A Note to Our Partners - Grow Smart Rhode Island · A Note to Our Partners ... Twin revolutions in ... water scarcity, we cannot ignore the hardships that these conditions will create

A Note to Our Partners

The Rhode Island Economic Policy Council convenes leaders from government, business, education and labor to focus the state’s economic development efforts on game-changing initiatives. This publication builds on the Policy Council’s previous strategy, Ten Ways to Succeed Without Losing Our Soul (2001).

For every action called for in this strategic update, there is at least one other organization that plays a key role in planning and implementation. We have worked to engage these partners in this update, such that this strategy integrates these efforts into a whole in which each of the players can see their distinctive part. We are deliberately making a strategy with many authors.

We plan to work with partners on a series of platforms for action specific to the Strategic Initiatives called for in the document. These plans will build on the discussion papers prepared as part of this document’s creation.

We will continue our role as a scorekeeper on economic development with updated metrics to be available online at www.ripolicy.org.

Table of Contents

Executive Summary ........................................................ 1

Our Vision ....................................................................... 3

Introduction ..................................................................... 4

Drawing Strength from our Origins ........................... 4

The Innovation Imperative.......................................... 5

The Environmental Imperative ................................. 11

The Government Reform Imperative ........................ 12

The Whole Place Imperative..................................... 15

Strategic Initiatives ....................................................... 21

Adapt education and workforce systems for the innovation age .......................................................... 21

Build Rhode Island to make whole places and enable high wage job growth. .............................................. 24

Accelerate new value creation through discovery, collaboration, commercialization, and entrepreneurship ....................................................... 27

Measuring Progress ...................................................... 33

Strategic Project Summary ........................................... 34

List of Contributors ....................................................... 36 List of Council Members .............................................. 37

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A Rhode Island Economic Strategy: Grow the Top, Build a New Middle and Move the Bottom Up

When the Rhode Island Economic Policy Council released its last economic development strategy for the state in 2001, we were focused on seizing our place in the Boston Metro. We challenged ourselves to “Grow the Top and Hold the Middle” to increase our share of the Metro’s high wage jobs, while holding onto our strength in middle wage jobs.

Over the last six years, we have accomplished this goal. Of the four submarkets arrayed around the Boston core (Manchester, N.H., Worcester, Providence and Fall River/New Bedford), the Providence submarket (essentially the state of Rhode Island) was the only submarket to grow the top and hold the middle. In contrast, no other submarket was able to grow the top. We have laid a foundation for continued success in both areas, though we still have a considerable distance to go before our share of the Metro’s high-wage jobs equals our share of the Metro work force.

Our past success and the conditions we face today point us towards a new challenge, which is not to “hold the middle” but to “build a new middle” as some of the industries that were the foundation of the old middle continue to shrink. We can also “move the bottom up” through a combination of skill development and job restructuring. This strategy’s core message is that Rhode Island’s future lies in innovation that is based primarily on human capital rather than physical capital, and that the locus of innovation will be the front line worker.

Rhode Island has a rich history as a center of tolerance, diversity and innovation and we can flourish by building on this legacy. We can be a place where revolutionary new ideas, as well as smaller niche ideas, are tested and scaled, leveraging both our resident design talent and our compact geography as well as our position in both the Boston Metro and the Northeast Megaregion. We can embrace innovations in business, in government, and in the combination of the two.

The Imperatives

We highlight four imperatives that we need to understand if we are to continue to succeed economically. The common theme in all four is resilience. We need to do more than simply adapt and survive; we need to thrive by exploiting the opportunities that come with the threats.

The Innovation Imperative. Twin revolutions in technology and information have made it possible to distribute work, capital and ideas worldwide. Our firms need to re-invent themselves over the next decade or face decline. While they need specialized labor for the work they are currently doing, it is even more critical that they find the highly innovative and flexible talent that will help them invent and perform the next generation of work. At its core, innovation is about problem solving; and it is not exclusively an imperative for business, it applies equally to the government and the non-profit sector.

The Environmental Imperative. We face extraordinary environmental challenges today; from rising sea levels to water scarcity, we cannot ignore the hardships that these conditions will create. However, we also can choose to embrace the opportunities that come with them. The Ocean State can be a leader in how we respond to today’s environmental conditions, creating new market opportunities and models to export to other cities worldwide.

The Government Reform Imperative. In the wake of Hurricane Katrina we have learned that the quality of government services matters. What’s required is not just greater efficiency, but rather a whole new “business model” for government, where our agencies are better networked and where our government workers are empowered to be problem solvers, and have the support and systems necessary to be so.

The Whole Place Imperative. Place is where all of the pieces come together – from city and town centers to specific site development. We need to design places that not only respond to the market but also respond to environmental challenges, and that serve as talent magnets and platforms for upward mobility. We need to create whole places - that is places that are: dense, mixed-use, mixed income and walkable; full of life, distinctive and diverse in their built form, natural environment and social networks; empowering of their people; water and energy efficient; transit and digitally connected; and disaster resilient.

Executive Summary

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A Rhode Island Economic Strategy: Grow the Top, Build a New Middle and Move the Bottom UpA Rhode Island Economic Strategy: Grow the Top, Build a New Middle and Move the Bottom Up

Strategic Initiatives

Adapt education and workforce systems for the innovation ageThe single most important economic strategy the state can pursue is to adapt our education and workforce systems to the innovation age. This strategy requires two parallel efforts: one aimed at tomorrow’s worker, by expanding experiential learning and problem solving opportunities within the K-16 system; and another aimed at today’s worker, by integrating and realigning the adult education and skill training systems, fostering job restructuring on the front line, and embedding workforce development in a holistic neighborhood-based approach to upward mobility.

Strategy 1. Expand experiential learning and problem solving opportunities for high school and college students.

Strategy 2. Fully integrate adult education, skill training and frontline innovation, as part of a holistic approach to upward mobility.

Build Rhode Island to make whole places and enable high wage growthCreating whole places is a complex undertaking. It requires partnerships that integrate planning, design and implementation. This will require a new approach to site development, amending our tax policies and taking on new initiatives in transit, water and energy.

Strategy 3. Develop partnerships in whole place development.

Strategy 4. Enact tax reform that aligns state and local development interests.

Strategy 5. Increase Rhode Island’s capacity for water supply and demand management.

Strategy 6. Build a seamless transit system from the sidewalk to the Megaregion.

Strategy 7. Make Rhode Island a leader in energy demand management and alternative supply development.

Accelerate new value creation through discovery, collaboration, commercialization and entrepreneurshipRhode Island has clear economic objectives in science and technology. We are working to increase the share of Rhode Island employment in skilled science and technology jobs. We support initiatives that increase the ability of our workforce to collaborate between disciplines within and outside the sciences and technology for the advancement of knowledge and in pursuing new ways to create value. We measure the economic impacts of our science and technology enterprise in terms of increased productivity, new products and processes, the growth of new ventures, and nurturing the next generation of talent.

In order to achieve these goals in the context of global competition, where many regions are making investments many times larger than ours, we need our investments to be targeted in areas where Rhode Island can build world-class competencies that are both nimble and highly networked.

Strategy 8. Create a robust Research Alliance among Rhode Island’s colleges, hospitals, and technology industry to increase basic and applied research and to promote entrepreneurship.

Strategy 9. Leverage the Slater Technology Fund to accelerate technology commercialization and entrepreneurship by expanding the availability of follow-on financing and biotech lab space.

Strategy 10. Create a best-in-nation business recruitment and retention capability that leverages Rhode Island’s unique strengths.


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OUR VISION OF RHODE ISLAND’S FUTURE

value creation

innovation workforce

placemaking

Our Vision

Rhode Island is a city-state of distinct regions, vibrant neighborhoods, town centers and villages,

of both dense places and open spaces,

centered on the Narragansett Bay,

where nature and history are not just beautiful and preserved, but part of everyday life.

Rhode Island has an empowering legacy of tolerance, diversity and entrepreneurship,

a rich network of higher education institutions,

and a culture of releasing the full potential of its people.

From these strengths, we will make Rhode Island a center for business and government innovation,

an important hub of design, technology and finance,

a talent magnet

and a dynamic engine of upward mobility.

Rhode Island will succeed precisely because our world is so immediate and manageable;

our size gives us the opportunity to realize our dreams.

Photography courtesy of Jonathan Beller

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Introduction

The Rhode Island Economic Policy Council released its last economic strategy on September 10, 2001. The world changed dramatically the next day, and it has continued to change at a breath-taking pace over the last six years. These new conditions require a reassessment of our economic strategy; but we also need to update our strategy because we achieved the 10 initiatives we called for in 2001 (see table below). In doing so, we have created the capabilities and the confidence to call for even bolder action in this strategy, to face looming threats and exploit emerging opportunities.

Drawing Strength from our Origins An origin story is the history of the founding of a place and a people that says something powerful about what it is and where it is going. This is particularly critical for us, because Rhode Island has one of the most compelling stories of any state.

A Legacy of ToleranceRhode Island was founded in 1636 by Roger Williams, who fled the Puritan theocracy in Massachusetts to create a “lively experiment of independent men”. Williams welcomed all faiths to his colony, including Puritans, Quakers, Jews, and Catholics. He even recognized Native American religions.

Williams founded Rhode Island based on the principle of tolerance; a belief that is as relevant today as it was in

1636. Because Rhode Island practiced tolerance, it quickly became a very diverse place, not just of people with differing religious views, but also rogues, cranks and odd balls of all sorts.

By 1790, 150 years after its founding, Rhode Island was a frothy stew of diverse people with crazy ideas, which would help it become the birthplace of the American Industrial Revolution and modern entrepreneurship.

By then, the Enlightenment was in full bloom, and Williams’ ideas were enshrined in the constitution of our new republic. Rhode Island also had become one of a small handful of Quaker centers, including New York and Philadelphia. As a result, we were in the game when a young Quaker named Samuel Slater snuck out of England with the secrets of the factory system and was looking to sell his knowledge to the highest bidder among the American Quaker communities. Lucky for us we had Moses Brown, a Quaker, who offered Slater not a salary, but a piece of the action.

The Birth of Industrial EntrepreneurshipIn that transaction, the first angel investor met the first industrial entrepreneur. Brown took the traditional form of business organization—the partnership—and applied it in a new way to the industrial enterprise. Their agreement triggered an explosive period of growth and dynamism that made Rhode Island a center of innovation and the richest place in the country for a while.

Ten Ways ResulT Key PaRTneRs

1. Develop economic niches based on place

2. Nuture vibrant, authentic, walkable places

Launched creative economy initiative in providence, the blackstone valley partnership, the borderlands project and the southside pilot

City of Providence, The Providence Foundation, New Commons, The Nature Conservancy, Blackstone Valley Partnership members

3. Create Grade 7-16 career pathways Established Academies of Information Technology in several high schools RI Department of Education, Tech Collective

4. Scale up adult literacy programs and build career ladders

Redesigned adult education system, recruited new director, began scale up Adult Literacy Task Force, Governor’s Office, RI Department of Education, adult education providers

5. Refocus higher education on technology Built a model workforce intermediary, the Tech Collective, which has partnered with the state’s colleges to increase the number and diversity of IT and biotech graduates

Tech Collective, Human Resources Investment Council

6. Grow the top and hold the middle Increased our share of the Boston Metro’s high wage jobs in several key industry clusters, including Biotechnology and Management

RI Economic Development Corporation (EDC)

7. Create a vital entrepreneurial culture in high tech industries

The Slater Technology Fund has connected university inventors with experienced entrepreneurs and venture capital to take their ideas to scale

Slater Technology Fund, EDC, Brown University, University of RI, Lifespan

8. Promote sustainable use of the Narragansett Bay

The Rhode Island’s Bays, Rivers, and Watersheds Coordination Team was created to enable joint economic and environmental stewardship

RI House of Representatives, RI Department of Environmental Management, Governor’s Office, Save the Bay

9. Move people better

10. Move goods better

Formed GoGreen Alliance to promote lengthening the runway at T.F. Green Airport to enable non-stop coast-to-coast air service

Greater Providence Chamber of Commerce, GoGreen Alliance members


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Natural Areas <25 person sq miRural 28 − 150Ex Urban 151 − 500Suburban 501 − 2500Inner Ring Suburban 2501 − 10,000Urban 10,000 person per sq mi

In summary, tolerance created diversity and diversity enabled innovation, which fostered a dynamic economy. It’s a formula that remains compelling today as the foundation of our economic strategy.

