Opinion: CT reinvents itself as a national leader in...

Opinion: CT reinvents itself as a national leader in innovation under Gov. Lamont Jeffrey Sonnenfeld By Jeffrey Sonnenfeld and Steven Tian August 1, 2026 Just a few years ago, conventional wisdom declared Connecticut a state in economic decline. As the bipartisan Connecticut Commission on Fiscal Stability and Economic Growth, chaired by former Webster Financial CEO Jim Smith, insightfully observed in 2018, “Connecticut is in crisis by every measure: consistent budget imbalances, growing unfunded liabilities, falling bond ratings, stagnant economic growth, competitive disadvantages and increasing outmigration.” To echo jazz singer Dinah Washington’s 1959 Grammy Award winner, “What a Difference a Day Makes,” what a difference a decade makes. In the near-decade since, Gov. Ned Lamont has ushered in more than just an unprecedented economic turnaround; he has transformed Connecticut into a premier destination for high-growth startups, serious venture capital and visionary business builders. Indeed, the data shows Connecticut now stacks up against New York, Boston, Miami, Austin and even Silicon Valley as a center of innovation across AI, pharma, fintech, and much more. ADVERTISEMENT According to recently released PitchBook data, Connecticut Innovations (CI) — the state’s strategic venture capital arm led by the dynamic and widely admired Matt McCooe — is now ranked No. 1 in New England for portfolio exit value. More impressively, it secured a top five spot on the East Coast among all venture capital firms, beating out renowned VC funds with a quarter of their staffing working at a tiny fraction of their salaries such as General Catalyst, General Atlantic, Insight Partners and Greycroft. McCooe, with his extensive venture capital background, could be running any fund in the nation, making 100x what he is earning here, but he stays out of loyalty to our state, and we are all better off for it. These gains are not just on paper; they are creating genuine wealth for the state, saving taxpayers their hard-earned tax dollars while creating thousands of jobs across the state that would not have otherwise existed. Over the last 12 months, Connecticut generated $7.5 billion in completed “exits,” or when a company is successfully sold or taken public. From these exits, Connecticut has netted over $100 million flowing back to the state — a win-win for everybody. ADVERTISEMENT To understand the magnitude of Connecticut’s newfound momentum as a national innovation capital, one only needs to look at the caliber of the exits. In the past year alone, success stories within Connecticut Innovation’s portfolio included: Halda Therapeutics, founded by Yale-based scientists, which was acquired by Johnson & Johnson for $3.05 billion — the largest private biotech M&A deal of the past year in the entire world;Veradermics, which had the global stock market’s best-performing biotech IPO in the last 12 months; andQuantum Circuits (QCI), which was recently acquired by D-Wave for $550 million in a landmark quantum computing deal. Other promising startups doing business in Connecticut, such as Vessel, which manufactures prefabricated homes to tackle the housing affordability crisis, are well on their way to success. Of course, these successful startups come on top of Connecticut’s recent success in attracting and retaining global multinational corporations, thanks to the leadership of the AdvanceCT team led by John Bourdeaux. ADVERTISEMENT Connecticut’s success in building a premier innovation ecosystem from scratch sets a shining example for all 50 states to follow, and shatters the old refrain that Connecticut could never stack up against Silicon Valley, Cambridge or Miami. Instead, Connecticut is proving that any state can forge a dominant economic engine when it invests early and cultivates relationships across its own academic, financial and operational ecosystems. It should also be noted that these businesses are built on the foundation of knowledge, echoing the wisdom of Benjamin Franklin, who said “an investment in knowledge pays the best interest.” This level of success is not accidental, nor did it happen overnight. It is the result of years of smart, forward-thinking economic policymaking by Gov. Lamont, his economic team led by Commissioner Dan O’Keefe, and the hard work of Connecticut Innovations and many others. One savvy and prescient focus has been to build ties with Connecticut’s institutions of higher learning; and indeed, many of Connecticut’s most successful startups share deep roots with Yale and UConn, which are fast emerging as the nation’s premier centers for biotech and advanced manufacturing innovation. Success breeds success; we see this in action as accomplished local operators like Biohaven’s widely admired Dr. Vlad Coric and board member John Childs help guide the next generation of founders, such as Dr. Reid Waldman of Veradermics. Similarly, another prescient and savvy focus has been Gov. Lamont’s successes in cleaning up the state’s fiscal house. Few business builders would have chosen to build in Connecticut with the unfunded liabilities and fiscal overhang of prior administrations; but under Gov. Lamont, Connecticut has balanced the budget completely without raising income taxes. In fact, the state delivered the largest income tax cut in its history. Similarly, under Gov. Lamont, Connecticut has delivered consecutive record budget surpluses, pushing total surplus savings beyond $11 billion since 2020. By freeing up hundreds of millions of dollars annually, the