PROVIDENCE – Richard Horan, senior managing director of the Slater Technology Fund, spoke up at length toward the end of a two-hour “extra” mapping session for select business leaders on Jan. 6.

It’s unclear whether his comments – and his dialogue with John Donoghue, director of the Brown Institute for Brain Science – will actually show up in the final mapping product of economic development opportunities. But his comments could very well result in a dramatic change in strategic direction and outcomes for Rhode Island’s emerging knowledge economy.

The add-on discussion, convened by the Rhode Island Foundation and Commerce RI, was the final “conversation” in development of an action plan, mapping market opportunity for Rhode Island’s future economic development.

The biotech/medical/public health sector had been inexplicably “omitted” from the three market opportunities identified and targeted – food, water and manufacturing – as part of a three-month, $75,000 process facilitated by The Fourth Economy, an out-of-state consultant.

The added session on Jan. 6 was clearly an attempted course correction, even if CommerceRI spokeswoman Melissa Czerwein adamantly refused to call it “additional.”

With 15 minutes left, the final item on the evening’s agenda being discussed was “access to capital,” but Horan changed the entire focus of the conversation.

Horan offered his perspective based on his work during the last 10 years with Slater, which has served as an arm of state investment in technology and startups, often providing the “first money in” for many of the state’s brightest companies today – including Andera, Illuminoss, Nabsys, EpiVax, Mnemosyne and ProThera Biologics.

Horan began by drawing a sharp distinction between the political “aspirations” to create a vibrant knowledge economy in Rhode Island and the on-the-ground challenges of the long-term, iterative effort of translating ideas into companies into commercial products and then achieving success in the marketplace.

That iterative process often took years, building upon initial failures, as startups evolved into sustainable businesses. [To read Horan’s view of the Rhode Island’s emerging knowledge economy, published in the Sept. 23, 2013, issue of ConvergenceRI, see link below.]

Yet, every few years, Horan said, there was a similar planning effort, driven more by political considerations than economic reality. Without a sense of the history of investment and its place in the narrative, Horan continued, the current process would become another in a continuum of misplaced efforts.

Horan gave credit to the re-establishment of the Brown Medical School as a primary catalyst to the emergence of academic medical research as an economic engine in Rhode Island; he also praised Brown for its recognition and investment in carving our a niche in neurosciences.

Horan talked about how the potential for major state investment – $125 million in 2010 in a now defunct fund – had been destroyed by the poor choice of 38 Studios as a first investment of $75 million, a debt now saddled on taxpayers.

The ramification was that it was doubtful that Rhode Island’s emerging knowledge economy could look to the state for similar kinds of investments.

What was needed, Horan continued, was an independent Rhode Island fund, focused on investments in the Rhode Island innovation ecosystem, so that instead of investment in managed funds, often outside of the state, the focus would be on Rhode Island itself.

That’s when the conversation really took off, in a totally different path.

Veering off course, toward a better idea
Up to that point, the conversation, facilitated by Kathleen Shannon of Shift, who took on the task as a last-minute favor, had plowed through the same familiar ground covered during earlier conversations back in October, focused on creating an action plan as part of an effort to map out future market opportunities, using a formulaic approach.

Christine Smith, executive director of the R.I. Science and Technology Advisory Committee, or STAC, had been charged with coordinating the extra session. No new participants had been invited to attend from the original list of select business leaders, according to CommerceRI officials.

The “extra” session participants included Ted Almon, president and CEO of the Claflin Company and co-chair of HealthRIght, David Goldsmith, co-founder and director of Aspiera, Jan Brodie, executive director of the 195 Redevelopment Commission, now known as The LINK, Dan Bacher, founder of Speak Your Mind, John Robson, administrative director of the Prince Neurosciences Institute, John Donoghue, director of the Brown Institute for Brain Science, known as BIBS, Denice Spero, vice president of Strategic Alliances at NsGene, and Marcel Valois, executive director of CommerceRI. [Although public health was included in the initial subject area, the select group of business leaders participating in the session did not include anyone from the public health sector.]

Donoghue jumped into the conversation with Horan, and the two of them began a fascinating dialogue on what such a new fund would look like and how it might work.

The first question was who would be the investors; previously efforts to get some of the big companies to invest had met with little enthusiasm.

Horan countered that the value of the investment had to be clear; for instance, Blue Cross & Blue Shield of Rhode Island, he said, had invested more than $65 million of its own money in the development of patient-centered medical homes in Rhode Island. The value has to be transparent.

Perhaps, Donoghue suggested, the fund should begin with smaller gifts, to build up the principal over time.

The meeting ended, but the energized dialogue between Horan, Donoghue and Robson continued for another 10 minutes.

Seizing the moment
After the meeting, Horan, Donoghue and Robson first discussed possibilities on what would be needed to create a home for the brain sciences in Providence, a modern facility that would include space to conduct clinical trials, located in the area formerly known as The Jewelry District, with Horan asking details about investments made by the Massachusetts Gov. Deval Patrick in life sciences.

Donoghue warned that despite the federal brain mapping initiative, it was wrong to expect that such studies would prove to be a cash cow for Rhode Island. It was also wrong, he continued, to put too much expectation on the neuroscience sector as an economic engine. The business model had yet to be proven, he said.

The discussion then veered toward the overall situation with the delivery of health care and health care reform in Rhode Island, the $16 billion elephant in the room that the planning effort by the Rhode Island Foundation and CommerceRI had studiously avoided including in their discussions of future economic market opportunities.

It was time to leave. What will happen to the idea to create an innovative Rhode Island fund? How will that conversation continue? Will it even featured as part of the flawed mapping process?

Good questions. Unfortunately, CommerceRI’s Valois has declined to be interviewed by ConvergenceRI before the Jan. 23 scheduled release of the new map for Rhode Island’s future market opportunities for economic development.

Why wait? Offering to serve in the role of convener, ConvergenceRI has invited Donoghue, Robson and Horan to continue their discussion next week about the potential of such a new fund and how it could be set up. Stay tuned.