JOBS PLAN. Gina Raimondo for Governor:

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1 Gina Raimondo for Governor: JOBS PLAN A Comprehensive Blueprint for Ending Our Jobs Crisis and Putting Rhode Island Back to Work Now and Through the Future Paid for by Friends of Gina Raimondo

2 A Note from Gina Dear friend, I first decided to run for office when I saw an article about cuts to our state s public buses and libraries. I took the RIPTA bus to high school. My grandpa learned English in the public libraries after coming here from Italy at the age of 14. These critical services allowed me and my family to succeed, just like the countless other Rhode Islanders who, because of good public schools, reliable public transportation, and libraries that were open late at night, had the opportunity to build a better life. When I saw that other Rhode Islanders might not have access to the same opportunities that allowed my family to get ahead, I knew I had to take action. Since then, we have come together as a state to help put Rhode Island on more sound financial footing by enacting pension reform that saves the state $4 billion and allows us to make investments in our future. Now we have to bring this same sense of urgency to rebuilding our economy and getting people back to work. That s why I decided to run for governor. We are in the midst of a crisis and it threatens to undermine the future and well-being of our state. We have the highest unemployment in the country (and that number doesn t even account for people who have simply given up looking for a job, or those who are working in part-time work). We have students failing to graduate from high school and those who do graduate often aren t equipped with the skills they need to find a job and succeed in the 21st century. We have roads and bridges that are crumbling, and cities and towns teetering on the edge of bankruptcy. The impact of this crisis on our communities is stark. We can see it in our cities, where giant office buildings sit vacant. We see it in our taxes, growing ever higher. We see it in communities like Central Falls, where retirees have seen their pensions slashed as a result of bankruptcy. And we see it in our children, who grow up here and are forced to leave their homes and families behind, because there are simply no opportunities for them here in Rhode Island. 1

3 We cannot afford to continue doing what we ve been doing. The stakes are simply too high. We cannot afford more of the same. And there is no single solution. Silver-bullet plans and back-room deals are not going to get us out of this crisis. Instead, we need a comprehensive, detailed approach that moves our state forward on multiple fronts, while focusing on areas where we are already poised to succeed. It s a big job, to be sure; and many skeptics may think that it s too big a job for any one governor to tackle. But many of those skeptics said the same thing about pension reform. But in my time as Treasurer, we brought our state together and addressed the issue head on. We did it by being honest: we diagnosed the problem, looked at our options, brought people together to formulate a plan, and took action. That s exactly what this jobs plan does, too. It takes into consideration global trends like the re-shoring of advanced manufacturing in the United States, and lays out a strategy for getting our fair share of those new jobs. It embraces Rhode Island s competitive advantages, like our budding food industry, and outlines ways we can capitalize on its growth to make Rhode Island a destination for food tech and culinary innovation. And it focuses on industries that have big ripple effects on our economy the types that create and sustain thousands of jobs throughout other industries so that we can get the most bang for our buck when it comes to investments in economic development. The plan calls for a comprehensive approach to five strategic areas: advanced manufacturing, workforce development, infrastructure, tourism, and small businesses/startups. These industries together represent the vast majority of the Rhode Island economy, and they offer the greatest opportunity to put Rhode Islanders back to work. All in all, this plan calls for the targeted creation of new jobs in the next decade, each of which help to sustain thousands of other jobs throughout the economy. This plan is ambitious. It has to be: the enormity of this jobs crisis demands a bold, aggressive approach. But as you read through this plan, I think you ll find that we have much to be hopeful about. Between our hardworking people, incredible natural and cultural resources, and rich history of innovation and entrepreneurship, Rhode Island has all of the ingredients it needs to develop a robust and thriving economy. This is my jobs blueprint for Rhode Island; it is my strategic vision for growing this economy and ending our jobs crisis. I know we can do it, and I look forward to working with you to make it happen. Gina 2

4 Table of Contents Executive Summary... 4 Manufacturing (Made in Rhode Island) A Workforce On the Cutting Edge Infrastructure (Rebuilding Rhode Island) Tourism in Rhode Island Supporting Rhode Island s Startups and Small Businesses Endnotes

5 Executive Summary In order to revitalize our economy and put Rhode Islanders back to work, we will need to change the way we approach economic development. For too long, we ve focused on attracting individual businesses by giving them special breaks if they relocate to Rhode Island, and betting on expensive, risky ventures with the hope that they ll be successful. Instead, we should be helping existing businesses in Rhode Island grow, and creating an environment that encourages new businesses to put down roots. But we must move quickly and with a sense of urgency. We need to focus on areas that will both put people back to work in the short term, and set Rhode Island up for economic prosperity for decades to come. That s exactly what this plan does. It is focused on particular areas and industries that will create thousands of new jobs quickly and position Rhode Island to grow and create even more jobs long into the future. The plan offers a strategy for five particular areas and industries: 1. Advanced manufacturing: for the first time in years, manufacturing is returning to the United States. By making Rhode Island a destination for innovation in advanced manufacturing, we can ensure that we get our fair share of those jobs coming back from Asia. And at the same time, we can help our existing manufacturers grow and create jobs by providing them with the tools they need to expand. 2. Workforce development: our existing educational and workforce development efforts are failing to close the skills gap in a meaningful way. By working more closely with businesses, our public colleges and career and technical education schools can create curricula that will equip students with the skills they need to get a job, and quickly. 3. Infrastructure: rebuilding our roads, bridges, and schools creates jobs in two ways: it puts people in the building and construction trades to work immediately, and makes our state a more attractive place to do business and put down roots. This plan helps make our infrastructure investments more sustainable and less expensive for our cities and towns, while ensuring that our roads and bridges are among the best in the country. 4. Tourism: Every Rhode Islander knows how beautiful and unique our state is, but we could do a much better job sharing that beauty with the rest of the country. Our tourism industry has big ripple effects throughout the rest of the economy, and can play an even bigger part in our state s economic development. 5. Small businesses and startups: our state s regulations are too burdensome for our small businesses, which make up the bulk of our economy. This plan calls for streamlining our regulations and creating new tools that will help our small businesses thrive. 4

6 Advanced Manufacturing Jobs in the manufacturing sector have a big impact on the economy: they pay higher wages than jobs in other industries and provide good benefits. They also have a powerful ripple effect across the economy: every new manufacturing job creates another 1.6 local service jobs, and each dollar in manufacturing sales adds another $1.34 to the local economy. Manufacturing jobs are coming back to the United States for the first time in years. Since 2010, our country s economy has added more than half a million new jobs in manufacturing, gaining an average of more than 12,000 new jobs per month. Rhode Island has a long legacy in manufacturing, but our leaders have failed to prepare our state for the future. I have a vision of a Rhode Island that leads again in advanced manufacturing. We will make that vision a reality for the people of Rhode Island by implementing a three-part plan. 1. First, we will foster innovation and make Rhode Island a destination for applied research by establishing the Rhode Island Innovation Institute or RI II: a place where our world-class local colleges and universities can pair up with businesses and the private sector to generate amazing new ideas for innovative products and ways to manufacture them. When we double down on innovation, and create a central place for our colleges to come together with our private sector, we will not only help create new businesses based on new ideas and products, but we ll attract manufacturers from around the world who want to be close to a hub of research and development. RI II will be composed of one, or maybe more than one campus, each focused on a particular industry. It will focus on industries in which Rhode Island is poised to excel, like food sciences, marine industries, and health sciences. RI II will create jobs in three phases. First, it ll put people back to work constructing the campuses themselves. Then it ll employ Rhode Islanders who operate the campuses, from administrative support staff to young college graduates with new ideas. Finally, thousands of Rhode Islanders will be employed in the manufacturing jobs that are created by the new products and processes conceived at RI II, and the manufacturers who relocate here to be close to a research hub. 2. Second, we will prepare our workforce with 21st-century skills to close the skills gap. Advanced manufacturing jobs require advanced training, and our state is not doing enough to prepare our students and workforce in the skills they need for the 21st century. Moreover, there are employers in our state with open positions now who cannot find qualified candidates to fill them. To close this skills gap and put people to work immediately and in the future, we must change the way we approach workforce development. As governor, I will bring together our public schools, our colleges and universities, and our state s employers to reimagine the way we train our workforce. 5

7 I ll also work to increase our students exposure to STEM fields at a young age, especially among elementary-school aged girls, and turn STEM to STEAM by partnering with our arts industry to expose more students to training in illustration and design, which will become increasingly important skills in the 21st century. We ll make the Community College of Rhode Island an engine of workforce development by connecting it with businesses and manufacturers to tailor curricula and training programs for exactly the types of skills that they ll need to put Rhode Islanders to work and create a pipeline of well-trained employees. Whether you re 18 years old and right out of high school, or 50 years old and recently unemployed, you ll be able to turn to CCRI for training in a new, high-quality career. We ll ensure that all of our students have access to higher education by improving our state scholarship fund. And we ll create a loan-forgiveness program for students who work or start a business in Rhode Island, so that we stop losing talent to other states. 3. Finally, we must do more to support Rhode Island s manufacturers. We can do this by giving our businesses a Manufacturers Toolkit to help their businesses grow, and by helping our manufacturers increase exports to new markets with research, branding efforts, and promotions. There is no reason why our children and our grandchildren should have to leave Rhode Island to find opportunity. And there is no reason why our communities can t take advantage of manufacturing s return to America. By investing in innovation, improving our approach to workforce development, and supporting our manufacturers, we will position our state for success and bring quality jobs back to Rhode Island. When Rhode Island becomes a destination for research in applied sciences and technologies, begins generating new ideas and innovations, and has the most talented and equipped workforce in the country, manufacturing will thrive. Workforce Development Our public education system is an excellent vehicle for preparing our workforce. We can and must structure it in a way that prepares Rhode Islanders for jobs of the future. Both our high schools and our public colleges should work more closely with employers to develop curricula, foster internship and apprentice opportunities, and create pathways for employment. As governor, I will: Pair CCRI up with our local businesses to develop curricula and training programs in skills that our employers need. Expand internship and apprenticeship opportunities for CCRI students. Our students should spend part of their time on campus and part of their time in an internship or apprenticeship program, where they can simultaneously apply their skills, get real work experience, and put themselves on a path to a full-time career. 6

8 Create opportunities for our high school students who choose not to attend college. We must ensure that our career and technical education schools are working with employers to develop curricula, training programs, and internship and apprenticeship opportunities and giving students opportunities to find lasting careers in high-growth industries. Improve Science, Technology, Engineering, Arts, and Mathematics education in both our K 12 and higher education schools. Infrastructure Unemployment among the building trades in Rhode Island is astonishingly high more than 25 percent by some estimates. 1 Yet we have a tremendous opportunity to put people back to work in this industry while at the same time making our roads safer, saving our families and municipalities money, and making our state a more attractive place to do business. Despite the fact that state spending on infrastructure is so high, our roads and bridges are among the worst in the country and our buildings and energy infrastructure are dirty, inefficient, and outdated. Rhode Islanders deserve better. Having a world-class infrastructure will require serious investment and strategic thinking about how we use our resources. We need to be smarter about how we maintain our infrastructure, and more creative when we look for ways to finance upgrades. In short, we need to develop a plan to deal with our infrastructure, and we must execute that plan. And we need to ensure that our investments in infrastructure are saving us money in the long term. Our state s infrastructure is a patchwork of state- and municipal-owned assets. Therefore, we must improve our infrastructure efforts at both the state and city/town levels. Much of the burden of maintaining roads and bridges falls on our municipalities, whose property taxes are already far too high and budgets far too tight. That s why, as governor, I will create the Rhode Island Municipal Infrastructure Bank, to help our cities and towns get the funding they need to finance critical infrastructure upgrades, save more money over time, maintain their roads and bridges, and retrofit their communities to make them more energy efficient. The Rhode Island Municipal Infrastructure Bank will be a one-stop shop for municipalities that want to upgrade their infrastructure. It will: 1. Expand and manage the Municipal Road and Bridge Revolving Fund, so that our cities and towns have access to low-interest loans for immediate upgrades to their surface infrastructure; 2. Establish a Road and Bridge Funding Formula to fund ongoing maintenance so that our local roads never again become as deteriorated and dilapidated as they are now; 3. Create a Green Bank to help towns, businesses, and homeowners retrofit their buildings and facilities with green, energy-efficient technologies; 7