state can now invest those funds strategically in innovation, education, infrastructure and core services instead of the old tax hike playbook. This stable fiscal foundation has created an environment where economic growth can finally accelerate. And it is accelerating on all fronts, by all metrics. Recent data confirms that Connecticut’s economy was among the fastest growing in the nation last year. In 2025, the state posted an annual real GDP growth of 2.4%, ranking 12th nationally, and we have gained the most population of any state in the region since the pandemic, driven by an influx of new workers attracted to our state’s flourishing innovation ecosystem. Indeed, according to data from AdvanceCT, Connecticut now has the single highest concentration of trained advanced manufacturing, aerospace and financial workers in the nation; and there have been over 100,000 new jobs created in Connecticut with at least $100 billion invested in Connecticut by the private sector over the last four years alone (as a measure of reference, the state government budget is $25 billion annually). The financial markets have noticed; Connecticut recently secured its first bond rating upgrade in two decades; and the state’s finances on other fronts are performing just as well. We have been previously critical of Connecticut’s lagging investment performance, with the second-worst performing public pension funds in the nation for a quarter century due to poor investments made by prior officeholders. But under current Treasurer Erick Russell, who has instituted many much-needed changes, Connecticut’s investment performance is now amongst the top states in the nation, adding billions of dollars in surplus investment gains that would have historically instead been plugged by taxpayer dollars. He has benefitted from the wisdom of the Investment Advisory Council, chaired in succession by experienced endowment managers Ellen Shuman and Philip Zecher, who previously ran the Carnegie Corporation Endowment and the Michigan State Endowment, respectively, who brought their priceless investment wisdom and acumen gratis as volunteers who love our state. No wonder Connecticut has jumped 12 places on CNBC’s Top States for Business rankings. All these numbers track the upbeat spirit of the state. The Connecticut blueprint under Gov. Ned Lamont proves that with the right leadership, the next great American economic engine does not need to be built in Silicon Valley. It is already being built, and it is thriving, right here in Connecticut. Jeffrey Sonnenfeld is senior associate dean for Leadership Studies and the Lester Crown Professor in Management Practice at the Yale School of Management, and president of the Yale Chief Executive Leadership Institute. He is also on the Board of Directors of AdvanceCT. Steven Tian is the director of research at the Yale Chief Executive Leadership Institute. Just a few years ago, conventional wisdom declared Connecticut a state in economic decline. As the bipartisan Connecticut Commission on Fiscal Stability and Economic Growth, chaired by former Webster Financial CEO Jim Smith, insightfully observed in 2018, “Connecticut is in crisis by every measure: consistent budget imbalances, growing unfunded liabilities, falling bond ratings, stagnant economic growth, competitive disadvantages and increasing outmigration.” To echo jazz singer Dinah Washington’s 1959 Grammy Award winner, “What a Difference a Day Makes,” what a difference a decade makes. In the near-decade since, Gov. Ned Lamont has ushered in more than just an unprecedented economic turnaround; he has transformed Connecticut into a premier destination for high-growth startups, serious venture capital and visionary business builders. Indeed, the data shows Connecticut now stacks up against New York, Boston, Miami, Austin and even Silicon Valley as a center of innovation across AI, pharma, fintech, and much more. ADVERTISEMENT According to recently released PitchBook data, Connecticut Innovations (CI) — the state’s strategic venture capital arm led by the dynamic and widely admired Matt McCooe — is now ranked No. 1 in New England for portfolio exit value. More impressively, it secured a top five spot on the East Coast among all venture capital firms, beating out renowned VC funds with a quarter of their staffing working at a tiny fraction of their salaries such as General Catalyst, General Atlantic, Insight Partners and Greycroft. McCooe, with his extensive venture capital background, could be running any fund in the nation, making 100x what he is earning here, but he stays out of loyalty to our state, and we are all better off for it. These gains are not just on paper; they are creating genuine wealth for the state, saving taxpayers their hard-earned tax dollars while creating thousands of jobs across the state that would not have otherwise existed. Over the last 12 months, Connecticut generated $7.5 billion in completed “exits,” or when a company is successfully sold or taken public. From these exits, Connecticut has netted over $100 million flowing back to the state — a win-win for everybody. ADVERTISEMENT To understand the magnitude of Connecticut’s newfound momentum as a national innovation capital, one only needs to look at the caliber of the exits. In the past year alone, success stories within Connecticut Innovation’s portfolio included: Halda Therapeutics, founded by Yale-based scientists, which was acquired by Johnson & Johnson for $3.05 billion — the largest private biotech M&A deal of the past year in the entire world;Veradermics, which had