Business Climate
Rhode Island’s close proximity to two major industrial cities serves as a great asset to the business climate in the Ocean State, with Providence as the epicenter for business transactions in Southern New England. Rhode Island is located in the heart of the Northeast, only 50 miles from Boston and 180 miles from New York City.
Rhode Island is included in Boston metropolitan area demographics, which is designated as the 10th largest population center in the US. The Providence metropolitan area alone, which includes six counties in Massachusetts and all of Rhode Island, is ranked 37th out of the 366 defined metropolitan statistical areas in the country.1 With the recent expansion of MBTA train travel, including stops in Providence, Warwick and Southern Rhode Island, and Amtrak’s Acela Express servicing Providence, residents can easily commute to and from both the Greater Boston Area, New York City and down the Eastern seaboard. TF Green Airport, readily accessible off of I -95 and centrally located in Warwick, Rhode Island, offers continually expanding air service, providing convenient connections for business and leisure travelers.
As the first American colony to declare its independence in the 1700s, Rhode Island continued to distinguish itself in United States’ history, including being the birthplace of the American Industrial Revolution. While industrialization, urbanization, and multiculturalism were prominent characteristics throughout the country in the twentieth century, Rhode Island came to exhibit these traits more markedly than any other state. Many industrial giants left their footprints in the littlest state in union including textile industrialists Henry Steere and Samuel Slater; and innovators like George Corliss, who developed the steam engine; Frederick Grinnell who patented the automatic sprinkler (becoming a world renowned leader in fire prevention); and Joseph Davol who significantly refined rubber goods.
The original Jewelry Capital of the World, Providence Metro Area manufacturers revolutionized the industry during the Great Depression by transitioning from precious jewelry to more economically feasible costume jewelry. Today, Rhode Island’s tradition is strong as the jewelry manufacturing industry, lead by newcomer and ever expanding designer Alex and Ani LLC, the industry employs over 7,500 in the state, with many thousands more employed in jewelry-related areas.2 While the jewelry industry is the gem of manufacturing history within the state, there is also a great tradition of textile mills. In fact, Rhode Island is home to Slater Mill, the first water powered cotton textile mill in North America. During the 1900’s, Providence was ranked at the top in the nation when it came to the production woolen and worsted goods.
The list of top private sector employers in the state is dominated by financial services, defense, education, retail trade, and the healthcare and biotech industries. Rhode Island headquarters two Fortune 500 companies, CVS Caremark (#18) and Textron (#236), along with five other Fortune 1000 companies, United Natural Foods (#520), Hasbro (#546), FM Global (#572), Nortek (#886), and Amica Mutual Insurance (#969).3 Small businesses (defined as companies with less than 500 employees), totaling 76,626 as of March 2012,4 accounted for 97.7% of the state’s private sector employers. As business ownership has become more widespread within the state, the number of minority-owned businesses in particular has grown 49.7% from 2002 to 2007.5
Rhode Island has a high concentration of jobs in the healthcare and biotech industries, with more expansion opportunities on the horizon. From 2001 to 2010, the state's bioscience industry increased the total amount of those employed by 44%, well above the nation's increase of 6.4%. In particular, the drugs and pharmaceuticals sub sector saw an increase in employment by 155% during the same period of time.6 The state boasts respected pharmacy and nursing programs at the University of Rhode Island; as well as accredited nursing programs at Rhode Island College, Salve Regina University, Community College of RI and St. Joseph’s School of Nursing in Providence. The center of medical innovation in Rhode Island resides at Brown University's state-of-the-art Warren Alpert Medical School.
Within Rhode Island, manufacturing is still a vital industry, employing 40,300 as of 20107 and making up 7.6% of the state’s Total Gross State Product in 2009.8 Rhode Island’s creative industries, anchored by the state’s once world powerhouse and still world renowned jewelry industry, remain an important manufacturing sector. Today, Rhode Island’s top manufacturing sectors include advanced manufacturing, chemical manufacturing, primary metal manufacturing, computer and electronic product manufacturing, and fabricated metal manufacturing.9
Science and Technology have become a significant piece of the U.S. economy and Rhode Island has embraced the industry whole heartedly, particularly with the launch of the Rhode Island Science & Technology Advisory Council in 2005. In 2010, the state was ranked 16th in the nation in the State New Economy Index, which measures states by their economic structure. The report specifically focused on knowledge jobs, globalization, economic dynamism, transformation to a digital economy, and capacity for technology innovation.10 The STEM fields (Science, Technology, Engineering, and Mathematics) have a strong support center in Rhode Island, grounded by University of Rhode Island and Brown University, home to the oldest Ivy League engineering program (the third oldest civilian program in the entire country). Brown also houses nationally ranked science, mathematics, and computer science programs. Support for these industries in the state can be found at the Slater Technology Fund, a state-backed venture capital fund which also organizes an entrepreneurial fellows program.