9 4. Create a School Building Authority to stimulate construction and capital improvements in schools while saving our school districts and local education authorities money; and 5. House expertise on best practices, data collection, and new technologies so that municipalities are implementing the best possible infrastructure solutions. The state itself must also be creative and strategic when it comes to its infrastructure assets. As governor, I will ensure that the state is: Utilizing a road and bridge funding formula for state highways and bridges for ongoing maintenance to keep them in peak condition; Seeking opportunities for private capital to pay for desperately needed infrastructure projects without putting our state in debt; and Retrofitting state-owned buildings and facilities with energy-efficient, green technologies. Every $10 million of spending on infrastructure projects supports approximately 150 jobs in the construction and building trades. 2 The Municipal Road and Bridge Revolving Fund, which I created last year with the General Assembly, is lending nearly $20 million this year alone. When combined with increases in spending on school construction, as well as the retrofitting of public buildings and facilities with energy-efficient upgrades, this plan will generate upwards of 4,000 new jobs over the next five years. Infrastructure projects also have a powerful multiplier effect. Every 100 jobs created in the building and construction trades support an additional 83 jobs in other industries. 3 Most of this plan is paid for using the reallocation of already existing sources of funding. For example, the Green Bank will be capitalized using money currently allocated to the Rhode Island Commerce Corp s Renewable Energy Fund. The Road and Bridge Funding Formula would likely require $10 20 million per year in aid to cities and towns to fund. Additionally, the Municipal Road and Bridge Revolving Fund will need about $40 million over the course of the next 20 years, which will enable us to invest more than $400 million in roads and bridges in that same period. This strategy will also allow us to attract private capital to our infrastructure projects, particularly for energy efficiency upgrades. 8

10 Tourism Tourism is already one of our state s most prosperous industries, supporting thousands of jobs and bringing in millions in spending and tax revenue. And our individual tourism districts are doing an outstanding job attracting visitors to their individual communities. But our tourism industry has even more untapped potential. We need a coordinated, statewide plan with strategic, collaborative, targeted marketing efforts to highlight our strengths. An effective campaign can bring more visitors to our borders; fill our hotels, retail stores, and restaurants; and have powerful ripple effects throughout our entire economy, helping to create thousands of quality jobs and grow our state. Other states and cities around the country offer instructive lessons that we can follow. With our unbelievable cultural assets, prime location on the East Coast, and gorgeous natural resources, there is absolutely no reason why we cannot take advantage of our state s attractiveness to grow our economy and create new jobs. Any plan to invest in Rhode Island s economic development must have a strategy for growing tourism. As governor, I will take a four-pronged strategic approach to grow our tourism industry and create more than 5,000 new jobs in the next five years. My plan will: 1. Invest in highly targeted marketing and advertising with a cohesive statewide strategy to attract more visitors to Rhode Island. Other cities and states have found that small, smart investments in tourism marketing result in millions in visitor spending, support thousands of new jobs, and bring in much-needed tax revenue. We should do the same here in Rhode Island. 2. Make Rhode Island a world-class culinary destination by highlighting our amazing restaurants, breweries, vineyards, and thriving food industry. We already have a rich culinary landscape, but we must create branding efforts to highlight this asset to bring more visitors to our borders. 3. Foster workforce development efforts that focus on tourism and hospitality industries. We have a world-class hospitality college right here in Rhode Island. We should forge a tighter relationship between Johnson and Wales and our tourism industry to prepare a tourism workforce ready for growth. 4. Improve our state s tourism infrastructure. With an ideal location on I-95, we have the perfect opportunity to capture travelers traveling on the East Coast if we invest in smart tourism infrastructure, like welcome centers, highway signage, and links to other regional destinations. 9

11 Small Businesses and Startups Small businesses are the backbone of our state. They represent over 95 percent of all employers in Rhode Island and employ more than half of our state s private sector workforce. They run the gamut of industries, from manufacturing and construction to retail and restaurants. And all of these small businesses had a beginning: at one point, they were all fresh startups, carving out a name for themselves, putting people to work and adding new jobs to our state s economy. If we want to encourage our small businesses to foster a culture of entrepreneurship, we need a government that is supportive instead of antagonistic. We need a government that helps instead of hinders. We need to end the perception among small business owners and entrepreneurs that government is the adversary, and instead let them know that the state is in their corner. As governor, I will: 1. Focus on reducing the regulatory burden faced by our state s small businesses, by taking the following steps: a. Undertake a complete review of the state s regulations in my first year in office; b. Bring small business owners to the table at ORR so that the state knows exactly which regulations are the most burdensome to our small businesses, and targets processes that will do the most good; c. Simplify and unify the state s regulations where there are duplicative efforts or inefficiencies caused by the siloing of government agencies; d. Create a single, online source for all state and municipal permitting; e. Improve transparency by setting deadlines for government decisions; f. Create incentives for cities and towns to modernize their permitting and regulatory processes; and g. In addition to taxes, our state government often nickel and dimes our small businesses, charging them for a variety of routine and necessary procedures. As governor, I will: Take on a full review of non-tax state fees that are being charged to our state businesses, with an eye toward eliminating or consolidating fees that make it tougher for businesses to comply with government regulations. 2. Make it easier to start and run a business, by: a. Increasing entrepreneurial training, education, and mentorship, starting in our high schools, and on through our public colleges and universities, to give our residents the support and training they need to start new businesses. 10

12 b. Creating a concierge service for our businesses and startups. Sometimes all our startups need is a person to help them navigate the tricky waters of government regulations and find other resources in our state to get going. There should be someone in the state government who helps you every step of the way and guides our state s businesses to success. c. Creating a startup and small business toolkit, so that entrepreneurs know exactly what they need to do to get their businesses started, and have access to resources that will allow them to hit the ground running. 3. Use collaboration and innovation to foster a culture of entrepreneurship: a. Highlighting and promoting our incubators and accelerators. Our state can do a better job of exposing potential entrepreneurs to these resources, and market them across the region to attract new startups to the state. b. Using the Rhode Island Innovation Institute to commercialize innovative new products and ideas. Our colleges and universities possess a wealth of great ideas. RI II will help turn these ideas into new businesses by providing end-toend support (helping them find access to capital, hire a workforce, patent their products, etc.). 4. Improve access to capital, by: a. Welcoming immigrants and capital to Rhode Island with an expanded EB-5 program. Immigrants are incredibly entrepreneurial, and federal programs are increasingly creating opportunity for foreign investment in local startups. We must embrace this program to grow small businesses in our state. b. Improving access to seed capital. As part of our small business concierge service and toolbox, the state will maintain relationships with all area sources of capital, including but not limited to venture capital firms, angel investors, and local credit unions and banks and provide educational tools and coaching for entrepreneurs seeking private capital, so that people hoping to start a small business will know where they can turn to get the capital they need. Ensuring that women- and minority-owned businesses have access to loans. We must work with our local banks and financial assistance organizations to help finance and guarantee loans and microloans targeted to minority- and women-owned businesses. 5. Give our small businesses the tools they need to grow, by: a. Strengthening connections between our businesses and local colleges and universities. URI has a Business Engagement Center that has resulted in fruitful relationships between the university and local businesses. We should have a statewide effort to do the same, so that innovations and ideas at our colleges are being shared with small businesses that can grow and create new jobs. 11

13 Workforce development. In particular, we need to bring our businesses of all sizes to the table with our public colleges and universities to help tailor curricula that will provide businesses with a workforce equipped with the skills they need. b. Improving export initiatives. Many of our small businesses are making amazing products, but lack the resources to market them on a global scale. The state can help with a robust export initiative designed to show the world all that our state has to offer. c. Improving gigabit Internet connectivity in Rhode Island. With so many of our businesses dependent on teleconferencing, online sales, and highbandwidth applications, we must do a better job of ensuring high-quality Internet connectivity. Cities and states around the country are doubling down on gigabit Internet. We must do the same, not only for the sake of our small businesses, but for our families and schools as well. 12

14 Manufacturing (Made in Rhode Island) Restoring Rhode Island s Legacy as a Global Leader in Manufacturing by Investing in Innovation, Embracing Our Competitive Advantages, and Preparing our Workforce to Succeed Introduction It wasn t long ago that Rhode Island was a manufacturing powerhouse. From textiles and jewelry to knives and watches, we were once a state known for making things. It was who we were. Every Rhode Islander has a manufacturing story to tell: my own father worked at the Bulova Watch factory. Countless others worked at the hundreds of mills and factories that still dot our cities and towns, now dormant and abandoned, reminders of a time of prosperity. And with our economy firmly anchored in manufacturing, middle-class families thrived. But with global competition, Rhode Island began to lose its manufacturing advantage and our local facilities started moving to other countries. I lived it; after 28 years of working at the watch factory, my father and all of his co-workers had to find new jobs when the business moved its manufacturing overseas. Yet, as thousands and thousands of good manufacturing jobs left our state, far too many of our leaders sat by and did nothing. We failed to adapt. We failed to position our state to take advantage of new opportunities and new markets, resulting in slower growth and higher unemployment. And when the Great Recession came, it was harder for us to recover than it was for the rest of the country, because we were not adequately prepared for growth. 13

15 I do not accept that it has to be this way. There is no reason why Rhode Island should continue to struggle with the highest unemployment in the entire country. There is no reason why our children and our grandchildren should have to leave our state to find opportunities and put down roots. We have incredible resources, like our world-renowned research universities, and untapped potential in promising new fields such as food sciences, marine technologies, and health sciences not to mention incredibly hardworking, industrious people. In short, we have more assets with which to work than states many times our size. While many of our leaders may have failed us, our fellow Rhode Islanders have not. Across the state, we see their strength, resiliency, and character as they establish their own businesses in creative new fields and start making things in Rhode Island. Yet too many of them find that our Rhode Island is not able to provide them with the resources they need to succeed, forcing them to them to leave for other states. We need to stop exporting our ideas and people and start exporting our goods. There are great opportunities ahead. The global manufacturing landscape is beginning to change: for the first time in decades, manufacturing is coming back to the United States. It s not the textile and jewelry manufacturing of our past: it s newer, high tech, advanced manufacturing. 4 But we can harness our strengths to position ourselves to capture this next big wave of manufacturing ensuring that we don t miss out on economic opportunities the way we have in the past. The keys are innovation and skills. If we can make Rhode Island a cradle of innovation in industries where we already have a competitive edge industries where Rhode Islanders are already doing amazing work and if we can arm our workforce with 21st-century skills, then we can position ourselves to be a leader in the manufacturing boom of the future. Before I was Treasurer, I started a business dedicated to helping entrepreneurs take good ideas and turn them into companies that created over a thousand jobs. I know what new companies need to start making things and hiring people again. And as Treasurer, I have demonstrated time and time again that great things can happen when we have a vision and bring people together to achieve it. That s what we ll have to do to get our economy going. We need an active government with a vision for bringing manufacturing back to Rhode Island and a governor who works every single day to make it happen. This is, after all, the role of the governor: to set the tone at the top and position our state to succeed. Innovation is in Rhode Island s DNA. We were the birthplace of America s Industrial Revolution. From that little bit of innovation came an era of prosperity where manufacturing provided the foundation for a thriving middle class. We can do it again. If we embrace innovation, focus on areas where our state is already poised to excel, and prepare our residents with 21st-century skills, then we can reinvigorate our manufacturing economy. The following pages outline my ideas for doing exactly that. Throughout this campaign, we will continue to have a conversation about Rhode Island s manufacturing roots and its manufacturing future. We ll discuss how we can strengthen our economy again by leaning in to innovation and skill development, so that there are opportunities for our children here in Rhode Island. There s absolutely no reason why we can t lead in manufacturing again and I look forward to making it happen with your help. Gina 14

