Innovation Ecosystem

A history lesson about innovation

The use of Slater Mill as the model for Rhode Island's new innovation initiatives leaves out a critical part of the story

Photo by Richard Asinof

Gov. Gina Raimondo addresses gathering at the release of "Rhode Island Innovates" at the Rhode Island Foundation on Jan. 19. Listening in the audience, from left: Providence Mayor Jorge Elorza, the team from the Brookings Institute, Mark Muro and Bruce Katz, Steve Strauss, a pro bono consultant from Princeton University, and Stefan Pryor, secretary of Commerce RI.

By Richard Asinof
Posted 2/1/16
When Gov. Gina Raimondo reveals her proposed budget this week for FY 2017, it is expected that a number of new spending initiatives tied to the recent Brookings Institute will be included. But the use of Slater Mill as the paradigm to launch a new wave of innovation reveals what is fundamentally missing from the equation: the increasing gap in income equality.
How can health equity, and investments in neighborhoods, communities and housing be measured against investments in companies as an economic strategy? How can those outside the mainstream of the business community participate in discussions about economic development priorities? Is there a way to engage with Gov. Gina Raimondo and her team in substantive discussions about future investments where it doesn’t seem to be that it’s her way or the highway?
Innovation is an iterative process, and the pathways often change quickly, making what Brookings’ Bruce Katz called the “proximity, vibrancy and authenticity” of the collisions and convergences a critical component. And yet, the rush to encapsulate this process within economic development initiatives tied to this year’s budget as part of an urgent political agenda, seem hard to grasp – as if the consequences of asking questions and conducting a more thoughtful, inclusive colloquy would somehow get in the way. Why not take a bit more time and figure out how diversity, health, affordable housing and income inequality fit into these initiatives. As the Governor increasingly has discovered, sometimes the positions she has taken – such as whether to fly the state flags at half-mast in honor of Buddy Cianci – may require a change of heart and mind.

PROVIDENCE – This week, on Feb. 2, when Gov. Gina Raimondo unveils her FY 2017 budget, it is a good bet that new innovation economy initiatives that are an outgrowth of Rhode Island Innovates, the $1.4 million study conducted by The Brookings Institute, will be featured prominently in the spending plan.

The study, which was unveiled with much hoopla at The Rhode Island Foundation on Jan. 19, called for new investments between $70 million and $100 million in seven targeted industry sectors and clusters.

The front-page headline in that morning’s Providence Journal, capturing the intended messaging that “The moment was urgent,” received a shout-out from Neil Steinberg, president and CEO of the Rhode Island Foundation, with a nod toward reporter Kate Bramson, who occupied a reserved seat in the front row, sitting in front of Christina Paxson, president of Brown University.

Raimondo was equally effusive in her praise: “I couldn’t have written a better headline myself,” she said.

“We have what it takes,” she continued, “but we have to get going to make it happen, to seize the opportunity. We have everything it takes to move us into a new, innovation-based economy. Are we going to do it?” she asked rhetorically. “My answer is yes, we don’t have any choice.”

Expect that the “urgency” to take action and seize the opportunity will be a constant refrain in her messaging in her state-of-the state address.

Rewriting history
Both Bruce Katz and Mark Muro, the team leaders from The Brookings Institute, gave overviews of what the study found and the recommended plans of action that Rhode Island should pursue.

The findings – and the action plan – had been detailed by ConvergenceRI, in two separate articles, in advance of the event. [See links to ConvergenceRI stories below.] There was nothing surprising in the presentation.

Surprisingly, what made ConvergenceRI sit up and pay close attention was the presentation given by Stefan Pryor, the secretary of CommerceRI, who spoke at length about the innovation economy and network of entrepreneurs spawned by the Slater Mill and its engineering firms.

In Pryor’s view, the history lesson to be gleaned from the creation of the Slater Mill in 1793 was apparent: “Ladies and gentlemen,” he said, “there was an innovation ecosystem that our state operated within, and we were pioneers in this field because people worked together, traded ideas and generated ideas together.”

The takeaway, Pryor continued, was this: “Rhode Island had done it before, and we can do it again. We can change our trajectory, generate jobs, and create a brighter future.”

What got left out
What got left out of Pryor’s circumscribed history lesson was the fact that the system of child labor in Rhode Island began with the Slater Mill textile factory. Samuel Slater’s first employees were all children between the ages of 7 and 12. By 1830, about 55 percent of the mill workers in Rhode Island were children, according to historians. The children worked long hours in unhealthy conditions for wages of less than $1 per week.

Children were then replaced in part by women workers in the early 1820s with the introduction of the power loom, which allowed manufacturers to weave finished cloth by machine, which required adult laborers.

The Slater Mill was also the site of the first organized strike in America, when in May of 1824, 102 women workers left their looms after the mill owner’s announced a wage cut. It led to the other similar walkouts by women at Pawtucket’s other eight mills.

The immediate cause of the “turn-out,” as the strike was then called, was a decision by Pawtucket’s mill owners to cut female mill workers’ wages by 25 percent and extend the working day by one hour for all workers, according to an article by Joey L. DeFrancesco and David Segal published in 2014 by In These Times.

The Slater Mill had instituted what were deemed “innovative” systems by some [and draconian by others] for controlling its workers, including highly regimented factory time, with work hours counted down to the minute, factory bells and a company store.

Another part of the story not told by Pryor was the fact that Slater Mill was spinning cotton. Where did that cotton come from? And, how did it bolster the value of the ongoing slave trade through which many prosperous merchants in Rhode Island in Providence, in Bristol and in Newport, made their fortunes?

