Innovation Ecosystem

Is innovation an improvisation, or an economic standard?

This week’s release of the Brookings Institute strategic plan, Rhode Island Innovates, culminates a series of economic initiatives by the Raimondo administration to capture the hearts and minds of Rhode Islanders in the name of innovation. Will anyone push back?

Photo by Dr. Amy Nunn

As Rhode Island embarks on a economic path toward investment in an innovation economy, the nuances around what innovation in the marketplace means from a corporate perspective requires some discussion. For instance, the introduction and marketing of e-cigarettes as an alleged "healthy" alternative to tobacco products could be seen by some as an innovative economic approach, instead of a new threat to the public health efforts to curtail smoking and limit sales to children and teenagers under 18. The billboard along Providence's skyline captures the aggressive marketing campaign.

By Richard Asinof
Posted 1/18/16
In a well-orchestrated communications strategy, Gov. Gina Raimondo and her economic team have positioned investments in innovation in a series of public-private partnerships as the best way to rebuild the state’s economy. The release of a 198-page strategic plan by the Brookings Institute planned for this week will offer a comprehensive corporate view of where it believes the future jobs are. It furthers a new calculus of governing, where public policy decisions are made by think tanks, funded by private philanthropy.
What are the metrics of job creation being employed by CommerceRI? How do investments in public mass transit fit into the framework of the new strategy, beyond improving rail transit between Boston and Rhode Island? How is diversity within Rhode Island, one of the state’s strengths, captured in the new strategic plan? How does the potential colonization of Rhode Island’s health care delivery systems by out-of-state players change the equation? Are investments in healthy, affordable housing as a key root cause of social and economic disparities included as part of the economic strategy of innovation? What happens if the experiment of Medicaid reinvention fails?
In his response to ConvergenceRI’s request for an interview, following the release of the embargoed strategic plan, Mark Muro, one of the team leaders of the Brookings Institute study, wrote back: “Thanks for your steady and fair-minded and expert interest.”
It may be a calculated kind of flattery, but it struck ConvergenceRI as sincere. It stands in sharp contrast to the calculated rudeness of the Raimondo communications team, which still has never responded to frequent requests for an interview with Stefan Pryor, and more recently, requests to talk with Raimondo. Pryor himself shook hands with ConvergenceRI at a recent event and said that yes, he looked forward to getting together and talking with ConvergenceRI. Joy Fox, Marie Aberger, Ashley O’Shea and Melissa Czerwein: how can we make that happen?

PROVIDENCE – Innovation has entered the Rhode Island lexicon, big time, when it comes to economic development.

But there are plenty of blurred lines about what innovation actually means, how innovation is being defined as a strategy for promoting future economic growth, and how the concept is being used to promote the emerging innovation ecosystem in Rhode Island.

There will be a lot of cheerleading coming from Gov. Gina Raimondo and her economic team, led by Stefan Pryor, as innovation is marketed as the very next phase of “Making it in Rhode Island.”

In case you hadn’t realized it, we are now in the midst of a slick, carefully coordinated communications campaign, building toward a crescendo:

Last week, the action plan for the creation of a Providence Innovation and Design District, developed by the consultants HR&A Advisors, was made public at a joint meeting of the I-195 Commission and the CommerceRI board of directors. [The consultants recommended that the state stop calling the property the former I-195 land and create a new brand; they may not have understood the cultural proclivity of Rhode Islanders to give directions using landmarks that no longer exist.]

The 68-page document unveiled the concept for a new urban innovation district, defined as a distinct brand, focused on the state’s diverse array of growth industries, “to attract institutions and firms across diverse sectors.” The concept attempts to draw a larger map of innovation for downtown Providence, incorporating the former Jewelry District, the I-195 land, and Downcity.

[Despite the frequent use of the term, diverse, what the new action plan does not appear to do is to make any investments in the more “diverse” neighborhoods of Providence. Rather than promoting inclusion and the strength of Providence’s diversity, the Providence Innovation and Design District appears to promote a greater wall of separation between the haves and the have-nots.]

Also last week, Gov. Gina Raimondo announced the recruitment and hiring of the state’s first chief innovation officer, Richard Culatta, with a $210,000 annual salary plus benefits plus some perks, including a $550 monthly car allowance [$6,600 a year], according to a story in The Providence Journal.

In a curious arrangement, Culatta will be ensconced at Rhode Island College and his salary paid by the Rhode Island College Foundation, but he will serve as a member of Raimondo’s cabinet. [It’s a public-private partnership where public accountability and legislative oversight of the position remains vague and unclear; Rhode Island voters and the R.I. General Assembly seem to have no say whatsoever over Culatta’s salary, portfolio or job performance.]

