NH’s Sort-Of-Secret, Cross-Border Business Poaching Operation

The lead of Jen Abelson’s Boston Globe piece reads like a spy novel:

“New Hampshire pays Michael Bergeron to be a full-time thief, sending him across the border in an unmarked black sedan to poach Massachusetts companies.

To help keep his missions undercover, the business recruiter even scraped the New Hampshire state seal off his Ford Fusion.”

It’s the cloak and dagger behind “the New Hampshire Advantage.” 

After introducing Bergeron, Abelson moves on to the usual anecdotal back-and-forth, New Hampshire vs. Massachusetts discussion.  And of course, no one in the piece can agree on how much of an effect the effort to round up Bay State defectors has had on either economy.

kraammoz / Flickr

Liberty Mutual Building, Boston. According to The Boston Globe, it's one of the Bay State businesses that's moved a good chunk of its operations northward.

But what’s even more interesting is how New Hampshire is funding this little economic poaching operation.  (Hint: There’s not very much state money involved.)

“[Bergeron’s] skills as a salesman are especially important because of the threadbare $100,000 marketing budget New Hampshire sets aside for recruiting businesses. Massachusetts, meanwhile, spends about $600,000 a year on efforts to attract new companies and keep existing ones.

To compensate for the meager funding, Bergeron and other state officials tap into the generosity of local businesses that supply free limos, hotel rooms, and lunches to help court Massachusetts companies. In return, the New Hampshire firms get their logos on the state’s economic development website.”

So in this case, maybe part of “the New Hampshire Advantage” is having an environment where the state feels comfortable bartering with businesses to boost economic development–and businesses accept the deal as par for the course.

Blogger Steve Poftak of Boston Daily has a different take on the situation.  He cites a Pioneer Institute white paper offering solid economic data on the effects of business relocation away from Massachusetts.  Using net gain/loss figures, Poftak concludes it’s not much of an effect at all,

“From 1990 to 2007, the absolute value of the jobs created and destroyed by firms coming and going from the state was 1.8 percent of the all jobs created and destroyed. (Other drivers like start-ups, and existing firm expansion and contraction were far more important.)

And New Hampshire? During that same period, Massachusetts lost 8,499 jobs to New Hampshire on a net basis, or about 500 per year. Meanwhile, the creation of new businesses and expansion of existing businesses was producing far more jobs over the period.”

But the raw tally of individual businesses leaving, rather than just the jobs, isn’t all that encouraging either.  From 1990-2007, the Pioneer Institute counted 6,975 businesses leaving Massachusetts.  That works out to more than one business leaving the state, every day, for 17 years.

During the same period, New Hampshire got the largest slice of Massachusetts’ economic pie, reeling in 20.6 percent of relocating businesses.

But weirdly enough, New Hampshire was also the state that lost the most businesses to Massachusetts.  In fact, over 17 years, 679 Granite State businesses pulled up stakes and headed south.

So Massachusetts’ business losses to New Hampshire certainly haven’t all come out in the wash.  But these numbers do lend an interesting perspective to the complex economic relationship between New Hampshire and its neighbor.