16 The Next Wave of Manufacturing Rhode Islanders already know the value of manufacturing jobs. They once drove our entire economy. Jobs in manufacturing pay higher wages than jobs in other industries, have better benefits, and spur education in STEM fields (science, technology, engineering, and mathematics). They also have a major multiplier effect, giving a significant jolt to the local economy: a single new manufacturing job creates another 1.6 local service jobs, and each dollar in manufacturing sales adds another $1.34 to the local economy. 5 But in today s global economy, we can no longer rely on the types of manufacturing jobs that once sustained our state. Instead, we need to prepare ourselves for the next wave of advanced manufacturing by making Rhode Island a cradle of innovation, and training our workforce in the skills they need to fill these new jobs. Manufacturing is coming back to the United States in a big way. Employment in manufacturing peaked in 1979, and has been on the decline since then, with losses accelerating through the Great Recession and bottoming out in But since then, the U.S. economy has added more than half a million new jobs in manufacturing, gaining an average of more than 12,000 new jobs per month. 7 Strong gains in productivity in the United States, coupled with increased labor and energy costs across the world, are driving manufacturers back to our shores. Companies like Caterpillar, GE, Ford, Lenovo, and BASF have announced plans to return their manufacturing to the States. 8 We cannot afford to miss out on this trend. For too long, we ve relied on silver-bullet deals, back-room promises, and attempts to make our state appear economically competitive approaches that have sold our state short and failed to produce any meaningful growth. Instead, we need a vision. We need to make longterm strategic decisions that lay the foundation for future growth, and we need a government that hustles day in and day out to make it happen. The Rhode Island Innovation Institutes RI II Innovating our way to growth. In order to position our state to be a leader in the manufacturing of the future, we must plant the seeds of success now. That s why, as governor, I ll help establish the Rhode Island Innovation Institute, or RI II. There are many worthy think tanks focused on economic development and technological innovation. The Rhode Island Innovation Institute is conceived as a proactive do tank dedicated to bringing together the government, our world-class universities and research institutions, and the private sector to promote partnerships in high-growth areas where Rhode Island is well positioned to excel like advanced manufacturing, health sciences, food sciences, renewable energies, and marine technologies. RI II will be devoted to making Rhode Island industries more productive and competitive by helping to pair the vast academic resources at our state s outstanding colleges and universities with our private sector s business savvy and capital. 15

17 The Rhode Island Innovation Institute will provide top-to-bottom support for the commercialization of innovative ideas and products. By partnering our world-class colleges and universities with the private sector and philanthropic ventures, we can make our state a leader in the field of applied sciences: the type of research that focuses on technologies, products, and processes that help businesses grow. Strategy: Expand our state s existing businesses, create new ones, and help attract manufacturing to Rhode Island by fostering innovation and ingenuity. If you re a college or graduate student with a great idea for a new business, and you want to make it a reality, RI II will be there to help you every step of the way, from patenting and licensing to financing and staffing. Or if you re a business that needs a new product or a new way to manufacture your goods, RI II will pair you with the brightest minds in the world to make it happen. Fact: If you combined the sales of all active companies founded by MIT faculty and graduates, they would equal the GDP of Brazil. The Institute itself will be comprised of a series of campuses, each dedicated to a particular industry, field, or expertise. For example, one division of RI II will be dedicated to advanced manufacturing. Another could work on innovative marine technologies. Others yet could be centers for research and development in food sciences, medical device manufacturing, and renewable energy technologies. Each campus will be a research hub dedicated to exploring applied sciences, as opposed to theoretical or academic sciences the type of research that will result in products, businesses, and jobs. These campuses will spur job creation in the short term by putting Rhode Islanders to work constructing buildings and laboratories, and by employing thousands more in support staff to manage and operate them. And when Rhode Island becomes a home for innovative research, we will attract talent, capital, and businesses from all over the world. Companies will want to put down roots where they have access to quality research and talented employees. The Research Triangle Park in North Carolina, composed of research partnerships between businesses and universities like Duke, North Carolina State, and UNC Chapel Hill, has attracted more than 170 businesses and 39,000 employees. Companies like GlaxoSmithKline, BASF, and United Therapeutics have all set up shop in the RTP. 16

18 We can start with our assets. For example, design is an increasingly critical aspect of advanced manufacturing and we have a world-class design school in the heart of our state. The health science industry is a hotbed of innovation and we ve got some of the greatest meds and eds in the country. We already have great resources at our disposal. The Rhode Island Innovation Institute will help us utilize those resources to create jobs. The Institutes will create jobs in three phases: First, they ll put people back to work in the short-term planning and constructing the actual campuses. Second, the campuses will employ support staff, from administrative and custodial staff to research professionals and recent college graduates, who will work at the campuses themselves. Finally, thousands of Rhode Islanders will be employed by the new businesses conceived at RI II, and by the manufacturers who locate in Rhode Island to be close to a source of innovation and research. They ll also help spur improvements in a variety of other areas. RI II can help us: Encourage training in STEM fields (science, technology, engineering, and mathematics) and industrial design Close the skills gap by creating a talented, skilled workforce Create partnerships across industries throughout all of Rhode Island, including but not limited to our public schools, our colleges and universities, our pre-existing businesses, and our cities and towns Focus on the development of applied technologies that will actually generate products and jobs Invite investment from all over the world New York City recently broke ground on an academic campus with a partnership between Cornell University and businesses like Google. They estimate it will generate over $33 billion in economic activity, nearly 50,000 jobs, and 1,000 spinoff companies in the coming decades. The campus alone will help create up to 20,000 construction jobs and up to 8,000 permanent jobs! 17

19 Here s how we ll get it done when I m governor: First, we ll identify parcels of attractive, government-owned land (the unoccupied I-195 parcels would be a great place to start). Then, we ll challenge our state s research institutions and companies from around the world to present their vision for how they ll best use that land. These groups will have to demonstrate: A commitment to research and innovation Partnerships with local universities and businesses An ability to create good, high-paying jobs A commitment to producing skilled workers The state will do everything in its power to get these institutions up and running as quickly as possible: it will convene the parties, fast-track the regulatory process, help to get zoning approvals, make infrastructure improvements anything and everything the RI II campuses will need to get going. In short, they ll have the full weight of the government behind them. The state will serve as a matchmaker between private, educational, and philanthropic institutions that want to work with the Innovation Institute. Once it s up and running, it s not connected to the government. Cost: The state will either give away government-owned land or sell it off at a small price. The vast majority of the financing for the Institute will come from private sector partners and philanthropic ventures interested in innovation and research in particular fields. As governor, I will put us on track to open the Rhode Island Innovation Institute in less than two years. Institutes like these are opening across the country in places like New York, Ohio, and North Carolina. President Obama recently announced an initiative to connect six universities in North Carolina with 18 companies in the area, to create a regional hub designed to bridge the gap between applied research and product development. They will bring together companies, universities, and other academic and training institutions to focus on the manufacturing of next-generation, energy-efficient electronic chips and superconductors. Ohio is creating the American Lightweight Materials Manufacturing Innovation Institute, which is expected to bring more than 10,000 jobs to the state. The President of the University of Michigan, Mary Sue Coleman, has said: Through this initiative, our region will build on its core strengths to become the nation s technology hub for lightweight materials and manufacturing. Companies from around the country will come here not only because of our technological capabilities, but also because we have the workforce they need in their efforts to revitalize and transform domestic manufacturing. 9 18

20 Between our world-class universities, our legacy of manufacturing, our strategic location on the East Coast, and our export-ready ports, there is absolutely no reason why we cannot do the same. Embracing Rhode Island s Advantages and Emerging Opportunities The Rhode Island Innovation Institute will be particularly productive if we can structure it to take advantage of the incredible resources and assets Rhode Island already has. Between our colleges and universities, our access to the ocean, and our entrepreneurial spirit, our state is full of opportunities to start making things in Rhode Island again. As governor, I will work to embrace these opportunities and leverage our state s unique advantages to generate new products and new jobs and make our state a manufacturing powerhouse once again. Food Sciences Rhode Island s food industry is poised to experience major growth. Recent years have seen a boom in the growth of our small farms, food and beverage manufacturers, wineries, distilleries, and breweries. As governor, I will do everything I can to foster this segment of our economy, by: Dedicating a division of the Rhode Island Innovation Institute to researching innovations in food sciences, so that farmers, brewers, food manufacturers, and all food-related businesses have a place to go to develop new ideas and access valuable resources Encouraging local businesses and institutions to serve locally produced foods Supporting the growth of food science incubators and facilities Helping our food-industry businesses finance the upgrades they need to grow and expand Branding and marketing our state s food and beverage production across the region and country 19

21 Marine Industries Rhode Island s maritime trades already generate over $2.2 billion in sales for local businesses, and $118 million in tax revenue for state and local governments. We are, after all, the Ocean State. We can use our ocean access and beautiful bay to put people to work in an environmentally responsible way. As governor, I will: Dedicate a division of RI II to exploring opportunities for innovation and research in the marine trades Ensure that our marine infrastructure including piers, marinas, and ports is world-class and ready for growth o We can finance improvements to our marine infrastructure using private-public partnerships, with a mix of private sector investment, federal funds, and public bonds. Work hand in hand with businesses in the marine trades, like Electric Boat and Hall Spar, to help them expand their capabilities and employ more Rhode Islanders Make Rhode Island the boat building and repair capital of New England, by encouraging and supporting boat manufacturers throughout the state Health Sciences We hear a lot about how Rhode Island s current economy is built on meds and eds : our healthcare providers, colleges, and universities. We already have outstanding research institutions that are churning out new discoveries and technologies in health sciences it s time we take advantage of them to stimulate manufacturing. In particular, we can become a leader in producing medical devices and technology by: Dedicating a division of RI II to coordinate our already thriving culture of research in medical technologies to stimulate tech transfer and bring new products to market Establishing a manufacturing infrastructure specifically for medical devices, to make Rhode Island the go-to state for any company with a medical product it s looking to manufacture on a large scale Helping Existing Manufacturers Grow In addition to stimulating the growth of new manufacturers, we must also do more to help Rhode Island s existing manufacturers to grow and create new jobs. As governor, I will: o Create a Manufacturer s Toolkit for anyone making things in Rhode Island. Rhode Islander s manufacturers shouldn t have to waste time finding resources or navigating a tricky regulatory environment. They should have a state government that helps them focus on their business. That s why we ll create a centralized toolkit for all manufacturers, 20