the global stock market’s best-performing biotech IPO in the last 12 months; andQuantum Circuits (QCI), which was recently acquired by D-Wave for $550 million in a landmark quantum computing deal. Other promising startups doing business in Connecticut, such as Vessel, which manufactures prefabricated homes to tackle the housing affordability crisis, are well on their way to success. Of course, these successful startups come on top of Connecticut’s recent success in attracting and retaining global multinational corporations, thanks to the leadership of the AdvanceCT team led by John Bourdeaux. ADVERTISEMENT Connecticut’s success in building a premier innovation ecosystem from scratch sets a shining example for all 50 states to follow, and shatters the old refrain that Connecticut could never stack up against Silicon Valley, Cambridge or Miami. Instead, Connecticut is proving that any state can forge a dominant economic engine when it invests early and cultivates relationships across its own academic, financial and operational ecosystems. It should also be noted that these businesses are built on the foundation of knowledge, echoing the wisdom of Benjamin Franklin, who said “an investment in knowledge pays the best interest.” This level of success is not accidental, nor did it happen overnight. It is the result of years of smart, forward-thinking economic policymaking by Gov. Lamont, his economic team led by Commissioner Dan O’Keefe, and the hard work of Connecticut Innovations and many others. One savvy and prescient focus has been to build ties with Connecticut’s institutions of higher learning; and indeed, many of Connecticut’s most successful startups share deep roots with Yale and UConn, which are fast emerging as the nation’s premier centers for biotech and advanced manufacturing innovation. Success breeds success; we see this in action as accomplished local operators like Biohaven’s widely admired Dr. Vlad Coric and board member John Childs help guide the next generation of founders, such as Dr. Reid Waldman of Veradermics. Similarly, another prescient and savvy focus has been Gov. Lamont’s successes in cleaning up the state’s fiscal house. Few business builders would have chosen to build in Connecticut with the unfunded liabilities and fiscal overhang of prior administrations; but under Gov. Lamont, Connecticut has balanced the budget completely without raising income taxes. In fact, the state delivered the largest income tax cut in its history. Similarly, under Gov. Lamont, Connecticut has delivered consecutive record budget surpluses, pushing total surplus savings beyond $11 billion since 2020. By freeing up hundreds of millions of dollars annually, the state can now invest those funds strategically in innovation, education, infrastructure and core services instead of the old tax hike playbook. This stable fiscal foundation has created an environment where economic growth can finally accelerate. And it is accelerating on all fronts, by all metrics. Recent data confirms that Connecticut’s economy was among the fastest growing in the nation last year. In 2025, the state posted an annual real GDP growth of 2.4%, ranking 12th nationally, and we have gained the most population of any state in the region since the pandemic, driven by an influx of new workers attracted to our state’s flourishing innovation ecosystem. Indeed, according to data from AdvanceCT, Connecticut now has the single highest concentration of trained advanced manufacturing, aerospace and financial workers in the nation; and there have been over 100,000 new jobs created in Connecticut with at least $100 billion invested in Connecticut by the private sector over the last four years alone (as a measure of reference, the state government budget is $25 billion annually). The financial markets have noticed; Connecticut recently secured its first bond rating upgrade in two decades; and the state’s finances on other fronts are performing just as well. We have been previously critical of Connecticut’s lagging investment performance, with the second-worst performing public pension funds in the nation for a quarter century due to poor investments made by prior officeholders. But under current Treasurer Erick Russell, who has instituted many much-needed changes, Connecticut’s investment performance is now amongst the top states in the nation, adding billions of dollars in surplus investment gains that would have historically instead been plugged by taxpayer dollars. He has benefitted from the wisdom of the Investment Advisory Council, chaired in succession by experienced endowment managers Ellen Shuman and Philip Zecher, who previously ran the Carnegie Corporation Endowment and the Michigan State Endowment, respectively, who brought their priceless investment wisdom and acumen gratis as volunteers who love our state. No wonder Connecticut has jumped 12 places on CNBC’s Top States for Business rankings. All these numbers track the upbeat spirit of the state. The Connecticut blueprint under Gov. Ned Lamont proves that with the right leadership, the next great American economic engine does not need to be built in Silicon Valley. It is already being built, and it is thriving, right here in Connecticut. Jeffrey Sonnenfeld is senior associate dean for Leadership Studies and the Lester Crown Professor in Management Practice at the Yale School of Management, and president of the Yale Chief Executive Leadership Institute. He is also on the Board of Directors of AdvanceCT. Steven Tian is the director of research at the Yale Chief Executive Leadership Institute.