Innovation Ecosystem

One-on-one with Commerce Secretary Stefan Pryor

A frank discussion about the challenges facing Rhode Island’s future prosperity

Photo by Richard Asinof

Commerce RI Secretary Stefan Pryor, at Seven Stars on Point Street.

By Richard Asinof
Posted 11/8/21
An in-depth interview with CommerceRI Secretary Stefan Pryor, addressing future strategic investments to spur prosperity in Rhode Island.
When will the R.I. General Assembly go into session to authorize spending of the $1.1 billion in unspent federal American Rescue Plan funds? What kind of potential solutions are there to address the critical nursing shortage in Rhode Island? Is there a way to conduct an audit of the private managed care organizations providing health services for Medicaid members, before planning for potential expansion of MCOs? Where do investments in addressing climate change threats fit into the future spending strategies for Rhode Island 2030? Is there a way to emphasize and prioritize the sources of Rhode Island-base expertise when it comes to policy?
On Monday, Nov. 8, Blue Cross and Blue Shield of Rhode Island, in partnership with the Brown School of Public Health, will share the results of the 2021 Rhode Island Life Index, a comprehensive survey about Rhode Islanders think about their own health and the health of their communities.
This is the third annual RI Life Index, creating a longitudinal database about the relative state of well being in Rhode Island. All too often, the opinions of Rhode Islanders get lost in the conversations by stakeholders and decision-makers, who have far more power and influence on strategies and policies, it seems.
The RI Life Index provides a seat at the table for those whose voices have a hard time being heard, if people are willing to listen. At the inaugural session of the Index, Angela Ankoma, now a vice president at the Rhode Island Foundation, suggested as a member of a response panel that the data from all those folks calling for help through 211 be analyzed as a way to capturing an accurate picture about where the greatest needs are.
Beyond focusing on private companies, the state might do well to look at the network of nonprofit agencies that provide the human and social services for Rhode Islanders as a source of future investment – as a way to keep the safety net stitched together.

PROVIDENCE – In the last six years, each time that ConvergenceRI has had the opportunity to sit down and talk with CommerceRI Secretary Stefan Pryor, it has resulted in a robust conversation, covering the waterfront when it came to economic development in Rhode Island – the highs and lows of the innovation economy, the intermittent deal flow around the life sciences industry sector, the burgeoning research engine of the health care industry, and even the Newport Jazz Festival and the passing of the torch from George Wein to Christian McBride.

Pryor is an attentive listener these days, positioned to try to help the state of Rhode Island emerge from its COVID-related crises and to pivot toward an economic recovery, looking at future investment strategies for the next decade.

The potential role of the life sciences industry, particularly as part of the proposed merger of Care New England, Lifespan, and Brown University into an academic medical enterprise – what former Gov. Lincoln Chafee once coined as “eds and meds” – still remains an elusive brass ring to grab onto as the pathway toward economic prosperity.

At the same time, the realities of the coronavirus pandemic and its disruption of the health care delivery system – and the tenuous, shaky, shifting ground around public health, racial equity and affordable housing – keep enlarging the economic divisions between Rhode Islanders who have and those that do not.

Steering the economic ship
The man performing on the economic high wire is Secretary Pryor. Although he deflected the idea that he was major player during the efforts during the initial onslaught from COVID to right the ship, CommerceRI was, according to numerous observers inside and outside of government, a major catalyst in the state government’s response.

Under former Gov. Gina Raimondo, Pryor was always an indefatigable salesman and cheerleader for her initiatives, since he first came on board in 2015 as Secretary of CommerceRI, revamping what had been known as the R.I. Economic Development Corporation, still reeling from its misplaced trust in investing in 38 Studios.

In March of this year, Pryor made the transition to serving a new boss, continuing to work closely on behalf of Gov. Dan McKee and Lt. Gov. Sabina Matos. His recent to-do list has included helping to prepare the draft plan for Rhode Island 2030.

Pryor’s former top aide, Matt Sheaff, who had served as Director of Stakeholder Engagement and Chief Marketing Officer, is now on loan to Gov. McKee, serving as a top advisor to the Governor. [On Sunday, Nov. 7, Sheaff ran in his first-ever New York City Marathon, a testament to his determination.]

Most recently, Pryor said during his interview that he has been involved with attempting to forge a new regional collaboration, working with Northeastern University in Boston as part of a Build Back Better initiative focused on regional collaborative research and biopharmaceutical manufacturing.

