Without new growth drivers, Rhode Island's economy will continue to drift, according to a
"The moment is urgent," said the $1.3 billion, 195-page study titled "Rhode Island Innovates: A Competitive Strategy for the Ocean State." The report, financed privately and undertaken at the request of Gov. Gina Raimondo, said the state's economy has lost growth capacity "and is now a middling performer."
It called for state government, the private sector and philanthropy to spend upwards of $100 million to spur technology innovation, create academic tech collaboration centers, prepare and assemble more "pad-ready" commercial-industrial building sites, and strengthen regional economic links by improving Rhode Island's rail connections to Boston and beyond.
"Ever since the Great Recession exposed deep structural erosion beneath the collapse of an outsized real estate bubble, Rhode Island has struggled to regain its economic footing at a time of technological disruption and 'winner-take-all' markets," said the study, prepared by Battelle Technology Partnership Practice in association with the Metropolitan Policy Program at Brookings.
Monitor Deloitte and TEConomy Partners LLC also provided support.
Raimondo, beginning her second year as governor after four years as the state's general treasurer, has hinged a Rhode Island comeback to a technology renaissance. Last week she named Richard Culatta, a former senior advisor to former U.S. Secretary of Education Arne Duncan, as the state's first chief innovation officer.
"This report is a deep, under-the-hood look at what has driven Rhode Island's economic decline - and how we can climb out of it," Raimondo said in a statement. "A key takeaway from this report is that no one person or one thing can do this alone. This is going to have to be an all-hands-on-deck effort."
Raimondo envisions use of land near downtown Providence abandoned by the relocation of Interstate 195 for a tech campus similar to New York City's plans with Cornell University at Roosevelt Island.
"With a change in direction, we can leverage our assets - strategic location, world-class universities - and build the opportunities Rhode Islanders deserve," she said.
Additionally, the governor has also called for upgrades in public transportation and for fixing infrastructure, citing architectural studies that ranked Rhode Island's roads and bridges the worst in the nation.
Raimondo's "RhodeWorks" proposal would tax large commercial trucks on interstate highways within the state to backstop a $700 million bond for transportation infrastructure. The trucking industry opposes the measure, saying it unfairly targets one industry.
Brookings has recommended such transit improvements as new rail subsidies and the development of an app-based "Rhody Pass" ticket option; a new express commuter rail service to Boston and expanded intercity rail service; and transit hub developments, highlighted by a new Pawtucket-Central Falls station.
"Rhode Island's economic performance continues to trail national trends with slower jobs growth and a relatively high unemployment rate," Fitch Ratings said when the state sold roughly $145 million in general obligation bonds last year. "The state's economic decline was among the worst of the states during the downturn and the pace of recovery has lagged."
Fitch and Standard & Poor's rate Rhode Island GO bonds AA. Moody's Investors Service assigns an Aa2 rating.
"[The report] envisions state government more as a catalyst and leader of co-developed problem solving than as the sole owner of all actions," said Brookings.
"It should be observed that while the report recommends significant state-government outlays, it more notably proposes a new degree of partnership across the public, private, civic, and philanthropic sectors."
