While some people fear an economic slowdown, others say it might be good for the local economy.
Kip Bergstrom, executive director of the Rhode Island Economic Policy Council, said there are benefits to an economic slowdown.
Rhode Island's Market Has Changed. Developers, Builders, Investors and Sellers Must Change With It.
By Emilio DiSpirito IV License Partner | Engel & Völkers Oceanside Leader | The DiSpirito…
Learn More
“It helps take pressure off the job crunch,” he said. Layoffs or closures, he said, “free up talent to help further the growth of other firms.
“I don’t see this as being a negative to us. I don’t think it means much of anything. If so, it’s a positive. Our biggest problem is producing enough skilled workers to feed the information economy. Companies worry that if they relocate, they might not be able to replace someone.”
Bergstrom said the Northeast might be a little more sensitive to these economic dips.
“We have a much higher concentration of high tech businesses, so those short-term blips affect us more than other areas of the country,” he said. “The Northeast is much more sensitive to ups and downs in the stock market.”
Tim Kearns is Director of Marketing for MontegoNet, a full-service interactive kiosk manufacturer and content provider in Portsmouth. MontegoNet is ranked as the area’s fastest growing high technology company in the recently released Providence Business News 2001 “Book of Lists,” with 300 percent growth in revenue over the last three years. Kearns said the company is not fazed by the downshift in the economy.
“It’s something that we have discussed, but I wouldn’t say that we’re extremely concerned,” he said. “We’re not tied to any particular market. I think we’re pretty well insulated. As a privately held company, we’re not tied to the whims of the stock market. We’re pretty confident right now.”
MontegoNet provides kiosks for settings such as hotels, shopping malls, convention centers and corporate lobbies. Kearns said the company has enough confidence to introduce new kiosk models and applications this year.
“We’re moving from a hardware company to a hardware and software provider,” he said. “We’re adding more to the software and development side of our business right now.”
According to Barry Bluestone, a professor of political economy at Northeastern University and the author of Growing Prosperity: The Battle for Growth With Equity in the 21st Century, the death and consolidation of high tech companies is nothing more than history repeating itself.
“If you go back and look at the turn of the 20th century and you see the development of the automobile, you have a mammoth proliferation of automobile firms, almost all of which have disappeared,” he said.
Consolidation does not indicate this industry is in trouble, Bluestone said, but is a part of the growth process.
“Growth rates will be slower,” he said. “Microsoft, Compaq and Dell are reporting
slower sales growth, relative to where they were last year. I am not particularly
worried about a high tech disaster — slow down, yes. Disaster, no.”
According to Bluestone, at least some of this slowing can be attributed to good Y2K preparation.
“The end of the 1990s, a lot of people advanced their purchase of technology and
equipment,” he said. “A year from now, people will say, ‘Hmm, time to upgrade
again.’ Some people see this as the beginning of a real drought — I’m not as
worried about that.”
