Rhode Island is rich in economic history. Samuel Slater, dubbed "father of the American Industrial Revolution" by Andrew Jackson, erected his first mill in Pawtucket. A hundred years later the robber barons transformed the oceanside city of Newport into a gilded summer haven. Through most of the 1900s, the state boasted a formidable manufacturing presence in textiles and jewelry.
During the 1980s however, globalization roared into Rhode Island. Factories were shuttered and the Ocean State's economic successes were relegated to the history books.
As we progress into the new year, Rhode Island's economy appears to be poised for an upswing. Three blue-chip companies – General Electric, Virgin Pulse Inc., and Johnson & Johnson – have recently unveiled plans to move several hundred technology jobs to the state's capital.
Redevelopment of the Providence Interstate 195 land – a downtown district left barren following the interstate's relocation – is also underway, anchored by the construction of an industrial-academic "innovation complex." The announcements represent critical steps forward for the state.
In Providence, GE has started hiring developers and engineers to build software that will support both the company and its industrial clients. Virgin and Johnson & Johnson are in search of similar technical talent to propel the development of health care-focused software applications.
Rhode Island has yet to regain all the jobs wiped away by the recession – the U.S. as a whole did so nearly three years ago – and growth of any kind is welcome. However, high-skill, high-salary positions are particularly attractive to a state boasting median household income 20 percent lower than that of its neighbors, Massachusetts and Connecticut. Although the jobs arriving in Rhode Island number only a few hundred in total, research indicates they are a potential sparkplug to its economy.
In 2012, University of California Berkeley economist Enrico Moretti published "The New Geography of Jobs." In his book, he argued regional employment growth in innovative disciplines such as engineering, science and technology has positive impacts on growth in the broader workforce.
In Silicon Valley, the hiring of a single technology worker creates five additional nontechnology jobs. Even assuming a multiplier less than five, the arrival of 500 technology positions in Providence could generate an additional 2,000 jobs, from Uber drivers to attorneys.
Though the new jobs have potential to invigorate an otherwise moribund economy, they have not come cheaply. Gov. Gina M. Raimondo and her commerce chief, Stefan Pryor, have not been shy in showering tax incentives on their new corporate residents.
Tax breaks are not the only tool being used to drive growth, however. With the highest number of colleges and universities per capita of any state, figuring out how to translate Rhode Island's brainpower into economic success is another key piece of the puzzle. Wexford Science & Technology, a developer of industrial-academic mixed-use properties, has announced plans to build a 190,000-square-foot "innovation complex" on the former I-195 land in Providence. The project has secured two tenants, Brown University's executive education program and the Cambridge Innovation Center. CIC, with roots in Kendall Square, leases co-working space to early-stage companies. A magnet for venture-capital dollars, CIC counts HubSpot and Google's Android team among its alumni, and has been a bastion of the relationship between knowledge-sharing and entrepreneurship.
The innovation complex closely resembles a piece of Raimondo's 2014 campaign platform dubbed the "innovation institute," a venue where industry and academia could collaborate on cutting-edge research.
National Science Foundation data from 2011 shows that Rhode Island has been nothing short of terrible at commercializing innovation; any efforts to increase the monetization of smart ideas are well-worth it to the state.
Industry accounts for about 80 percent of R&D efforts across New England, but just 50 percent in Rhode Island. Sticking high-growth companies side-by-side with university researchers can help strengthen the pipeline between university labs and the market. Though word has yet to emerge on the presence of academic labs in the innovation complex, the stage has been set. Last winter, Brown University gestured toward establishing a translational science facility in the same area of town.
Rhode Island's economic problems are large. Ask its policymakers, ask its people. But for the first time in a long time, major companies – two Fortune 100s and an international blue chip – have committed to move hundreds of high-skill and high-wage jobs to the Ocean State.
Just as importantly, the development of the innovation complex provides an important boost to Rhode Island's entrepreneurial climate, while better allowing the state to link its academic merits with the engines of capitalism. Perhaps the time has arrived for Rhode Island to shed its reputation as the badlands and begin forging an identity as a southern New England stronghold of innovation and intellectual capital.
If the last few months are any indication, big change is in store for the smallest state. n
Matthew Doyle is a financial analyst at General Dynamics Electric Boat and a graduate of the University of Rhode Island. He can be reached on Twitter at @MatthewJDoyle.