The myth about Samuel Slater is that he re-created the English textile machines in Rhode Island from memory. The true story is much more powerful and relevant. When Slater arrived in Rhode Island, the textile machines were already here, having been smuggled out of England by American sailors. There were even skilled machinists from the boat building industry who could maintain the machines, even duplicate them. The problem was that no one knew what to do with the machines.

What was missing was an understanding about a fundamentally different way of organizing work, involving balancing workflow, maximizing output, producing a single product for inventory, and marketing beyond the local area. It was these ideas that Slater brought; a detailed knowledge of the English factory system.

Just by themselves, these ideas would have transformed American society; where products at the time were made to order, by hand, often at home, and for a local market. But layered onto Samuel Slater’s knowledge of the factory system was Moses Brown’s idea about industrial entrepreneurship. Slater was not Brown’s hired hand, even though Brown supplied all of the capital to build their first textile mill in Pawtucket. Slater was given an ownership stake in the factory because of the ideas he brought to the enterprise and his ability to turn those ideas into a profitable venture.

A New Business ModelThis concept of ownership would unleash the energies of a nation of immigrants, risk-takers by disposition. The entrepreneur—who uses other people’s money to bring ideas to market and gets a piece of the action for doing it—is now the primary source of dynamism in the American economy. And because there are many more people with ideas than with capital, the separation of the two, with capital the servant of the entrepreneur, gave us extraordinary competitive advantage. The energy and vision of

our entrepreneurs are what enabled America to overtake England within 100 years and have allowed us to continue to lead the world through many economic upheavals since then.

The moral in the tale of the Slater/Brown partnership is that innovation is not only about technology, but rather about having the right business model to exploit it. That is as true today as it was in 1790.

The Innovation ImperativeWe now stand on the threshold of another fundamental economic transformation, perhaps as significant as the shift from custom work to the factory system that Slater and Brown helped to usher in two centuries ago. Like then, there are powerful new forces that require a new way of thinking about work, education and the structure of both business and government.

Twin revolutions in technology and information have made it possible to distribute work, capital and ideas worldwide. As columnist Tom Friedman has highlighted, the world is now flat in competition for routine functions, including many manufacturing and back-office service operations. But as the creative economy analyst Richard Florida has also observed, the world is still very peaked in capabilities required for innovation and for the planning and management of complex global networks.

This image of population density in the Northeast Corridor is a proxy for the region’s peaks of innovation capabilities.

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Rhode Island is situated in the world’s highest peak of these capabilities—the Northeast Corridor. A key principle of the state’s economic strategy must be to exploit this position to our competitive advantage.

We who live in the Northeast Corridor have no choice but to focus on innovation; there’s no other way for us to achieve competitive advantage. We don’t have low cost land, low cost labor, low cost energy, low taxes, abundant natural resources, a great climate or a particularly favorable location on the global logistics system. Our history is the “triumph of ingenuity over natural disadvantage”1. It is in fact a blessing that it is so clear that we have no choice but to innovate. Other U.S. regions with lower costs than ours may be seduced into thinking that they can create sustainable competitive advantage based on cost. They can’t because there will ultimately be someone with even lower costs. The textile jobs that we lost to the Southeast, and that the Southeast is now losing to China, will move next to Vietnam, and ultimately to an even lower cost location.

In Rhode Island, there has been a continuous thread of thought and action in response to the innovation imperative, which includes The Greenhouse Compact and Rhode Island’s Choice: High Skills or Low Wages in the 1980’s, the Policy Council’s Meeting the Challenge of the New Economy in 1997 and A Rhode Island Strategy: 10 Ways to Succeed without Losing our Soul in 2001, the Economic Development Corporation’s more recent Innovation at Scale and Business Innovation Factory initiatives, the Rhode Island School of Design’s efforts to position Providence as a Hub of Design Thinking, and the study underway by the Providence Chamber of Commerce and the Providence Foundation to identify ways to grow the Providence Knowledge Economy. These efforts have not just been compatible and consistent; each laid a foundation of thought and initiatives for the ones that followed.

But What Exactly Is Innovation?At its core, innovation is problem solving. It is not just the province of elites; it occurs in all workplaces, from the frontline to the corporate suite. And it is not exclusively an imperative for business; it applies equally for government and the non-profit sector. To be successful as a state in an innovation-driven economy, the capacity for innovation needs to be pervasive throughout the Rhode Island workforce.

1 Glaeser, Edward. Eight Rules for Economic Development. Rappaport Institute for Greater Boston, Policy Brief. September 2006.

The Long TailThe years ahead for us will not be marked primarily by a slow, steady stream of sustaining innovation by large, established firms. According to Clayton Christensen of the Harvard Business School, the future lays in disruptive innovation, which either creates new markets or reshapes existing markets by delivering relatively simple, convenient, low cost innovations to a set of customers who are ignored by industry leaders.

Collectively, these innovations increase the differentiation in an industry, such that over time the niches in total represent more of the market than the dominant product or service, the internet-enabled phenomenon which Chris Anderson calls The Long Tail, in his book of the same title. Using the examples of powerful new distribution channels like Amazon and eBay, Anderson argues that future business success will come from selling less of more. The Long Tail means exploiting these new distribution channels to sell to a global market.

Leveraging Human CapitalToday’s innovation is about leveraging human capital, rather than physical capital. We are now primarily a service, rather than a manufacturing, economy. In a service economy, innovation will not result solely from technical workers in labs and corporate offices. It requires an innovation-capable workforce at all levels of firms and institutions, with a particular focus on increasing the innovation skills of front line workers. In the typical service company, the front line worker has 100 times more customer contact than the CEO2. The front line 2 Moments of Truth, Jan Carlzon, 1989. See also McKinsey Quarterly, December 2006 for contemporary context.

The New Marketplace

Long Tail

Popu

larit

y

Products

Head


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worker is the product. A service company cannot successfully innovate unless the front line workforce has the problem-solving skills to improve the customer experience.

These skills are based on the cognitive process of pattern recognition. In The New Division of Labor, Richard Murnane and Frank Levy ask two questions: What do computers do better than people? What do people do better than computers? The answers: Computers are better at rules-based thinking and people are better at pattern recognition. Their research shows that two pattern recognition skills, expert thinking (the ability to generate solutions that are not rules-based using technical knowledge) and complex communication (the ability to communicate across multiple situations and cultures), are now the skills most in demand for jobs at all levels and in all sectors. They are the two key skills in an innovation-driven economy.

There are three other complementary skills that are necessary to fully develop these two pattern recognition skills: learn-on-demand—the ability to construct and apply new knowledge from work activities; interdisciplinary design—the ability to integrate content from multiple disciplines, including both the arts and sciences; and mobility—the ability to transition across projects, disciplines, and work/learning experiences.

All five of these skills are based on a foundation of fundamental decision-making, communication,

interpersonal and lifelong learning skills, which have been well

defined by Equipped for the Future. This project,

initially funded by the National Institute for

Literacy and continuing at the University of Tennessee, identified a common core of 16 crucial skills that adults need to succeed in their roles as workers, parents,

citizens and life-long learners.

In spite of this, our K-16 education system

(in Rhode Island, in the U.S. and globally), as well

as both the adult education and skill training systems, are

more focused on developing rules-based skills. We must refocus our education

and workforce systems on developing pattern recognition skills. This must build on and extend existing PreK-16 reform efforts such as Rhode Island’s joint project with Vermont and New Hampshire to develop the nation’s most rigorous assessment standards, and the efforts of the Rhode Island Department of Education to radically improve the performance of urban schools.

Divergent DemographicsEighty percent of total U.S. net population growth in the 1990’s was from foreign immigration. By 2020 that figure is projected to be 100 percent. Rhode Island is already living in that future…all of our net population growth in the 90’s was from foreign immigration.

Foreign immigration is bi-polar in terms of educational attainment. Many foreign immigrants are college-educated. In fact, in New England, net foreign immigration

EFF Standards for Adult Literacy and Lifelong Learning

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Workforce Innovations: CVS – Pharmacy Tech Program While the term “innovation economy” often conjures to mind biologists in lab coats and software engineers at super-computers, CVS/pharmacy’s nationally acclaimed workforce development initiative is training a front-line workforce that will wear a different kind of white coat—pharmacy technicians.

In May of 2006, CVS/pharmacy piloted a pharmacy technician training program at the Providence Skills Center at the former Providence Place Academy. The program, which to date has trained more than 150 pharmacy “techs” since its inception, is a unique program with benefits for both CVS—by training a new population of talent for the company’s pharmacies—and the state—by helping unemployed or underemployed Rhode Island residents find challenging and rewarding careers.

The CVS Pharmacy Technical Training Program recruits and trains Rhode Island residents to become CVS Pharmacy Technicians. Pharmacy Technicians assist and support licensed technicians in providing health care and medications to patients. Requirements for enrollment include a minimum age requirement and a high school degree (or GED). To succeed and graduate, pharmacy techs must have a broad knowledge of pharmacy practices and be skilled in the techniques required to stock, package, and prepare medications. As part of the program, prospective techs receive training in a mock CVS pharmacy, which according to Stephen Wing, Director of Government Programs for CVS has “everything but the customers.” Upon graduation, not only are the newly trained techs licensed to work in all CVS/pharmacy stores across the state, but they are also offered a job with the company.

To date, the program has been extraordinarily successful. The partnership between CVS and the Rhode Island Economic Development Corporation has seen students in the program achieve a 92% pass rate on the national pharmacy tech certification tests. Moreover, since the rollout, the program has extended its reach in to the community by developing a feeder program into the pharmacy tech program through the MET School.

The future of the Pharmacy Tech Training Program in the state is bright. In fact, the company is considering adding photo-tech training labs to the Providence center, and is exploring the possibility of having students receive college credit for completing the program. Moreover, the company also hopes to expand its teacher “externship” program, which offers experiential learning opportunities for teachers to gain exposure to the types of tasks and skills that their students will experience when they enter the workforce.

The Pharmacy Tech program would not be successful without the innovative partnerships that CVS has cultivated with other area private, public, and non-profit organizations. As Wing puts it, “networks with area organizations—RIEDC, non-profits, schools, and faith-based organizations—are critical to the success of the program.” As a result of these relationships, as well as its commitment to the State of Rhode Island, CVS has become an active participant in helping the state develop a new breed of innovative front-line employees in white lab coats.

Photography courtesy of CVS


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Network of New England Inventors

of college-educated young professionals more than likely offsets net domestic out-migration of young professionals, turning what would be a deficit in our trade in young talent into a surplus3.

The other part of foreign immigration is made up of individuals with both low literacy levels and limited English fluency. In Rhode Island, they join a large native-born population of adults with low literacy levels who were able to get by in our former industrial economy, but who do not have the skills required for new higher wage jobs, or for those which are also starting to be vacated as college-educated or technically-skilled Baby Boomers start to retire. Unless we can help new immigrants and our legacy industrial workforce transform themselves into innovation workers, we will not have the workforce to support an innovation economy.

Churn is GoodInnovation is not usually the result of one entrepreneur working alone; more often it comes from a network of entrepreneurial collaborators. Human networks are leveraged by the Internet but they cannot just exist in virtual space; too much of the knowledge required for innovation is tacit and therefore difficult to communicate electronically. Michael Polyani put it this way: we know more than we can tell.

As described in the work of Lee Fleming at the Harvard Business School, collaboration among the same group of people over time actually stifles innovation. Truly breakthrough innovation comes from face-to-face interaction among a diverse and changing group of people. A face-to-face innovation network is typically created as a result of movement of workers among firms and institutions within a labor market.

The mobile worker brings to the new firm the relationships he or she had at the previous firm, thereby linking the two firms. The innovation power of large and dynamic networks advantages labor markets with a lot of worker churn among firms and a high rate of in- and out-

3 Brome, Heather (2007). Is New England Experiencing a “Brain Drain”? Facts about Demographic Change and Young Professionals. New England Public Policy Center, Discussion Paper 07-03.

migration of talented workers. For example, Silicon Valley has a very high rate of labor market churn and New England has a high level of trade in young talent.

As Rhode Island seeks to educate more college graduates, to retain a larger share of the college graduates that we educate, and to attract a larger share of college graduates from other states, we need to reframe our focus from stopping the “brain drain” to a focus on balancing our trade in young talent. Churn is a good thing.