22 to help them find talented employees, locate the resources they need to build their products, understand state and federal regulations, and develop more efficient practices and procedures. This toolkit will help give Rhode Island manufacturers an edge by providing them with the resources they need to thrive and expand. o Leverage federal funding for investments in advanced manufacturing. Rhode Island recently won a first-round grant for Investing in Manufacturing Community Partnership (IMCP) from the U.S. Department of Commerce, which will help the Rhode Island Commerce Corporation to design an Advanced Manufacturing Center with its local manufacturing partners. 10 This year, the 2014 Challenge Competition will select exemplary Manufacturing Communities throughout the U.S., to be eligible for grants and investments offered by 10 federal departments. As governor, one of my first priorities will be to ensure that Rhode Island earns a place among these select Manufacturing Communities, so that we can leverage further IMCP Challenge grants and investments. o Use RI II to promote capital investment in the adoption of cutting-edge advances in productivity by in-state manufacturers, to increase our competitiveness and boost tech transfer in high-tech fields. o Help small Rhode Island manufacturers to become more flexible. Many smaller companies just need a hand in transitioning from existing capabilities to new ones with greater growth opportunities. They need assistance figuring out how to apply their knowledge and expertise in component manufacturing, for example, to opportunities in renewable energy or health care manufacturing. Many diverse manufacturers require similar advanced manufacturing skills, but companies or facilities may need technical assistance in moving from one product to another. I will work to create a mentoring program pairing manufacturers that have made such transitions with those who seek to do so. In Ohio, for example, there are seven Edison Technology Centers that provide a variety of product and process innovation and commercialization services to both established and early-stage technology-based businesses, such as new product design; computer-aided design and computer-aided manufacturing (CAD/CAM); prototyping; materials selection and handling; plant layout and design; quality systems; information systems; machining; joining technology assistance; and biotechnology business consulting. o Find new markets for Rhode Island products and increase exports. As governor, I will create a strategy to promote Rhode Island exports to new markets in the U.S. and abroad, and to help local businesses take advantage of export opportunities in neighboring states and around the world. Rhode Islanders are making some amazing things; we just need to make sure the rest of the world knows about them. After a period of decline, Rhode Island exports have been a bright spot on our economy in recent years. From 2009 to 2012, Rhode Island exports grew by 60 percent to a total of $2.4 billion in value. 11 We need to invest in this source of growth to build upon this momentum. The greatest export growth has been in exports of chemicals, machinery, computer electronics, and textiles; exports of these products were up percent in The return on state investment in export promotion is dramatic; for every dollar 21

23 invested in trade programs, $40 in new export revenue is generated.12 Export growth directly drives job creation, with an estimated one job created for every $200,000 in exports. International trade will become an increasingly important opportunity for Rhode Island businesses especially manufacturers to grow and prosper. Rhode Island already has special export advantages in the food industry, marine sector, and innovative health care products and services but many companies need technical assistance to enter overseas markets, including Canada and Mexico as well as Europe, Asia, and South America. All businesses will benefit from a strong program for promoting Rhode Island products and industries to markets outside the state. 22

24 A Workforce on the Cutting Edge Introduction With tens of thousands of Rhode Islanders looking for work, and even more working in parttime or temporary positions, our state is in a crisis. The jobs plan I have been laying out over the course of this campaign will put Rhode Island in a position to create thousands of new jobs. But creating jobs is only part of the equation. We must also simultaneously equip our students, and the thousands of Rhode Islanders currently looking for jobs, with the skills they need to find employment. Since I ve kicked off my campaign, I ve met far too many hardworking, frustrated Rhode Islanders who are ready to work, but lack the skills needed of today s workforce. Whether you are an 18-year-old student about to graduate from high school, or a 50-year-old employee who just lost your job, our state should have resources in place to help you find a quality career. Today s jobs require 21st-century skills and a new level of technical competency. Employers are looking for critical thinking abilities; knowledge of science, engineering, and technology; and computer proficiency. If we are going to position our state to succeed, our workforce development efforts need to reflect this reality. No one knows the needs of modern workforce better than our state s employers. That s why as governor, I will bring our employers to the table to reimagine our state s workforce training efforts. There are examples of this kind of collaboration all over the country. In South Carolina, BMW is working with the state s community colleges to train students with the skills they need to work in the automobile industry, while employing them at their plants. In Texas, the aerospace industry has teamed up with local vocational schools to create curriculum that puts students on a track to lasting careers building and maintaining the next generation of airplanes. Just a few weeks ago, I delivered my plan for manufacturing on the floor of Videology Imaging Solutions, a manufacturer in my hometown of Greenville, surrounded by employees building advanced imaging sensors and camera technologies for a whole new generation of devices. These employees were highly trained and technically skilled. We have the opportunity to grow businesses like Videology, and put people back to work, if we work together to change our approach to workforce development. Producing a skilled workforce will also help to attract even more jobs to our state. In a recent survey, 83 percent of American manufacturers reported a moderate or severe shortage of high-skilled workers, with approximately 600,000 high-skilled manufacturing positions going unfilled. In my own roundtable discussions with local manufacturers, I heard the same thing. Businesses want to expand in fact, they are expanding but they cannot find Rhode Islanders equipped with the necessary skills to fill the positions they have open. We can simultaneously put Rhode Islanders back to work now at businesses looking for skilled employees and make our state a destination for companies that need a skilled workforce by preparing our state for in-demand trades. 23

25 Our state must also take a more active role in helping the unemployed find jobs that are available now. The Department of Labor and Training must do more than provide unemployment benefits. It must actively work day in and day out to get people back to work. The role of the governor is to have a vision for the state. The following pages will outline my vision for a workforce strategy that gives workers, both new and old, every opportunity to upgrade their skills for the long term, while stepping up efforts to people get back to work immediately in the jobs of today and tomorrow. Reimagining Our Workforce Development Efforts Our public education system is an excellent vehicle for preparing our workforce. We can and must structure it in a way that prepares Rhode Islanders for jobs of the future. Both our high schools and our public colleges should work more closely with employers to develop curricula, foster internship and apprentice opportunities, and create pathways for employment. 18-year-old high school graduate Vocational Programs Examples: Alamo Academics, P-TECH 50-year-old recently unemployed HIGH SCHOOL Students College Courses CCRI Skilled Employees Curriculum and Training Programs EMPLOYER Skilled Employees The graphic above describes how we can do exactly that. Employers who are looking for skilled Rhode Islanders should work with both CCRI and our high schools to tailor curricula and training programs, and provide internship opportunities. CCRI (and all of our public colleges) can also work in turn with our public schools to give students college credit for 24

26 certain courses, so that students can save money on tuition. Our high school graduates will have exposure to job opportunities at multiple levels. And Rhode Islanders who are currently unemployed will be able to utilize CCRI as a resource for learning new skills and making new connections with employers. Making CCRI an Engine of Workforce Development Whether they re 18 years old and just graduating from high school, or 50 years old and recently unemployed, all Rhode Islanders should be able to turn to the Community College of Rhode Island to learn the skills needed for a new career. That s why we must: Pair CCRI up with our local businesses to develop curriculum and training programs in skills that our employers need. As governor, I will ensure that CCRI is working hand in hand with our employers to tailor existing curriculum and create custom training programs, so that CCRI is producing students who are trained in high-growth, in-demand skills that employers need. Expand internship and apprenticeship opportunities for CCRI students. We need to give CCRI students the opportunity to work while they learn. Learning doesn t just happen in the classroom; it also happens on the job. That s why our CCRI students should spend part of their time on campus, and part of their time in an internship or apprenticeship program, where they can simultaneously apply their skills, get real-world experience, and put themselves on a path to a full-time career. Example: The BMW Scholars Program in South Carolina In South Carolina, automobile manufacturer BMW works with Tri-County Technical College, Spartanburg Community College, and Greenville Technical College to train students in a specialized manufacturing program. BMW provides tuition assistance for students enrolled in the program, while employing them part-time in BMW s manufacturing facilities. The program allows students to further their education while gaining valuable experience in a high-tech manufacturing environment and become potential candidates for full-time positions at BMW. 13 We must also do a better job of matching all of our public colleges with local businesses. URI has invested in a Business Engagement Center with the aim of partnering businesses and industries with the University to put students to work, tailor the school s curriculum, and share research. Our entire state should have a similar coordinated effort to connect businesses with our institutions of higher learning. Using Our High Schools to Prepare Students with 21st-Century Skills Our public high schools are educating students for jobs that may not even exist yet. That s why it s critically important to expose our students to skills that will put them in a position to excel in the future. We must: 25

27 Create opportunities for our high school students who choose not to attend college. Across the country, efforts are under way to utilize vocational schools as a tool to equip students with the skills they need to obtain a quality career right out of high school. We must ensure that our vocational schools are working with employers to develop curricula, training programs, internship and apprenticeship opportunities, and giving students opportunities to find lasting careers in high-growth industries. Businesses across the country see the value in these types of programs, with some going so far as to provide funding for students in vocational programs. We should look for opportunities to do the same right here in Rhode Island. Example: The Alamo Academies in San Antonio, Texas When businesses in the Texas aerospace industry faced an aging workforce and difficulty finding employees with the skills they needed, they took it upon themselves to work with the local high schools and community colleges to create a training program that would put students on course to a good career. Students at the Alamo Academies spend their junior and senior years of high school taking courses that count toward both a high school and a community-college degree, at no charge and then participate in a paid summer internship. The aerospace academy was so successful that the state now has four new Alamo Academies, in the fields of manufacturing, health care, and information technology. 14 Improve Science, Technology, Engineering, Arts, and Mathematics education in both our K 12 and higher education schools. Advanced manufacturing is going to require STEAM capabilities so we must orient our public education in a way that aids discovery in these areas, and provides our students with skills in each area of study. We can also specialize curriculum in these areas to provide students with the launching point for careers right out of high school. Start instruction in 21st-century career skills in high school. High school students don t necessarily need to know what their careers will be, but we are shortchanging our youth if we don t make clear, adequate information available to them about potential career pathways and what is required to follow them. We must strengthen coordination between high schools, community colleges, and large and small employers alike to ensure that high schools and post-secondary schools are providing up-to-date information about the projected job market and the skills that are valuable to employers, so that students understand exactly what kind of education and training it will take to pursue their career aspirations, whatever they may be. And this can save our students money as well. Our colleges can work with our public schools to prepare students in baseline literacy and numeracy skills, and give them college credit in the process. This will reduce the cost of college tuition and make it easier for students to graduate quickly and start working in high-quality jobs. 26

28 Example: The Pathways in Technology Early College High School in New York City In 2011, the New York City Department of Education worked with IBM and the City University of New York to create Pathways in Technology Early College High School (P-TECH). According to P-TECH, it is the first school in the U.S. to directly connect high school, college, and career. The school offers an integrated high school and college curriculum that focuses on science, technology, engineering, and math (STEM), while also providing essential workplace skills such as leadership, communication, and problem solving. P-TECH s graduates will receive both their high school diploma and an Associate in Applied Science degree in computer information systems or electromechanical engineering technology, free of charge. And they are first in line for consideration for IBM entry-level positions. 15 Improve access to computer science courses in our high schools. There is a welldocumented national shortage of individuals with engineering and computer science skills. Unemployment in computer-related occupations has fallen to just 3.4 percent, or less than the traditional rate for full employment. And most available analyses indicate that this shortage is going to get worse. We can help our students find jobs in this field by making computer science courses more accessible at an earlier age. Forge tight relationships between CCRI and our public high schools so students can earn college credits before they go to college. Students should be able to earn credits in introductory courses while in high school, so they can get a jump start on their degree and save money on tuition. We will ensure that our public colleges are working closely with our public schools to train our students in both the skills they ll need for college and the skills they ll need to succeed in the workforce. Making Post-Secondary Education Affordable Every Rhode Islander will have the opportunity to earn the equivalent of at least two years of education or training past high school that leads to a vocational credential, industry certification, or pathway to college. A recent report by WPRI showed that 10 percent of prime working-age Rhode Islanders (25 54) have left the state over the past six years to find jobs elsewhere. 16 At the same time, the number of citizens aged 55 and older jumped 19 percent. Older Rhode Islanders are staying in the state but aren t being replaced by a new generation of younger, working residents. Rhode Islanders 65 and older made up a larger share of the population than any other age group in 2012, whereas six years ago they were only the third largest. Meanwhile, Rhode Island college students have the fourth highest student loan debt in the country, according to a report released in That s why we must: 27

