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January 23, 2020

Economist Traynor: Yale can’t be New Haven’s sole economic engine

PHOTO | New Haven BIZ Economist Traynor at Quinnipiac Thursday morning: New Haven needs to grow its innovation ecosystem.
By Michael C. Bingham

When John Traynor talks about how New Haven must become the Cambridge of Connecticut, he’s talking Massachusetts, not England.

He talks about it a lot. And as chief investment officer and EVP of People’s United Bank and a frequent talking head on CNBC and Fox Business, Traynor is a certifiably smart guy. For the Elm City to fulfill its destiny as the innovation and entrepreneurial engine of Connecticut, he argues, it must follow the example of that beacon of brain power to our north, home to the world-class academic and innovation centers of Harvard and MIT.

New Haven has just one, not two, of those. But Yale can’t be the sole driver of the Elm City economy. Instead, our future depends on the creation and sustenance of a broad-based ecosystem nurturing innovation and invention, according to Traynor.

Traynor was the guest speaker for the New Haven Manufacturers Association’s 2020 Economic Outlook breakfast event Thursday morning at Quinnipiac University’s People’s United Bank Center. He noted that New Haven can’t put all of its eggs in the Blue Mother basket — that other major academic centers such as Southern Connecticut State University and host Quinnipiac have key roles to play, too.

“You might have that smart young man or woman researcher from Yale who comes up with a new drug,” Traynor said. “They’re not going to produce it by themselves. They need the engineers, they need the [manufacturing workers], they need the people who are going to go out and sell this — they need that entire infrastructure,” he explained.

“It’s not just Yale,” Traynor said. “The success of Cambridge and [northern California] is that they have multiple [bioscience] companies in various stages of development” — offering a critical mass of employment opportunities to the smartest and most resourceful potential employees.

That’s the reason companies such as GE and Amazon didn’t elect to move to or build in Connecticut, Traynor said. Instead, they chose locations like Boston, Long Island City, N.Y. and Arlington, Va. — not for their high living costs, but “for their high concentrations of smart people. The industries and jobs of the future will demand greater levels of human capital.”

And that’s what New Haven must be ready and able to provide. “It’s not just Yale,” he said. “What’s taking place in New Haven and has to continue growing is the development of this ecosystem.”

“It’s not just Yale and a couple of researchers; it’s all the schools and all the businesses [that together] build an ecosystem,” Traynor said.

Some additional insights and metrics from Traynor’s Thursday morning talk:

  • In 2019 Connecticut ranked fourth nationally in number of patents issued to companies headquartered here, behind only (in order) California, Massachusetts and Wasington state. That’s good.
  • Fully 71 percent of manufacturing activity in Connecticut is advanced manufacturing, Traynor noted, far outpacing other Northeastern states (the figure for Massachusetts is just over 50 percent, he added). That’s a positive harbinger for that dynamic industry sector — but only if Connecticut companies can find a way to weather the “grey tsunami” of retirements as manufacturing workers in their 50s and 60s approach the end of their working lives.
  • To place the impending U.S. Presidential contest in a context an economist would appreciate, Traynor noted that when real disposable income growth exceeds 1.4 percent annually in modern U.S. history, the incumbent occupant of the White House has been, without exception, re-elected. The annualized U.S. income-growth rate for 2019: 2.46 percent.

Draw your own conclusions.

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