Rhode Island’s Trade in Young Talent

Rhode Island currently has a high level of trade in 25-34 year olds, the most mobile element of the U.S. population. Every year, approximately 4,800 of them move into the Providence Metropolitan Statistical Area (essentially the state) and 5,400 move out, leaving us with a small trade deficit of 600. A lot of trade with a small deficit is better than a low level of trade, but ideally, we want to increase the overall level of trade in young talent, while making the deficit into a surplus.

Source: The Young and the Restless: How Providence Competes for Talent, 2004.

Copyright © 2006 by the Regents of the University of California. Reprinted from the California Management Review, Vol. 48, No. 4. By permission of the The Regents.

This graphic shows the connections among Boston Metro scientists. Each dot is a scientist; each color is a different company or education institution. The connections are scientists who are co-patenting or citing each other’s work. Certain scientists serve as “gate-keepers” to connect separate clusters together. Typically, these scientists have moved between two organizations.

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True High Speed Rail puts Providence in handshake distance to New York City

Providence

New York

From the Metro to the MegaregionThe need for face-to-face interaction to drive innovation is the primary source of regional competitive advantage. The larger and deeper the innovation networks within a region, the greater the region’s potential for innovation. Currently, the largest functional unit of economic geography is the metro region because it is the limit of a labor market. Most people commute to work using the interstate highways that form the skeletal structure of metro regions. Providence, Rhode Island is not just a city/state of 1 million people; it is the second major hub of the tri-state Boston Metro, which includes Rhode Island, eastern Massachusetts and southern New Hampshire. At 7 million residents, the Boston Metro is the fifth largest metro in the U.S.

As a result of our connection to the Boston Metro, Rhode Island firms have access to a deep and broad pool of talent, Rhode Island residents have access to a large and rich mix of jobs, and Rhode Island innovators have access to a world class set of collaborators. The regional advantage works in both directions: we are as important to Boston as Boston is to us. For example, Boston’s surge of job growth in the dot.com boom of the late nineties could not have happened without commuters from Rhode Island and New Hampshire.

In the Northeast, there is a tantalizing prospect of extending the reach of face-to-face innovation networks to the Megaregional scale, aggregating the unmatched capabilities of the five metros in the Boston-Washington corridor through high speed commuter rail that creates overlapping labor markets between adjacent metros. Few

other regions in the U.S. or the world have this opportunity because in most other regions, metros are islands separated by seas of rural space, such that the labor markets of the metros would be very difficult to integrate.

We have developed the confidence to think beyond the metro to the megaregion. Situated between Boston and New York, Rhode Island has connections to both and we would be particularly advantaged by truly high-speed rail that integrates these two metros. We should play a lead role in making that happen.

Colleges and Hospitals as Anchor InstitutionsThe anchor institutions of Rhode Island’s industrial past were textile mills and jewelry factories. The anchor institutions of today’s knowledge-driven economy are colleges and hospitals, both in Rhode Island and throughout the Northeast Corridor. As shown in the table below, Education & Health Services is the leading sector in three metros in the Northeast.

Colleges and hospitals do not only generate new research that spawns new companies, or only produce new talent. They are our major employers, and need to be nurtured as such just as we would any other major business sector.

Today’s challenges such as disease, energy, and climate change are driving research in the public and private sectors. Rhode Island can improve its economic future by investing in cutting-edge research and applying it to solve these real world problems.

Rhode Island’s economic strategy calls for increasing our higher education research capacity and connecting

Graphic – Local LLP Photo – James Hardy / PhotoAlto / RF Collections / Getty

Important Sectors in the Northeast

Metropolis Leading Sector by Second-leading Sector Concentration

Baltimore Education&Health Professional& Services BusinessServices

Boston Education&Health Information Services

NewYork FinancialActivities Information

Philadelphia Education&Health FinancialActivities Services

Washington Professional& Information BusinessServices

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research to the marketplace. We need to do this not just because it will help foster innovation outside the institutions, but also because it will strengthen their research enterprise as a business in itself.

Science & TechnologyThe reasons a state supports science and technology are well known: expanding knowledge creates new technologies, new products, and new ways to create value, and drives productivity growth. High wages and wealth flow to places that have strong science and technology workforces and innovative companies with science and technology competencies. To succeed, our science and technology strategy has to be embedded in our larger strategy for innovation, infrastructure, workforce development, and making great places. In particular, universities are central to providing both the knowledge workforce and a significant share of total research and development.

In 1996, Rhode Island initiated targeted investments in technology-based development to unlock the economic value of the ideas coming out of our universities, while simultaneously creating partnerships to make economic development more strategic. (The Economic Development Corporation, Economic Policy Council, the Jobs Development Fund, RIMES, and the Slater Technology Fund were born at this time).

We’ve continued to build on these investments and have seen evidence of our success. Rhode Island gained the distinction as the most improved state on the most recent Milken State Science and Technology Index moving from 21st in 2002 to 11th in 2004. On the New Economy Index Rhode Island moved from 21st in 2002 to 15th in 2007 and was one of the four states making the greatest gains. Rhode Island is now credibly positioned as a potential center of innovation and entrepreneurial business growth.

Continuing to translate research to commercial growth requires an ecosystem approach rather than investments in one silver bullet. We need to continue to target and network our efforts in science and technology to ensure our economic potential is reached.

The Environmental ImperativeThe economic imperative for innovation is embedded in an equally dramatic environmental imperative. When the Policy Council prepared its last strategy in 2001, global

warming was still a matter of policy debate; it has since become an “inconvenient truth”. The issue is no longer whether there will be sea level rise, but how high it will rise and how fast. Rising sea levels have particular relevance for Rhode Island as the Ocean State. Our population and development is concentrated along our 400 miles of coastline; a rise in sea level and more frequent and more dangerous storms will affect us disproportionately. Many of our development opportunities are waterfronts. We need to move quickly to make our waterfronts less vulnerable and more resilient. This may also represent a major new business opportunity: the solutions we develop can be exported to other coastal states.

To reduce global warming and rising sea levels, it now appears probable that there will ultimately be a carbon trading system, carbon taxes, or both. Any changes in carbon policy will be coupled with rising oil prices: just since 2001, the price of oil has gone from $25 a barrel to $100 a barrel, and the pump price of regular gasoline from $1 a gallon to $3 a gallon.

Rising fuel prices and carbon taxes will produce hardship for us. At the same time, there is economic opportunity, as both conditions will advantage transit-oriented development and energy efficiency. These are areas where Rhode Island is uniquely positioned to take the lead given our small size and relatively compact development pattern.

As significant as the impact of rising oil prices and possible carbon taxes may be, they could be eclipsed by the growing problem of water scarcity. In fact, water may become the new oil as a driver of economic fortunes. It is hard to imagine how places like Phoenix and Las Vegas could support the population growth for the next 50 years that they experienced over the past 50 years, because they are running out of water. Already, over the past five years, there has been a decline in the population growth rates of

One River Project / RISD & RI Economic Policy Council

RI can be a leader in designing new approaches to waterfront development

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Nevada and Arizona, the fastest growing states4.

We in Rhode Island are fortunate to live in a place of relative water abundance, if we do not squander it. Rhode Island can be as big as it wants to be; the key is to determine how much bigger that is, and how and in what places we want that growth to occur. In the long term, developing and managing Rhode Island’s water supply, and using it wisely through active demand management, is one of the most critical strategies the state can undertake.

The Government Reform ImperativeHurricane Katrina taught us, by negative example, that the quality of government services is critically important. The nation was stunned by the glaring incompetence of federal, state and local government in preparing for and responding to that disaster, and in the rebuilding effort afterwards. The quality of government services matters. It is a lesson that reverberates beyond emergency services and disaster-resilient construction.

The need for innovation in all government services is now obvious, if it wasn’t before. What’s required is not just greater efficiency, but rather a whole new “business model” for government where our agencies are better networked and where our government workers are empowered to be problem solvers, and have the support and systems necessary to be so. This need holds at all levels of government—federal, state and local—but it is at the state level where there is perhaps the best combination of resources, authority and willingness to act. The State of Rhode Island needs to become a leader of government innovation.

Transparency and the Rule of LawInnovation is enabled by a legal and cultural framework that values transparency, fairness, efficiency, the rule of law, and high ethical standards. Trust in this framework enables collaboration and dynamic change. Differences in legal and cultural frameworks have given Silicon Valley a competitive advantage over most metros in business innovation and continue to give the United States a competitive advantage over China, where contracts are difficult to enforce and regulators can be bribed.

4 United States Census. Current Population Estimates.

Leap-Frogging over the Administrative StateRhode Island has made impressive progress in cleaning up government and public ethics, overcoming a legacy of corruption and opaqueness. We now need to leapfrog other places to make ourselves into a center of government innovation. There is no mileage for us in catching up with best practice in government, because it is only the best practice possible within the structure of the Administrative State, the universal model by which government is organized at the federal, state and local level.

This model, characterized by clearly defined agency missions and structures, was a necessary shift in the early 20th century when we were governed by corrupt kleptocracies. It has served us well in remedying many of the problems that we faced; it created accountability and transparency, two critical ingredients to succesful governance.

The question we must ask oursleves now is whether, given our more dynamic times and the fiscal challenges we face, is this model the right fit? Although Rhode Island’s small size is an advantage in many ways, we are at at disadvantage in our ability to achieve the economies of scale that make the Adminstrative State more effective in other places. How do we take the values that underly the Administrative State and apply them to a more nimble and networked approach that fits for Rhode Island?

Rhode Island has the freedom to think outside the box of the Administrative State in part because it is currently performing so poorly within it. Governing Magazine consistently ranks Rhode Island state government as one of the least effective in the country, particularly in its management of human resources. When you’re last in the race, incremental improvements won’t change your position; you need a whole new game plan.

A Test Bed for Government InnovationOur resident design talent, our city/state polity, our compact size and market singularity make Rhode Island a compelling government laboratory and can put us at the leading edge of this kind of innovation. We can execute new ideas more easily and more quickly than bigger and more complex places, and our current budget deficit gives us the compelling motivation we need to start now. We must protect the important reforms to the capital gains tax and the personal income tax that have made Rhode Island more competitive, while improving the quality of


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government services. We can’t achieve this simply by across-the-board cuts in department budgets or in the number of state employees. These changes do not fundamentally change the system; they just make the current structure a little leaner.

We need a different government structure which delivers higher quality service at lower cost. The key idea is to increase initiative at the organizational level and for individual employees, replacing the current command-and-control structure of siloed agencies. This does not mean creating mega-departments or secretariats; that would be an intensification of the command-and-control model. What is need is a networked structure where organizational units have autonomy and incentive to collaborate in ways that improve government services and reduce costs.

Our agencies already recognize the value in a more networked approach to solving the challenges we face today. The Governor’s PreK-16 Council and the RI Bays, Rivers and Watersheds Coordination Team are two initiatives that are experimenting with ways to align agency missions and programs. We must learn what we can from these specific efforts, but we should scale up a more widespread approach to government reform that fosters parallel innovation in every area of government services. We will be breaking new ground. There are no proven models which we can import from other states. We will be the pioneer.

This effort should honor and preserve the accomplishments of the Administrative State—the rule of law and transparency—while overcoming its rigidity and stifling of initiative.

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Workforce Innovations: Gilbane – ACE Mentoring Program While Gilbane Building Company—Rhode Island’s largest construction management firm—has been constructing buildings for 135 years, the company is also building the skills of its future employees through the innovative ACE Mentor Program.

The ACE (Architecture, Construction, and Engineering) Mentor Program is a national initiative founded by leading design and construction firms to introduce high school students to career opportunities in the design and construction industries. As a founding member of the Rhode Island affiliate of ACE, Gilbane and its partners aim to enlighten and motivate Rhode Island high school students to consider careers in architecture, construction, and engineering.

ACE Rhode Island is a seventeen week program that takes place at the University of Rhode Island’s Feinstein Campus in downtown Providence. Every other week, juniors and seniors from Providence-area high schools come together to listen to presentations, participate in hands-on workshops, and collaborate on real development projects related to architecture, construction, and engineering. In addition to the formal programming, all participating students are matched with professional mentors who are employed by Gilbane or one of fifteen other firms across the state.

