Kauffman Foundation and Information Technology and Innovation Foundation Cites RI as Top Five Movers in Economic Transformation
March 7, 2007 | Print this page | Share This | Email this page
The 2007 State New Economy Index recognizes Rhode Island's innovation capacity and creation of knowledge jobs
Rhode Island was recently cited as one of the "Top Five Movers" in economic transformation in the 2007 State New Economy Index, a report published by the Ewing Marion Kauffman Foundation and the Information Technology and Innovation Foundation (ITIF). The Kauffman Foundation / ITIF Index contained state-by-state analysis of how state economies are transitioning away from economic development strategies that focus on big company relocations toward strategies that focus on the creation and retention of high-wage jobs in growth industries.
The Index, which expands on earlier reports issued in 1999 and 2002, uses 26 indicators to rank each state on how their economies are structured and how they operate to compete regionally and globally. The core of this ranking examines the degree to which state economies are knowledge-based, globalized, entrepreneurial, information technology-driven and innovation-based.
In the 2002 Index, Rhode Island was ranked 23rd overall nationally. In the 2007 Index, the Ocean State's national ranking moved up to 15th in the nation.
"The Kauffman Foundation / ITIF Index highlights the progress Rhode Island has made in building a 21st century innovation economy," said Saul Kaplan, executive director of the Rhode Island Economic Development Corporation. "Rhode Island was cited in this report as one of the "Top Five Movers" in a national ranking of states, an improvement that can be directly tied to the state's bi-partisan efforts to improve our business climate, support entrepreneurs, spur new company creation, and increase our overall innovation capacity."
According to the report, Rhode Island:
- Ranked 2nd in the nation for Industry Investment and R&D (industry-performed research and development as a percentage of total worker earnings);
- Ranked 3rd in the nation for the immigration of knowledge worker (average educational attainment of recent migrants from abroad);
- Ranked 5th in the nation for scientists and engineers as a percentage of the workforce;
- Ranked 6th in the nation for the percentage of jobs held by managers, professionals and technicians as a share of the total workforce;
- Ranked 7th in the nation for foreign direct investment (the percentage of each state's workforce employed by foreign companies);
- Ranked 19th in the nation for "Gazelle Jobs" (firms with annual sales revenue that has grown 20 percent or more for four straight years) as a share of total employment.
One important driver of Rhode Island's ranking improvement is the Rhode Island Science and Technology Advisory Council (STAC). STAC was created in 2005 by Governor Donald L. Carcieri and sustained by legislative statute in 2006 with the mission to make innovation central to the state's leadership agenda.
In 2006, STAC released an initial set of recommendations for actions to support and grow an innovation economy in Rhode Island. These recommendations were supported by Governor Carcieri and the Rhode Island General Assembly, resulting in several important programs and policy changes.
STAC successes include the creation of the Rhode Island Research Alliance, a platform for promoting collaboration, maximizing state and federal investment in research, and enhancing the state's R&D-related economic development opportunities; the launch of a new funding program to stimulate collaborative research projects across the state's research institutions; creation of a blue ribbon commission to put forth a plan for strengthening research at the University of Rhode Island; and the creation of a new tax credit for investors in Rhode Island-based innovation companies.
In 2007, STAC released a follow-up set of recommendations. These recommendations were supported by Governor Carcieri and are now under consideration by the Rhode Island General Assembly. (www.stac.ri.gov)
Rhode Island's bid to become to become the first state in the country with a border-to-border broadband wireless network has also brought attention to the state's commitment to building and innovation infrastructure. The Rhode Island Wireless Innovation Networks (RI-WINs), a project of the non-profit Business Innovation Factory, is focused on building a platform for wireless innovation that powers new solutions in areas like healthcare, education, public safety and government services.
Now in the final stages of its piloting phase, RI-WINs is preparing for state-wide rollout. (www.businessinnovationfactory.com/ri-wins)
Rhode Island leadership also recently ushered in a one of the most sweeping pro-growth tax reform packages seen in any state in recent years. The move did not escape the attention of the nation's top financial leaders and in 2006 The Wall Street Journal chronicled Rhode Island's tax package in its editorial pages.
In its analysis, the Journal celebrated the bi-partisan flavor of the tax relief package and heralding the leadership's ability to so swiftly improve the state's tax competitiveness ranking.
"It is exciting to see that Rhode Island's hard work is starting to pay off," says Kaplan. "Although there is still much work to be done, this report confirms what we've known to be true for a long time: Rhode Island has what it takes to grow a globally competitive innovation economy."
The 2007 State New Economy Index can be viewed at: www.kauffman.org/pdf/2007_State_Index.pdf