Culatta previously worked for the Central Intelligence Agency, developing mobile apps for the spy agency. Raimondo called his appointment a way “to make government work better, faster, cheaper.” In effect, Culatta will function as the state’s one-man innovation institute, responsible to Raimondo.

Raimondo also was featured last week in a favorable Boston Globe story about her plans to create a new innovation economy, with the promise of creating thousands of new technology jobs. The story had a photograph of her posing atop the roof of the Warren Alpert Medical School at Brown University, the camera looking out behind her at an innovative landscape in progress on the former Route 195 land – the kind of glowing puff piece that could only be written by Boston reporters unfamiliar with Rhode Island’s political turf.

Further, last week General Electric announced its decision to relocate its corporate headquarters to Boston, leaving Connecticut and bypassing Rhode Island, collecting some $145 million in tax incentive giveaways. GE’s corporate spokesman Seth Martin blew a few kisses Rhode Island’s way, in response to questions from The Providence Journal, saying: “Rhode Island’s was one of the strongest pitches of any state’s, and they were a finalist in our process.”

Martin continued: “The governor and her team, along with Rhode Island’s delegation in Washington, led an outstanding process,” as reported in the story in The Providence Journal. “Although GE has decided to locate its corporate headquarters in Boston, we remain in discussion with Rhode Island about locating GE jobs in the state in the future.”

[ConvergenceRI’s first choice, if asked, would have been to suggest Pittsfield, Mass., on the site of GE’s former plastics factory, which was responsible for massive PCB pollution that poisoned acres of the surrounding land and the length of Housatonic River as it travels from Pittsfield down through Connecticut, the result of the toxic detritus left behind by GE’s efforts  to bring good things to life.]

Not surprisingly, Boston was named “the most unequal big city in America” in terms of income inequality in 2014, according to findings of new report issued on Jan. 14 by the Brookings Institute. The analysis found that households in Boston earning more than 95 percent of other households made some $226,224 in annual income, compared to households earning more than 20 percent of other households, which earned just $14,942.

The ratio between those two figures, dubbed the 95-20 ratio by the Brookings Institute as a measure of income inequality, put Boston at 17.8 percent, number-one in the nation.

Providence, in turn, had a 95-20 ratio of 15.4 percent, number five in the nation.

Investing in innovation
The innovation fireworks finale in Rhode Island will occur this week, when the Brookings Institute is slated to reveal its $1.4 million strategic plan for Rhode Island’s future economic investments, in a rollout event at the Rhode Island Foundation on Tuesday morning, Jan. 19.

The story promises to be covered by all the major media outlets that morning, in advance of the event, with all of them having been provided an embargoed copy of the 198-page strategic plan. You can expect stories by The Providence Journal, The Providence Business News, WPRI’s Ted Nesi, and WPRO's Steve Klamkin, among others. The news will be well managed.

[ConvergenceRI also received an embargoed copy, and will honor that embargo; ConvergenceRI plans to publish a special edition on Tuesday morning, looking in detail at the report, originally called “Restart Rhode Island.”

The name has now been changed to “Rhode Island Innovates: A Competitive Strategy for the Ocean State.”

The report promises to identify a strategy of investment in innovation to leverage the state’s competitive advantages in five advanced industry sectors and two opportunity industry sectors, based on previous presentations.

Redefining Rhode Island as a bastion of innovation
What will the weighty new report, “Rhode Island Innovates,” say? Tune in tomorrow for exact and precise details.

In advance of receiving and reading the report, based upon previously published materials and presentations by the Brookings Institute as well as previous interviews with the Brookings’ team, ConvergenceRI offers, much like Johnny Carson’s TV character, “Carnac the Magnificient,” some obvious predictions:

• The plan will champion industry-focused, public-private partnerships, offering detailed analysis of growth opportunities in industry sectors.

• The plan will define innovation as a collaborative corporate-academic economic enterprise.

• The plan will put emphasis on investing in the research engine and improving the skills of Rhode Island’s workforce.

• The plan will receive a full-throated embrace by Raimondo and her team, positioning it as an endorsement of her leadership in sparking an economic comeback in Rhode Island and unleashing of the power of public-private partnerships.

[The cost of the $1.4 million Brookings Institute effort was underwritten by private philanthropies, including the Rhode Island Foundation and the van Beuren Charitable Foundation.]

One more obvious prediction: ConvergenceRI would not be surprised if the launch point for the plan was some kind of invocation of Rhode Island’s entrepreneurial past, citing the Slater Mill as the first water-powered cotton-spinning factory in the U.S., much as an overused quote from Scripture. [Of course, the terrible working conditions that women and children endured at Slater, and the way in which Rhode Island’s prosperity was linked to the slave trade used to grow cotton and sugar cane, probably won’t get mentioned here.]

