Dear Mr. Chafee: Ditch the clichés about RI’s economy

January 3rd, 2011 at 7:00 am by under General Talk

On Tuesday, Lincoln Chafee will be inaugurated as Rhode Island’s 58th governor. What should he do when he takes office? To get some ideas, I asked five of the state’s smartest citizens what advice they would offer the new governor. Last week we heard from Tom Sgouros, Mary-Kim Arnold, Justin Katz and John Marion.

The final essay comes from Allan Tear, a technology consultant who is co-founder and managing partner at Betaspring, a startup incubator in Providence.

As the first independent Governor of Rhode Island, you have a unique opportunity to forge a new path of leadership that not only challenges old assumptions, but discards them all together. I suggest you start with our outdated language about the economy. Language is important because it shapes the conversation about what we as a state will prioritize, strive for, and compromise on.

Until now we’ve echoed the national economic conversation, with terms like “Small Business vs. Big Business,” “Brain Drain vs. Student Retention,” “Traditional vs. Innovation Economy,” and “Employees vs. Contractors.” This language is reflected in our economic metrics, our rankings and how we compare ourselves to other states. But it reflects where we’ve been, not where we need to go.

Here is some independent language about the economy that breaks the current false choices and illuminates a way forward:

• Startups. A recent Kauffman Foundation study shows that firms less than five years old – startups – have generated nearly all of the net job growth in the U.S. over the past 25 years, while established firms averaged near-zero growth in aggregate. It matters less if the startups are what we think of as “old economy,” “Main Street” or “innovation economy” businesses. What matters is that we start talking about new startups and entrepreneurship as the primary engine of job creation in Rhode Island. Remember: our economic stalwarts of today – Hasbro, APC, GTECH and FM Global – were all Rhode Island startups once.

• Export Businesses. Rhode Island must bring dollars from outside our borders to drive our economy. More important than posturing about “being a state of small business” or the “importance of large employers” is a recognition that businesses that make their dollars by selling Rhode Island goods, services, talent and experiences to non-Rhode Islanders are the fuel that primes our state economic pump. These “Export Businesses” – boat builders in Bristol, artists in Pawtucket, defense contractors in Middletown, software developers in Providence and many others – cut across our old buckets of economic language. Whether it’s to Massachusetts or Manila, our goal should be to be an export powerhouse.

• Talent Flow. As a state that feels like we’ve lost much in the past few decades, we are obsessed with holding onto what’s left, and that is doubly true when it comes to conversations about our college graduates leaving, or Brain Drain. But the most vibrant economic hotspots have a flow of talent coming and going; learning, studying, starting companies, creating art, doing research, treating patients – and, yes, often moving on. This flow benefits us immensely as a state, bringing new ideas and global expertise, and imparting an affection for and connection with the Ocean State. When we shift from talking about Brain Drain to Talent Flow, we can begin to engage the energetic and smart folks that already flow through our state, get the most from our time with them, leverage them as Ocean State alumni if they move, and create new reasons for them to stay. The 21st century economic challenge is not to attract companies, but to attract talent.

We’ve proven that Rhode Island cannot win by playing someone else’s game, so it is left to us to forge a new economic path on which our state can thrive. The guideposts to that new path start with language; clear-eyed and supported by data, but unafraid to break from truisms that don’t serve the future well. I look forward to your leadership in starting, framing and driving this crucial conversation, and I think it will be a happy surprise to see the previously underleveraged talent that will respond to a change in language, stepping forward to help us compete on a different field. •

(photo: Betaspring)

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5 Responses to “Dear Mr. Chafee: Ditch the clichés about RI’s economy”

  1. [...] Allan Tear’s advice to Governor-elect [...]

  2. Rhode Island’s fantastic quality of life, augmented by proximity to Boston and New York, is an ideal draw for start-ups and entrepreneurs.

    Requiring no infrastructure and nary a footprint, the state should nurture the growing legion of businesses linked to the world purely via an Internet connection.

    Great post!

  3. Pat Crowley says:

    Great post. Budget modernization should be a key mantra.

  4. Mike Pierce says:

    Excellent and thoughtful article. Nice work Allan and thanks to Ted for doing this series!

    Gov Chafee has a history of bucking the trend. I would echo Allan’s call to action with a recommendation that Gov Chafee have a conversation with exiting Gov Schwarzenegger about how to ‘pump-up’ the morale and government support of the state’s entrepreneurial sector. The Governator is an active user of social media to promote his state’s agenda and make the efforts of the administration very visible. Politics aside, he was quite genuine in his approach (very active Twitter user) and effective in keeping CA’s innovation profile high particularly for green start-ups. Gov Chafee can likewise improve his accessibility and engage the future generations both in the state and nationally through an active social media presence.

    RI is one of a few states blessed in size to make its political and economic leadership so accessible you can literally bump into them on the street. Likewise, those same leaders have visibility on the national stage. Their bullhorns and visits to the pulpit are opportunities to tout the efforts of the innovation economy here in the state. We are sure that programs like Betaspring and RICE would welcome their participation and provide ample support back in identifying growth areas and opportunities for further collaboration.

    We wish the new administration success and look forward to their support!

    1. Ted says:

      Thanks for the kind words and the comment, Mike. We’ll all be watching to see what happens now that the Chafee administration is in place.