The use of Slater Mill as a paradigm for Rhode Island’s future innovation ecosystem contained no small amount of irony, related to the gaps in income inequality created by the child labor and women mill workers 200 hundred years ago – and the current income inequality that exists today.

Steinberg attempted to address those issues, in part, in his introduction to the report, when he said: “It’s extremely important to note that we [need] an economy that works for all Rhode Islanders, that we need to close the gaps that exist in employment, education and income.”

A more direct reference was provided by another report by The Brookings Institute, released the week before, which showed where economic disparities were rising in U.S. urban areas. As the headline in The Atlantic’s CityLab stated: “The Direct Link between Income Inequality and Affordable Housing.” [See link to story below.]

Not surprisingly, two of the questions directed at Muro and Katz, one from Rep. David Cicilline, the other from Scott Wolf, executive director of Grow Smart Rhode Island, asked about apparent absence of investments in affordable housing in the recommendations.

What was missing from the report
Following the official event, there were a number of conversations going on at the same time. The news media formed a semi-circle scrum around Raimondo, peppering her with questions.

Leaders of Rhode Island’s business community huddled together in other parts of the room, including Jon Duffy, president and CEO of Duffy & Shanley, Peter Andruszkiewicz, the outgoing president and CEO of Blue Cross & Blue Shield of Rhode Island, Laurie White, president and CEO of the Greater Providence Chamber of Commerce, and Katherine Gordon, Ph.D., managing director of the Technology Ventures Office at Brown University.

ConvergenceRI happened upon a heated conversation occurring between Geoffrey Davis, senior partner at Ropes & Gray in Boston and chair of the Slater Technology Fund board of directors in Rhode Island, and Katz, regarding the apparent lack of acknowledgement in the new report of the crucial role the Slater Technology Fund had played – and was playing – in supporting the growth of the innovation economy in Rhode Island.

In Davis’s opinion, too much attention had been given to the Slater Mill and not enough to the Slater Technology Fund.

In an interview the next day with Mitch Horowitz [from Battelle], one of the principals in conducting the study, particularly focused in on the biotechnology sector, ConvergenceRI followed up with what had been witnessed, and why.

Horowitz said Brookings and its team had “full appreciation” of the impact that the Slater Technology Fund had had and knowledge of its current mission. “There was no antagonism,” Horowitz said.

Rather, it was the nature of the report that it wasn’t going to get into specifics in a way that the Slater Technology Fund could make its case, he explained. “It wasn’t within our scope,” he said.

The interview covered a broad swathe of innovation economy initiatives within the bioscience innovation cluster that were happening around the country – from Indianapolis to Maryland, from Cleveland to Portland, Ore.

Horowitz also touched on the important role of affordable housing: “You cannot have innovation zones without affordable housing; we’re too often displacing people rather than engaging people,” he said.

Horowitz also responded to questions by ConvergenceRI about why health – both from the health care delivery system perspective, and health in terms of equity – did not appear to be front and center in the report.

“Health was just not our charge in this project and how we think about the world,” he explained. “We were brought in to think about the economy.”

When asked specifically about the way in which the 11 health equity zones in Rhode Island could provide a different kind of model for investment, not in companies, per se, but in the development of neighborhoods and communities, Horowitz admitted that he had not been aware of health equity zones before.

When asked about the potential to develop a digital health initiative in parallel to what had been recently announced in Massachusetts, which seeks to build an industry cluster and attract new companies and entrepreneurs around the explosive growth in new digital health devices as well as Big Data, Horowitz said that such an initiative would connect to many of the strengths and competencies that Rhode Island possessed, in terms of computational resources and applied math and design.

In terms of how the conversation around investing in innovation would move forward, and who would be directing it, Horowitz deferred to Muro at the Brookings Institute.

The takeaways
The use of Slater Mill – and not necessarily the Slater Technology Fund – as a model upon which to grow Rhode Island’s innovation economy, is a telling distinction.

By romanticizing the Slater Mill’s history, seeing it as a legacy of innovation but not also talking about the exploitation of children and women workers, fails to acknowledge one of Rhode Island’s true bright spots today – its breadth of diversity, and the important roles that many have played in shaping Rhode Island's progress, and not just industrial titans.

The expert quality of analysis of Rhode Island’s economic clusters by Brookings established a framework for understanding the state’s areas of growth and its competencies, based upon evidence and not anecdote.

Where the conversation goes from here is equally important. More than a platform and an action plan by the government, the report makes clear that there is a need for public-private partnerships and engagement with civic partners. But exactly who are those civic partners and how they get to participate in the conversation is still not clear.

From the Brookings perspective, it is about empowering a mega-business organization that can advocate in a unified way.

The growth of health equity zones, something that was apparently “overlooked” by both CommerceRI and Brookings, provides a different type of model of investment – where health, education and housing are connected and not separate from the economic development equation.

Finally, there needs to be more discussion, conversation and convergence about exactly what is meant by developing entrepreneurs and nurturing a culture of innovation through startups. Translated, what is Rhode Island's relationship to the larger innovation ecosystems of Boston, New Haven and New York? The larger question, of course, is who will serve as the neutral convener?

Is the value in creating a new class of entrepreneurs coming out of academic institutions such as Brown, as witnessed by the recent gift by the head of Providence Equity? Or, is it about how best to attract and connect seasoned entrepreneurs to the existing talent within the state’s innovation ecosystem in Rhode Island?

Stay tuned.

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