Since 2003, when the initiative was piloted by Gilbane’s Paul Choquette III and Consigli’s Vance Freymann at two charter high schools, the size of the program has expanded greatly. Applications to the program have increased every year, and the program currently serves over 40 students at ten high schools across the state; moreover, the Ace Mentor Program of Rhode Island has awarded over $15,000 in college scholarships to date. Perhaps more importantly, the program has inspired hundreds of Rhode Island’s youth to think about their future careers, whether they be in construction and engineering or not. Osmary Rodriguez, Business Development Coordinator with Gilbane and a mentor herself puts it best, “The ACE Mentor program is about giving kids a vision; it’s about letting them know that there are doors open to them. Many of our students come from single parent homes and don’t necessarily think about what opportunities might be available to them. This program gives students a chance to think big, and we as mentors can help them make those big things happen.”

The construction industry is the second largest employer in the U.S. Through the ACE Mentor Program of Rhode Island, firms like Gilbane Building Company, Consigli Construction Co., Inc., Dimeo Construction, Ed Wojcik Architect Ltd., Jacobs Edwards & Kelcey, Emcor Facilities, Maguire Group Inc., Odeh Engineers, Robinson Green Beretta (RGB), Saccoccio & Associates, Service Point, Shawmut Design & Construction, StudioAD, Ltd., VHB Engineering, and Vision 3 Architects are developing the future workers and leaders for their own industry, and for the entire state. Over the next several years, Gilbane and its partners hope to expand the program to include more (and younger) students. As the program continues to grow, both mentor firms and the state will surely benefit from the skilled and educated workforce that ACE Rhode Island is helping to construct.

Photography courtesy of ACE Mentor Program of Rhode Island


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The Whole Place ImperativePlace is where all of the pieces come together. We need to design places that do not just respond to market demand but also to the rising cost of oil, the growing scarcity of water, the impacts of global warming, and the probability of high carbon taxes to mitigate them.

Place has to be as much about human development as it is about physical development. To paraphrase the African proverb, it takes a neighborhood. Successful upward mobility is the result of a mutually reinforcing network of relationships that link individuals in a neighborhood. School reform, neighborhood revitalization, parent leadership development, home ownership programs, adult education and skill training should not be separate efforts, but rather parts of a whole.

Our purpose is to create whole places—that is places that are: dense, mixed-use, mixed income and walkable; full of life, distinctive and diverse in their built form, natural environment and social networks; empowering of their people; water and energy efficient; transit and digitally connected; and disaster resilient.

Whole places are also the natural environment for innovation because they preserve and enhance diversity of people and uses; they are magnets for talent. Our research indicates that college-educated young talent and entrepreneurs want to live and work in whole places. Place is increasingly a differentiator not a commodity in today’s mobile society.

SUPPORT LOCAL SCHOOLS

PROVIDE A MIX OF WORK OPPORTUNITIESPROVIDE A VARIETY OF HOUSING TYPES

PRESERVE LOCAL OPEN SPACE DENSITY ANCHORS PUBLIC TRANSIT

BUILD ON EXISTING INFRASTRUCTURE INVESTMENTS

INVEST IN NEIGHBORHOODS

MANAGE STORMWATER ON SITE

TRANSIT SUPPORTS DENSITY

Graphic – Local LLP

Economic development that strives to create whole places will better link how we live, work and learn, and do so in a way that enhances the quality of our communities

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Reframing Site DevelopmentThe creation of whole places is a reframing of one of the traditional roles of economic development: site development. The reality is that the state has been largely out of the site development game for the past decade. Much of our recent job growth has taken place at sites that were developed through state action one or two decades ago: Amgen’s construction of its BioNext facility at land originally developed for Digital Equipment in the 1980’s; Fidelity Investment’s expansion on land originally assembled by the state for a biotech park in the 1980’s; GTECH’s relocation to land in downtown Providence assembled as part of the relocation of the railroad tracks and the rivers in the early 1990’s; and the on-going business growth at Quonset Business Park, originally ceded to the state by the Navy in the 1980’s.

While the state has sometimes been less than successful in the industry targeting of its site development efforts, the land assembly and infrastructure development itself has been an unqualified success, without which the state could not have absorbed much of its recent job growth. There will soon be no more of this legacy of assembled land to harvest. Furthermore, our best development opportunities are redevelopment opportunities. Without the state’s more patient capital and power of eminent domain, it is unlikely that private developers, acting alone, will assemble sufficient land to support economic development or create whole places.

Sustainable Tourism:

The Intersection of an Industry & Place

Tourism can support a set of high quality places that are beyond those which local residents can support by themselves, and which are enjoyed by both residents and tourists.

For tourism to result in this end, the volume of tourists, as well as local users of the same amenities, has to be managed so as not to overwhelm the place; the tourism experience has to be positive; and a significant portion of tourism spending has to go to the creation and maintenance of high quality place amenities.

Initiatives like the Blackstone River Valley’s Sustainable Tourism Lab and the State’s commitment to geotourism principles point towards an exciting new way to think about the role of tourism in Rhode Island.


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Workforce Innovations: RaytheonRaytheon is well known in Rhode Island—and across the nation—as one of the nation’s most innovative companies. A technology leader specializing in defense and homeland security, Raytheon provides state-of-the-art electronics, technology solutions, mission systems integration, and mission support to a broad international and domestic customer base. However, Raytheon’s innovation is not limited to the laboratory; rather, the firm has created unique opportunities for its Rhode Island-based workforce to serve as mentors, teachers, and role models to students interested in science, technology, engineering, and mathematics (STEM).

While the firm offers engineers numerous ways to get involved in the state’s STEM education efforts, one of the most unique is the firm’s annual “Creating Your Future” event, a fun-filled day of interactive math and science workshops for middle school girls at the company’s Maritime Mission Center. Once there, over 100 girls attend workshops dedicated to different topics, technologies, and engineering disciplines. Moreover, the girls work in teams on challenging engineering tasks—last year’s students competed to build the tallest free-standing tower given limited supplies.

Encouraging students to pursue careers in math and science is certainly in Raytheon’s best long-term interest. In the short term, however, the primary goal of the event is to introduce the remarkable applications of science and technology, and to inspire girls to understand that they can—and will—become the next generation of great scientists and engineers.

While Creating Your Future has brought students to Raytheon for the past eight years, the company’s tutoring and mentoring program at Thompson Middle School in Newport, RI brings Raytheon to the classroom. Three to four times per week, Raytheon engineers wake up early and go school themselves, at which time they help students with their math and science homework before the opening bell. In addition to tutoring, Raytheon engineers also support the school’s Technology Club, which meets after school three times per week. In the club, students and engineers together explore the basics of robotics and collaborate to build robots that compete in local competitions. As if their time in the classroom wasn’t enough, Raytheon employees also serve as mentors for Thompson students; Raytheon and the school work together to match mentors with “mentees”, after which the pair meets on a regular basis throughout the year.

Photography courtesy of Raytheon

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The 16 County Boston Metro Economy- Highly Concentrated in High Wage Sectors

Construction

Healthcare &Social Services

Financial Services

Software &Communication

M anufacturing*

OtherServices

Leisure &Hospitality

Retail

Post-SecondaryEducation

Headquarters

Biotech

Computer & Electronics

Wholesale,Transport &

Power

Information

1 billion in payroll-10%

-5%

0%

5%

10%

20% 70% 120% 170% 220%

InnovationServices

Ave

rag

e A

nn

ual

Jo

b C

han

ge

2001

-200

6

Percent of Regional Average Wage ($51,000)

The Boston Metro has a very high concentration of jobs in the six highest wage industry clusters as well as the knowledge intensive healthcare and higher education sectors (shown in red). Of these healthcare, higher education, fi nancial services, and innovation services have added jobs over the last fi ve years. These are all good targets for job growth in Rhode Island.

The Rhode Island Economy - Existing Strength in the Middle

The Rhode Island economy has a very high concentration of jobs in Healthcare, Higher Education, Headquarters, and Biotech. All of these sectors have added jobs in the last fi ve years. Rhode Island also has a large and growing Financial Services sector. This chart illustrates how the Rhode Island economy has more industries in the middle of the wage spectrum compared to greater Boston.

Industry Concentration

High, LQ >120%AverageLow, LQ < 80%

ConstructionHealthcare

Social Services

Financial Services

Software &Communication

Computers,ElectronicsM anufacturing*

OtherServices

Leisure &Hospitality

Wholesale,Transport

Power

Retail

Innovation Services

Post-SecondaryEducation Headquarters

Biotech

Information

1 billion in payroll

-10%

-5%

0%

5%

10%

20% 70% 120% 170% 220%

Ave

rag

e A

nn

ual

Jo

b C

han

ge

2001

-200

6

Percent of Regional Average Wage ($51,000)

higher wages

higher job growth

higher wages

higher job growth

Rhode Island is Growing the Top and Holding the Middle

3%

1%1%

-2%Job

Ch

ang

e 01

-06

SE New Hampshire10% of Metro Jobs12% of Labor Force

3%

1%

-2%

Job

Ch

ang

e 01

-06Worcester County

9% of Metro Jobs10% of Labor Force

1%

-2%

-1%

Job

Ch

ang

e 01

-06

Rhode Island13% of Metro Jobs14% of Labor Force

2%

.5%1%

Job

Ch

ang

e 01

-06

SE Massachusetts11% of Metro Jobs14% of Labor Force

3%

1%

-2%

Rhode Island seeks to increase its share of the Boston Metro’s high wage jobs. In the last fi ve years Rhode Island is the only one of the “third ring” regions to add jobs in both middle and high wage industries.

The Rhode Island Economic Policy Council benchmarks Rhode Island against this 16 County Boston Metro region that includes all of Rhode Island, three counties of New Hampshire, and 8 counties of Massachusetts. The charts show change in private sector jobs 2001-2006 by region and by sector (Source: BLS QCEW).

Low Wage Middle Wage High Wage


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Leveraging Rhode Island’s Unique Strengths

Attracting, retaining and growing our middle and high wage industries in Rhode Island requires us to identify and creatively combine those capabilities where we can be the best in the world.

An Example of a World-Class RI Niche: Undersea TechnologyRhode Island is at the center of the largest concentration of undersea technology in the world, a

region of integrated capabilities that extends from the Wood’s Hole Oceanographic Institute on Cape Cod to the Electric Boat Shipyard and the U.S. Navy Sub Base in Groton,

Connecticut. The anchor institutions in Rhode Island include the Naval Undersea Warfare Center, the Naval War College, ocean-related research and education at

the University of Rhode Island and Raytheon Integrated Defense Systems.

If you dig beneath the surface of these organization names to uncover their capabilities, you will find that Rhode Island has world-class technical

resources in systems integration, simulation, remote sensing, acoustics and signal processing. Combining these capabilities with a compact

city/state polity makes us a perfect test bed for the integrated surveillance, interdiction and first responder coordination that are central to solving the maritime portion of the homeland security challenge. This is an example of a Long Tail strategy—taking our niche expertise in undersea technology, applying it to ourselves to solve the homeland security problem, and through the national standards that we then help to develop, amplifying our niche to capture a national and global market.

Many of these capabilities have niche applications outside defense/homeland security. For example, the Slater Fund helped to launch Advanced Image Enhancement, a start-up company which is applying signal processing algorithms used in mine detection to improve the diagnostic accuracy of digital mammography.

Slater and EDC Focus AreasThe EDC Business Development team is assigned to RI’s seven

high-wage sectors: Information Technology and Digital Media; Financial Services; Marine Trades & Defense Technology; Industrial

Products & Infrastructure; Healthcare & Life Sciences; Professional & Educational Services and Consumer Products & Design. Through

the Slater Technology Fund, Rhode Island is investing in entrepreneurial ventures in Biomedical, IT, Communications, Ocean, Energy, and the

Environment.

Strengthening Providence’s Knowledge EconomyThe Providence Chamber of Commerce and the Providence Foundation convened the

city’s hospitals and colleges to identify capabilities which can be targets for new business development and for new investment in basic and translational research. The project is focused

on identifying niche opportunities to combine and develop world-class capabilities, building on existing strengths in areas such as public health, biomedical technology, healthcare, design, oceanography,

alternative energies and culinary arts.Photography courtesy of URI, RI Division of Planning/Statewide Planning Program and RIEDC

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Workforce Innovations: Taco – Taco Learning Center Workforce development is a term used by politicians and policy wonks to describe an organization’s ability to enhance the professional skills of its employees. Taco’s (pronounced TAY-ko) President John H. White Jr. describes it differently—“we invest in our people and let them do what they need to do.” Businesses in Rhode Island would do well to listen to Taco’s President—the company’s employee turnover rate is approximately 0.5% per year, due largely to the firm’s investment in its workers.