Beyond the hoopla
Beyond the promised hoopla and self-congratulation, however, there are some big, unanswered questions regarding the process of innovation as an economic imperative:

Can innovation be defined and measured by real estate investments, new buildings, or cranes in the sky? [If it can, then does most of the credit for Boston’s current boom go to former Mass. Gov. Deval Patrick and his eight years of promoting long-term investments in research, life sciences, advanced manufacturing, clean energy, and marine sciences?]

What is the relationship between the innovation economy and state investments in research – basic, applied and collaborative? How much is Rhode Island willing to invest in matching grants to win competitive federal research awards?

What are the metrics for job creation that CommerceRI is now using, and how do they need to change? And, if job creation and investment in the research engine is a long-term strategy, how does that fit into the short-term state budget – and political – priorities?

Do investments in innovation and equity at the neighborhood and community level, investments in place, in housing, in health and prevention [and not just the health care delivery system] create a better return on investment compared to investments and tax breaks for companies?

Is there a way for the R.I. General Assembly leaders to become more knowledgeable themselves about the innovation and research equation, so that they are less dependent on what they are told by “experts?”

What are the limits on the new calculus of governing – where public policy decisions are made by think tanks, consultants, and working groups made up mostly of corporate CEOs?

To paraphrase Amy Kempe’s mantra, “In Schilling we trust,” urging support of the 38 Studios deal in 2010 when she served as spokeswoman for former Gov. Donald Carcieri, are we to put our trust in the Brookings Institute, and its research partners, Battelle and Monitor Deloitte, to decide public policy questions? [Or, for that matter, think tanks such as HR&A Advisors, the Fourth Economy, or ALEC, Heritage, Rand and McKinsey?] What say do voters, patients, and citizens have in public policy decision-making?

The evolution of innovation, as told by Raimondo
Once upon a time, when Gov. Gina Raimondo was running for governor in the summer of 2014, she held a news conference, surrounded by union construction workers who were supporting her election, to unveil her vision of building an innovation institute for Rhode Island.

As reported by ConvergenceRI: On July 28, Raimondo, in a made-for-media event, in front of assembled members of construction unions supporting her campaign, proposed building a Rhode Island Innovation Institute campus to support a hub of applied research in advanced manufacturing.” [See link to ConvergenceRI story below.]

The story continued: “She promoted the concept: if you build it, they will come – predicting that companies would flock to be part of a new manufacturing hub.”

“‘Places like North Carolina, Ohio and New York are investing in innovation institutes, and we should as well,’ Raimondo said at the news conference, touting her vision of the new campus construction which would, in her view, recreate Providence as a new hub of manufacturing, the ‘Providence Makes, The World Takes’ vision of the 21st century.”


Raimondo’s vision of an innovation institute at that time appeared to be long on aspiration and short on details – on how much it would cost and who will pay for it. 

Perhaps, more significantly, Raimondo failed to give proper attribution to where the “innovation institute” concept for advanced manufacturing came from – President Barack Obama’s administration, as ConvergenceRI reported.

[A recent story by reporter Mark Reynolds in The Providence Journal that attempted to compare Raimondo’s campaign promises with today’s reality gave it an “In The Works” rating; ConvergenceRI respectfully disagrees with that reporting and analysis, because the concept has morphed so much.]

Fast forward to 2016: the plans for an innovation district and the creation of an innovation institute have changed considerably, for the better. It is no longer about building buildings, per se, or the idea that Rhode Island will be able to support an advanced manufacturing sector in downtown Providence on the former highway land.

The concept is being built in part on the identification of the biomedical innovation industry sector by the Brookings Institute as one of the targeted sectors for investment, something that had eluded the Raimondo administration’s earlier plans, and previous economic strategies developed by The Fourth Economy at the behest of the Rhode Island Foundation.

The past as prologue
It is worth taking note, briefly, of the ways in which the Raimondo administration had previously invoked innovation as a concept.

First, there is the effort known as reinventing Medicaid, as a way to reduce the cost of government spending and rebalance the system of care for older, frailer, poorer Rhode Islanders.

The reinvention of Medicaid is an experiment, not a fait accompli, with economic assumptions built into plans that have not yet been proven, such as what the actual cost will be of building a new community infrastructure that does not now exist.

As much as $70 million in savings have been championed by the Raimondo administration as having been already achieved in reductions from general revenue funds, the reality is that $46 million of that comes from funding cuts and provider tax increases, according to numbers from the November case load estimating conference. That same ratio also holds for all funds in the state budget, with 66 percent of the $166 million in savings calculated – some $120 million – coming from funding cuts and increases in provider taxes. Is that innovation or re-invention?

