A study released by a Los Angeles-based think tank has found Rhode Island to
be the biggest mover in terms of states best positioned to take advantage of
a high-tech economy.
The Milken Institute, financed by former junk bond trader Michael Milken, used 75 different measurements to issue its second State Technology and Science Index. The first index was released in 2002 and ranked Rhode Island as No. 21. This year’s index, released on March 31, placed the state at No. 11 – the largest gain for any state.
Massachusetts retained the top position while Connecticut dropped two slots to just ahead of Rhode Island.
As in the original study, researchers found a correlation between where a state ranks and its per-capita income, a measure of economic health across a variety of factors. The 75 different measurements fall into five categories, including research and development; risk capital and entrepreneurial infrastructure; human capital investment; technology and science work force; and technology concentration and dynamism.
Some of Rhode Island’s biggest gains over the last two years were in the amount of dollars invested in engineering research and development, the number of companies receiving venture capitalist investment and proceeds from initial public offerings (which were measured as a percentage of the state’s gross product).
The state also did much better in such specific categories as the intensity of computer support specialists and microbiologists per 100,000 workers, which helped overall gains in the index measuring the technology and science work force. Based mostly on 2001 data, the state also made a leap in the risk capital and infrastructure index.
Katherine O’Dea, executive director of the Rhode Island Technology Council, said job growth at Amgen and GTECH may have played a big role in the state’s increased ranking. The biotechnology company, Amgen, added more than 500 jobs to the state last year while GTECH, the online gaming business, is poised to add another couple hundred jobs through this year.
“Because the rankings looked at technology broadly and not just the IT sector or the telecommunications industry, I think that helped us,” O’Dea said. “To jump from the middle of the pack to almost into the top 10 is a good thing anyway you look at it.”
Thorne Sparkman, executive director of the Slater Center for Interactive Technologies, describes himself as a huge Rhode Island proponent, and was pleasantly surprised by the ranking “to see that other people are catching on.”
Sparkman said he’s having more success convincing smaller, established companies to relocate to Rhode Island. The state’s Slater Centers offer seed money and mentoring to new companies. Sparkman said the main difference between his funding and a venture capitalist’s is that he never gives more than $100,000 and a traditional venture fund rarely gives under $1 million. That said, over the past couple years, Sparkman believes while the rest of the technology world was struggling in a slow economy, Rhode Island was able to spend money where it could to make an impact.
“The state is small enough where our funds and the initiatives smaller groups take on really make a difference,” Sparkman said. “That’s a real strength.”
As the study puts it, “The new engine of regional economic prosperity is based upon how successful that location is in attracting and expanding science and technology assets and leveraging them for economic development. Science, technology and knowledge-driven innovation are critical to job and wealth creation.”
The same five states occupied both the top and bottom five spots in the index, although Massachusetts was the top state by far, scoring an 84.35, while the three states behind it scored 78s. Texas, which has been hit hard by a slowdown in the semiconductor business, dropped from No. 14 to No. 23, the largest decline.
Ross DeVol, director of regional economics at Milken and the study’s principal author, said in a release that while many people gave up on the technology industry because of the dot-com meltdown and high-tech slowdown in 2000, the research shows that a region’s tech and science infrastructure are more important than ever. He said more and more states are competing with one another to provide homes for upstart companies.
O’Dea is encouraged by the study, and said early last week that word of Rhode Island’s improved placement was just beginning to circulate among state officials.
“It shows we’re doing something right,” O’Dea said. “It’s something we certainly want to make a strong effort to maintain. And that’s something I think the state needs to have a plan in place to facilitate.”