While there are numerous reasons for Taco’s success in retaining employees, perhaps the largest is the Taco Learning Center, which since 1992 has operated out of the firm’s headquarters in Cranston. Taco—a manufacturer of hydronic systems and equipment for residential, light commercial, industrial and OEM markets—later expanded the Center to the company’s office in Fall River, MA. Both Centers provide employees and family members with more than forty-five different courses in both job and non job-related skills.

The goal of the Center: to help Taco employees gain new job skills, improve their general education, and learn about government and citizenship. To accomplish this, the Learning Center offers a wide variety of courses, including English as a Second Language, alternate high school diploma programs, college courses, and “quality of life” courses, including gardening, yoga, healthy cooking and eating, and negotiating. Skills training workshops offered include global business awareness, project management, and product design. In 2007, the Learning Center opened a state-of-the-art CNC (computer numeric controlled) training lab complete with mill and lathe training machines. Employees graduating from the program rotate through all of Taco’s CNC machines under the guidance of a mentor, gaining additional knowledge and skill about Taco’s machining capabilities and products so that they can quickly respond to production demands anywhere in the plant.

Taco’s Learning Center benefits both employees and the employer. Many employees receive college credit for courses completed through the Learning Center, and in 2003, eight employees completed their MBA program onsite. For Taco, the benefits are innumerable. In addition to a direct return on investment through improved employee skills, the company cites low employee turnover. Long-term employees not only limit the firm’s HR and training costs, but contribute to enhanced business operations; tenured employees are often consulted before new technology or equipment is purchased.

Much of the success of the Learning Center can be attributed to a culture of collaboration at Taco. As White puts it, “Our success is a result of the combined input and support from senior management down to the shop floor employee. Everyone works together to create programs that are relevant to the needs of the business, and to continuously grow employee skills. This is why the Learning Center is so successful.”

Luckily for Rhode Island, the Learning Center at Taco has become as much a part of the company as the HVAC products the firm manufacturers. With low turnover rates and high employee satisfaction, something is clearly working. Regardless of what one calls it—workforce development, investing in people, or something else—the Taco Learning Center is smart business. More importantly for the State, it serves as a model example of how to prepare employees to succeed in an innovation-driven economy.

Photography courtesy of Taco


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GROW THE TOP, BUILD A NEW MIDDLE & MOVE THE BOTTOM UP

VALUE CREATION

INNOVATION WORKFORCE

water

energy

PLACEMAKING

transit

tax alignment

public private partnerships

skill training

experiential learning

basic & applied researchentrepreneurship

sales & marketing

Strategic InitiativesStrategic Initiatives



The emerging conditions described require that we reestablish Rhode Island as a center of tolerance, diversity and innovation that it was at our origins. We can be a place once again where revolutionary new ideas, as well as smaller niche ideas, are tested and scaled, leveraging both our resident design talent and our compact geography, as well as our position in both the Boston Metro and the Northeast Megaregion. We can embrace innovations in business, in government, and in the combination of the two.

Resilience is the common thread in all of the four imperatives. The point is to do more than adapt and survive in the face of looming challenges, but to thrive by exploiting the opportunities that come with the threats. Rather than focus on the uniqueness of our problems, we must focus on the uniqueness of our opportunities.

We can build on our advantages in energy efficiency and water availability, and reinvent our public transit system while connecting it to the emerging Northeast Corridor high-speed rail network. The sites we create for business development should be whole places that respond to looming environmental imperatives and serve as magnets for innovative talent and platforms for upward mobility. In all of this, we must remember that innovation today is about leveraging human capital rather than physical capital.

Adapt education and workforce systems for the innovation ageThe single most important economic strategy the state can pursue is to adapt our education and workforce

systems to the innovation age. This strategy requires two parallel efforts: one aimed at tomorrow’s worker, by expanding experiential learning and problem solving opportunities within the K-16 system; and another aimed at today’s worker, by integrating and realigning the adult education and skill training systems, fostering job restructuring on the front line, and embedding workforce development in a holistic neighborhood-based approach to upward mobility.

The idea is not to create a master plan for a perfect education and workforce system, but rather to give managers and instructors in both systems the autonomy to pursue parallel innovations, and to give individual learners, whether youth or adults, the tools and support to construct powerful learning experiences from a diverse and imperfect network of resources. The learning process to create empowered problem solvers has to itself embody learner initiative.

1. Expand experiential learning and problem solving opportunities for high school and college students.

A reporter once asked the famous hockey player, Wayne Gretzky, “What is the secret of your success?” Gretzky told the reporter that “most other hockey players skate to where the puck is, while I skate to where the puck is going to be.” In the K-16 education system, we have a 17-year production cycle. We would do well to skate like Wayne Gretzky. In fact, to stretch a metaphor, we need to skate to where the ice has not yet even formed, as many of the jobs which high school freshmen (let alone

22


kindergarteners) will have when they are 25 are not yet invented. We need to think today about how to create the innovation-capable workforce that will define our future.

The focus of even our most enlightened workforce development initiatives is about skating to where the puck is now…for example, the great work that the PreK-16 Council is doing to meet a current shortage of science, technology, math and engineering talent. This focus on technical talent is absolutely essential, but it is not what technical skills we teach, but how we teach them that drives an innovation economy. Robotics competitions, for example, engage learners in collaborative problem solving applying technical knowledge with the support of mentors from industry.

Meanwhile, much of the K-16 system is actually skating to where the puck was. It is producing talent for an industrial-era, rules-based economy of managers and semi-skilled workers that no longer exists. It’s not that our schools are doing a worse job of educating their students than they use to. In fact, the opposite is true. Math and reading scores on national standardized tests have gone up over the past two decades.

It’s the economy that’s changed dramatically, not the schools. Over the past three decades, there has been a sharp decline in middle wage jobs in manufacturing and administrative support functions that were accessible with a high school diploma and basic arithmetic and reading skills, coupled with a sharp increase in two kinds of jobs: high wage jobs that typically require at least some college preparation; and very low wage jobs that require little or no preparation. The education strategy that worked for an industrial economy does not work for the economy we have today. Unless we make some fundamental changes, students will not be able to access the kind of jobs that can support a family and our state will not have the kind of workforce that will enable it to stay competitive.

The changes that are required are not just in the schools, but also in the workplace. The burden of change does not fall just on teachers, but equally on parents, employers and the larger community. Some of the most important skills that students need to learn cannot be taught in a classroom; they are gained through experience at home, at work and in the community.

Pattern recognition skills are a fundamentally different cognitive process than rules-based thinking. It does not lend itself to formalized instruction or book learning. It is

based largely on tacit knowledge… you learn to recognize patterns by actually doing it the company of someone who is already very good at it. It’s the essence of good experiential learning and mentoring, which can no longer be thought of as a luxury in the education system. If we want to produce the workforce we need for an innovation economy, we need to make experiential learning a part of every K-12 and college experience.

Some of our colleges are doing experiential learning very well. Johnson & Wales University trains chefs by running a restaurant, and grows hotel managers by running a hotel. The Rhode Island School of Design develops new design talent through its studios, enhanced by a faculty of practicing designers and artists. Brown University does it through its inquiry-based undergraduate program. But the richest integration of academic and experiential learning is happening at the secondary school level, most notably at the Met Schools operated by the Big Picture Company, including six in Providence and one in

“Hard Skills” Vs. “Soft Skills”

The Tech Collective’s 2007 Report of the IT Skills Gap Task Force reinforces the importance of experiential learning. IT employers tell us that the deficits of “soft skills” are becoming more important than the deficits of “hard skills.” What they see is that among their applicants (who all have at least minimum required technical knowledge), the “soft skills” are what differentiate great from average employees. This reflects employers’ greater ability to specify required technical knowledge and their inability to communicate the specific required mix of “soft skills.” The “soft skill” phrase is used broadly to include critical thinking skills that enable an employee to apply their knowledge in diverse settings and the complex communication skills that enable the employee to respond to customer and business needs.

What employers are really saying is that technical knowledge and the various skills required to apply technical knowledge and to create new knowledge are essential, but that the academic community is doing a better job of producing the former than the latter. The crux of the problem is that the academic world cannot develop the latter skills without the help of employers while learners are in school. These insights call for a greater collective role for business in providing mentors and internships for students. The Governor’s Workforce Board and Tech Collective are designing new programs to prepare technology workers based on these insights.


23


Newport. Students spend two full days a week in an internship with an adult who shares an interest with them. All of the academic work is organized as projects around the internship. These models are producing graduates with extraordinary expert thinking and complex communication skills. We need to expand these efforts to reach a much larger portion of Rhode Island’s college and secondary school population, as well as extend them down to the middle school and elementary levels.

2. Fully integrate adult education, skill training and frontline innovation, as part of a holistic approach to upward mobility.

We summarized the job creation and workforce development strategies of 10 Ways to Succeed without Losing Our Soul with a challenge to “Grow the Top and Hold the Middle”. Those are still worthy goals; but they are not sufficient. Our true challenge is to grow the top, build a new middle and move the bottom up. We need to unleash and develop the innovation capabilities of front line workers.

While the number of knowledge and innovation jobs is growing, Rhode Island faces a decline in workers with post-secondary education and an increase in workers without a high school diploma, driven by trends described earlier in this document5. 5 National Center for Public Policy and Higher Education. 2005, November. Policy Alert: Income of U.S. Workforce Projected to Decline If Education Doesn’t Improve. San Jose, CA.

The Health Care Learning Network

The Policy Council has been working with the Metro South/West Regional Employment Board (a Workforce Investment Board based in Framingham, MA) to develop and seek demonstration funding for the Health Care Learning Network, a workforce development initiative which combines adult education with skill training, integrates classroom and experiential learning, and uses both face-to-face and on-line delivery to enable healthcare workers in lower-skill positions to problem solve in ways that improve the patient experience in their current role, while developing skills to move up into nursing and other technical positions where there is unmet demand. We also expect this initiative to enable job restructuring to reflect the added value that the participants bring to the patient experience.

While this initiative demonstrates the power of collaboration across state lines, it calls into question whether the typical workforce development strategy of tightly-contained sector-focused initiatives makes any sense. Here’s why: It is likely that many of the front line healthcare workers that the Healthcare Learning Network helps to move up will not stay in healthcare, because it will have nurtured in them skills that will be in high demand in other sectors. With the prudent investment of public workforce development resources, healthcare may end up serving as a primary feeder of new innovation-capable workers to other sectors because it has the longest job ladders and the most demand in the middle of the job ladder.

Under a similar public/private partnership, other sectors that currently employ large numbers of front line workers (e.g. retail, restaurants, hospitality, construction, personal services, manufacturing, recreation, communications, transportation, security, etc.) could evolve longer job ladders as jobs are redefined based on the value-adding potential of innovation-capable front line workers. This will not only improve firm competitiveness and benefit their employees, it will also create multiple sources of talent for sectors with truncated job ladders.

The Policy Council is working with the Prairie Avenue Revitalization Initiative to link the Healthcare Learning Network initiative to a holistic approach to upward mobility in the Southside neighborhood. The physical link between the two efforts would be the South Providence Academic and Career Education Center (the SPACE Center).

Photography courtesy of Save the Bay

Learning and Our Natural Environment

Environmental education has been a proven way to engage learners in problem solving and critical thinking skills. Organizations such as Save the Bay, The RI Audubon Society and Roger Williams Park Zoo play a key role in providing experiential learning opportunities for learners of all ages.

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To address this challenge, a diverse group of stakeholders, under the umbrella of the Governor’s Adult Literacy Task Force, created a plan to improve the performance of the adult education system and to triple its size over five years from $10 million of annual federal, state and private funding to $30 million of annual funding. Through a national search, a new Director of Adult Education was recruited to provide strategic leadership to the system. The Workforce Alliance, a coalition of business, labor, foundations, adult education providers and upward mobility advocates, has successfully lobbied for incremental state investment in adult education in line with the five-year plan.

This was achieved by positioning an investment in adult education as part of the solution to our structural budget deficit, which comes from having too few workers paying taxes and too many dependents needing state services. Investing in adult education turns dependents into taxpayers. It is in fact not an expense, but an investment that produces returns in the form of increased tax revenue and reduced social services costs.