The conversation with Pryor took place at Seven Stars on Point Street, the former location of Olga’s Cup and Saucer, on Friday morning, Nov. 5, with Brian Hodge, a communications aide at CommerceRI, joining the conversation. The meeting had been postponed once, and the time changed twice, a result of Pryor’s hectic schedule.

While there has been speculation by some in the news media about the potential of Pryor running for the R.I. Treasurer’s office in 2022, Pryor kept the focus on the tasks at hand.

Here is the ConvergenceRI interview with Stefan Pryor, Secretary of the CommerceRI Corporation, as the state seeks to right its economic keel after nearly two years of struggling with the continuing fallout from the COVID-19 pandemic.

The last time ConvergenceRI had interviewed Pryor, face to face, in person, was in February of 2020, nearly two years ago, and ConvergenceRI began by repeating one of the same questions that had been posed at that time.

ConvergenceRI:The last time we talked, in a one-on-one sit-down interview, was in late February of 2020, in the café across from your office. I asked you a question, which turned out to be quite prescient: What was the relationship between public health and future economic prosperity in Rhode Island?

[See link below to ConvergenceRI story, “What does public health have to do with future prosperity in RI?”]

What have you learned in the past two years about the relationship between public health and the future economic prosperity of Rhode Island? How do we need to adjust our thinking?
PRYOR: I think we have all learned about the centrality of public health in light of the pandemic. I will say this. It certainly was the case that Rhode Island was in the process of positioning itself as a life sciences hub.

And, the importance of bioscience to our economic growth was acknowledged. I think that has been heightened; i.e., we ought to be emphasizing even more bioscience in analyzing and investing in industries for Rhode Island’s economic growth.

One of the projects in bioscience as an industry that brings together both of these points – the value of public health and the value of bioscience as an industry sector – is the proposed laboratory complex for the R.I. Department of Health.

CommerceRI, in tandem with R.I. Department of Health and under the guidance of Dr. Nicole Alexander-Scott [the director of the R.I. Department of Health], is coordinating the effort to seek applicants to develop and build a new state health lab that will serve Rhode Island, as we continue to emerge from the COVID crisis, and as we look to future challenges – and we hope not future crises, but they may arise.

That health complex will also serve as a catalyst for the bioscience industry. Our goal is to enable the lab itself, the R.I. Department of Health lab, to serve as an anchor for development; it will include commercial space and it will enable incubation for new ventures that will help to advance the [bioscience] industry.

[Editor’s Note: The proposal for a new public health laboratory was initially planned to be part of the bond issue that went before Rhode Island voters in March of this year, but it was dropped – without explanation – from the bond special election by Gov. Raimondo and by the R.I. General Assembly leaders.]

ConvergenceRI: I read the recent story that WPRI’s Steph Machado wrote about the 10-year anniversary of the creation of the development plans for the I-195 land. I came away thinking that the wrong metrics were being used to evaluate the progress around investments, as if its success revolved around real estate deals.

As you know, I have reported extensively on the life sciences industry sector here in Rhode Island. My background was working as a consultant for the John Adams Innovation Institute in Massachusetts. What came to mind were the lyrics from the Bob Dylan song, “There’s no success like failure, and failure’s no success at all.”

I think it is mistaken to put short-term cycles on the process of innovation; job creation often takes 10-15 years, and numerous companies will go through failures before they succeed. I believe it is often misunderstood what the metrics we should be using to measure the growth of the life sciences industry.

I also recall asking you, in a 2019 interview, if you had ever visited the Institute for Applied Life Sciences at UMass Amherst.
PRYOR: Not personally.

ConvervegneceRI: I would still highly recommend that you find the time and go and visit them. And talk with the founding director, [Peter Reinhart], about how they have positioned themselves to marry together industry and the academic research enterprise…
PRYOR: Yes…

ConvergenceRI: Nothing against the Wexford Innovation Center, but the model that UMass is using might be something that you might want to consider migrating toward, because of their relationship with companies, different from the ways that Wexford and CIC has built their relationship with companies, particularly as you begin to develop the concepts around a public health laboratory. Not that I should be giving you advice.

The other question I had is whether or not the state will get back into the business of investing. Once there was the Slater Technology Fund, but Slater has essentially gone out of the business as a source of state-funded investments of start-up firms, for better or for worse.
PRYOR: Two responses for you. One, we have looked at Massachusetts as an example and as a potential partner around biosciences.

Recently, the federal government had issued solicitations for potential grant making, one of those processes is called, “Build Back Better Regional Challenge,” Rhode Island has joined forces with Northeastern University in Massachusetts around bioscience in applying for one of these grants.

We have specifically allied ourselves with Northeastern because they have expertise and capacity regarding tech transfer particular to R&D translated into bio-pharmaceutical manufacturing.

