The General Electric move from Fairfield County, on Connecticut’s Gold Coast, to Boston was probably inevitable, given the direction in which the iconic company is moving.
GE, which traces its lineage to inventor Thomas Edison, lately has been moving back to the future, selling off finance units and concentrating on manufacturing and the high-tech market.
Rhode Island Gov. Gina Raimondo gamely tried to keep the Ocean State in this game, but given The Hub’s advantages and Rhode Island’s failure to build an educated workforce that can compete with Boston, Austin and Silicon Valley, there was no way Rhode Island would lead this pack.
Among the other areas in competition were New York, Atlanta and Connecticut.
Perhaps the most salient aspect of this move is that wasn’t – if you believe the GE brass – based mostly on the twin conservative bogeymen of high state taxes and regulations. If high taxes and regulations were the gold standard for barring a state from 21st Century high-tech and high-wage economic growth, why is California, with high taxes and the nation’s strongest environmental regulations, a leader in this new economy?
State government policies obviously have something to do with job growth and corporate siting decisions – Connecticut pols didn’t help themselves by raising taxes on GE. Yet, sometimes setting the stage for growth is more existential, based on culture and tradition. Boston adman Jack Connors recently opined on this subject in a Boston Globe story musing on why Kendall Square, a forlorn slice of Cambridge three decades ago, is now a bio tech lodestone. ``You take two of the world’s best universities, put them next to each other, and wait 200 years,’’ quipped Connors.
Yet there is a role for state policy. Massachusetts Gov. Deval Patrick in 2008 decided to stick with a $1 billion high-tech innovation program, despite the recession. And he and Bay State lawmakers raised the sales tax rather than slash aid to cities and towns and higher education, which is what happened at the same in Rhode Island under then-Gov. Don Carcieri and the Democratic-controlled General Assembly. Carcieri had the twisted belief that if only taxes for the wealthy were slashed, the RI economy would magically flourish. Another failure of the trickle-down mirage.
The tax package Massachusetts put together for GE was fairly modest given that the prize is the relocation one of the world’s largest and most successful companies to its largest city. At $140 million or so, the deal for GE is less than double the $75 million that Carcieri, state economic officials and the Smith Hill pols spent to attract ill-fated 38 Studios.
Hopefully this decision won’t lead to another round of Rhode Island’s famous inferiority complex, fueling self-laceration. For too many years, our pols have seen Boston’s economy as competition. They have tried, with scant success, to lure companies from New England’s most important city. What Rhode Island should have been doing was cooperating with Boston and working to push such amenities as better high-speed train service from Providence to Boston.
Providence is a Triple-A city (PawSox, P-Bruins) and Boston is the major leagues (Red Sox, Bruins, Celtics and the New England Patriots). This isn’t going to change anytime soon. So work with Boston instead of trying to poach their jobs.
The other obvious reaction ought to be to double-down on building a workforce marinated in 21st Century skills. And keeping what we have. We trust that Raimondo and her team are working to ensure that such companies that are headquartered in the Ocean State, such as CVS, Hasbro and Textron, remain here.
As the governor reminds us, Rhode Island’s economic situation didn’t happen overnight and it won’t be solved overnight. It is time for a dose of patience. And perhaps, there is something to Raimondo’s good-loser stance. Maybe GE will put a few jobs in Providence. Maybe their well-paid execs will visit Newport and Providence and spend a few dollars on great food and lodging. It is far better for Rhode Island for GE to have chosen Boston rather than N.Y. or Atlanta.
And let’s congratulate Boston. This is a serious coup. As Boston Globe columnist Shirley Leung put it this morning (very surprised by lack of RI media analysis on this move so far), ``General Electric moving its headquarters to Boston is all glory, giving us a chance to step onto the global stage on our own terms. The world can now mention Boston is the same sentence as Silicon Valley when talking about where the future is being built.’’
We should worry more about the recent Woonsocket-based CVS move to build a high-tech center in Boston than the shift of GE from Connecticut to Boston.