This effort to improve and expand adult education was one of the ten initiatives called for in 10 Ways to Succeed without Losing Our Soul. We now need to go further by integrating the adult education system with the larger workforce development system. Our research on national best practice in adult education6 makes it clear that the way to increase learner persistence in the adult education system, resulting in higher GED completion and higher

6 Integrating Adult Basic Education and Occupational Training: A Review of Research and Practice, Lisa Soricone, Commonweath Corporation and Rhode Island Economic Policy Council, October 2006.

rates of entry to higher education, is to combine adult education with skill training, rather than conducting them as separate, sequenced activities.

Given how dynamic the economy has become, the focus of our workforce system cannot be on very specific industry and job skills, but rather on a core set of skills that enable workers to learn on the job and innovate. Robert Atkinson contrasts the new economy to the old by saying that “job specific” skills used to be important in the old economy, but that “broad and changing” skills are most important now (see table above). The primary relevance of industry clusters may be that they speak different languages. We may need workforce programs that are packaged to speak the language of different sectors, but the programs can share some similar core content.

Build Rhode Island to make whole places and enable high wage job growth.Creating whole places is a complex undertaking that is becoming more difficult as resources including land, energy and water are less available and climate change increases risks. Therefore, our first recommendation in this area is the creation of state/local/private partnerships in whole place development. This needs to be complemented by changes in tax policy that align state and local development interests. In addition, the state needs to strengthen three elements of the underlying infrastructure for whole place development: water supply development and management; creation of a seamless system of public transit from the sidewalk to the Megaregion; and energy

IssueMarketsScope of CompetitionOrganizational formProduction systemKey factor of productionKeytechnology driverCompetitive advantageRelations betwee n firmsSkillsWorkforceNature of employment

Old EconomyStableNationalHierarchicalMass productionCapital / LaborMechanizationEconomices of scaleGo it alone Job-specificOrganization ManSecure

New EconomyDynamicGlobalNetworkedFlexible productionInnovation / ideasDigitiationInnovation / qualityCollaborativeBroad and changing“Intrapreneur”Risky

The New and Old Economies

Robert D. Atkinson, The Past and Future of America’s Economy: Long Waves of Innovation that Power Cycles of Growth. (Northampton,MA: Edward Elgar, 2004).


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demand management and alternative supply development.

3. Develop regional state/local/private partnerships in whole place development.

Creating new sites for business prospects in a way that contributes to the wholeness of a place requires a much closer partnership between the state and localities, and between the public and private sectors. It is a proactive process of market-making for the kinds of development we want.

It is essential that we have the capacity to plan and foster mixed-use, mixed income development in a whole place-sensitive manner. The potential for whole placemaking is increased when communities in a region collaborate to exploit common opportunities and when team of diverse experts work together. One implication of the innovation imperative is that we must deploy state resources including The Rhode Island Division of Planning (DoP) and the Rhode Island Economic Development Corporation (EDC) to support local planning and implementation of whole place projects. Creating shared regional resources not only makes financial sense, it also allows us to strategically plan at the regional level and continuously learn through the integration of planning, design, and implementation.

DoP and EDC would need to engage other state agencies and institutional partners to build this capability. We need a team that includes real estate experts, architects, landscape architects, and urban designers to create good buildings, to plan sites well, to layout districts, to manage watersheds and to analyze patterns of the larger economic geographies in which a place is nested. We also need people on the team who understand new approaches to energy efficiency, water recycling, waste treatment, and flood avoidance. We need folks who understand social networks, including the networks that create innovation, the networks that enable upward mobility and the networks and stories that give meaning and life to a place.

Harnessing this diverse set of capabilities and bringing them to bear on specific local projects represents a whole new kind of interaction between state and local government and the public and private sector. It is a more fluid integration of planning, design, and implementation. Rather than simply denying the kind of growth we don’t want, this approach involves imagining the kind of growth we do want, then partnering with private developers to create it.

Partnerships for Place

A place-centered economic development strategy requires us to pair the unique features of our places with growth opportunities and depends on creative collaboration and a shared long term vision among partners. It sees our city, town and village centers not just as sites for new development but as the built environment in which we live, learn and work. The Policy Council has launched three key partnerships in place that demonstrate the value in this approach on the ground.

The Borderlands Project: This partnership between The Nature Conservancy and the Policy Council is focused on creating opportunities for economic and community development in our rural village centers along the CT-RI border while conserving and enhancing the natural amenities that make these places unique. Through its Village Innovation Pilot, the Project has created a regional, state and local partnership to implement village-based development and conservation in two pilot towns.

The Parent Leadership Training Institute (PLTI): PLTI is a 20-week course that gives parents the confidence and tools to impact change in Providence. The Policy Council partnered with the Prairie Avenue Revitalization Initiative to

bring this program to RI. PLTI, originally launched by the CT Commission on Children, is a proven model for civic engagement, a critical ingredient for holistic neighborhood revitalization.

The Blackstone Valley Partnership: This Partnership is an open network of public and private-sector partners working to shape the future of the Blackstone River Valley. Over 25 partners contributed to the Partnership’s recent publication of An Action Agenda for 2020, which highlights key projects that would enable the Blackstone Valley to adapt to change and use growth pressures to make the regional healthier, more prosperous and more sustainable.

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4. Enact tax reform that aligns state and local development interests.

There is a lack of alignment between state and local development efforts due to the fact that localities derive tax revenue from real estate development while the state derives tax revenue from economic development. Local communities benefit most from land development with high market value per square foot, while the state’s costs and revenues are a function of wages and incomes.

For example, the growth of the property-tax exempt anchor institutions of the knowledge economy, higher education and healthcare, benefits the state but actually disadvantages localities. The solution is for the state to share with localities some of the incremental income tax benefits of the growth of the colleges and hospitals, enabling localities to make on their real estate what they would have made if the real estate were occupied by a non-exempt user.

5. Increase Rhode Island’s capacity for water supply and demand management.

Rhode Island can and should provide a predictable water supply so that residents, businesses, farms and visitors have the water they need, and so we are maintaining necessary river flow and adequate fresh water input to Narragansett Bay. The Policy Council, as part of the Coalition for Water Security, is advocating legislative and administrative action based on principles of fairness, cost-efficiency, protecting environmental functions, and maximizing our opportunities for future prosperity.

Rhode Island is a water rich state, industrial water use has been on the decline for decades, and our population growth is slow by national standards. Still, some of our water supplies have been contaminated and taken out of use, while more wasteful summer water use has risen significantly. The result is a dramatic shrinking of the reserve supplies that give us security to meet the summertime needs for water in dry years. The uncertainty about future water supplies is already having an influence on economic development and agriculture, and could soon be a barrier to the growth of our state university.

Furthermore, whether we take action on water management or not, our 70 year old water supply and delivery infrastructure is due for some significant maintenance and replacement over the next 20 years. We need to exercise the authority to maintain our infrastructure so that we can continue to enjoy a secure water supply at a

manageable cost.

The Policy Council is calling for legislation in the 2008 legislative session that will:

• Provide the financial framework necessary for water suppliers to invest in system maintenance and repair.

• Have the State Water Resources Board exercise the authority to increase statewide reserve capacity, reliability and interconnections.

• Call for DEM to determine predictable and sustainable levels of water availability.

• Increase water efficiency and cut summertime peak demand while assuring sufficient revenues for system operation.

6. Build a seamless transit system from the sidewalk to the Megaregion.

Transportation infrastructure—roads, rail lines, shipping lanes, transit loops, air service routes, airports, sea ports, train stations, parking garages and sidewalks—create the skeletal structure around which development organizes at the neighborhood, city, state, regional, national and global scales.

The foundation of the transportation system is people walking on the vibrant, pedestrian-empowering sidewalks of well-designed urban, town and village centers. It’s easy

The London Model of Public Transit

London is a sprawling city of moderate density, but with excellent public transit systems, which put pedestrians on the sidewalks of virtually every street at all hours of the day and night. It is such a pleasure to walk in London, precisely because it is such an easy place to take public transit, whether via the Tube or the tall, narrow buses so well-suited to the London streets. Most riders carry a handy flip-open “Oyster” card that works for both bus and subway and makes boarding quick and efficient. Sidewalks are wide, well-lit and kept in a constant state of good repair. Congestion pricing in the core of London provides a strong disincentive to driving a car, but also keeps traffic under control, with the result that the buses make good time and the pedestrians on the sidewalks do not feel overwhelmed by cars and trucks.


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to forget that one of the results of a good public transit system, and one of its chief goals as well, is a lot of people walking the streets.

Rhode Island has the potential for a seamless transit system from the sidewalk to the Megaregion. It has the density of development to support public transit in many areas, and even has many walkable urban, town and village centers. What’s missing is a good system of public transit. It would not be hard for us to put one in place. Much of the current built fabric of Rhode Island was developed initially around earlier forms of public transit: ships, stagecoaches, trains and streetcars. It will be much easier for us to reinvent a public transit system here, than it will be for areas with lower density than ours, which grew up almost entirely around the automobile, to invent a public transit system for the first time. Transit could be a source of competitive advantage for Rhode Island, particularly if it is connected to the evolving Northeast Corridor high-speed rail network.

This seamless transit system would reduce carbon emissions, insulate us from rising oil costs, expand the reach of face-to-face innovation networks across the Northeast, and strengthen our own city, town and village centers. The future of the Northeast lies in an integration of local transit and regional transit along the entire corridor, with a higher speed Amtrak service and overlapping higher speed commuter rail systems.

While we make this stronger connection to the megaregion, we cannot forget the importance of connecting to centers of innovation. The expansion of the runway at T.F. Green is essential in making these links to the West Coast and Western Europe.

7. Make Rhode Island a leader in energy demand management and alternative supply development.

Rhode Island is one of the most energy efficient state economies in the United States (Gross State Product / BTU) mostly because of our compact urban form, but in the last twenty years we developed in ways that eroded this advantage. We should aspire to be the world leader in energy demand management, working in partnership with our local utility, National Grid, which is experimenting with a new business model focused on energy conservation. At the same time we need to exploit opportunities to develop alternative sources of energy.

Accelerate new value creation through discovery, collaboration, commercialization, and entrepreneurshipRhode Island has clear economic objectives in science and technology. We are working to increase the share of Rhode Island employment in skilled science and technology jobs. We support initiatives to increase the ability of our workforce to collaborate between disciplines within and outside the sciences and technology for the advancement of knowledge and in pursuing new ways to create value. We measure the economic impacts of our science and technology enterprise in terms of increased productivity, new products and processes, the growth of new ventures, and the education of the next generation of talent.

In order to achieve these goals in the context of global competition where many regions are making investments many times larger than ours, we need our investments to be targeted in areas where Rhode Island can build world-class competencies that are both nimble and highly networked.

8. Create a robust Research Alliance among RI’s colleges, hospitals and technology industry to increase basic and applied research and promote entrepreneurship.

Today, it is important that all universities and colleges in the state look for ways to collaborate. The strategy, to focus on areas where Rhode Island can create unique world-class capabilities and make cultural and procedural changes to support research and entrepreneurial thinking, is reflected in a set of statewide initiatives advanced by the Science Technology Advisory Council (STAC).

Rhode Island’s experimental program to stimulate competitive research (RI EPSCoR) is a partnership among RI research universities and colleges to build research capability and connections to our economy. Rhode Island’s status as an National Science Foundation EPSCoR state, and the federal dollars that it brings in, has brought the colleges and universities around the table to build core facilities in marine life sciences, genomics and proteomics, create undergraduate research experiences and organize a life sciences path from high school through college.

These new facilities and collaborations lay the groundwork on which STAC intends to engage a larger Research Alliance to seed economic growth through higher

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Workforce Innovations: Biotechnology Education PipelineIn order to fuel the growth of high wage industries in Rhode Island, a strong partnership is connecting our state’s high schools, community college, state university and biotechnology companies. This is making Rhode Island a national leader in the biotechnology industry, by creating focused and innovative workforce development opportunities that inspire students to look towards this area, become engaged, and develop technical skills by participating in hands-on, inquiry-based science. “We have built a highly effective and productive biotechnology workforce development pipeline in Rhode Island that runs from our high schools, thru our college undergraduate programs, to the lab benches of our research universities” says Dr. Jeff Seemann, Co-chair of the RI Science and Technology Advisory Council and Dean of the College of the Environment and Life Sciences at the University of Rhode Island.