That’s an area where Rhode Island has recently done well, with the arrival of Amgen, including multiple construction projects and multiple manufacturing facilities. And, with Rubeus Pharmaceuticals, with its R&D out of Cambridge, Mass., and its manufacturing facility in Smithfield.

We know that this is something we can undertake. So, we have allied ourselves with Northeastern, and we are excited about that. Whatever happens with the grant, we are allying ourselves with Massachusetts.

And, of course, with key local players, such as RI Bio, and with the aforementioned pharmaceutical companies. They are all part of this alliance.

The second point [is in response to] what you said in regard to Slater. Do you mind if I [continue]?

ConvergenceRI: Go right ahead.
PRYOR: It is the case that Rhode Island continues to overcome the legacy of certain investment missteps, missteps that precede my tenure.

I’ll note that I do think it is time that we establish, or re-establish, an investment fund. It ought to be the case that pre-revenue companies are evaluated very carefully, if at all, and it ought to be the case that, we don’t put all our eggs in one basket.

[Editor’s Note: It appeared that Pryor was talking about the failed investment in 38 Studios without mentioning the company by name, in ConvegenceRI’s opinion.]

Having said that, there are professionals, methods, and reasonable protocols that can be utilized to make investments in, for example, bioscience ventures.

Brown has taken steps in this direction. Its medical school has taken steps in the direction of luring venture capital for the purpose of enterprises emerging from Brown. I think we ought to do something in Rhode Island. That is something that I am actively working on, with a set of other stakeholders. So, I embrace your point.

ConvegenceRI: One of the things that I know about Northeastern, from my work a decade ago with the John Adams Innovation Institute, was their work in supporting collaborative research on computers. What Northeastern did was to partner with a number of other entities to build a high-speed computing facility out in Holyoke, Mass.

The facility is up and running in Holyoke. What I became aware of was that there was collaborative research consortium around computer science, and that is another niche sector that Rhode Island has a lot of potential to expand around. If you are talking with Northeastern, look at what at what they are doing with computer research.
PRYOR: That is a great suggestion. Thank you.

ConvergenceRI: Let me move to some questions about the role that Commerce RI played in terms how the state responded to the pandemic. Many sources told me that CommerceRI was driving the response, from the rollout of testing kits to the deployment of the National Guard. Is that accurate? Or, is that an exaggeration?
PRYOR: I am flattered by the characterization, but it is a severe exaggeration. Honestly, not an accurate characterization. We forged an authentic partnership within the state government.

In many dimensions and in many ways, the R.I. Department of Health was first among equals – and was the lead partner. I do not accept the premise of the question.

But having said that, we are proud of the fact that we played a significant role, and that the very significant role involved supporting the Department of Health, as did the R.I. National Guard, as did many other players that were in the constellation that included the R.I. Department of Education, on fronts where we cold be helpful, for example, on interfacing with businesses.

And, in outreach to small businesses – offering guidance and assistance to small businesses, to help them navigate the COVID protocols. And yes, interfacing with private sector players and partners that might participate in the system.

Different parts of the Commerce RI organization helped in many different ways, according to what priorities were emerging in the administration.

We do play a very significant role, and we are proud of the fact that Commerce was able to, for example, issue of thousands of relief checks for direct deposits for small businesses, and to provide materials, including at one point cleaning supplies and tech support for small businesses, to help them to interface with the private sector as to tech solutions.

The first head of testing was an alum of Commerce RI – he left his job with CommerceRI to run the testing program, but it wasn’t run out of Commerce RI. And this may be the source of some of the mild confusion or exaggeration [about CommerceRI’s role].

And, in no way did the R.I. National Guard work for us. I have to say that. They were working in tandem with us, and bless them for their marvelous efforts. Having said that, we are very proud of the tremendous pivot that the CommerceRI agency did to support Rhode Islanders.

ConvergenceRI: WPRI’s Ted Nesi put out the calculation that the total number of funds from the CARES Act was $6.7 billion, based on calculations from the House Finance Committee staff. I do not know whether it was an accurate figure or not. So, I have a two-part question: How much money came into the state from the CARES Act? Is the $6.7 billion figure accurate? And, what did it go to pay for?

Also, it seemed that some of the funds went to pay for the work of some private consultants, such as the Boston Consulting Group, which came in and had staff embedded inside the R.I. Department of Health.
PRYOR: Richard, I don’t have command of those figures. I am not the official in charge of the overall budget. I honestly don’t know the answer. And I don’t want to hazard a guess in our interview. And I was not personally involved with the consulting contracts that you describe.

