Nurturing Home Grown Business

Exporters may grab headlines, but domestic companies have economic clout

Maggie Downie with a client in her pilates studio
Photo:Sujata Srinivasan
Nurturing Home Grown Business
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Nurturing Home Grown Business


Economic recovery is often tied to increasing exports and attracting foreign investments. But some economists say it’s just as important to grow what’s known as the “non-tradable” sector - small businesses that provide products and services for people who live here. WNPR’s Sujata Srinivasan reports.

History major Maggie Downie was working in museum education when she realized she wanted to start her own business. 


“At the gym, I started taking a Pilates class and when that instructor left, she asked me to take over the class. I loved it, got certified and decided I would start my own company. And what I like to say is that now instead of researching the past, I’m researching bodies and muscles and I try to help people live better, healthier lives through that.”


Downie’s Pilates company Personal Euphoria is one of many businesses in the state’s non-tradable sector. These products and services are consumed by people who live here. For example, local government, construction, restaurant, hotel, and many healthcare services. Nationally from 1990 to 2008, 98 percent of the 27 million jobs added were in this segment. Public policy often focuses on the tradable sector because of its high value, high-paying jobs – for example in R&D, advanced manufacturing or finance. But Connecticut is keen to grow the domestic goods and services sector as well. Catherine Smith, Commissioner of the Department of Economic and Community Development:


“We created the Small Business Express because we recognize that if the health of our little downtown restaurants, dry cleaners, you know the support services for our economy aren’t in place and growing and healthy, that will upset the whole apple cart in many ways regardless of whether we have great larger companies that are creating new jobs. So it is a combination and we want to employ the whole gamut of types of resources and people we have in the state.”   


Last year the healthcare sector accounted for more than seven percent of Connecticut’s economic output. Alyssa DeJonge, chief economist at the Connecticut Economic Resource Center, on growth opportunities.


“Because of the demographic changes over the past number of decades, baby boomers are going to require more and more healthcare services and I think that’s why we’re seeing this need and growth in this area. I think there’s going to be a lot of shifts in this industry because people are talking about nursing homes and healthcare at homes and things like that. So the way that healthcare is delivered is going to be something I think that’s going to change in the coming decades.” 


But some areas in the non-tradable sector have contracted. For instance, hiring by local government has slowed down nationwide. Officials are hoping that private businesses will step in to fill the gap. Lt. Governor Nancy Wyman.


“We are trying to do things more efficiently and state government hasn’t done that for a long time. We’re not hiring people; we’re really trying to get the right way of running government. Combining resources, working together, having one human resource agency that will take care of other human resource agencies, it’s just what we have to do. The other part that we have to do is to get more businesses into our state. We have to get people that will employ people in our state; it doesn’t have to be state government.”


The non-tradable sector plays an important role in attracting businesses from other parts of the U.S. and the world by providing goods and services that affect the quality of life. Good municipal services, public schools, vibrant downtowns, local restaurants, and a thriving non-profit and arts scene are all important, according to Cindy Lovell, the new executive director of the Mark Twain House & Museum.


“Think of a new business coming in. If they want to attract good employees, you know people are being asked to move their families here to come and work for an industry, they’re going to know that this is a community that values a quality of life. They value culture and the arts and this is important. It’s something that I think the business world is looking at more and more these days because a paycheck and benefits are one thing. But what is my community, what is this place I will call home, what is important?”


Some economists say the non-tradable sector will pick up pace as local demand increases and people begin to spend more after paying off personal debt accumulated in pre-recession years. Others say continuing structural changes will slow down hiring, so export industries must pick up the slack. But almost everyone agrees that growing the size of the economic pie would require both sectors to thrive. 


For WNPR, I’m Sujata Srinivasan