Post-COVID recovery: the Challenge for Connecticut

More than twenty years ago, the Gallis Report (link below) warned that Connecticut was on track to become an economic cul-de-sac, disconnected from the regional and national economy. Despite widespread public discussion, there was no meaningful policy response--and post-2008 that is exactly what happened. As the national economy grew more than 18%, Connecticut's economy shrank, never recovering in either employment or real output. Connecticut had the worse economic performance of any state, by a wide margin. Particularly striking was the apparent disconnect from the modern data-driven, digitally dependent economy; neighboring states all saw robust double-digit growth in jobs in the IT specific occupations. Connecticut saw almost none.

Now an academic research paper that looks at how state economies have in general become more synchronized with the national economic cycles, finds Connecticut is the outly--it has become less synchronized and disconnected. This underlines how profound the challenge Connecticut faces in recovering from the COVID pandemic shutdowns. Recovery for Connecticut to where is was in February 2020 would mean recovering to a bad place--about where it was in 2006. The massive ARP funding gives Connecticut a once-in-a-lifetime opportunity to change its trajectory, to reconnect with that modern data-driven, digitally connected economy, and restore its economic competitiveness. It is a massive challenge because all of our competing states are already well ahead of Connecticut and thus are building from a stronger foundation. Catching up is hard work.

https://crcog.org/wp-content/uploads/2017/09/Gallis-Report-1999-Strategic-Book-for-Connecticut-Regional-Institute-for-the-21st-Century.pdf