PROVIDENCE – Gov. Donald L. Carcieri and legislative leaders said today they will replace the R.I. Economic Development Corporation’s board of directors and launch a national search for a new executive director, following some of the recommendations outlined in a report highly critical of the state’s economic development efforts.
The report, released today by an advisory panel formed by the governor in December, found fault with the lack of a clear economic development strategy, chided state leaders for failing to collaborate, and noted that in the business community, the EDC is not perceived as helpful to small and emerging companies.
Seifert Systems Invests in Energy Efficiency to Strengthen Operations
For manufacturers, energy is more than just another operating expense. It plays a critical role…
Learn More
In a press conference at the Statehouse this morning, Carcieri stressed the need for a better coordinated economic development campaign, saying the state has been “doing it pretty much the same way since the EDC was created” in 1995.
Carcieri said that effort would start with several steps to reorganize the EDC:
• Replace the quasi-public agency’s board with members who can develop strategy, ensure accountability and drive performance. The move is not a reflection on the performance of existing board members, Carcieri said, “It’s about structure … and how we better integrate policy with its execution.”
The changes to the board would require special legislation, something that Senate President Teresa Paiva Weed – who attended today’s press conference – said she supported.
Although the advisory panel suggested that the existing board members resign immediately, the Carcieri administration has asked them to stay on until the legislation is enacted.
As governor, Carcieri is chairman of the EDC board, but the advisory panel suggested that he “need not” continue to do so. At the press conference today, Carcieri said that is still a “point of discussion.”
• Conduct a national search for an EDC executive director who Carcieri said would be “proven, tested and experienced” enough to navigate through the state’s economic crisis.
The governor will seek legislation that would allow the state to offer a three-year contract to the new EDC chief in an effort to slow the high rate of turnover at the top – something that the advisory panel noted was an obstacle to economic development.
In the most recent change, EDC director Saul Kaplan’s tenure ended abruptly in December when he left to lead the nonprofit Business Innovation Factory (BIF). After Kaplan’s departure, J. Michael Saul, the EDC’s deputy director in charge of lending services, was named the agency’s interim director.
• Abolish the R.I. Economic Policy Council, which had started out as a nonprofit corporation supported by the private sector and the state, but was brought under the control of the EDC by Carcieri in March 2008.
The governor said the council had become an example of the state’s uncoordinated economic development strategy – “a lot of energy going in disparate directions,” he said.
• Create an Office of Economic Research and Policy Analysis within the EDC. Carcieri said he is proposing legislation for the office that will “compile, prepare and distribute key economic data and relevant trends.” The EDC has already launched a search for an economist.
Carcieri said an early priority of the new EDC board would be forming a “public/private partnership” that would issue grants from both companies and the state to assist in “business attraction and recruitment activities.”
“This public-private partnership will be responsible for marketing the state as a whole through an aggressive external marketing campaign and face-to-face meetings with prospective companies, leaving the main focus of the EDC on supporting and growing business in Rhode Island,” said a statement issued by the Carcieri administration.
The advisory panel issued its 17-page report and recommendations today after months of meeting with the EDC’s senior management, as well as others in the business community.
The panel included Al Verrecchia, chairman and former president and CEO of Hasbro Inc.; Paul Choquette, chairman of Gilbane Inc.; Ed Cooney, vice president and treasurer of Nortek and chairman of the Greater Providence Chamber of Commerce; Marc Crisafulli, partner at Hinckley, Allen & Snyder LLP; R.I. Sen. Walter S. Felag Jr., D-Bristol; Stephen Lane, co-founder and CEO of Ximedica; George Nee, secretary-treasurer of the Rhode Island AFL-CIO; Sue Stenhouse, director of community relations for the governor; and R.I. Rep. Donna Walsh, D-Charlestown.
The EDC – and the Carcieri administration – has been under a growing amount of pressure as businesses in the state have continued to shed jobs and the state’s unemployment rate reached double digits.
The advisory panel report said it would be unfair to lay all the blame for Rhode Island’s economic troubles on the EDC. But Verrecchia said today the agency’s strategy has not worked.
Members of the business community “are disappointed with the level of performance, and have been for a long time,” Verrecchia said.
For more information on the R.I. Economic Development Corporation, visit www.riedc.com.
