A new report requested by the Raimondo administration says Rhode Island can overcome its economic listlessness by using a focused strategy to make targeted investments in key sectors for job growth.
The "Rhode Island Innovates" report -- prepared by the Brookings Institution's Metropolitan Policy Program and a handful of partners -- was formally outlined during an 11 am event Tuesday at the Rhode Island Foundation.
The main theme of investing in promising job sectors echoed comments made by Governor Gina Raimondo since she was a candidate, and she endorsed the findings.
"You know, what’s that old phrase? Skate where the puck is," she said. "It’s where the good jobs are. It’s where high-skill, high-wage jobs are and if we want our families to have opportunity, this is what we need to do."
Raimondo told reporters that some of the Brookings' findings may find a place in her next budget, due to be unveiled February 2. In general, she said, the report will be a part of ongoing efforts to improve the state's business climate while trying to foster growth through fresh investment in promising sectors.
"What I would say is, it's in everyone's interest to get behind the plan," she said. "Every company that operates here has an interest in making it easier and cheaper to do business, every college and university has an interest to dig in and be a part of the solution. If we can get this economy to hum, if we can create jobs here which are high-wage, high-skill, everyone benefits. And that's my job -- to make the case to the people and get buy-in for the strategy."
Meanwhile, Commerce Secretary Stefan Pryor revealed that the state Economic Development Planning Council accepted Brookings' findings Tuesday morning as a formal economic strategy. In addition, he said, the priorities outlined in the report for desirable industries "are to be considered the target industries for the purpose of our incentive programs and our investment initiatives."
In setting the stage for recommendations, the report outlines the roots of Rhode Island's under-performing economy: "Basically, the collapse of the state’s legacy advanced industries combined with the too-slow emergence of new ones has left the state without a growth engine. Erosion of the state’s advanced industry base and the failure to nurture new advanced industries has left the state adrift. In order to get back on track, Rhode Island needs to build more resilient, future-oriented industry specializations capable of securing prosperity for the next generation."
Brookings recommends that Rhode Island focus on strengthening five sectors marked by high productivity, better pay, strong exports, a commitment to research and development, and workers in the STEM fields of Science, Technology, Engineering and Math: Biomedical Innovation; IT/Software, Cyber-Physical Systems, and Data Analytics; Defense, Shipbuilding, and Maritime; Advance Business Services; Design, Food and Custom Manufacturing. The report also cites two growth areas representing "opportunity industries": Transportation, Distribution, and Logistics; and Arts, Education, Hospitality and Tourism.
Rhode Island Innovates calls on the state to pursue three separate growth initiatives:
-- Rhode Island Innovates "to invest in the state’s innovation capacity, quality of place, and skilled workforce," in part through targeted faculty recruitment; a Rhode Island Global Innovation Challenge accelerator program; creating an entrepreneur in residence program to attract foreign entrepreneurs to establish and grow companies in Rhode Island, and promoting statewide technology education.
-- Rhode Island Competes "to upgrade the state's business environment. Recommended steps include: “ 'Plus up' the state’s underperforming R&D tax credit; reform the unemployment insurance payroll tax; modernize the state’s permitting regulations and processes; take Rhode Island’s e-permitting initiative statewide; reform occupational licensing requirements; and reduce or eliminate the restrictions of the state’s non-compete rules; Expand state-wide land-assembly and site-preparation; Improve Rhode Island’s rail connections by targeting new subsidies and spearheading the development of a new app-based 'Rhody Pass' ticket option."
-- Rhode Island Acts to raise the state's capacity for "business-led civic engagement" by "establishing a business-led Partnership for Rhode Island to facilitate strategic action among private-, civic-, and public-sector leaders."
While some of the recommendations have no cost to implement, the study said, others range from $1 million to more $10 million a year. Planners put the annual public cost of implementing all the recommendations in the neighborhood of $70 million to $110 million.
Conservative critics like the RI Center for Freedom & Prosperity criticized Brookings' report as a kind of central planning document that will do little to help typical Rhode Island families. Asked about that by a reporter, Brookings' Bruce Katz disagreed, asserting that investing in growth industries will have spin-off effects that will extend to the advantage of ordinary Rhode Islanders.
Governor Raimondo announced plans for the study last August. She said at the time that Rhode Island needed a strategy for improving its economy.
Brookings Metropolitan Policy Program did the study in connection with the research group Battelle, TEConomy Partners, and Monitor Deloitte.
Although the study does not include a cost/benefit analysis, the report's authors indicate that that when it comes to their recommendations, "extremely conservative assessments suggest that implementation of these actions could appreciably accelerate output and job growth over time -- perhaps enough to move the state up a quintile or more in the state growth rankings."
"Rhode Island has done it before," is the first line in the executive summary for the report Brookings -- an indication, the authors say, that the state can once again emerge as a center of technology and innovation.
This post has been updated.