Thursday, December 10, 2009

Providence - Another Madison or Boulder?

Desperate to do something about some of the worst unemployment in the country, Rhode Island plans to shell out $250k for a new econ dev director. The lucky recipient of this Hail Mary attempt to juice up the state's economy is Ioanna Morfessis, who in this editorial, claims that developing a technology sector requires public investment in the same industries every other state is chasing after.

Morfessis has been working as a consultant for Phoenix, and before that her last major job was with the Economic Alliance of Greater Baltimore in the early 2000s, where she ensured that region continued its stagnation, in spite of educational and transportation advantages that are the envy of most cities.

Reacting to a Boom Right Before a Bust
Perhaps unable to calculate a stock's P/E ratio, Metro Baltimore's economic leaders, supported by a standard cast of follow-the-herd venture capitalists, placed their bets on turning the route 32 corridor into an optical networking hub because it had two overvalued companies in this sector (Ciena and Corvis). When this destined-to-fail strategy collapsed, the region was forced to play up its proximity to the Capital, and develop a Washington-lite strategy of chasing after defense contracts and promoting Fort Meade. And Baltimore, once the 2nd largest city in the country, now has less commercial office space than Tyson's Corner.

Before Baltimore, Morfessis led Montgomery County, MD's econ dev efforts as it continued to lose its share of DC area jobs to Northern Virginia.

More People Staring at Test Tubes

The genius behind some of Maryland's past failures still has to get approved by the Rhode Island state senate. The current RI econ dev website features the same indistinguishable blather about alt energy and workforce development as everyone else's, and comes with the obligatory pictures of test tubes.

Morfessis' strategy of having government invest millions for a few thousand jobs in overhyped technology sectors makes little sense for a state whose largest city has already made large and worthy investments in urban planning. For all the me too nonsense Morfessis would likely have the state invest in, Rhode Island has done little to promote the fact that it has one of the most densely populated mid-size cities in the country.

Michigan Had the Right Idea, Providence Had the Right Implementation

While some states have been misguided in their attempts to recruit educated labor , there is no denying the importance of attracting young workers by promoting your lifestyle benefits. And no city in Michigan, Ohio or any other high unemployment state can begin to come close to matching Providence in this regard.

At 3,700 per square mile, Providence has a higher household density than Seattle, Denver, Portland, or any other "hot" city for young people. At 9,400 per square mile, its population density is higher than Washington's. And not only does it have an Ivy League school, it's got one of the top art schools in the country, and as I've pointed out, creativity is far more important for sustainable economic development than innovation. On top of all this, it's got a commuter rail link to Boston and an NFL team 20 miles away.

Why Don't We Ever Hear About Providence?

Providence could have more lifestyle advantages for a young worker than than any 100,000-250,000 city in the country. And being in the smallest state in the country, its commutable from just about anywhere in Rhode Island. But instead of highlighting clear and obvious advantages of its largest city and capital, the state is desperately bringing in a brand name director with a questionable track record.

Providence should be in the same discussion with Madison and Boulder as a top mid-size city for young professionals. But instead of promoting this city's incredible advantages, the state has caught the alt energy - biotech flu making its way through econ development professionals. And it has the unemployment rate to show for it.

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