Rhode Island engineered the most dramatic leap of any state in the 2018 Chief Executive “Best States / Worst States for Business” survey with an approach that is almost always guaranteed to be effective with CEOs: making it much easier to do business.
America’s tiniest state jumped 10 spots, to No. 32 from No. 42, after Gov. Gina Raimondo and the state’s legislature, economic development team and business community worked together to enact significant cuts and other reforms in various taxes and overhauled expensive government pensions.
“There’s been a series of deliberate and proactive steps that we’ve taken to change the perception of Rhode Island,” Stefan Pryor, the state’s secretary of commerce, told Chief Executive.
“When our administration took office three years ago, the responses we would get from CEOs and site selectors and brokers wasn’t positive. Sometimes the professionals would be puzzled as to why we were even inquiring. They had perceptions of Rhode Island based on past experience or outdated understandings.”
But now, Pryor said, “They respond more frequently, and in fact we’re on the receiving end of outreach from companies inquiring regarding making things happen in Rhode Island.”
David Osborne would attest. The CEO of Virgin Pulse, a global software company, recently moved its headquarters to downtown Providence from Framingham, Mass., after buying a smaller, Providence-based concern called Shape Up. Osborne had aggressive growth plans and wanted to leave Virgin Pulse’s suburban office environs for a vital downtown teeming with the kind of millennials he needed to hire by the dozens.
“one key to leveraging a more business-friendly approach was to ensure that it targeted industries where Rhode Island enjoyed advantages over other locales.”
“We looked at Boston, but the CEO of Shape Up said that we should look at Providence, too,” said Osborne, whose company was started by U.K.’s Virgin Group, which now has a minority interest. “So we did. Then we met with Gov. Raimondo and her staff and made a quick decision for Providence.”
Why? Osborne cited the city’s “open, hip culture, great restaurants, and great vibe” as well as four to five “great universities” and other infrastructure elements, including a jobs program launched by Gov. Raimondo. The cost of doing business and the cost of living also are materially lower than in Boston. “We can also borrow from the Boston talent base,” he said.
Wexford Science & Technology is partnering with Brown University to create a “knowledge community” around the school’s $220-million redevelopment of an old power station on the Providence River, plus student housing and a parking garage. The idea of these “innovation districts” is to establish a university-centric, mixed-use development that is built on a foundation of research and entrepreneurism.
“The governor’s engagement and her economic-development programs were a key to making this happen,” James Berens, founder and CEO of Baltimore-based Wexford, Wexford Science and Technology, told Chief Executive. “They were necessary to making this project economic from the beginning.”
Laurie White, president of the Providence Chamber of Commerce, said that one key to leveraging a more business-friendly approach was to ensure that it targeted industries where Rhode Island enjoyed advantages over other locales, mainly those driven by its esteemed higher-educational institutions.
Those areas included manufacturing, design, ocean expertise, tourism and hospitality, cyber-security, data science and advanced analytics. Plus, she said, “We know how to deliver talent into the pipeline. And that’s the first preference that businesses express when it comes to deciding where they want to invest.”
White said that another key to more CEOs noticing Rhode Island is that the state has begun talking itself up more in significant ways outside its borders, including at trade shows, site-selection forums and even a “social-innovation summit” outside Chicago. Rhode Island has taken out a flurry of advertising in prominent print publications as well.
Still, Rhode Island first needed to write a new story worth telling, Pryor noted. “Governor Raimondo had the courage to tell it like it is: The future of our state was on the line, and she laid out the facts, and ensured that the public had an understanding of what it would take to put us on a strong fiscal footing. In partnership with the [legislature] we’ve done so, and thanks to them, we’ve been able to place important new tools in the economic-development tool box.”