Industry, higher education and the state department of education have come together to deliver professional development for high school teachers, and assist with the curriculum development for Introduction to Biotechnology, Biotechnology I&II - a three-year course sequence. This ‘biology for the 21-century’ curriculum is being piloted by 5 model high schools: Burrillville High School; William B. Cooley Health and Science Technical High School; William M. Davies, Jr. Career and Technical High School, Exeter-West Greenwich High School; Mount Hope High School; and South Kingstown High School. A recent grant from the Amgen Foundation to the URI-based SMILE (Science and Math Investigative Learning Experiences) program provides high school science teachers and students with hands-on laboratory experience in biotechnology techniques using kits of materials and equipment that can be shared among many classrooms. The ultimate goal is to make biotechnology content available in all high and middle schools in Rhode Island.

The door to biotechnology careers is also open to working Rhode Islanders through a partnership between CCRI and URI. CCRI offers a biotechnology certificate program that can be completed on a part-time basis. At URI, undergraduate and graduate level degree granting programs in biotechnology are in place, including a BS in Biotechnology Manufacturing and a 3 year Masters Program in Clinical Laboratory Science. “These programs have been very successful in recruiting motivated students,” according to Greg Paquette, Director of the Biotechnology and Clinical Laboratory Science Programs at the University of Rhode Island. “Most of the students entering the program are non-traditional students, and they have come from varied backgrounds like accounting, engineering, teaching, and computer professions.” Nine hundred people, including workers in biotechnology companies, high school teachers, and students at CCRI and URI have received training in biotechnology over the past five years through a competitive federal grant managed by the Tech Collective. Rhode Island biotechnology companies are now advising colleges on curriculum, providing internships for students, and one of them, Amgen, donated significant money and equipment. Industry support of Rhode Island biotechnology education also includes a web- based course offered by URI through lifeedu.org that allows anyone around the world to enroll at any time to learn the key concepts in this increasingly important discipline. It is available to a broad range of the public and free to educators as a primer in biotechnology and biotechnology issues. Furthermore, high school students can take this course for advanced college credit at URI. Through all these programs, URI and CCRI are giving Rhode Islanders access to the higher wage jobs of the knowledge economy.

Photography courtesy of URI


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Basic Research

Translational Research

Business Start Up

Sustainable Growth

Need resourcesand policies

to support research

Fund research withcommercial potential

RESEARCH ALLIANCE

Colleges, universities, research institutions, and the state partnering to build shared world-class research capabilities, compete for major federal grants, and support collaborative research with commerical potential.

i$$

i$$

i

$

Expertise and Leadership

Money

SLATER

RIEDC

RESEARCH ALLIANCE

SLATER

i$$

The Slater Technology Fund provides mentoring and seed �nancing for innovators to build businesses across several major sectors

The Rhode Island Economic Development Corp. provides a range of consulting and �nancial services to businesses in Rhode Island RIEDC

Need to expandbridge �nancing

Need to invest ininfrastructure and

land redevelopment

education. STAC launched the Research Alliance Competitive Research Awards in 2007 to increase the flow of innovative, collaborative, potentially commercially important research from universities and hospitals. By requiring participation of researchers from at least two Rhode Island institutions, the grants are building new social networks. The Rhode Island Research Alliance seeks to be a collaboration driven by research hospitals and all eleven colleges and universities working together to increase local research capabilities and spark initiatives that have real economic potential.

9. Leverage the Slater Technology Fund to accelerate technology commercialization and entrepreneurship by expanding the availability of follow-on financing and biotech lab space.

Over the last ten years, Rhode Island has made significant progress in improving the early stages of venture formation related to research through the Slater Technology Fund. Slater has a strong record of mentoring technology-based ventures through the launch stage and leveraging state investments to help companies access outside capital. In the first nine years of operation, Slater invested $11.5 million in ventures helping them access $140 million in competitive funds. As a result, we can now leverage Slater’s success to address other weak links in the science business ecosystem: the pipeline of university research with commercial potential, follow-on financing, facilities for growing biotech businesses, and shortages in our science and technology workforce.

The Research Alliance, described in the previous section, is part of the answer to increasing the pipeline of research

with commercial potential. There are multiple options for expanding follow-on financing. The lowest cost option is for the State to adapt existing EDC financing authority to enable it to offer more follow-on financing for new science and technology businesses based on their IP and facility assets. The Slater Technology Fund could partner with private sector investors to create a pool of follow-on financing. Rhode Island could also follow the lead of Connecticut Innovations and the John Adams Innovation Institute fund and allocate more money to the Slater Technology Fund to make it a more powerful tool. The Slater Technology Fund is now operating with $3 million in state funds per year. Connecticut Innovations was started with a $65 million investment by the state of Connecticut in 1995 and is now self-sustaining with $84 million under management. Massachusetts’ John Adams Institute Fund is a $15 million fund.

Rhode Island’s recent tech business growth benefited from infrastructure and site development work dating back 20 years, but we are not laying the groundwork for the facilities that are needed to support growth in the next 10 to 20 years. Space, particularly for small growing biotech companies, has become a limiting factor in keeping expanding companies in Rhode Island. The EDC in collaboration with Slater, BioGroup, the City of Providence, colleges and universities, and hospitals should work to create sites and facilities that make Rhode Island a compelling location for our own growing science businesses and also for expanding businesses out of Boston/Cambridge. Pre-permitting could be a significant development incentive in addition to financial incentives.

Steps to Grow Science Businesses

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Experiments in Value Creation The Business Innovation Factory brings public and private sector partners together to focus on projects that transform how value is delivered across all sectors of the economy. Through the BIF Experience Labs, BIF uses an open innovation methodology to help collaborative teams from across industries and disciplines design and test new solutions in real world environments and transfer what they learn back into their organizations. BIF’s Collaborative Innovation Summit annually brings leading innovators from across the world to Rhode Island for a two day event focused on innovation. www.businessinnovationfactory.com

RISD Media + Partners. In 2008 RISD is reinventing the Center for Design and Business under a new organizational home. Inspired by a burgeoning interest in “design thinking,” RISD is building a network of design innovators—including industry, students, faculty and other organizations--to explore how design can answer questions, solve problems and create opportunities in business and society. These collaborations range from in-classroom sponsored studios to longer-term research to freer-form custom collaborations. All of these have the same goal: Discovering new ways to explore and solve design challenges. They help RISD’s industry partners discover innovative ideas at the heart of their businesses. www.centerdesignbusiness.org

Innovation Monday at Johnson & Wales University RISBDC is a resource for small businesses and individuals who want to commercialize their new product ideas. Support is provided to innovators through a gateway series of assessment, coaching, learning and networking services. Transforming a good idea into a marketable product is within the grasp of just about anyone with a strong work ethic, objectivity, and the ability to problem solve. Clients get a customized project action plan, follow-up access to individual or group education on-demand, and connections to local experts in development-related fields as appropriate. www.risbdc.org

The Enterprise Growth platform of the Rhode Island Manufacturing Service Extension, Inc (RIMES) helps manufacturing companies increase their sales. Core competencies include: Product and Business Strategy Development, Repositioning, Differentiation, and New Product/Market penetration programs. Further, as a part of the Manufacturing Extension Partnership, RIMES has an exclusive arrangement with Doug Hall and the Eureka Ranch to help clients through the ideation and feasibility stages of new product development. www.rimes.org


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The Providence Jewelry District is a place that has the potential to stimulate face to face collaboration because of its proximity to medical school, hospitals, urban mixed-use amenities, and transit connections. There is a real sense that Providence has a credible position in pursuing life science businesses. However creating a lively urban district with room for growing life science business will require leadership from the City of Providence and support from the state. Beyond the challenge of redevelopment, the misalignment of state and local fiscal interests in the expansion of the non-profit hospitals and universities is a serious barrier to joint action. Rhode Island will need to pass legislation that supports Providence as the hub of non-profit institutions that anchor Rhode Island’s knowledge economy.

The Slater Technology Fund plans to relocate its Center for Entrepreneurship in Life Science to Providence’s Jewelry District. Slater’s current 7,500 square feet of wet lab incubator space at Richmond Square cannot meet the growing need for incubator space in the life sciences sector. STAC recommends that the Slater Technology Fund expand its life sciences incubator program by partnering with private developers to build out 10,000 square feet in the Jewlry District, with an option of future expansion to 20,000 square feet. The Center will deepen the state’s capacity for launching compelling new ventures and improving our ability to develop more sustainable seed stage ventures with substantial commitment to building their businesses in Rhode Island.

10. Create a best-in-nation business recruitment and retention capability that leverages Rhode Island’s unique strengths.

The RI Economic Development Corporation (EDC) needs to marry recruitment and retention capability with a deep engagement with industry sectors in collaborations that find new ways to add value.

The EDC Business Development team specializes by high wage sector and partners directly with industry organizations like SENEDIA, and Tech Collective’s Bio Group and Info Group. Engaging business leaders through industry organizations expands EDC’s intelligence and lead network. It is necessary also for EDC to collaborate with business leaders as partners in order to build a best in the nation business recruitment and retention capability.

The key to a successful business recruitment and retention effort is to build a lead network that identifies who is in the market for space in Rhode Island and the Boston Metro. A relatively small number of commercial real estate brokers account for the majority of transactions in the Boston Metro—the top 10 brokers probably do as much as 80 percent of the deals. None of these brokers will tell anyone the deals they are currently working on, but if they trust you, they will tell you the accounts they tried to get, but lost to a competitor. If you talk to all of them on a regular basis, you develop a radar screen of every prospect that’s in the market. Building such a lead network takes time and the ability to trade information without betraying confidences.

Once a prospect is identified through the lead network, the next step is to make contact before the prospect makes a relocation decision. This requires a proactive sales effort, rather than a reactive one. Effective economic development is a developmental sales process not a maintenance sales process. It is consultative rather than transactional. That is, it is about problem solving, not about order taking.

The problem solving that is central to the economic development sales effort has to do with the intersection of business and government, two worlds with different values, different decision-making processes, and different languages. A good economic development sales person has to be bi-lingual—understanding the different languages of business and government, and serving as a translator between the two groups. It is helpful if the economic development sales person has had experience in both business and government. Even better, a good

The Georgia Research Alliance

The idea for RI’s Research Alliance was born from the successful Georgia Research Alliance model, which is credited with helping Georgia grow its knowledge economy. The Georgia Research Alliance has five distinctive elements that should serve as a model for building the RI Research Alliance.

The Spark – Vision of the business community

Mission – Seed state-wide economic growth through higher education

Leadership – Guided by strong board that incorporates diverse groups

Objectivity – Independently balance the diverse economic development agendas of universities, government, and business

Focus – Fund a small number of high-impact technical thrust areas using a small operating staff.

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Workforce Innovations: Tech Collective The Tech Collective—the technology industry association of Rhode Island that drives technology growth and innovation by uniting industry, government and education in the State—is not only building relationships between existing technology companies in Rhode Island, but also developing and inspiring their employees and executives of the future. Through two innovative programs—GRRL Tech (Girls Reaching Remarkable Levels) and FIRST Robotics (For Inspiration & Recognition of Science and Technology)—Tech Collective is moving Rhode Island from a follower to a leader in science, technology, engineering, and math (STEM) education.

GRRL Tech, an annual event hosted by the Tech Collective, aims to inspire, engage, and educate young women across the state about careers in science, technology, engineering and mathematics. Through classroom activities, panel discussions, and interactive workshops, the one-day conference brings high school girls and female business professionals together in a collaborative environment aimed at instilling confidence in women to pursue careers in technology-related fields. According to Tim Hebert, CEO of Atrion Networking Corporation and President and Chairman of the Board for the Tech Collective, “the primary goal of GRRL Tech is for young women to leave knowing that they can do anything they want to do.”

Likewise, the U.S. FIRST Robotics programs, which Tech Collective sponsors in cooperation with the Rhode Island Economic Development Corporation (RIEDC), the Science and Technology Council (STAC), the New England Institute of Technology, and others, is preparing students of all ages for the future demands of an innovation-driven economy. Working together in teams, students build robots that then compete in local, regional, and national competitions. However, despite the intense competition and complicated technical skills students learn, as Hebert says, “the program is less about teaching skills in robotics than it is about using robotics to teach the skills that students will need to succeed in business and in life.”

Based on the enormous success of both programs to-date, Tech Collective plans to expand the number of students who attend and to enlist even more support from the business community. Moreover, in the future the Tech Collective is hoping to use social networking tools, blogs, and live webcasts to increase the reach of GRRL Tech to include both teachers and parents; future goals for FIRST Robotics include expanding the program to every school in the state.