29 o Create a loan forgiveness program for students who start a business or work in Rhode Island. We can do more to entice the educated young people who earn valuable degrees in this state to live and work here after graduation. That s why I ll work to create a loan forgiveness fund, so we can capture the talents of our students and use them to reinvigorate our economy. o Improve our statewide scholarship fund. Every single Rhode Islander must have a chance to develop relevant job skills. No Rhode Islander should be left without the ability to support himself or herself in an increasingly competitive job market, and we need every Rhode Islander s contributions to build our new high-growth, high-wage economy. As governor, I will create a statewide scholarship fund that will guarantee that every high school graduate with demonstrated financial need can pursue at least two years of education or training beyond high school that puts them on a path to a career, or to a four-year college. Improving the Department of Labor and Training The Department of Labor and Training has incredible potential to help put Rhode Islanders back to work. As governor, I will direct the DLT to take a more active role in finding employment opportunities for Rhode Island s unemployed. Target workforce development programs to unemployment beneficiaries. Instead of state government waiting for the unemployed to seek out job training, opportunities for job skills training should be targeted at unemployment insurance beneficiaries through interagency coordination. UI and workforce development agencies should be working together to actively pair unemployed workers with relevant job opportunities and training in order to get Rhode Islanders back to work as efficiently as possible. We will create a Real Jobs Now training program. Unemployed workers seeking job training that will match workers receiving unemployment benefits with companies that will offer on-the-job training programs designed to lead to full-time employment. This system allows the unemployed to get a foot in the door with an employer, and allows employers an opportunity to evaluate potential employees with no obligation. Job seekers would continue receiving unemployment benefits during training and qualify for a small stipend to cover travel and childcare expenses related to job training. We will boost employment of our veterans. We can help get unemployed veterans back to work by helping to match the skills of returning veterans with those required in civilian jobs, such as advanced manufacturing. We must also increase awareness among employers about the valuable and unique skills available in the veteran labor pool, and opportunities to hire veterans. 28

30 We will increase the participation of women in manufacturing. Women are underrepresented in manufacturing and have not shared in the sector s recent jobs gains. Women s share of manufacturing employment in the United States right now is 27 percent, the lowest it has been since We will increase STEAM education and proficiency for girls beginning as early as elementary school, and equip women with the skills and knowledge needed by manufacturing employers through strategic outreach by CCRI. We can take advantage of the Women and Minorities STEM Booster Act to access grants to increase the participation of women and underrepresented minorities in STEAM education. 29

31 Infrastructure (Rebuilding Rhode Island) Putting Rhode Islanders Back to Work and Upgrading the State for Our Families, Businesses, and Our Future Introduction Rhode Islanders are keenly aware of how important our state s infrastructure is to our quality of life. The problem literally shakes us to attention in the morning as we commute to work. Potholes get a lot of attention and rightly so: whether you commute by foot, bike, or car, they re dangerous and expensive. But the reality is, potholes are just a symptom of a much bigger problem. We have failed to implement a strategy for how our state maintains its infrastructure, and as a result, we have some of the worst roads and bridges in the entire country. 70 percent of Rhode Island roads are in poor or mediocre condition. And 411 of our state s 757 bridges are considered structurally deficient or functionally obsolete. Many of these bridges were built by the Works Progress Administration in the 1930s, and haven t seen upgrades since. Roads and bridges in this condition are a hazard to our personal safety and our economic security. They make it harder for our businesses to be competitive, make our state a less attractive place to work and live, and cost us serious money. On average, the condition of our roads is costing each Rhode Island motorist an additional $476 per year. Rhode Island s dilapidated roads and bridges cost motorists $476 per year in vehicle repairs. But infrastructure means more than just roads and bridges. Step into any given school in Rhode Island, and chances are you ll find a bucket somewhere collecting water from a leaky roof. Just last week, a news report described how heavy rains caused the roof to cave in on a Rhode Island school last August. To this day, that roof hasn t been fully fixed. Aside from being in disrepair, many of our other state buildings and facilities have outdated, wasteful, and inefficient sources of power. These buildings are in desperate need of retrofitting with green, energy-efficient technologies. Our infrastructure is the backbone of our state. If we want position our state to thrive, we need to do better. Fortunately, we have an opportunity to improve our state s infrastructure, put Rhode Islanders back to work, and save our cities and towns money, all by being creative and strategic about how we approach this problem. 30

32 Improving our infrastructure is an easy way to put people back to work now. Unemployment in the building and construction trades is far higher than in many other industries. Some estimates put it at more than 25 percent. That means we have trained Rhode Islanders who are ready to get to work and our state desperately needs their help. We also have an opportunity to put people back to work retrofitting our state to be green and energy-efficient protecting our environment for future generations and saving the state money in the process. Between fixing our roads and bridges and retrofitting our state with green technologies, we can put more than 4,000 Rhode Islanders back to work in the next five years. If we want to improve our infrastructure, we need to be smarter and more strategic about the way we approach infrastructure. This means being less ad-hoc, thinking long-term, and being creative about how we pay for it, so our infrastructure is safe and saves us money. Infrastructure upgrades are the shared responsibility of both the state and our municipalities. Improvements cost money and budgets are tight so it s no surprise that our cities and towns have been less than willing to consistently repair and upgrade their streets. But in a state as small as ours, where we cross through many of our neighboring cities and towns on the way to work or school, we must realize that we are in this together. In order to help our communities both improve their roads and bridges and employ Rhode Islanders who need the work, we must ensure that our state is doing everything it can to give our municipalities access to funding and expertise, and help them plan their infrastructure in a way that results in savings over time. This plan does exactly that. It helps our cities and towns invest in infrastructure projects like school building construction and road repairs by giving them access to low-interest loans, helping them tailor their maintenance plans to the individual needs of their streets and bridges, and providing them with the expertise they need. This week, I ll be focusing on how we can help our cities and towns repair their roads and schools, and how our entire state can upgrade to energy-efficient technologies. There are many other aspects of infrastructure that I ll be discussing as this campaign continues. From making our state more bike-friendly to improving RIPTA (a transit system that helped me get to where I am today), there is much more we need to do to ensure that our state is safe, accessible, and inviting. 31

33 Executive Summary Unemployment among the building trades in Rhode Island is astonishingly high: more than 25 percent by some estimates. 19 Yet we have a tremendous opportunity to put people back to work in this industry while at the same time making our roads safer, saving our families and municipalities money, and making our state a more attractive place to do business. Despite the fact that state spending on infrastructure is high, our roads and bridges are among the worst in the country, and our buildings and energy infrastructure are dirty, inefficient, and outdated. Rhode Islanders deserve better. Having a world-class infrastructure will require serious investment and strategic thinking about how we use our resources. We need to be smarter about how we maintain our infrastructure, and more If we strategically invest in our infrastructure, we can create more than 4,000 new jobs in the next five years. creative when we look for ways to finance upgrades. In short, we need to develop a plan to deal with our infrastructure, and we must execute that plan. And we need to ensure that our investments in infrastructure are saving us money in the long term. Our state s infrastructure is a patchwork of state and municipal-owned assets. Therefore, we must improve our infrastructure efforts at both the state and city/town levels. Much of the burden of maintaining roads and bridges falls on our municipalities, whose property taxes are already far too high and budgets far too tight. That s why, as governor, I will create the Rhode Island Municipal Infrastructure Bank, to help our cities and towns get the funding they need to finance critical infrastructure upgrades, save more money over time, maintain their roads and bridges, and retrofit their communities to make them more energy efficient. The Rhode Island Municipal Infrastructure Bank will be a one-stop shop for municipalities that want to upgrade their infrastructure. It will: 1. Expand and manage the Municipal Road and Bridge Revolving Fund, so that our cities and towns have access to low-interest loans for immediate upgrades to their surface infrastructure; 2. Establish a Road and Bridge Funding Formula to fund ongoing maintenance so that our local roads never again become as deteriorated and dilapidated as they are now; 3. Create a Green Bank to help towns, businesses, and homeowners retrofit their buildings and facilities with green, energy-efficient technologies; 4. Create a School Building Authority to stimulate construction and capital improvements in schools while saving our school districts and local education authorities money; and 32

34 5. House expertise on best practices, data collection, and new technologies so that municipalities are implementing the best possible infrastructure solutions. The state itself must also be creative and strategic when it comes to its infrastructure assets. As governor, I will ensure that the state is: Utilizing a road and bridge funding formula for state highways and bridges for ongoing maintenance to keep them in peak condition; Seeking opportunities for private capital to pay for desperately needed infrastructure projects without putting our state in debt; and Retrofitting state-owned buildings and facilities with energy-efficient, green technologies. Jobs Created Every $10 million of spending on infrastructure projects supports approximately 150 jobs in the construction and building trades. 20 The Municipal Road and Bridge Revolving Fund, which I created last year with the General Assembly, is lending nearly $20 million this year alone. When combined with increases in spending on school construction, as well as the retrofitting of public buildings and facilities with energy-efficient upgrades, this plan will generate upwards of 4,000 new jobs over the next five years. Infrastructure projects also have a powerful multiplier effect. Every 100 jobs created in the building and construction trades support an additional 83 jobs in other industries. 21 Investment Most of this plan is paid for using the reallocation of already existing sources of funding. For example, the Green Bank will be capitalized using money currently allocated to the Rhode Island Commerce Corp s Renewable Energy Fund. The Road and Bridge Funding Formula would likely require $10 20 million per year in aid to cities and towns to fund. Additionally, the Municipal Road and Bridge Revolving Fund will need about $40 million over the course of the next 20 years, which will enable us to invest more than $400 million in roads and bridges in that same period. This strategy will also allow us to attract private capital to our infrastructure projects, particularly for energy efficiency upgrades. 33

35 Background Our roads and bridges have been in poor shape for far too long. One of the very first economic scorecards, the 1987 CFED Development Report Card for the States, gave Rhode Island s infrastructure an F and ranked us 49th out of That was almost 30 years ago and our roads are still terrible. According to the American Society of Civil Engineers, 411 of our state s 757 bridges are considered structurally deficient or functionally obsolete. 70 percent of Rhode Island roads are in poor or mediocre condition. And driving on our streets is costing Rhode Island motorists $350 million a year in extra vehicle repairs. That s $476 per motorist. 23 Too little has changed in 30 years. To truly improve our infrastructure, we need to: Find new sources of financing for infrastructure upgrades, and help municipalities do the same: we have too many critical projects to fund and not enough money to do it. Better understand where our current money is going: we spend more per lane-mile than almost any other state and yet, somehow, have little to show for it. Take the politics out of transportation decisions: decisions have been haphazard regarding how much to spend on maintenance, when to rebuild roads, and which projects to prioritize. Our state s infrastructure includes more than just its roads and bridges. It also includes our public buildings and energy infrastructure. Our state is in desperate need of an upgrade on multiple fronts. 70 percent of Rhode Island s schools were built between 25 and 75 years ago. The average age of a school building in Rhode Island is 58 years. In order to bring our schools into good condition (as defined by the Rhode Island Department of Education), our municipalities would have to spend approximately $1.7 billion. The three-year moratorium on school building construction has resulted in districts deferring upwards of $600 million in repair costs. 24 Our public assets aren t the only things in need of an upgrade. Nearly two in five Rhode Island households use fuel oil as their primary heating source, making the state, like much of the U.S. Northeast, vulnerable to fuel oil shortages and price spikes in winter. In early 2000, heating oil prices rose sharply when extreme weather increased demand, while frozen rivers hindered delivery of new supply. And the percentage of our state s electricity derived from renewable sources of energy is less than 2 percent. We must take the politics out of our infrastructure decisions, and find ways to make our roads and bridges safe, our buildings and schools greener and more energy-efficient and generally make our state a better place to live for generations to come. Implementing these upgrades will employ thousands of workers building schools, repairing roads, and retrofitting upgrades. Jobs in construction and building trades pay annual wages that are, on average, 20 percent higher than the average wage for all other 34