Officials at R.I. EOHHS have pledged that some portion of those “savings” will be reinvested back into providing improved, more efficient, care for Medicaid members, yet the actual reinvestments are two budget years out, so the results of the experiment cannot yet be known.

The Working Group for Healthcare Innovation, tasked by Raimondo with developing a plan to put a cap on state health care costs, put off any decision about actually creating such a cap, worried about the lack of capability to enforce it, given Massachusetts’ experience.

Ironically, the release of the report by the Governor’s Working Group for Healthcare Innovation occurred in tandem with the filing by Lifespan, the state’s largest health care delivery system, of its intent to build a new obstetrical facility at the cost of some $20 million to construct and another $30 million a year to operate.

The plans for a new obstetrical facility to compete with Care New England’s Women & Infants Hospital, virtually on the same site, as part of a competitive war to capture a greater share of the women’s health care market, appears to undercut any plans enunciated by the working group. The rationale for the facility, given Rhode Island’s relatively stable birthrate and total population, appears to be less about health care innovation than market competition. To date, the Raimondo administration has not yet spoken publicly about the issue.

Investing in public health, not corporate health
One of the best, most innovative approaches to reducing health care costs, improving workplace performance, and increasing economic output and productivity was the public health intervention to ban smoking indoors in Rhode Island.

The concept was not the product of a think tank’s strategic plan looking at Rhode Island’s future economic opportunity. It was implemented under the leadership of Dr. Patricia Nolan, then director of the R.I. Department of Health, under fierce pushback from many in the corporate world.

Despite the intervention’s proven success, it requires a constant vigilance. In recent years, efforts to sell tobacco-flavored products to children and teens in Providence were successfully halted by a lawsuit by the city of Providence.

The latest threat, as portrayed in the photo of the billboard used to illustrate this story, is the rapid growth and promotion of e-cigarettes and vapes, now unregulated. There are efforts underway to develop new federal regulations for e-cigarettes to prohibit the marketing of these products to children and address e-cigarette flavorings that appeal to minors.

The e-cigarettes, which feature liquid nicotine and no “tobacco” products, are considered to be very addictive. In 2014, e-cigarette products were being used by about 2.4 million middle and high school students, according to the Centers for Disease Control and Prevention statistics. The agency also said that more than 18 million – seven out of 10 – middle and high school youth were being exposed to e-cigarette ads, similar to one shown.

From a marketplace and corporate perspective, the development of e-cigarettes could be construed as an innovative approach to stop smoking and start the vape, as the ad urges. Is this innovation at work?

As much as new initiatives to promote better educational opportunities around technology, coding and STEAM make sense, would not new public health initiatives around e-cigarettes prove to have a higher return on investment?

Nuances of innovation, ecosystems and collisions
As innovation enters the public lexicon in Rhode Island’s economic and political spheres, there are some important nuances to discern.

The gap in the way the term is used can be as wide as that between, say, the musical styles of Lawrence Welk and Charles Mingus.

Mingus, one of the great American composers and musicians of the 20th century, once wrote a tune, “All the things you could be by now if Sigmund Freud’s wife was your mother.” It was a playful reinterpretation of Jerome Kern’s classic, with lyrics by Oscar Hammerstein, “All the things you are,” a popular ballad.

The song appeared on the 1961 recording, “Charles Mingus presents Charles Mingus,” for Nat Hentoff’s label, Candid. The album also included “Original Faubus Fables,” the version of the song Mingus had recorded and wanted to record, decrying Ark. Gov. Orville Faubus and his racist stand against integrating the public schools in Little Rock, but Columbia had prevented him from including the lyrics on his album, “Ah Um,” because they were considered too risqué in 1959.

The metaphoric difference between the classic ballad, “All the things you are,” as played by the Lawrence Welk band, and the soulful improvisation by Mingus, “All the things you could be by now if Sigmund Freud’s wife was your mother,” best captures the psychic distance between the intuitive, nimble, iterative world in the way a true innovation ecosystem operates, where ideas and people collide in an improvisation of daily interactions, and the imposed rigor of an innovation district and innovation institute designed and imposed by real estate developers, replicating models as if the world was a downtown of successful Walmart stores. [See links below to the songs.]

It is a collision that resembles, in many ways, the battle once fought between the philosophies of Robert Moses, the power broker who favored highways over mass transit and massive urban renewal projects that often destroyed the human fabric of neighborhoods, and Jane Jacobs, author of “The Death and Life of Great American Cities,” who argued that cities needed to function on a human scale.

The process of innovation is an improvisation; it is more than an economic standard.

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