Does Rhode Island Need 17 Chambers of Commerce?
Wednesday, August 21, 2013
Rhode Island, ranked second in the country in population density, but 43rd overall with just over 1 million residents -- 1,050,292 at last census count -- has seventeen Chambers of Commerce in the state representing local and statewide business interests, as well as a statewide Coalition.
With the third highest rate of unemployment in the country currently, and recent rankings of #49 by Forbes and CNBC as a "state to do business", and #47 in the U.S. Chamber of Commerce's "Getting Down to Business" 2013 Enterprising Rankings, it is no secret that the Ocean State has been struggling economically.
All is not lost however, as the U.S. Chamber's same recent assessment found that RI had rankings of 15th in talent pipeline and 16th in innovation and entrepreneurship that would, for the state, "suggest the existence of a foundation on which to build the future."
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTAnd having recently landed the number two spot in a national nursing home quality report card -- and high accolades for tourism and even coffee -- GoLocal local reached out to Rhode Island leaders and experts to see if having multiple Chamber organizations, as well as Chamber Coalition, are moving the state's economic needle forward -- or if the high number of chapters for a small state is, in fact, necessary.
See the 990s -- How Much Do the Chamber Bosses Make? Click Here for Slideshow
Distinguished URI Professor of Business Administration Edward Mazze thought the current Chamber structure is well-suited for the state.
"In a state the size of Rhode Island, fewer chambers of commerce would seem better than more. However, local chambers deal with small business members concerned about their local area and problems of doing business in that area. By local means having local Chambers promoting and lobbying for their members. I would not combine the chapters," said Mazze.
Mazze didn't think a more centralized approach would benefit the Chambers -- or business. "In my experience, "super combined" chambers become too political, very bureaucratic, not representative of the members and do little for their members other than collect dues and sponsor programs for the few rather than the entire membership. Currently, we have the right number of chambers. Some chambers perform better than others because of their leadership and volunteers," he continued.
However, Mazze did see the need for a clear vision for the future of the state.
"Chambers are only one of a number of facilitating agencies for supporting economic development. The chambers could be more effective if the state had a vision for what it wants in terms of economic development. At the end of the day, economic development does not work without a partnership of government, business, labor unions, education and professional organizations like chambers. This is a case where the "whole is greater than the sum of its parts."
GoLocal spoke on Tuesday with Stephen Boyle, Executive Director of the Cranston Chamber of Commerce, who said that his advocacy efforts were split between local and statewide endeavors, noting that while he often testified at the State House, "I've also go to be on top of any ordinance that gets passed by the City Council."
Boyle said that the Cranston Chamber was particularly active in lobbying for healthcare issues that affect small businesses. "We've been aggressive on this, because it's important to small business. Health insurance is one of their largest bottom line items," noting that he was involved with such groups as HealthRight and the Health Insurance Advisory Council, and mentioned the Cranston Chamber was hosting an event on Wednesday with HealthSource RI and Lieutenant Governor Roberts.
While a lot of his work was done on the local level, Boyle gave credit to the statewide Chamber Coalition. "There's no way we could do the statewide lobbying and mobilization individually."
Critics Questions Politics and Numbers
Mike Stenhouse with the Rhode Island Center for Freedom and Prosperity said that in general he believed in local Chambers -- "I think there should be many, and be done at the most local level. The concerns of Narragansett are always going to be different than say South Kingstown."
"As a whole in the state however, I feel that there are many people that believe that the Chambers have failed the business community. In some cases, their insider nature makes it difficult to be an effective voice for reform against the status quo," said Stenhouse.
Stenhouse recently penned an opinion piece for The Ocean State Current in early August in which he questioned the Narrgansett Chamber of Commerce's decision to petition the PUC to deny a license to a ferry boat company that would compete with an existing Narragansett based-operator.
In the article, Stenhouse wrote, "Competition, a core principle of capitalism, means that consumers, via the open market, are free to decide for themselves which products and services best meet their needs. These decisions should not be forced on consumers through crony policies or a central planning process. This is how the Ocean State has restricted economic growth over the decades. Any chamber of commerce head should be well aware of this."
He continued, "Chambers of Commerce should be pro-business voices that support open competition. They should be in the business of promotion, not sinking to the practice of protectionism. Yet, like far too many other chambers, political entities, and elected officials in our state, insider politics often trump potential economic development and job growth.
URI Economics Professor Leonard Lardaro offered up a similarly sharp critique of the the scenario facing Chambers of Commerce in Rhode island -- and the state of the state in general.
Looking at the number of local Chambers in Rhode island, Lardaro said, "The's because Rhode Island is cloaked in redundancy in all levels of government and its municipalities. You have to wonder, has anyone heard of economies of scale?"
Lardaro acknowledged the combined efforts of the statewide Chamber Coalition, but posed a theoretical question. "What does it even mean to be 'effective' in a highly ineffective state? Rhode Island is one of the worst run states in the country, partly because of not relying on the necessary role of due diligence."
"While Rhode Island had done a rather inconsequential reorganization with the establishment of the Department of Commerce, which might though if anything provide Chambers with a better connection to a point person at the executive level, what is the Secretary of Commerce going to be able to do when the state falls severely behind in just a few years when Massachusetts' casinos emerge, and gaming revenue -- and subsequently our state economy -- starts to slump? The state will be in crisis mode. This is not a theory. This is our reality. And we're not prepared for this train wreck."
Founding Director of the Hassenfeld Institute for Public Leadership at Bryant University and a former state administration director and RIPEC executive director Gary Sasse expressed his thoughts on both the Chambers and business community to GoLocal.
"There has been a concern for a number of years as to whether or not Rhode Island has too many organizations representing business interests. Answering this question should be done by the business community itself . Business leaders should ask themselves, “If this was my business would the current organization structure maximize results and benefits?”
Sasse continued, "The germane question is whether or not leaders in the business community are being aggressive, visionary and effective in creating a better business climate. Unfortunately, after reviewing a myriad of national business climate rankings it appears that business leaders need to assess how they can become more influential in driving a pro-business agenda in Rhode Island. This should also include a discussion of how to organize for success."