36 industries. These jobs stimulate job creation in retail trade, health care and social assistance, manufacturing, food, recreation, and accommodation, and real estate, rental and leasing services. They have a major impact on our state s economy: if we could bring spending on construction up to the level it was at in 2001, we could reduce the unemployment rate from 9.2 percent to 7.3 percent, moving Rhode Island from the highest rate in the country to the 14th highest. 25 Municipal Infrastructure: The Rhode Island Municipal Infrastructure Bank In a state as small as Rhode Island, we all share each other s resources. This is particularly true for roads and bridges: any Rhode Islander s commute is likely to cross more than one city or town border, and travel across a mix of municipal and state streets. That s why it s imperative that we ensure all of our municipalities have the ability to pay for infrastructure improvements and maintenance. And with property taxes rising higher and higher in our cities and towns, we need to do a better job of keeping costs low for improvements to our public buildings, and give municipalities the opportunity to invest in cost-saving improvements like energy-efficient upgrades. That s why I will create the Rhode Island Municipal Infrastructure Bank. This bank will be a one-stop shop for cities and towns looking for the expertise and financing they need to improve their infrastructure. And when towns have the ability to start investing in infrastructure again, we can start putting more Rhode Islanders back to work. Expand and Fully Fund the Municipal Road and Bridge Revolving Fund I am incredibly proud of the work that Treasury has done to launch Rhode Island s Municipal Road and Bridge Revolving Fund in conjunction with the Clean Water Finance Authority. This Fund offers low-interest loans to our cities and towns so that they can get to work fixing their roads and bridges right now. These low-interest loans allow our municipalities to put people to work rebuilding our communities immediately, and result in long-term savings for our cities and towns, due to lower interest costs and fewer accidents. The program has been a resounding success: in the upcoming year, we will be able to help more than 15 different municipalities with a total of nearly $20 million to repair roadways, bridges, and sidewalks. But it can be an even more powerful tool for our cities and towns. As governor, I will put the Revolving Fund on a path to be fully funded, so that it can do even more good for our municipalities. 35

37 Investment: Fully funding the Municipal Road and Bridge Revolving Fund will cost approximately $40 million over the course of 20 years. This money can come from a variety of sources, including bonds, private capital, or state appropriations. In that same time period, the fund will loan out nearly $400 million to our cities and towns to help them put people to work fixing their roads and bridges. This is a creative, proven model and we have other successful examples from which to work in our state, including the various funds in the Clean Water Finance Agency. Institute a Road and Bridge Funding Formula Our cities and towns do not do enough to consistently maintain their roads and bridges. This often means that instead of spending a little on a frequent basis to keep roads and bridges in peak condition, we instead defer spending on maintenance, often resulting in expensive replacement projects. But Rhode Islanders know this already. They see it every day in their commute. A trip to work or school often means either putting yourself at risk avoiding potholes or damaging your car driving through them. Our municipalities are often unwilling or unable to spend money on road and bridge maintenance for a number of often understandable reasons: overall budgets are still tight (and property taxes too high); it is easy to skip maintenance costs for a year (at the expense of more costly repairs in later years); local Departments of Public Works are not familiar with best practices; and decision-makers are not empowered with good information with which to make spending decisions. A funding formula for roads and bridges would solve this problem by creating a custom solution for individual roads and their particular needs. It would: 1. Recommend how much should be spent on maintenance per year by type of road/bridge, its current condition, and its traffic patterns; 2. Create statutes to ensure that this amount is spent by municipalities every year, and provide funding to help them do so; and, 3. Institute a digital pavement-management system to track progress and continuously improve, helping towns work together to reduce overall costs. If we give our cities and towns the resources and ability to maintain their roads, then we can keep our surface infrastructure in prime condition. Investment: The Road and Bridge Funding Formula would likely require approximately $10 20 million per year in aid to cities and towns to fund. In the long term, our municipalities will save money as a result of fewer capital replacement projects. 36

38 Establish a Rhode Island School Building Authority One of our biggest infrastructure problems is also an education problem: our state s schools are crumbling. Our schools are where our students spend the majority of their time. We need to ensure that they are safe, efficient, and designed to prepare our students with the skills they need in a global economy. With the school construction moratorium lifting this May, we have an opportunity to rethink the way that we fund the building of our schools, and institute a plan that will save our state money and put people back to work. Rhode Island s municipalities anticipate about $1.8 billion in school construction costs over the next 20 years. Under our current system, school construction is paid for entirely by borrowing. This adds 35 percent to the expense of building schools (an additional cost of nearly $125 million per year!). We can reduce this expense by using a dedicated portion of our sales tax to create a revenue stream and reduce our cities and towns reliance on borrowing. In FY2013, Rhode Island s 7 percent sales tax yielded $873 million in revenue. Taking just half of a cent from this tax will yield $60 million annually, which we can use to borrow less and therefore reduce municipal debt. When we reduce borrowing costs for our municipalities and state, we can make it less expensive to rebuild schools and put people back to work. Our state is also unnecessarily dividing the process of school construction funding among a number of agencies. In order to further reduce costs, I will bring together our school building efforts under one roof, called the Rhode Island School Building Authority. This Authority will provide expertise and guidance to cities and towns to help them identify their school construction needs, prepare budgets and timelines, and keep costs low. Massachusetts has created its own School Building Authority, using a dedicated revenue stream of one cent from the state s sales tax. The Authority uses this money, in conjunction with its ability to issue bonds, to provide grants to school districts to reimburse construction costs within 15 days of a school district s request. By working closely with municipalities and serving as a trust for school districts, the Authority has saved municipalities over $2.9 billion in interest costs, and has pumped money into communities during difficult economic times. 37

39 Establish a Green Bank Every day when I get to work at the State House, I look out across the street to the Department of Transportation building, and I m dismayed by what I see. Whether it s the window-unit air conditioners in the summer or the heat escaping in the winter, I know that our state buildings are wasting state money and polluting our environment. Renewable green technologies offer hope. Between the installation of solar panels, the replacement of old, inefficient power technology, and the implementation of energy-savings technology, we can retrofit our state to save money and reduce carbon emissions, and put people to work now. Many municipalities, homeowners, and businesses in Rhode Island want to retrofit their facilities, but despite the promise of long-term savings, most are unwilling to make the up-front expenses and many more don t even know where to start. That s why, as governor, I ll bring all of Rhode Island s existing green-energy and energyefficiency efforts under a single roof, and establish a Green Bank. By consolidating expertise and sources of revenue, we will have a starting point from which to scale up our Green Bank. We have a perfect example of how we can implement just to our west. Connecticut established the first Green Bank in the nation. It s called Clean Energy Finance and Investment Authority, and it s aimed at providing low-cost financing for clean energy and energy-efficiency projects. Investment: The Green Bank will take a little bit of state money to get started, but the key to its expansion will be private capital. There are sources of private capital to do these kinds of energy efficiency and renewable upgrades states like Connecticut and cities like New York are already taking advantage of them. We need to structure ourselves to do the same, or Rhode Island will once again miss out on an opportunity. State Infrastructure Projects: Being Creative and Strategic In addition to giving our municipalities the resources they need to address their infrastructure needs, we must also be more strategic about our state-owned assets. As governor, I ll ensure that we implement the Road and Bridge Funding Formula for our state-owned highways and bridges in addition to our municipal streets, ensuring that we are constantly maintaining our state assets, and saving money by reducing the frequency of large capital outlay replacement projects. And for large infrastructure projects, I will seek out opportunities to supplement government spending with public-private partnerships, so that we can save money on borrowing costs and service bond debts, and put less stress on our state budget for big infrastructure projects we desperately need. 38

40 Public-private partnerships will give us the ability to do big, bold things, and employ thousands of Rhode Islanders in the process. Finally, I ll use the Green Bank as a mechanism for retrofitting all of Rhode Island s public buildings and facilities with energy-efficient upgrades. We can save money on energy costs in the long run if we put in the investments now to make our buildings more energy efficient. Between our public colleges and universities and our government administration buildings, there are countless opportunities to employ people retrofitting our facilities and upgrading Rhode Island with green, energy-efficient technologies. 39

41 Tourism in Rhode Island Growing Rhode Island s Economy by Creating a Strategic Statewide Tourism Plan That Embraces Our Strengths and Competitive Advantages Introduction Talk to any Rhode Islander about their favorite thing to do in Rhode Island, and you ll get as many answers as people you ask. For a state our size, we are absolutely rich with cultural and natural attractions. We ve got cities brimming with things to do, like Newport, where you can spend the morning strolling the Cliff Walk, visit the Tennis Hall of Fame or a few historic mansions in the afternoon, and finish the day off having dinner while watching sailboats glide in and out of the harbor. We ve got affordable day trips to getaways like Block Island, where a family can spend the day exploring the island by bike or lounging on the beach. And who hasn t bragged about our amazing restaurants to out-of-towners, or shown off our capital city to friends and family one summer evening with a trip to a Waterfire? We all know how beautiful and special Rhode Island is. It s time we tell the rest of the world. Tourism is an incredibly powerful economic force. Every person who visits our state spends $481 in our local businesses, generating billions in wages and salaries for Rhode Island employees. There is a direct and immediate connection between the number of visitors we bring to Rhode Island and the number of jobs we produce. And small, smart investments in marketing can generate tremendous economic activity. Cities and states with a fraction of our assets have found that every $1 spent on marketing results in $100 in new visitor spending. And yet despite this incredible ripple effect, our state s tourism efforts are disjointed and underfunded, especially as compared to our neighbors. Our total collective budget for statewide tourism is a mere $400,000. In total, approximately $0.68 per capita on tourism efforts, ranking us 46th in the nation. Connecticut invests $16.36 per capita on tourism. And Massachusetts outspends us eight to one. Cultivating our tourism industry presents a tremendous opportunity to create jobs and grow our economy. If we bring all of our existing tourism efforts to the table, and think strategically about ways to market our state and bring in new visitors, we can create more than 5,000 jobs in the next five years. We are literally in the middle of one of the most well-traveled corridors in the world, and yet we do little to attract people spending time in New York City or Boston. We have a rich culinary legacy, and an explosion of growth in our food industry that we can be using to make our state a destination for travelers, yet we are not working as one state to capitalize on these efforts. We ve got families coming to visit our colleges and universities year in and year out, but we 40

