Innovation Ecosystem

One on one with Bruce Katz of New Localism Advisors

RI Innovates 2.0 is “a particular kind of thesis of how economies grow in the 21st century”

Photo courtesy of New Localism Advisors website

Bruce Katz, co-founder of New Localism Advisors, the author of R.I. Innovates 2.0.

By Richard Asinof
Posted 2/10/20
A one-on-one interview with Bruce Katz, the principal author of RI Innovates 2.0.”
When focused on developing advanced industries as an engine for future prosperity, how are the stakeholders defined who get to participate in the conversation? What kinds of traffic studies have been conducted regarding the flow of traffic in the Providence Innovation and Design District? How will the rapid spread of the coronavirus change perceptions and priorities around public health research?
In writing the story that dug very deep into the R.I. Innovates 2.0 report, a funny thing happened: with each new paragraph, I recalled a story in ConvergenceRI that “covered the waterfront” when it came to that discussion point. I ended up linking to some 31 stories published in ConvergenceRI, which served as a kind of living appendix, news stories being told and now retold.
It was like new a kind of disruptive Jeopardy game to remember and integrate not just the news but the content and the nuance behind what had happened.
Bruce Katz was unfamiliar with ConvergenceRI; he immediately found it online as we talked, in sotto voce, saying, "Wow." No one, it seemed, had thought to share with him the content during the last few years, a symptom of the way our news content has succumbed to silos, to sound bites, and to private equity debt managers. Maybe that will change now. Collaboration is hard, sharing is harder, and the process of convergence requires persistence.

PROVIDENCE – Bruce Katz, the primary author of RI Innovates 2.0 and a co-founder of New Localism Advisors, an economic consulting firm, spoke with ConvergenceRI on Sunday afternoon, Feb. 9. Here is the interview:

ConvergenceRI: First, are you familiar with ConvergenceRI? Has anyone shared with you the recent content from the digital news platform?
KATZ:
No one shared the recent content.

ConvergenceRI: Were you involved in decision-making around who in the news media received an advanced copy of the draft report? Or, was that a decision made by CommerceRI?
KATZ:
That’s correct. I think the Boston Globe [story] may have happened because Gov. Raimondo saw Ed [Fitzpatrick] at a meeting and mentioned it to him.

ConvergenceRI: I have a series of questions. It was a very impressive, thorough report, at 118 pages. Do you think that is a problem that few people read reports these days that are so lengthy? Do you envision the report will be re-packaged into different formats?
KATZ:
I think of this as a follow-on report. The initial report, which was also quite lengthy, actually quite lengthier, I think it was read by quite a few people. This [new report] essentially updates the performance of the advanced industry clusters and others that were identified in that first report.

I’m hoping that there is a broad group of stakeholders who have significant expertise in these different parts of the Rhode Island economy will take a hard look at this, either with respect to their own particular interests in the broader economy as a whole.

ConvergenceRI: Tomorrow, the Rhode Island Foundation is following up on its 10-year long-term statewide plan for health in Rhode Island, engaging with some 200 stakeholders. Is that a process that you might consider for RI Innovates 2.0?
KATZ:
I think there are aspects of 2.0 that lend themselves to the excellent process that has been designed and delivered by the Rhode Island Foundation.

I think that the blue economy, in particular, [because] it cuts across so many different sectors of the economy, and it is essentially a future-oriented set of economic activities, I think the blue economy lends itself to that kind of multi-sector interdisciplinary focus.

I think the whole report itself could be the subject as well. But these efforts tend to work best when they are focused and disciplined around a topic that different stakeholders rally around and see themselves in.

I think the blue economy might be the area of the report that is most conducive to a broad-based effort.

ConvergenceRI: One of the things I was surprised by in the report, what seemed to be missing, was Rhode Island’s work around Health Equity Zones, and their success in being a community-based driver of economic development. First, are you familiar with the work of Health Equity Zones?
KATZ:
Yes, I am familiar with the work of Health Equity Zones. I think it is emblematic of how much territory this kind of economic development report has to cover that we didn’t focus on that. It’s a really important effort. These kinds of reports and plans are a starting point, rather than an ending point, in my view.

They are really intended to give everyone a consensus on reality, on how the economy performed, and which are the leading sectors in the economy that have growth potential. Moving forward, I think it is completely aligned with the spirit of the effort to expand it and broaden it and capture the Health Equity Zone effort.

ConvergenceRI: Similarly, in Central Falls, in terms of improving quality of life, you mentioned the redevelopment of the Central Falls/Pawtucket train station, but you didn’t mention the new Neighborhood Health Station, built by Blackstone Valley Community Health Care, which was the first major construction in Central Falls in more than two decades. It is a place where more than 80 percent of the city’s residents can receive integrated primary care and urgent care. It may be considered too granular, but when looking at economic impacts around quality of life in Central Falls, which will have the greatest impact, the redeveloped train station or the Neighborhood Health Station?
KATZ:
Again, this report, and the initial Brookings report, really starts from a deliberate focus on advanced industries, which are industries that are fed by research and development, and STEM workers. And so, in the health care system, what we tend to focus on in these kinds of reports is bio-med innovation, which is a growing sector in Rhode Island.

