanceCT, “social capital issues” often go hand in hand with a company’s ability to be productive. Reproductive health care, child care, education and other support services facilitate people’s ability to work and earn a living. The quality of life — which may include ease of transportation, clean air and water, public safety — may determine whether people stay or leave.
“[CEOs] have got to be sure they are aligning themselves in regions and states where their people are happy,” Denious said. “It’s about, ‘Where am I going to find the people?’ Because people is No. 1, every time in every survey, anyone you talk to, it’s all about people. Costs is No. 2.”
When many jobs went remote during the COVID-19 pandemic, millions of working people relocated to communities that were more affordable, easier to get around or more family friendly. At the same time, workers at prominent companies (Disney and Spotify, for example) have begun putting more pressure on their employers to take a public stance on many social issues.
Those combined trends could bode well for Connecticut, Denious thinks.
“The ripple effect of that is big,” he said.