Through GRRL Tech and FIRST Robotics, as well as new initiatives focusing on women in technology, mentoring underemployed individuals, and tech-related college internships, the Tech Collective is helping educate Rhode Island’s future workforce on the many benefits of a career in science and technology related fields. Even more importantly, however, through the Tech Collective’s collaboration with both state officials, post secondary institutions, and the private sector, the organization is inspiring students of all ages to consider opportunities they had never even dreamed of before.

Photography courtesy of Tech Collective


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economic development sales person would know several business “dialects”—as the needs and concerns of business sectors vary.

The art of marketing is the creation of a credible position about what one is selling in the mind of the prospect. The real power of positioning is that it makes it possible to sell the future in the present.

Rhode Island must sell what it intends to become, not just what it is—and if we do so effectively, those who share our vision will join us and help us achieve it. This is not so much “build it and they will come” but rather “imagine it and they will come and help us build it.” Business recruitment and retention must support, and be guided by, a larger positioning strategy. Not all development is good. Not all prospects are appropriate. Economic development must be made to reinforce and enhance the state’s basic identity as a place.

Measuring Progress

Successful economic development requires an ecological approach; instead of relying on any one silver bullet, many related factors need to be aligned and functioning. The breadth and diversity of initiatives called for in this strategy speak to this understanding.

These initiatives will not happen overnight; and their success will depend on many partners above and beyond even those highlighted in this report. The Policy Council is committed to working closely with other partners and lending our support to the creation and refinement of a series of more detailed action plans that lay out the steps necessary within each initiative.

The Policy Council will also continue in its role as a scorekeeper in charting the course of the State’s economic performance and progress in key areas. This measurement allows us to track whether we are making progress on the strategic initiatives and whether these efforts are producing positive outcomes. We are confident that by working together on these efforts, we can grow the top, build a new middle and move the bottom up.

www.ripolicy.org

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Strategic Project Summary

“A Rhode Island Economic Strategy: Grow the Top, Build a New Middle, and Move the Bottom Up” embodies the work of many partners across the state. Below is a summary of 28 current economic development initiatives along with their lead or partner organizations. Although this list is not exhaustive of every effort in the state, it emphasizes essential projects and illustrates the diversity in project types and partners that are necessary for successful economic development in the long term. Projects in bold face type are the ones in which the Policy Council will be directly involved in 2008.

Adapt education and workforce systems for the innovation age.

Strategy 1. Expand experiential learning and problem solving opportunities for high school and college students.

• Reform Career and Technical Education. Partners: House Finance Committee, Rhode Island Department of Education (RIDE), chambers of commerce

• Expand internships and externships. Partners: chambers of commerce, RIDE, industry partnerships, businesses, non-profits, colleges

• Support science, technology, engineering & math (STEM) initiatives. Partners: PreK-16 Council, Tech Collective, RI Economic Development Corporation (RIEDC)

• Create network of regional high performing public schools.

Partners: Cumberland Mayor Daniel McKee, Coalition of RI Mayors

• Improve performance of urban schools. Partners: PreK-16 Council, RIDE, communities

Strategy 2. Fully integrate adult education, skill training and frontline innovation, as part of a holistic approach to upward mobility.

• Use the Governor’s Workforce Board Strategic Plan to foster integration of adult education, skill training and front line innovation. Partners: Governor’s Workforce Board (GWB), RIDE, RI Workforce Alliance

• Develop the Health Care Learning Network (HCLN) Partners: GWB, RIDE, United Way Skill Up Project, Stepping Up Project, Nursing Homes, Boston Foundation

• Construct and develop program for South Providence Academic and Career (SPACE) Center. Partners: Prairie Avenue Revitalization Initiative, HCLN

Build Rhode Island to make whole places and enable high wage job growth.

Strategy 3. Develop partnerships in whole place development.

• Create opportunities for economic and community development in our city, town and village centers while conserving and enhancing the character that make these places unique. Partners: Local communities, RI Division of Planning, RIEDC, Blackstone Valley Partnership, Borderlands Village Innovation Pilot partners, The Nature Conservancy, Grow Smart RI, Preserve RI, Washington County Regional Planning Council, RI Housing KeepSpace Initiative, LISC Sustainable Communities Initiative, The Urban Revitalization Fund of Rhode Island, Tri-Communities Project, New Commons Resilient Communities Project

• Redevelop our urban waterfronts so that they create new economic opportunities, balance the needs of existing uses and are disaster resilient. Partners: Local communities, RI Bays, Rivers and Watersheds Coordination Team and its agencies, Coastal Resources Center, University of Rhode Island, Rhode Island School of Design, Washington County Regional Planning Council

Strategy 4. Enact tax reform that aligns state and local development interests.

• Enact Shared Economic Growth Act. Partner: City of Providence, RI General Assembly

• Revise property tax revenue cap to enable tax increment financing. Partner: Grow Smart RI, RI General Assembly

Strategy 5. Increase Rhode Island’s capacity for water supply and demand management.

• Develop robust capability for development of reserve water supply and integration with local distribution. Partners: General Assembly, RI Water Resources Board, RI Waterworks Association, Coalition for Water Security

Photography courtesy of URI


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• Streamline and integrate the permitting process for new supply development. Partners: RI Water Resources Board, Public Utilities Commission, RI Department of Environmental Management, RI Department of Health

• Create robust water demand management capability. Partner: Coalition for Water Security

Strategy 6. Build a seamless transit system from the sidewalk to the Megaregion.

• Reinvent public transit system in Rhode Island. Partners: RI Public Transit Authority, Transit 2020 Working Group

• Reauthorize Amtrak on terms favorable to the Northeast. Partner: Business Alliance for Northeast Mobility

• Support the extension of the main runway at TF Green Airport to achieve non-stop West Coast and western European flights. Partner: GoGreen Alliance

Strategy 7. Make Rhode Island a leader in energy demand management and alternative supply development.

• Create public power authority to develop renewable energy sources. Partner: RI Office of Energy Resources, RI General Assembly

• Develop new business model for energy distribution based on conservation and demand management. Partner: National Grid

Accelerate new value creation through discovery, cross-disciplinary collaboration, commercialization, and entrepreneurship.

Strategy 8. Create a robust Research Alliance among Rhode Island’s colleges, hospitals, and technology industry to increase basic and applied research and promote entrepreneurship.

• Strengthen the State’s basic research platform in the life sciences and maximize its use by faculty and student researchers from all Rhode Island institutions. Partners: RI EPSCoR, Science and Technology Advisory Council (STAC)

• Invest in collaborative research with the potential to create high value intellectual capital and new ventures. Partners: RI Research Alliance, STAC

• Support University of Rhode Island (URI) in making changes in rules and compensation to support faculty, post-docs and graduate student research. Partners: URI Commission, Research Alliance, STAC

Strategy 9. Leverage the Slater Technology Fund to accelerate technology commercialization and technology entrepreneurship.

• Develop a life sciences incubator in Providence’s Jewelry District operated by the Slater Technology Fund. Partners: Slater Technology Fund, RIEDC, City of Providence, universities and hospitals

• Adapt RIEDC financing vehicles to be able to offer more follow-on financing to science and technology companies. Partners: RIEDC, RI General Assembly

• Support university and hospital research offices in becoming more client-focused in supporting faculty entrepreneurship, understanding business value creation, and building a bigger portfolio of deals. Partners: universities and hospitals, Slater Technology Fund, RIEDC, Providence Chamber of Commerce

Strategy 10. Create a best-in-nation business recruitment and retention capability that leverages Rhode Island’s unique innovation strengths.

• Develop a best-in-nation consultative business development function that enlists business leaders and industry organizations as partners in promoting Rhode Island as a place to locate and expand high-wage business. Partners: RIEDC, chambers of commerce, industry organizations, Washington County Regional Planning Council.

• Experiment with and scale up economic development programs that help businesses of all sizes find new ways to create value and grow.

Partners: RIEDC, RIMES, Business Innovation Factory, RI Small Business Development Center at Johnson and Wales University, Center for Design and Business at RISD, Washington County Regional Planning Council.

Photography courtesy of Cheryl DaCosta

AFL-CIOAmerican Association of University

ProfessorsAquidneck Island Planning CommissionAssociation for Public TransportationAtrion NetworkingBank of AmericaBig Picture CompanyBlackstone Valley PartnershipBlackstone Valley Tourism CouncilBrown UniversityCity of ProvidenceCoastal Resources Center/ RI Sea GrantCommunity College of Rhode IslandCornish AssociatesCVS/PharmacyFidelity InvestmentsGilbane Inc.Governor’s Workforce BoardGreater Providence Chamber of

CommerceGrow Smart Rhode IslandHasbroMetro South/West Regional Employment

BoardNational Education Association

National GridNew CommonsNew Harbor GroupNinigret PartnersNorthern Rhode Island Chamber of

CommercePartnership for Creative Industrial SpacePartridge, Snow & Hahn, LLPPreserve Rhode IslandProgreso LatinoProvidence PlanQuonset Development CorporationRegional Plan AssociationRhode Island Bays, Rivers and

Watersheds Coordination TeamRhode Island Board of Governors for

Higher EducationRaytheonRhode Island CollegeRhode Island Department of EducationRhode Island Department of

Environmental ManagementRhode Island Department of Labor and

TrainingRhode Island Division of PlanningRhode Island Economic Development

Corporation

Rhode Island Lt. Governor’s OfficeRhode Island Governor’s OfficeRhode Island FoundationRhode Island HospitalRhode Island House Policy OfficeRhode Island Manufacturing Extension

ServiceRhode Island Public Expenditure CouncilRhode Island School of DesignRhode Island Senate Policy OfficeSave the BaySlater Technology FundTacoThe Providence FoundationThe Poverty InstituteThe Steel YardTeam New EnglandTech CollectiveTown of BurrillvilleTown of SmithfieldUnited Nurses and Allied ProfessionalsUniversity of Rhode IslandWashington County Regional Planning

CouncilWest Elmwood Housing Development

Corporation

We would also like to thank our policy fellows and interns who contributed to this document and our roundtable process: Kevin Greer, Angierach Hansen and Kevin Park.

Graphic Design by Local LLP. Document Design & Layout by Science Applications International Corporation (SAIC)

List of Contributors

We would like to thank individuals from the following organizations who contributed to this update, by participating in roundtable discussions or providing input to this document over the past several months:

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The Rhode Island Economic Policy Council

Co-Chairs

The Honorable Donald L. Carcieri, Governor

Paul J. Choquette, Jr., Chairman & CEO, Gilbane Inc.

Council Members

Charles T. Bush, Vice President, Seapower Capability Systems, Raytheon Integrated Defense Systems

Robert Carothers, President, University of Rhode Island

The Honorable David Cicilline, Mayor, City of Providence Rhode Island

Paul J.Cronin , Vice President/Region Manager., Cox Communications

Michael DiBiase, Senior Vice President, Fidelity Investments

The Honorable Gordon D. Fox, House Majority Leader, State of Rhode Island

Kimball Hall, Vice President and General Manager, Amgen

William Hatfield, President , RI Bank of America

Tim Hebert, CEO, Atrion Networking & Chair of Tech Collective

Elizabeth Huidekoper, CFO, Brown University

Saul Kaplan, Executive Director, RI Economic Development Corp.

Ronald Machtley, President, Bryant University

Joseph MarcAurele, RI President, Citizens Financial

The Honorable Joseph A. Montalbano, President of the Senate, State of Rhode Island

George Nee, Secretary-Treasurer, Rhode Island AFL-CIO

John J. Partridge, Esq. , Founder, Partridge Snow & Hahn LLP

David B. Rickard, EVP/CFO & Chief Administrative Officer, CVS Corporation

Michael Ryan, Executive Vice President, National Grid

Gary Sasse, Director, RI Department of Revenue

Steven Sepe, Senior Director of Medical Affairs, Vertex

Shivan Subramaniam, Chairman & CEO, FM Global

Robert F. Valentini, CEO, Myomics, Inc.

George Vecchione, President & CEO, Lifespan Corporation

The Honorable William Walaska , Senator, Senator Montalbano’s representative to the Council

Laurie White, President, Greater Providence Chamber of Commerce

John Hazen White Jr., President, Taco Inc.

Staff

Christopher L. Bergstrom Executive Director

Beth Ashman Collins Director of Research

Ariana McBride Economic Development Planner

Beverly Bardwell Executive Assistant

New Harbor Group Public Affairs Counsel

Documents

A Note to Our Partners - Grow Smart Rhode Island · A Note to Our Partners ... Twin revolutions in ... water scarcity, we cannot ignore the hardships that these conditions will create