The New York Times

Monday, January 31, 2000

The New New Hampshire Has a High-Tech Face

By LESLIE EATON

MANCHESTER, N.H. -- To the naked eye New Hampshire looks unchanging.

Quaint village streets are still lined with white-spired churches and jumbled general stores, blank-windowed mill buildings remain along the Merrimack River, highway signs still warn of moose crossings not far north of Manchester. In thrifty and rock-ribbed New Hampshire, people do not brave snowy streets in trendy sport-utility vehicles, they just put chains on the tires of their Ford sedans.

But New Hampshire has changed as much as any state in the nation in the last 10 years. A financial basket case in the early 1990's, the state is booming, with unemployment rates far lower than the national average, and job growth and income levels far higher. It is not simply that the economy is better, it is profoundly different than it was eight or even four years ago.

Shaggy men in plaid shirts and suspenders still roam the streets, but they are less likely to be loggers or mill workers than computer jockeys (and they have the body piercings to prove it). Many have come from elsewhere, particularly Massachusetts, to work in a high-tech industry.

State officials boast that they have the highest concentration of technology workers in the country -- 82 out of every 1,000 workers in the private sector. High-tech services employ about 7 percent of New Hampshire workers -- far above the national average of about 4 percent -- and that does not include all the people who live in the state but work at technology companies in Massachusetts. Payrolls at some high-tech companies grew by almost $1 billion between 1995 and 1998, according to state data.

It is unclear how these changes will be reflected in the presidential primaries. And analysts remain unsure whether the newcomers will change New Hampshire politics, or if New Hampshire will change them.

But high-tech workers elsewhere have traditionally avoided joining political parties, and that seems to be the case in New Hampshire. Since 1996, the percentage of independent voters has risen from 28 percent of the electorate to 37 percent and they now outnumber either Democrats or Republicans, according the New Hampshire Department of State.

Dick Bennett, president of the American Research Group, a New Hampshire polling operation, said the newcomers do not seem engaged by national politics, although they have started participating in local politics.

"Especially with high-tech people," Mr. Bennett said, "they think government systems are antiquated and unresponsive, a bad investment."

But independents are expected to play an important role in the New Hampshire primary. Residents do not need a political affiliation to vote in a party's primary and polls show independent voters are split between the insurgent candidates in each party, the Democrat Bill Bradley and the Republican John McCain.

It was only eight years ago that, James Carville, Bill Clinton's chief political strategist, set the theme for the campaign with the phrase, "It's the economy, stupid." Anyone who made such a remark today "belongs in a mental health institution," said Steve Duprey, the state Republican chairman.

In 1992, 46,000 people were looking for work; today, the number is less than 19,000. Back then, the unemployment rate was 7.5 percent; now, it is 2.5 percent, well below the national average of 4.1 percent. Per capita income has risen by almost a third, and, in 1998, housing prices finally recovered all the value they had lost in the 90's.

Patrick J. Buchanan, who won the state Republican primary in 1996, would probably not find much support for protectionist philosophy now, local officials say. New Hampshire is sending 70 percent more products overseas than it was five years ago. More than half of its roughly $2 billion in exports are related to computers, electronics and industrial equipment.

In 1991, during the worst of the economic decline, the state's population fell as blue-collar workers, in particular, fled. But New Hampshire's population has been growing rapidly, especially in the two counties just north of Boston along the Massachusetts border. Between 1993 and 1998, even with some workers still leaving, the two counties, Hillsborough and Rockingham, grew by 43,000 people, or about 7 percent.

Only 40 percent of those who live in New Hampshire were born there, said Linda Fowler, a professor of government at Dartmouth University.

The people moving in, especially those from Massachusetts, are richer than those who are leaving, according to data from Regional Financial Associates, an economics consulting firm in West Chester, Pa.

Drawn by a high quality of life, and the lowest taxes in the nation, many of them are bringing their businesses with them, or starting new ones.

"I found the people much more cooperative for starting a business here than in Massachusetts," said Robert D. Thompson, who moved from Massachusetts about a year ago to start his own biochemical engineering business in Manchester. "The cost of living was attractive," and, he added, "I couldn't have rented the same space for so low in Massachusetts, at least nothing near Boston."

But computer companies are not the only ones that have moved in.

Fidelity Investments, the Boston mutual fund giant, employs more than 2,000 people in New Hampshire. Wal-Mart, which opened its first store in the state in 1991, is one of the state's largest employers. A decade ago, construction and mining were among the New Hampshire's top four industries; today, they have been replaced by financial services and real estate.

Of course, not everyone has benefited. Population is still falling in New Hampshire's northern counties, which are also poorer than the rest of the state.

And prosperity has led to new problems in New Hampshire. People worry about traffic, congestion and affordable housing.

Health care topped the list of concerns among registered voters questioned in a Dartmouth College survey last fall, with 25 percent of Republicans and 39 percent of Democrats calling it the most important issue facing the country.

Even tax cuts are not as much in demand as they long had been.

"The Republican candidates are trying to appeal to voters by promising to cut taxes," Ms. Fowler, of Dartmouth, said, "but they're not getting any traction."

Politicians are trying to adapt to the new New Hampshire.

Now, when they meet with New Hampshire businessmen, they are less likely to discuss agricultural programs or defense spending, and more likely to give their views on taxing sales made over the Internet.

And Gov. George W. Bush's parents are not the only celebrities he has campaigned with here. Last month he drew a big crowd in Manchester when he appeared with Jim Barksdale, the founder of Netscape.