PROVIDENCE, R.I. (WPRI) – From the Greenhouse Compact of 1983 to the Fourth Economy study of 2013, Rhode Island has had plenty of reports examining its economic woes over the years. What it hasn’t had is much success using them to speed up economic growth.
So it’s understandable if some Rhode Islanders shrugged off Friday’s announcement that Gov. Gina Raimondo is partnering with an arm of the Brookings Institution, the prominent center-left Washington think tank, on yet another study of the state’s economic condition.
But Mark Muro, director of policy for Brookings’ Metropolitan Policy Program and one of the men leading the Rhode Island study, insists his organization’s proposals will be different – and have a lasting impact.
“The state is very well-studied, but there hasn’t always been either an alignment to really do stuff or deep specificity on the recommendation side,” Muro told WPRI.com in an interview Wednesday. “So we’re going to be trying to connect those.”
“This is an opportunity that you don’t get that often, to take a shot at putting the state on a different trajectory,” he added. “It’s been a rough decade.”
It’s also an opportunity for Raimondo, a Democrat in her first year as governor, to get an economic strategy drafted by brand-name experts who share her preference for innovation-oriented development encouraged by state government.
The governor’s esteem for the Brookings team is long-established; she brought Bruce Katz, the nationally-known head of the Metropolitan Policy Program, to Rhode Island in 2013 for a meeting with local leaders, and she leaned on his research during her campaign last year.
“There have been, over three years or so, significant conversations with various people – not only the governor but other funders here – about the desirability of creating a real strategy that both could resonate at a high level but also try to winnow to really key moves,” Muro said.
The Brookings study exists in a bit of a gray area between the public and private sector.
On the one hand, the project’s cost of $1.3 million is being privately funded without taxpayer dollars, and Muro emphasized its independence from political leaders. On the other hand, Raimondo’s office announced it as a gubernatorial initiative, and Muro acknowledged his team plans to work “very closely” with the governor and her aides.
“They’ll be the first stakeholder among many,” he said.
The $1.3 million is coming from a small group of backers: the Rhode Island Foundation; another local nonprofit that has yet to be publicly identified; The Fascitelli Foundation, a nonprofit endowed by the wealthy real-estate executive Michael D. Fascitelli, a Rhode Island native; Mark Gallogly, a Rhode Island native and hedge fund executive, and his wife, Lise Strickler; Stephen Mugford, an executive with Capitol One Financial Corp. in Boston, and his wife, Kristin; and Thomas R. Wall, another private equity executive, and his wife.
Brookings has tapped Battelle Technology Partnership Practice, a division of the Battelle Memorial Institute, a multibillion-dollar nonprofit Ohio research outfit, to conduct technical analysis for the study. It also plans to use experts from Deloitte and may hire other partners, Muro said.Up to 10 ‘robust, hopefully transformative’ ideas
The Brookings team has given itself a tight timeline.
The final report is supposed to be finished by the end of this year – in time for Raimondo to use its findings to shape her 2016-17 budget proposal, due in January. Muro said to expect “a big, technical report with a huge amount of data in it” as well as a more accessible summary version.
“We will try to do a lean, authoritative view of current trends,” he said. “We will have some new things to say about the nature of [the state’s industry] cluster structure, because we’re doing some new things there. The state will emerge with a really authoritative view of what are the major industry opportunities.”
Over the next few months, Muro said, the Brookings team is planning to hold three public meetings and conduct various interviews while crunching data.
“I’m sure we’ll be getting earfuls about how everything’s already been done, or there are many great ideas but the state can’t seem to execute on anything,” he said.
Muro’s goal is to come up with 10 or fewer “robust, hopefully transformative” recommendations that Rhode Island leaders can act on over the following 18 months. “This is all about use,” he said. “We really are seeking impact. We clearly are thinking that some but not all of this will flow into a second budget. So by the end of the year we hope to have those various deliverables.”
While the Brookings report may suggest investments that would require taxpayer money, it is also likely to look at other sources of funding, such as the endowments of local universities or the resources of wealthy current and former Rhode Islanders, Muro said. He doesn’t expect the state to hire Brookings after the report is done.
“We’re a public policy entity and we’re not consultants – that’s not really what we do,” he said.
Muro was limited when it came to specifics, but said the Brookings team is “fundamentally trying to change the platform of economic development” rather than proposing narrowly targeted interventions to benefit specific business sectors.
Asked for examples of similar work Brookings has done elsewhere, he cited its 2006 report on the state of Maine, which proposed spending on “the state’s outstanding quality of place and most promising industrial clusters.” He also noted its 2011 study urging an overhaul of economic development in Nevada; its 2013 report pushing Colorado to invest more in its space economy; and its 2013 report on Tennessee’s car industry.
Brookings’ central focus in Rhode Island will be on advanced industries that rely on science and technology, and Muro said his team plans to take “a somewhat cold-eyed view” of the actual capabilities and potential of the research departments at Brown, URI and other local colleges.
