Dear Rhode Island business and community leaders:
This is an exciting week in our state. As the week begins, we’re writing you in order to reflect upon Rhode Island’s economic progress to date and to thank you for your contributions to our collective work.
This Week in Rhode Island
First, Governor Raimondo and we on the Commerce team hope you’ll join us in celebrating the opening of the new Wexford Innovation Center — a new hub for entrepreneurship and business growth — on Wednesday (details are below). This is a lot more than just the debut of a building. It’s the culmination of important work aimed at rebuilding Rhode Island’s economy. And it’s the start of a new era that focuses even more on innovation (and that requires even more continuing work in order to succeed).
Also this week, as the first and only state with an operational offshore wind farm, we will be hosting the Rhode Island Offshore Wind Conference in Newport. This convening comes on the heels of the Raimondo Administration’s announcement last month that GEV, one of the largest wind turbine maintenance companies in the world, is creating its US Headquarters — and with it over 120 jobs — here in Rhode Island. So, for all those reasons (and many more), this week seems like a good time to take stock of how far we’ve come together — as well as to consider the journey that is still ahead of us.
Recapping Rhode Island’s Economic Progress to Date
From 2014 to 2018, our unemployment rate dropped more than any other state’s. Our annual average unemployment rate last year was the lowest it’s been since 1988. Our rate is now 3.6%, right at the national average.
In addition, the U6 unemployment rate —which includes discouraged workers who are excluded from common measures of unemployment — fell below the national average in 2018, another sign of economic strength.
In April 2019, Rhode Island experienced the greatest month-to-month job growth in 20 years.
We have exceeded the national average for wage growth from 2014 to 2018.
More than 30 companies have decided to land or expand in Rhode Island under Governor Raimondo’s commerce programs over the past few years.
Promoting the Success of Small Business
Small businesses — the backbone of Rhode Island’s economy — have been helping to drive our economic recovery. Record numbers of businesses have started each year since 2015, and total business filings hit an all-time high last year (9,219).
Programs contributing to this growth include Rhode Island’s first state-financed small business loan program, started by the Raimondo Administration in partnership with the General Assembly. We have made more than 100 loans, more than half to minority-owned and woman-owned businesses.
Another new program, SupplyRI, is connecting 1,700 smaller suppliers to institutions and corporations within the state so the smaller vendors can attain a sustainable customer base right here in RI (and so larger purchasers have a reliable, local supplier network to draw upon).
A small business hotline was created to provide one stop shop resource for business owners for questions about navigating government, seeking capital, or general business resource questions. The hotline can be reached by dialing (401) 521-HELP.
Tax Stability and Reducing Tax
Significant state tax reductions have been enacted since Governor Raimondo took office. Rhode Islanders are benefiting from cuts in the corporate minimum, energy sales, unemployment insurance, and car taxes. In 2020, Rhode Islanders are projected to save well over $175 million due to lowered taxes (that’s a single year figure). These tax savings are the result of the partnership between the Governor and General Assembly leaders including the Speaker and Senate President.
Innovation and Entrepreneurship
The new Wexford Complex will house a replication or the world-renowned Cambridge Innovation Center, with its track record of fostering new and early-stage ventures, as well as new offices for Johnson & Johnson and Brown University’s School of Professional Studies.
Another important incubator, Innovate Newport, opened a few months ago (like Wexford, with support from the state). We encourage you to check it out when you have the chance.
Thankfully, some of the national rankings have been reflecting our progress. Just two months ago, US News & World Report ranked Rhode Island #20 for its economy, up from 29 last year (May, 2019). Also in May, Wallet Hub ranked Rhode Island the 10th best state for jobs (up from 21).
You may have heard that CNBC lowered Rhode Island in its ranking to 50th last week. That was definitely disappointing. It is worth noting that, in the midst of the overall decline, Rhode Island’s CNBC rank improved in three important categories this year: Technology & Innovation, Access to Capital, and Cost of Living. However, due to year-to-year changes by CNBC in how the categories were weighted, two of the categories in which RI made progress were weighted less significantly than in previous years. As a result, Rhode Island’s successes on these fronts were diminished. It’s also the case that, despite the launch of the Raimondo Administration’s major Rhode Works infrastructure program, CNBC continues to place RI last for infrastructure. Clearly this ranking system is, in some key areas, lagging behind our progress. Another observation that puts our ranking in context: this year’s CNBC listing dropped Massachusetts by 6 spots (while RI fell by 5).
That said, we are evaluating all of the rankings systems’ observations and insights to understand what they tell us about where we’re doing well and where we can do better. We certainly need to increase and improve our efforts in some areas and, working together, we will.
Planning for the Future
We are in the process of launching work on the next phase of our state’s economic development plan. This effort will build upon previous ones. It will draw lessons from a variety of sources including national assessments of Rhode Island’s economy as well as local stakeholders’ observations. It will be guided substantially by the Economic Development Planning Council that the General Assembly has established via legislation. We welcome your input to this important process, which is an opportunity to take our collective work to the next level.
In closing, Rhode Island has made a great deal of progress over the past few years. But we cannot simply rest on our laurels. Working together, we need to take seriously – and take on – the challenges that remain in our economy. With renewed determination, our efforts must involve collaborating across institutional boundaries in order to: strengthen our education and training systems, reduce barriers to business starts and business success, and further invest in our economic future.
The Commerce team and I want to thank our public and private sector partners – including the General Assembly, fellow state agencies, chambers of commerce, and more – for their continuing commitment to Rhode Island’s economic success.
With warmest regards and best wishes for the remainder of the summer,