I don’t want to diminish the impact or the importance of health care or neighborhood health care of the sort you are describing. But, this is a particular kind of thesis of how economies grow in the 21st century. I think it’s worthy for you or others to basically describe the report as covering a certain amount of economic territory, and focusing in very clearly on advanced industries. But, some of these other sectors deserve special focus as well.

Again, this is a platform to stimulate broader conversation about the Rhode Island economy. But it starts with a very particular focus on what is, in terms of workforce, a relatively small number of jobs in the Rhode Island economy, but a very large impact on exports, research and development, multiplier effects, so to speak.

ConvergenceRI: In Massachusetts, the state has been publishing the Index of the Massachusetts Innovation Economy since 1997, benchmarking the efforts around its innovation economy, as a longitudinal study. Would you recommend that Rhode Island consider developing a similar kind of Index?
KATZ:
I think it’s very important to keep score on how an economy is performing, whether it is the advanced industry economy, where it is the innovation economy, whether it is the health care economy, it’s very important to keep score. The U.S. is blessed, compared to other countries, with an enormous amount of data and information.

I think that kind of benchmarking exercise is valid. Generally speaking, what’s important in any given state or metropolitan area, is that there is some consensus on reality as to what your economy is and what’s important to the economy [in order to grow].

In Massachusetts, for decades, the state has made the innovation economy a centerpiece of their economic strategy.

I think Rhode Island, over the past five years, has moved toward that, in part, because your starting point in 2013-2014, was very, very difficult.

I think if RI Innovates 2.0 [can be seen] as a continuation of the first report, perhaps this kind of scorecard could develop.

ConvergenceRI: A year ago, I interviewed Mark Huang about his efforts to promote the Blue Tech economy. His firm, SeaAhead, already has a partnership with the Cambridge Innovation Center in Boston, as one of the signature innovation hubs in Boston. What is the likelihood that the CIC would be moving its innovation hub to Providence? When I interview Tim Rowe in April, the founder of CIC, he indicated that such a move was unlikely. How do you see the recommended approach in developing a Blue Tech economy in Rhode Island taking shape?
KATZ:
I know Tim well. I think the Cambridge Innovation Center is a phenomenal organization. What we were trying to tease out in this report – and there’s more to come, because the University of Rhode Island is doing a major report, specifically and narrowly on the blue economy – is that this is a special, distinctive advantage for the Ocean State.

The Ocean State, for our perspective, is not just a brand; it’s a platform for broader, innovative growth. The blue economy covers multiple sectors. It obviously covers what the Navy is doing at Naval Undersea Warfare Center, it covers the Naval War College, it covers off-shore wind near Block Island, it covers tourism, it covers aquaculture, it covers coastal resiliency and resiliency along rivers to prevent flooding or mitigate flooding, it covers environmental remediation.

So, this is a very broad super sector of the economy, which is essentially like the green economy was 25 years ago, it’s coming into its own, particularly as the U.N. has designated the next decade as the decade of ocean science, oceans writ large.

I think there are going to be multiple players in this space. And, I think the University of Rhode Island has a particular role to play because it is one of the top centers of oceanography in the world.

I could definitely see that the Providence Innovation District could have a portion of its focus be around the blue economy. You already have some movement in that direction. I think this is an evolution of an understanding of what makes the Rhode Island economy distinctive and special, and how to build on it over time.

We didn’t really talk about this in the first Brookings report to any great extent. But now, I think it has reached a critical mass, which deserves more focus.

ConvergenceRI: The new tax structure that the report recommended on community development, could you clarify, is that a companion piece to the federal program of opportunity zones?
KATZ:
There were a number of pieces in the report around taxes that would leverage federal tax incentives. There’s a recommendation that Rhode Island expand its community development base, because that is the way, ultimately, you can leverage new market tax credits and frankly, opportunity zone tax [credits].

We have some explicit recommendations around taxes, particularly around a taxpayer advocate to help improve the business climate. But, the way in which Rhode Island can leverage and build on federal tax incentives to strengthen community development infrastructure.

ConvergenceRI: It may be somewhat granular for you, but there are some very innovative projects underway with community development corporations, ONE Neighborhood Builders in Olneyville, and West Elmwood Housing in the West End of Providence. As part of your research, did you speak with them at all regarding how best to strengthen community development infrastructure?
KATZ:
One of my colleagues may have. I did not speak to them directly. I am fairly involved with opportunity zones around the U.S. and in building community development infrastructure.

The other recommendation we made in the report is our call for use of fellows in development efforts by municipalities. That’s been a method used in Fresno and in Stockton, Calif., that could be adapted to Rhode Island.

We come at this issue of community development in multiple parts of the report. I would be more than happy to follow up with whomever.

ConvergenceRI: Is there anything that I should have asked, that I haven’t asked, that you’d like to talk about?
KATZ:
I think the most important thing is that the plan gets coverage, particularly because it builds on the existing report and, frankly, the efforts that have been underway in the state for quite some time.

Rhode Island is a place that doesn’t tend to celebrate success. There are aspects of this report, particularly the assessments of how a group of workforce support programs, and business support programs, and place-making efforts have really been integrated and aligned over the past couple of years.

And, they’ve had a real effect, frankly, helping the state grow a more robust and prosperous economy.

The main message here is: it’s very important to understand that economic development is practiced differently in Rhode Island today than it was a relatively short period of time ago.

It’s important for stakeholders and observers to dig deep into the report and see what it covers and what it doesn’t.

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