I wasn’t involved in seeking them, securing them, or funding them. So I don’t know. It would be OMB and R.I. DOH that woudl be able to address that question.

ConvergenceRI: One of the things that I have heard, and you may or may not know about this, was that McKinsey & Company was also involved in this work. I have gone through the state’s transparency portal, and I haven’t seen anything related to McKinsey. So, was McKinsey involved?
PRYOR: I believe that they had a pro bono arrangement to work with the Rhode Island Foundation and with the state in the early stages of the pandemic, or early to mid-stage of the pandemic. I believe that was the case.

I don’t know if there were any compensated contracts, because again, that is not my domain. But I do believe that there was a pro bono arrangement.

ConvergenceRI: And, that was through the Rhode Island Foundation?
PRYOR: I believe so.

ConvergenceRI: There has been an interesting dynamic – a tension, if you will – about how we look to find policy experts to work for Rhode Island. It is a philosophical question in many ways: do we look internally to Rhode Islanders for policy expertise, or to outside consultants?
PRYOR: I think it is a very good question. I read with interest the dialogue in one of your recent articles, when the Rhode Island Foundation announced its recommendations [for the $1.1 billion in unspent ARPA funds. You asked a question about that.

When we can find the expertise locally, we should draw upon it. Because no one is going to know the local terrain, the local issues and, in many instance, the potential solutions better than local players. However, sometimes it is helpful to get a national perspective to identify and then draw from those reference points elsewhere, if a problem has been solved elsewhere, to draw from that example.

I think it is both/and, rather than either/or. Having said that, when it is possible, we ought to ask of our local stakeholders and experts and rely them as much as possible,. That ought to be a first resort.

And that is how we have undertaken the Rhode Island 2030 process.

Gov. McKee has emphasized that, to formulate our plans for the immediate recovery and for the longer-term investment through the next decade and beyond, we ought to start with Rhode Island wisdom, Rhode Island experience, and Rhode Island recommendations.

So what we have done is to partner with the University of Rhode Island, and we reached out to stakeholders across Rhode Island. We have held listening sessions, known as Rhode Island 2030 community conversations; we held 13 of those via Facebook live, and now we are going out across the state, holding in-person sessions.

In between the digital sessions and the in-person sessions, we formulated a draft report, emphasis on “draft,” that incorporated what we heard from these community conversations, which were knitted together by our URI colleagues.

That is our approach; we have taken to developing a draft strategy that will help take us out of the COVID crisis and help propel us into the next decade.

ConvergenceRI: One of the things that, in looking to future investments, we may need to wrestle with how we use data, particularly in the discussion around the proposed hospital merger moving forward. Currently, there does not appear to be interoperability between health systems around electronic health record platforms. And, even though CurrentCare is moving to pot-out from opt-in, it would seem to require a whole new level of investment, and we are potentially talking billions, not millions. Is there a role for CommerceRI to play around the integration of health data. I know, it is a small question.
PRYOR: I need to absorb that question. And I would love to, Richard, rely on you for some more resources and perspectives. I am not prepared to answer that question on the spot. I need to think about that so more.

ConvergenceRI: Perhaps we need to schedule a time to talk more frequently. We need to talk about more often. So, let me come around full circle, to my opening question, about the role of public health and future economic prosperity. Currently, there is a huge crisis around staffing around nursing in hospitals and nursing homes.
PRYOR: Yes.

ConvergenceRI: I haven’t seen the recent projections around job growth by industry sector. But I have heard that there are real serious problems with the nursing student pipeline. I have also heard that there are firms paying $25,000 in signing bonuses to out-of-state vaccinated nurses.

Is the workforce shortage something that becomes an area where CommerceRI will get involved?
PRYOR: We have taken a look at the overall labor market and the challenges around attracting personnel, Nursing is a very important part of the picture. That said, there are shortages of critical personnel across multiple industries right now, from restaurants to manufacturing plants to health care institutions.

We helped to inform the establishment of a program announced this week, which is being undertaken by the R.I. Department of Labor and Training, with the partner agency, Skills for Rhode Islands Future, which is offering federally funded bonuses, referral bonuses, and compensation for other recruitment-related expenses. That back-to-work incentive program was announced this week.

My understanding is that there has been a very substantial response from across Rhode Island. But there is only a limited amount of federal funding left until the American Rescue Plan funds are authorized. These are residual CARES Act dollars being utilized by DLT.

ConvergenceRI: You may want to take some time and visit with the folks at RIC Nursing School to get their views.
PRYOR: Good idea.

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