This article was originally run in the Union Leader on January 22, 2024.
Innovation ecosystems spur economic growth by generating new jobs, increasing wages and attracting new capital into the state. The benefits are clear. Since the inception of the Biotech Ecosystem in Massachusetts over 40 years ago, there are now over 1,000 biotech companies employing over 100,000 people.
Unsurprisingly, the NH economy has remained relatively flat. According to the Federal Bureau of Economic Analysis from 2017 to 2022, NH ranked 26th in year-over-year (YoY) per capita personal income growth, 18th in YoY population growth, 32nd in YoY per capita personal disposable income, and 28th in YoY GDP Growth.
Building a strong and vibrant innovation ecosystem is vital for the future of the Granite State. To create a healthy innovation ecosystem, there must be public and private forces that support the creation, development, and diffusion of new ideas, products, and services. These forces must also connect entrepreneurs, researchers, investors, policymakers, educators, customers, and others to foster collaboration and enhance innovation.
Other New England states have provided good models for building this. Vermont has numerous state-funded and private programs such as Elevate VT, VCET, LaunchVT, Hula, Features Capital, Flexible Capital Fund, and CORI. Maine has strong sources of capital from the state, foundations, and other institutions, such as Maine Technology Institute, Maine Venture Fund, CEI, Harold Alfond Institute for Business Innovation, Maine Community Foundation, MaineHealth Innovation, and Roux Institute.
Creating a sustaining innovation ecosystem in NH requires a combination of infrastructure, human capital, and financial resources that are often scarce or unevenly distributed. Areas of focus should be:
- Infrastructure: NH lacks adequate broadband access, especially in rural areas, which limits the connectivity and distributed productivity of innovators and their employees. The state also needs to invest more in knowledge generation sectors including our universities, research centers, labs, maker spaces, incubators, and accelerators, that can help nurture innovation and provide space and support for innovative companies. Workforce housing and childcare continue to remain challenges that impede our growth.
- Talent: The state has an aging population and a low rate of net migration. We need to attract and retain more young and diverse talent, especially in STEM fields, that can fuel innovation. The state also needs to improve its education system, from K-12 to higher education, to ensure that students have the skills and mindset to succeed in the innovation economy. Supporting workforce development that addresses industry specific skills gaps and builds workforce capacity are needed to produce and support innovation. Modernization of the immigration process is required to streamline and remove uncertainty in the process to help bridge the current skills gaps.
- Capital: Building a business requires many forms of capital support from startup to commercialization/sales. Startups can benefit from access to non-dilutive sources of capital from both public and private sources (e.g. federal, state, and foundation grants). As a company grows, building out a network of angel investors, venture capital, and private equity firms can help accelerate growth. Access to affordable loans and credit for more mature ventures will provide the capital needed to help fuel growth.
These challenges are not insurmountable. New Hampshire has many assets and opportunities to leverage its innovation potential, such as:
- Culture: The state has a strong entrepreneurial culture, rooted in its motto “Live Free or Die”. The state also has a high quality of life, with natural beauty, cultural diversity, and civic engagement. These factors can attract innovators to the state and inspire them to pursue their passions and visions.
- Collaboration: The state also has many organizations and initiatives that foster collaboration across sectors and regions, such as the NH Dept of Business and Economics Affairs, New Hampshire Tech Alliance, the MedTech Collaborative, ARMI, and NH Life Science Association.
- Competitiveness: The state has a competitive business climate, with low taxes, regulations, and costs of living. The state also has a strategic location in the Northeast corridor, with access to major markets and hubs of innovation, such as Boston, New York City, and Montreal. The state has benefited from increased federal grant support through programs such as EDA Tech Hub and Small Business Innovation Research / Technology Transfer grants that are helping to fuel the virtuous innovation cycle.
Leaning into and supporting these assets and opportunities can help New Hampshire overcome its challenges and build a robust innovation ecosystem that can drive economic growth and social progress for the state.
Jeff Chu is co-founder and Managing Partner at Features Capital, an early stage MedTech venture fund. He is also a co-founder of the MedTech Collaborative, a non-profit organization that supports the growth and sustainability of the MedTech industry in Northern New England. Prior to Features, Jeff was a partner and CTO at a NH product development and commercialization strategy business that was acquired in 2021.