Rhode Island Ranks #48 for Starting a New Business, Second Poor National Ranking in a Week
Tuesday, July 20, 2021
Rhode Island ranks near the bottom for those looking to start a new business, according to a study released on Tuesday. This is the second poor national ranking in the past week.
“Starting a business is never easy. According to U.S. Bureau of Labor Statistics data, about a fifth of all startups typically don’t survive past year one of operation, and nearly half never make it to their fifth anniversary. That’s without considering the economic damage done by the COVID-19 pandemic, which resulted in 200,000 more permanent business closures than usual within a year of the pandemic’s start,” writes Wallethub.
In this new study, Rhode Island comes in at #48 and trails only Connecticut and New Jersey, but don’t think that the study is biased against the Northeast — Massachusetts is ranked 10th in the country.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTMaine is ranked 13th.
“Outside of the pandemic, there are plenty of other reasons that startups fail, with a “bad location” among the most common. Choosing the right state for a business is therefore crucial to its success. A state that provides the ideal conditions for business creation — access to cash, skilled workers and affordable office space, for instance — can help new ventures not only take off but also thrive,” writes WalletHub.
The study from WalletHub comes just days after CNBC ranked Rhode Island #46 for "top states for business." CNBC wrote, "Business is choppy in the Ocean State. Health care is sound, but infrastructure is aging."
Why Is RI Ranked so Low
The WalletHub ranking is based on 28 data sources bundled into three major categories — business environment, access to resources, and business costs.
Rhode Island ranks #48 for a business environment, #17 for access to resources, and #37 for business costs.
Rhode Island's General Assembly once created a commission to identify issues to improve the states business rankings.
Moving the Needle
In January 2013, at a joint news conference, then-President of the Senate M. Teresa Paiva Weed and then-RIPEC Executive Director John Simmons unveiled a report titled “Moving the Needle” that featured a list of recommendations that they feel would help Rhode Island climb its way out of the cellar in national studies and rankings of business.
The report reviewed the individual factors that often cause Rhode Island to rank poorly compared to other states and made recommendations to begin to improve the state’s overall business climate and, subsequently, the way it is viewed in future studies.
“This report offers substantial recommendations to change how Rhode Island is ranked in national business-competitiveness surveys,” Paiva Weed said. “The economy is the Senate’s priority, and will be the Senate’s focus this session.”
“This benchmark is a huge development in understanding the factors driving or impeding Rhode Island’s growth agenda,” said Laurie White, president of the Greater Providence Chamber of Commerce. “The report is validation of the true link that exists between the legislative process and our ability to grow the jobs base. It is a monumental step forward in how we evaluate, prioritize and measure economic policy initiatives.”
Six months after the “Moving the Needle,” initiative was launched, GoLocal reported that Paiva Weed's office sent out a press release, "Passage of the legislative package builds on the General Assembly’s work over the past several sessions to improve the state’s economic competitiveness, including the creation of the Office of Regulatory Reform, pro-growth reforms to the state’s income tax, developing a single statewide electronic permitting system, and investments in workforce development."
Eight years later, Rhode Island is ranked #46 and #48 respectively in two national business rankings.
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