42 are failing to extend their stays to include our museums and cultural attractions. And there s no reason why everyone between here and Alaska shouldn t know about the joy of sipping a Del s lemonade under an umbrella on one of our state s 57 beaches. Tourism can be an incredibly powerful engine of economic growth, and Rhode Island is ideally suited to take advantage of it. The following pages outline my plan to do exactly that. We need to have a strategic vision for our statewide tourism efforts. With better coordination, a common goal, and a plan that highlights our state s assets, we can and will put Rhode Islanders back to work. Background Tourism and tourism-related businesses represent the second biggest industry in the state of Rhode Island. According to our state s tourism division, the industry supports 50,000 jobs and results in yearly sales topping $6.8 billion. 26 In recent years, Rhode Island has attracted tens of millions of visitors to our borders, each one spending money here in our state in our hotels and restaurants, our shops and malls, and at our beaches, ports, and marinas. These kinds of expenditures are known as direct effect spending, as they are the types of goods and services that actually touch the visitor. But the reality is that tourism in Rhode Island has a major ripple effect throughout hundreds of other industries which is why it is such a valuable source of economic activity. For example, visitor spending in Rhode Island also helps to drive spending in those industries which support the businesses that touch the visitor, such as food and beverage suppliers, building and construction businesses, and transportation businesses like airlines and rental car companies. The list of businesses supported by tourism is long, and each stands to grow and create new jobs from an increase of visitors to our state. For example, based on a 2009 study: 27 Every 183 new visitors to our state create a new Rhode Island job. Every Rhode Island visitor generates $481 in expenditures, $96 of which go to businesses that do not touch the visitor. Every visitor to RI adds approximately $235 to Rhode Island s gross state product. The total economic impact of tourism in Rhode Island was $2.31 billion. 68 of every tourism dollar spent in Rhode Island stays within the state s borders, supporting its businesses and local jobs. 42,160 jobs were created by economic activity resulting from tourism. $1.28 billion in wages and salaries for Rhode Island employees was generated in 2009 alone. 41

43 In addition to stimulating economic activity and job growth in Rhode Island, tourism brings in tremendous tax revenue from the state. In other words, investing in tourism here in Rhode Island would not only create jobs and grow our businesses, it would also provide our state and municipalities with desperately needed revenue. For example: If tourism in Rhode Island didn t exist, each household would pay $1,349 in taxes to maintain the current level of state and local tax receipts. Each visitor to our state creates approximately $134 in tax receipts, $78 of which goes to state and local authorities. It takes only 185 visitors to Rhode Island to pay for one public school student for one year. Yet despite all of these advantages, our state s current strategy for investing in tourism is disjointed, underfunded, and often overlooked in plans to revive our state s economy. Efforts to market our state as a whole fall to the Division of Tourism, housed in the Rhode Island Commerce Corp. Despite our state s many cultural and natural attractions, its flourishing food industry, and tourism s tremendous impact on our economy, the Division of Tourism has a budget of only $400,000. Further complicating our tourism efforts is the fact that Rhode Island is divided into seven individual tourism districts, each administered by a council or convention and a visitor s bureau, often cannibalizing resources to attract visitors and unnecessarily duplicating efforts. Worse yet, our state on the whole spends less on investing in tourism and travel than almost any other state in the country. Rhode Island spends approximately $0.68 per capita on tourism efforts, ranking us 46th in the nation. Connecticut invests $16.36 per capita on tourism. And Massachusetts outspends us 8 to Given the unemployment crisis in Rhode Island, and the tremendous impact that tourism spending has on our state and its economy, it is absolutely imperative that efforts to increase economic activity include a strategy for tourism. We must be marketing our state in a way that is affordable, providing our tourism-related businesses with the support they need to thrive, and ensuring that we are using our state s cultural and natural attractions as a way to create jobs. Investing in Highly Targeted Marketing and Advertising Small investments in tourism marketing generate huge returns in visitor spending, which in turn helps our business thrive and grow, and create new jobs. That s why we must invest in a coordinated statewide targeted marketing campaign. But we must be strategic with these efforts in order to ensure that we are getting the highest possible return on the money we spend to advertise our state. 42

44 That s why we should focus on areas where Rhode Island is poised to see the most growth in tourism. In particular, our state should try to: Capture more people traveling to the East Coast on business trips, particularly those who are traveling to nearby destinations such as Boston and New York City. o We need to encourage more of the millions of travelers passing through Rhode Island on their way to other East Coast destinations year round to stop and spend their vacation dollars in undiscovered Rhode Island communities. o In 2012, New York City had 52 million visitors. That same year, Boston had 22 million. That s 70 million people just outside our borders. If we can attract even a single percent of those travelers (700,000 visitors), that number of visitors alone will result in over 3,000 new tourism-related jobs. Encourage families traveling to visit Rhode Island s colleges and universities to spend more time here. o Scores of families come to Rhode Island every year solely to visit the campuses of our many world-class colleges and universities. Through targeted marketing efforts, we can keep those families here for longer, expose them to the attractions that Rhode Island has to offer, and increase spending as a result. Examples Philadelphia s With Love Campaign The Greater Philadelphia Tourism Marketing Corporation invested $4 million in the city s With Love campaign. That relatively small investment resulted in more than $400 million in visitor spending, $24 million in state tax revenue, and $44 million in tax revenue to local governments. Moreover, it was responsible for the addition of 7,000 new jobs. Ultimately, every $1 spent on advertising for the campaign results in $100 of direct visitor spending, coupled with $11 in state and local taxes. The Pure Michigan Campaign The state of Michigan has invested considerably in the Pure Michigan Campaign to market the state over the past several years. The state spent $13 million in 2013 on tourism marketing, resulting in $1.2 billion in economic spending that year alone. That s $92 in visitor spending for every $1 on marketing. In 2008, the advertising was credited with bringing visits to Michigan up by 41 percent, driving millions of additional visitors to the state. Michigan continues to commit to this investment, now topping $25 million annually, despite ongoing financial difficulties. 43

45 These kinds of marketing efforts will 1) create jobs, 2) increase the number of visitors to Rhode Island, and 3) provide the state with much-needed tax revenue. In order to ensure that our marketing efforts are as effective as possible, we must closely track the money we are dedicating to tourism. Every year, our state should rigorously analyze the outcomes of the marketing campaign, to ensure that we are concentrating on the right markets, attracting the most likely visitors, and getting our state the best possible bang for our buck. The state Tourism Division could construct a digital portal to gather data and measure trends in seasonality, hotel occupancy, reasons for travel, and most common point of origin for visitors, so that we can make more informed decisions about how to best spend our marketing dollars. Culinary Tourism Rhode Island has some of the greatest food and restaurants in the country. Our culinary history is rich and vibrant, and continues to be a bright spot in our economy today. We can build upon this strength by introducing our unique and diverse Rhode Island cuisine and food products to a wider audience through culinary tourism, and expanding product sales to wider markets. That s why our tourism marketing efforts should include a Culinary Tourism Initiative to brand our state as a culinary destination. The initiative will be a cooperative effort between the Rhode Island Commerce Corp Division of Tourism and diverse local restaurants and food producers throughout the state. It will work to: Increase efforts to brand Rhode Island food. We can do more to increase global recognition of Rhode Island as a world-class culinary destination, and of Rhode Island produced food products as premium and wholesome food brands in order to strengthen the role of food in the economic development of our state and local communities. Educate and train restaurateurs and food producers about the growing culinary tourism trend, including opportunities for restaurants to partner with other food producers to spin off, package, and market their best-selling dishes, sauces, and ingredients as products for purchase as well as export. Create opportunities for joint marketing to help small and local restaurants access much wider markets from regional to international and draw new customers to their restaurants and to more of Rhode Island s lesser-known towns and neighborhoods. 44

46 Fostering Workforce Development in Tourism Industry If we are going to work together to expand Rhode Island s tourism industry, then we must also ensure that we are providing our tourism-related businesses with professional and well-trained employees who are poised and ready to help the industry grow. Fortunately, Rhode Island is already home to a world-class hospitality and tourism-training program. Johnson & Wales has a renowned hospitality institute, already producing industry leaders and graduates who go on to serve in tourism-related fields around the world. In fact, JWU has already established four hospitality-driven campus cities, where the college works with local hotels, convention centers, and tourism-related businesses to provide students with internship opportunities, job training, and hands-on experience. As governor, I will work with Johnson & Wales, and all of our colleges and universities, to better connect our schools with our tourism industry, by: Working with our seven tourism districts to better identify and internship and career opportunities for our college students, particularly during the summers, as they are both our peak tourism season and the time when students will be looking for internships. Create new campus cities with JWU, potentially including Newport and villages in Narragansett, like Point Judith. Improving Our Tourism Infrastructure Rhode Island is lucky to be in an ideal location between a variety of other major national and international destinations. We have incredible potential to capture the millions of visitors traveling up and down the 95 corridors every single day. But to do this, we must invest wisely in tourism infrastructure, so that we are converting travelers who would otherwise drive right through our cities into visitors who patronize our businesses. To that end, we must: Open drive-on and drive-off welcome centers at the state s borders o A state welcome center at our state s borders could be a source of revenue (through leases and taxes), enhance tourism, and be a point of data collection so we can more accurately track visitors to our state. Invest in advertising space, retail sales, and food/ beverage sales in high-traffic areas and privately lease them to tourism-related industries Expand welcome centers beyond the border to points of local interest, and coordinate with local tourism efforts, convention centers, and hotels Work with nearby tourism centers like Boston to create alternative methods of transportation to Rhode Island destinations 45

47 Supporting Rhode Island s Startups and Small Businesses Transforming Rhode Island into a State That Fosters Entrepreneurship and Provides Its Small Businesses with the Tools They Need to Grow Introduction Small businesses are the backbone of our state. They represent over 95 percent of all employers in Rhode Island, and employ more than half of our state s private sector workforce. They run the gamut of industries, from manufacturing and construction to retail and restaurants. And all of these small businesses had a beginning: at one point, they were all fresh startups, carving out a name for themselves, putting people to work, and adding new jobs to our state s economy. Time and time again we ve seen that real job growth comes not from risky, silver-bullet backroom deals, but instead from people with good ideas and a drive to turn their visions into a reality. Over the course of this campaign, I ve met countless Rhode Islanders with this entrepreneurial spirit, and I m always struck by what they tell me. Despite their good ideas, their impressive ambitions, and their tireless work ethic, they are met with a state and a government that makes it hard for them to see their plans come to fruition. One small business owner told me a story of how four different government inspectors came into his building, and each told him to move a single small sink to four different parts of his shop in order to comply with a particular regulation. At the end of the day, he had spent thousands of dollars to comply with the regulation, and the sink ultimately ended up right back in the spot where it started. Another entrepreneur told me that when she first went to the state to start the process of filling out applications and permits, the entire ordeal was so wrought with complications, she walked away feeling like she had done something wrong. They re not alone. A recent study reported that half of Rhode Island s small businesses spend more than $2,000 a year complying with regulations and a third of small businesses have to hire a consultant just to understand the regulations. If we want to encourage our small businesses to foster a culture of entrepreneurship, we need a government that is supportive instead of antagonistic. We need a government that helps instead of hindering. We need to end the perception among small business owners and entrepreneurs that government is the adversary, and instead let them know that the state is in their corner. 46