Providence in particular has become a key city for entrepreneursand start-ups, with an abundance of resources to offer. Recently, Rhode Island was ranked 10th in the nation when access to capital for new business development was compared with other states.11 The Providence Metropolitan Area provides plenty of mentoring opportunities and support systems for up and coming entrepreneurs, with nationally recognized start-up programs such as Betaspring, The Center for Women & Enterprise, and The Larry Friedman International Center for Entrepreneurship at Johnson & Wales University, and the nationally rated entrepreneurship program at Bryant University, all expanding their offerings for start-ups.
Rhode Island’s higher education presence is keenly integrated into the business climate, due in part to the insurgence of collaborative research initiatives and the close proximity between businesses and educational institutions. Bachelors, Masters and Doctoral graduates, representing expertise in diverse disciplines, are abundant for businesses looking to expand their employee talent pool. In Providence alone there are a number of institutions with a major presence: Brown University, Johnson & Wales University, Providence College, Rhode Island College, Roger Williams University, University of Rhode Island and Rhode Island School of Design. While, Bryant University, the US Naval War College, New England Institute of Technology, Roger Williams University, Salve Regina University, and University of Rhode Island also have robust and expanding campuses throughout the state.
With 400 miles of coastline, Rhode Island’s geography is a natural fit for its long-established marine industry. The marine trades include over 2,300 businesses, accounts for $1.6 billion in sales, and provide 6,600 jobs in the state.12 In addition, Rhode Island lays claim to the world renowned oceanographic research center at the University of Rhode Island and a strong U.S. Navy presence in Newport, RI, home to the U.S. Naval War College.
Providing one of the best deep-water ocean ports on the East Coast, Narragansett Bay offers a natural safe harbor for ships crossing the Atlantic Ocean. As a result, diverse international products were often available to Rhode Island’s early settlers, coining the State’s moniker as “The Southern Gateway of New England”. Today, Rhode Island's list of imported and exported products continually expands via the Ports of Providence and Davisville -- the main points of entry for international shipping. Three designated Foreign Trade Zones include the two ports and the Airport Business Park, adjacent to Rhode Island’s expanding TF Green Airport.
New England hosts a total of 62 Foreign Consular Offices, with France, Guatemala, Italy, Latvia, Portugal and Senegal setting up diplomatic offices in Rhode Island. Currently, the state's 10 largest export partner countries are Canada, Germany, Mexico, Turkey, Egypt, Singapore, China, France, Italy and the United Kingdom.13 The US Export Assistance Center, based in Providence, and Bryant University’s John H. Chafee Center for International Business are great resources for individuals and firms looking to expand their reach and delve into the international marketplace.
Rhode Island has a vibrant arts community boasting 2,788 arts-related businesses that employ 12,675 as of January 2011.14 Creative industries are thriving in Rhode Island; there was a reported 13% increase in creative industry jobs and a 52% increase in businesses between 2007 and 2011, despite the recession.15 First commissioned in 1994, the instillation of WaterFire (an award-winning sculpture formed on the three rivers that converge in Providence) has captured the imagination of over ten million visitors, bringing life to downtown restaurants, hotels, art galleries, and shops during the summer months. The bedrock of the arts community in the state is the highly esteemed Rhode Island School of Design, which hosts the world-acclaimed RISD Museum of Art.
The impact of tourism in Rhode Island is extensive; the total direct and indirect economic impact of travel and tourism in 2010 was $2.37 billion, representing 5% of RI’s gross state product. Tourism directly supported 33,000 jobs in 2010, 8.3% of private employment, making it the 4th largest industry in the state.16 It all makes sense as Rhode Island has plenty to offer tourists -- from the beautiful coastline beaches and parks, to professional sporting venues and many historic attractions, such as the grand Newport Mansions and quaint original colonial villages (Rhode Island boasts the largest collection of Colonial homes in America) -- Rhode Island is the perfect getaway for vacationers who want all the variety of a New England experience without hours of travel and hassle. Attractions, accommodations, first-class restaurants and shopping are all packed into the smallest state.
1U.S. Census Bureau
2 RIEDC – Jewelry and Related Companies in Rhode Island July 2012
3CNN Money - 2012 Fortune 500+
4RIDLT Private Covered Employers Size By Industry (March 2012, Small business defined as company with less than 500 employees) 5USSBA Office of Advocacy – Rhode Island Small Business Profile (February 2011)
6Battelle/Bio State Bioscience Industry Development 2012
7U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics 2010
8U.S. Bureau of Economic Analysis 2009
9U.S. Bureau of Economic Analysis 2009
10The 2010 State New Economic Index
11America's Top States for Business 2012 - A CNBC Special Report
12The Marine Trades in Rhode Island: A Skills Gap Analysis By: Planning Decisions, Inc.
13US Census Bureau Top 25 Countries Based on 2011 Dollar Value
14The Creative Industries in Rhode Island 2011 - Americans for the Arts
15Creative Industries Trend in Rhode Island 2012 Report - Rhode Island Citizens for the Arts
162010 HIS Global Insight Inc.
