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RI Biz Winners and Flops

Monday, May 28, 2012

 

For Rhode Island, 2012 may prove to be one of the biggest years for economic turmoil. The unemployment rate, the bankruptcy of numerous municipalities, the collapse of 38 Studios, and the continued reinvention of the relationship between government and public service employees are some of the milestones and it is still only May.

Winners:

The State Budget – while much is grim in Rhode Island, the revenue numbers came in higher than Governor Chafee's original forcast. The result: Most of Chafee’s budget balancing revenue proposals can be eliminated and a flat budget can be achieved without new taxes.

Toray Plastics Inc., the only United States manufacturer of precision-performance polyester, polypropylene, and bio-based films is was awarded one of the Environment Council of Rhode Island’s (http://www.environmentcouncilri.org) Senator John H. Chafee Conservation Leadership Awards, the organization’s the highest honor. A plastic manufacturer winning the top environmental award is a message that jobs and the environment can both work together.

• LIN Media – owners of both WPRI 12 and Fox 64 – scored a strong 1st quarter. They achieved a net revenue increase 15% to $103.2 million, compared to $89.7 million in the first quarter of 2011. And, local revenues, which include net local advertising revenues, retransmission consent fees and TV station web site revenues, increased 16% to $67.7 million, compared to $58.3 million in the first quarter of 2011. This was a stark contrast to A.H. Belo’s Providence Journal.

• 38 Studios will continue to be one of the most controversial decisions ever proposed by a Governor or the decision-makers at the Economic Development Corporation, but some people got it right – candidate Linc Chafee, Ken Block, the Providence Journal Editorial Board, candidate Angel Taveras, EDC Board Member Karl Wadensten, and URI Dean Ed Mazze.

Forbes points out that 38 Studios collapse can be the spring board to a number of opportunities for RI. The failure of 38 Studios could be the launching pad to numerous start ups, “Boston-area Looking Glass Studios fell apart in 2000. But its alumni either created or went on to work for other games companies in the same area. An incomplete list includes Irrational Games (Bioshock), Harmonix (Rock Band), Mad Doc Software/Rockstar New England (Empire Earth), and Floodgate Entertainment (casual games).”

This past month also showed a number of major business flops. 

Massachusetts’s unemployment rate has now dropped to 6.3% in April. Rhode Island’s unemployment rate is 11.2%. This difference seems impossible.

• Cheerleaders for the 38 Studios helped push the project forward and none may have been more blindly supportive than the niche business publication, Providence Business News. In two separate editorials, the weekly newspaper with less than 3,000 paid circulation, went all in with glowing endorsements of the 38 Studios deal and wrote,”the EDC is setting up an independent structure to monitor 38 Studios’ operations. It looks like EDC got it right this time.”And in another editorial, Providence Business News wrote, “But this potential (38 Studios) bet is too big to miss on.”

RI’s business rankings – again this month RI found it being ranked among the worst state in the union for business to conduct their operations. More than a half dozen separate business publications using a range of methodology all rank RI in the bottom quintile. There needs to be some urgency to turn this around – both the reality and the perception.

“If consistency counts, then the states that ranked as the Pollina Corporate Ten Worst States for Business deserve to be given awards,” says Dr. Ronald Pollina, Chairman of the American Economic Development Institute (AEDI) and President of Pollina Corporate Real Estate, Inc.

AEDI and Pollina Corporate have joined together this year to produce the Pollina Corporate Top 10 Pro-Business States, which is known as “Gold Standard” for evaluating the pro-business status of each state. The annual study found that the lowest ranked states last year were Wisconsin, Illinois, Maine, Kentucky, Massachusetts, Vermont, West Virginia, New Jersey, Rhode Island and California.

For business rankings, the condition of the Economic Development Corporation, and employment, the only option is improvement. We hope.

 

 

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