48 As a businesswoman here in Rhode Island, I personally helped to create over 1,000 small business jobs in my career prior to entering public service. I ve worked hand in hand with entrepreneurs and small businesses to help them grow and thrive, and I m keenly aware of the issues they face. Small business owners generate a lot of economic activity in Rhode Island. But unlike big businesses, they don t usually have lobbyists advancing their interests in the state house, and they often can t pay accountants or consultants to take advantage of complicated loopholes designed for larger businesses. That s why it s critical that the government look out for the best interests of our small businesses and start-ups. This plan lays out exactly how we can start to change the relationship between the government and our small businesses and start-ups. By fostering a culture of entrepreneurship in our state, and recognizing that regulations are important but must still be navigable and user-friendly, we can help our small businesses thrive. Background According to the United States Small Business Administration (SBA), a small business is any business that is independently owned and operated, is organized for profit, and is not dominant in its field. 29 The size of a small business is dependent on the industry, but generally speaking, most small businesses have fewer than 500 employees. According to the SBA, Rhode Island small businesses under this definition account for 95.9 percent of all employers, and they employ 55.4 percent of the private sector workforce. Small businesses in Rhode Island employed 221,019 workers in Rhode Island in 2010, with most of the employment coming from firms with 20 to 499 employees. And start-ups are powerful job creators. Since 1977, virtually all net job gain in the U.S. has come from start-ups. In 2010, the Kauffman Foundation released a report looking at three decades of jobs data. It found that without startups, there would be no net job growth in the U.S. economy. The Kauffman report highlighted the fact that growth comes from new ventures. 30 We must ensure, therefore, that our state embraces a culture of entrepreneurship, to help create more jobs and grow our economy. Regulatory Reform Government regulations are important and necessary: they protect our residents and consumers, and provide data that helps our state function more smoothly. But today, many of our day-to-day interactions with government are inconvenient and time-consuming. Regulations and the rules around them can be complex and difficult to understand, and decisions can often seem arbitrary or unpredictable. 47

49 In a recent survey, more than half of Rhode Island small business owners estimated that they spent over $2,000 annually dealing with state regulations. Even worse, one-third of them said they needed to hire an outside consultant just to understand how to comply with the regulations. This is part of the reason that Rhode Island is perceived as being one of the country s worst places to do business. Rhode Islanders deserve better. As governor, I will dedicate myself to making agency rules easier to use and simpler to understand and to making it easier to do business in Rhode Island. This means modernizing its work, eliminating outdated or duplicative regulations, eliminating paper, and transforming decision-making into transparent and public processes, while taking politics out of the equation. In particular, I will: Prioritize the work being done by the Office of Regulatory Review, so that we complete a full inventory and review of the state s regulations within my first year in office. Central to this effort will be bringing together small business owners with the Office of Regulatory Review so that we can strategically target those regulations that are the most burdensome in order to do the most good. Simplify and unify the state s regulations where there are duplicative efforts or inefficiency caused by the siloing of government agencies. Create a single, online source for all state and municipal permitting. Improve transparency by setting deadlines for government decisions. Create incentives for cities and towns to modernize their permitting and regulatory processes. Many of the regulations and permits with which our small businesses must comply are handled at the municipal level. In order to stimulate the streamlining and modernization of their regulatory processes, I will work with the state to create incentives that spur improvement. In a day and age where we live so much of our lives on the Internet, there is absolutely no reason why our state should be so dependent on paper, or have so many regulations spread out across so many agencies. In Massachusetts, developers looking to create new businesses can go to a single online portal for access to every permit and document they need. There is no reason we cannot do the same in Rhode Island. 48

50 Example: Delaware In Delaware, Governor Markell undertook a year-long review of 385 regulations in 12 executive branch agencies in the state, with the goal of making it easier to do business, improving the efficiency of state government, and making state rules and regulations simpler to use and understand. As a result of the review, 144 of the state s regulations were amended or reviewed. We need to undertake a similar effort to make Rhode Island s regulations more user-friendly. Making It Easier to Start and Run a Business As someone who personally set up shop right here in Rhode Island, I know that starting a business can be a daunting task. There are hundreds of steps in the process, such as finding a location, hiring a staff, researching and developing products, filing paperwork, accessing loans and capital, understanding our state s regulations the list goes on. Despite these complexities, there are resources out there in our state that our small businesses can take advantage of. There are great organizations and businesses that help with staffing and management, real estate acquisition, product development, and many other aspects of running a business. If we want to encourage our small businesses to grow, and help our residents (or graduates from colleges and universities) to put their businesses here in Rhode Island, then we must make it easier for our entrepreneurs to access those resources. At the same time, our state can do more to provide our existing small businesses with the resources that they need to improve, grow, and thrive. For example, if small manufacturers are hoping to implement lean strategies to reduce waste or improve efficiency, they should be able to turn to someone in the state government who knows where people have implemented lean strategies elsewhere in the state, and can pair them in order to share expertise. Or if a small business is looking to implement new management strategies to increase the productivity, there should be a person in the state government who knows of similar efforts elsewhere in the state, or organizations with management expertise who can help the small business in its efforts. That s why, as governor, I will: Create a concierge service for small businesses. Every small business in the state will have access to a professional, personal concierge, housed in state government, who will help them: Navigate the various regulations with which businesses must comply at the federal, state, and local levels. The concierge will be highly trained and knowledgeable about all of our state s regulations, and will help our small businesses understand each and every step of the process, so that regulations are never a barrier to starting a business. 49

51 Connect small businesses and entrepreneurs with resources all over the state and region, in any area in which our businesses might need additional expertise. From staffing and management to research and development, the concierge will connect small businesses with the resources they need to succeed and thrive. We can house a concierge service in the CommerceRI, or pair with existing business development agencies to create a new organization dedicated to helping small businesses and start-ups. We can also do a better job of training Rhode Islanders with the skills they need to be successful entrepreneurs. Colleges and high schools around the world are establishing entrepreneurship training and education programs that are designed to teach students, both young and old, skills like basic accounting, presentation, and management. Other organizations are doing the same for the unemployed. Mentorship programs can also be a tremendous resource for small businesses. Other entrepreneurs who have opened their own businesses in Rhode Island can provide valuable guidance. That s why as governor, I will increase entrepreneurial training, education, and mentorship programs throughout our state, starting in our high schools, and on through our public colleges and universities. I will work with our public colleges and universities to increase the number of entrepreneurship training programs available to our students, and make more of those same programs available to the unemployed at little to no cost. Example: New York Just last week, Governor Cuomo of New York launched the Immigrant Entrepreneurship Training Series. According to their press release, the program will establish unique on-ramping courses [that] will provide budding and current immigrant entrepreneurs an overview of starting, running and growing a business. Participants will be assessed as to their level of business knowledge at the end of the seminar. Based on their knowledge, experience and standing in the business start-up and growth process, participants are offered follow-up one-on-one business coaching sessions or a more intensive multi-week course. At the end of either track, individuals will have completed a business plan or portfolio and gain access to various federal, state and private small business loan programs. 31 We can establish something similar in Rhode Island that is available to all residents, and to students at our colleges and universities. 50

52 Using Collaboration and Innovation to Foster a Culture of Entrepreneurship Collaboration is a powerful way for new businesses and start-ups to save money and get off the ground quickly. By sharing resources, facilities, and expertise, start-ups can get going even if they lack certain resources, or even a place to work. Rhode Island already has a number of shining examples of collaborative start-up efforts. Incubators like Betaspring and Hope and Main give entrepreneurs access to mentors, work spaces, and even capital to help launch new start-ups. And our state has a wealth of innovation in our colleges and universities, where students and professors are constantly churning out new ideas. For example, just a few weeks ago, the Providence Journal highlighted the work of a Brown University student who invented a new way to harness hydroelectric power. With a resource like the Rhode Island Innovation Institute, we can take ideas exactly like that and transform them into thriving ventures in our state that employ people and manufacture products. As governor, I will: Highlight and promote our incubators and accelerators. Our state can do a better job of exposing potential entrepreneurs to these resources, and market them across the region to attract new start-ups to the state. Use the Rhode Island Innovation Institute to commercialize innovative new products and ideas. Our colleges and universities are a wealth of great ideas. RI II will help turn these ideas into new businesses by providing end-to-end support (helping them find access to capital, hire a workforce, patent their products, etc.). Improving Access to Capital No new venture can get off the ground without access to capital and credit. Entrepreneurs need financing to rent facilities, hire staff, and launch their businesses and working capital to keep them going. Capital and credit are particularly important in the nascent years of a new business. Fortunately, with a solid business plan, entrepreneurs have access to a wide range of opportunities to finance their ideas. Rhode Island has dozens of start-up supporters who can help connect entrepreneurs with sources of capital. We also have an opportunity to increase access to capital from all over the world with new, special immigration programs. 51

53 As governor, I will: Welcome immigrants and capital to Rhode Island with an expanded EB-5 program. Immigrants are incredibly entrepreneurial, and federal programs are increasingly creating opportunity for foreign investment in local businesses. The EB-5 program allows for foreign investment in local ventures. We should take advantage of this opportunity to access foreign capital for investment in Rhode Island businesses and ventures. Improve access to seed capital. As part of our small business concierge service and toolbox, the state will maintain relationships with all area sources of capital, including but not limited to venture capital firms, angel investors, and local credit unions and banks, and provide educational tools and coaching for entrepreneurs seeking private capital so that people hoping to start a small business will know where they can turn to get the capital they need. The New England New York region has a flourishing startup capital environment. Our concierge service can house knowledge of all available sources of capital in our region, and create a network into which our small businesses and entrepreneurs will be able to tap. Ensuring that women- and minority-owned businesses have access to loans: we must work with our local banks and financial assistance organizations to help finance and guarantee loans and microloans targeted to minority and women-owned businesses. Giving Our Small Businesses the Tools they Need to Grow Small businesses are the backbone of our economy. They employ thousands of Rhode Islanders, create products here in our state, and are a tremendous source of pride. In addition to making it easier to do business in our state by streamlining and improving our regulatory framework, we must also give our small businesses the resources that they need to grow. For businesses to expand, they need access to research, a highly trained workforce, and the ability to improve their exposure. We must create an environment in our state that encourages the growth of small businesses. As governor, I will: Strengthen connections between our businesses and local colleges and universities. URI has a Business Engagement Center that has resulted in fruitful relationships between the university and local businesses. We should have a statewide effort to do the same, so that innovations and ideas at our colleges are being shared with small businesses that can grow and create new jobs. Bring our colleges together with our businesses to strengthen our workforce development efforts. In particular, we need to bring our businesses of all sizes to the table with our public colleges and universities to help tailor curricula that will provide them with a workforce equipped with the skills they need. 52

54 Export initiatives. As governor, I will create a strategy to promote Rhode Island exports to new markets in the U.S. and abroad, and to help local businesses take advantage of export opportunities in neighboring states and around the world. Rhode Islanders are making some amazing things; we just need to make sure the rest of the world knows about them. After a period of decline, Rhode Island exports have been a bright spot in our economy in recent years. From 2009 to 2012, Rhode Island exports grew by 60 percent to a total of $2.4 billion in value. 32 We need to invest in this source of growth to build upon this momentum. The greatest export growth has been in chemicals, machinery, computer electronics, and textiles; exports of these products were up percent in The return on state investment in export promotion is dramatic; for every dollar invested in trade programs, $40 in new export revenue is generated. 33 Export growth directly drives job creation, with an estimated one job created for every $200,000 in exports. International trade will become an increasingly important opportunity for Rhode Island businesses and especially manufacturers to grow and prosper. Rhode Island already has special export advantages in the food industry, marine sector, and innovative health care products and services but many companies need technical assistance to enter overseas markets, including Canada and Mexico, as well as Europe, Asia, and South America. All businesses will benefit from a strong program for promoting Rhode Island products and industries to markets outside the state. Improving gigabit Internet connectivity in Rhode Island. With so many of our businesses dependent on teleconferencing, online sales, and high-bandwidth applications, we must do a better job of ensuring high quality Internet connectivity. Cities and states around the country are doubling down on gigabit Internet we must do the same, not only for the sake of our small businesses, but for our families and schools as well. As governor, I will work with telecommunications firms to make investments in gigabit Internet here in Rhode Island, simultaneously improving the connectivity of our state while putting people to work building the underlying infrastructure. 53