“Clearly a central question here is, what capabilities really exist?” he said. “You have on paper a very attractive array of science entities, so we’re really trying to get a handle on what is going on, what they are good at, how they can really feed into a meaningful strategy.”
Rhode Island leaders have long talked up the potential for, say, brain science or biomedical research to drive the state’s economy going forward. Muro said the Brookings findings will shed light on whether those are real opportunities or a mirage.
“These are testable propositions,” he said. “I don’t mean that in a snarky way. It’s simply that there are data sets you can get, there are rankings you could get,” to determine the actual strength of the state’s research base.New incentive programs in the mix
Raimondo hasn’t waited for the Brookings findings to push changes in Rhode Island’s economic policies. The new state budget includes a suite of incentive programs, many aimed at spurring real-estate development, that she convinced lawmakers to create.
Most of those programs give significant authority to Stefan Pryor, Raimondo’s commerce secretary, to determine how the incentives will be allocated. Muro said that since rules and regulations for the programs are still being drafted, Brookings should have data and information available for Pryor to use by the time he’s ready to utilize the programs. He argued there was no reason for the governor’s team to wait for the Brookings findings to propose the programs.
“It probably saved us a year,” Muro said. His team’s report will help Pryor “make sure the tools then can be leveraged and utilized and support a broader strategy,” he said.
Asked about the Raimondo administration’s early emphasis on real estate, Muro said it was understandable given the construction industry’s high unemployment rate. “I think there’s going to be lots of room for more activity of different sorts, and focus on innovation assets, focus on human capital,” he said, adding: “Brick-and-mortar strategies are only one piece of modern economic development.”
Pryor, unsurprisingly, is the administration’s point man on the Brookings project. “Given the recent passage of our jobs plan, we are looking forward to working with Brookings to determine how best to target our new tools,” he said last week. “In addition, we aim to develop a high-impact strategy that builds upon Rhode Island’s strengths and advances our economy.”
One issue Brookings will examine: the question of scale. Rhode Island’s small size makes it harder for the state to invest globally competitive amounts of money in major initiatives the way that neighboring Massachusetts and Connecticut can.
“It’s a shrewd observation we’re thinking a lot about,” Muro said.
The Brookings team will look at Rhode Island’s tax and regulatory policies as part of its review, as well. “I don’t think we’re necessarily in the tax-cutting business, but we’re trying to find a platform for economic growth,” Muro said.
Katz added: “It’s impossible not to assess that and talk about it – it’s part of the context.”
The Brookings team hopes to take a new look at a perennial talking point when it comes to Rhode Island’s economy – the potential advantages of its geographic position between Boston and New York. One idea Muro floated is investing money in speeding up the rail connections between Massachusetts and Rhode Island to make commuting across the region easier.
“One way to think about this is to think about Rhode Island as situated in a broader economy that sweeps from, like, Nashua, New Hampshire, to Hartford, and really trying to think to understand how the state can play as a central location within what are actually sizable industries, sizable technology communities,” he said.
“We need to think about what hasn’t been attempted that should be,” he added.195 land, proposed ballpark on the agenda
Another obvious focus for Brookings is the vacant former I-195 land.
The commission charged with developing and marketing the land has already hired HR&A Advisors Inc., a top real-estate firm, to help guide its work. Muro praised HR&A for its “unequal real-estate placemaking knowledge” and said he thinks Brookings’ findings will help HR&A with its own efforts on the 195 land.
“I think that clearly the work there needs to reflect a business thesis and market realities,” Muro said.
The focus on the I-195 land means the Brookings team will be considering the positives and negatives of the proposal for a new Pawtucket Red Sox ballpark on some of the prime riverfront land there.
“We will examine the whole parcel’s future with the idea of the highest and best use for the state,” Muro said. Asked whether Brookings would be willing to say publicly once its analysis is done that it doesn’t think the ballpark is the best use of the land, he replied: “Yup.”
Muro and Katz both emphasized that the thrust of Brookings’ efforts will be to identify Rhode Island’s strengths, and then provide a strategy for how the public and private sectors can work together to capitalize on them.
“To some extent what really matters is that industry, government and universities collaborate to compete,” Katz said.
“I think in most parts of the U.S. it’s still, the government does this, the corporations do that, the universities are somewhere else,” he said. “In the successful places around the world there’s a seamless interaction between all these different sectors, and if they’re all on the same page – then that’s when you get the bigger returns. So it’s not just the policy … it’s this foundation of collaboration.”
Still, Muro was careful not to over-promise what the Brookings proposals could deliver in the short term.
“Realistically, it’ll take a decade to know whether the state is able to bend its trajectory a bit here,” he said.Ted Nesi (firstname.lastname@example.org) covers politics and the economy for WPRI.com. He hosts Executive Suite and writes the Nesi’s Notes blog. Follow him on Twitter: @tednesi