dibella

When the great Wayne Gretzky, NHL all-star, talks about his success, he frequently offers the following explanation: other players go where the puck is, I go where the puck is going to be. Saul Kaplan and the Economic Development Corporation would do well to keep these words in mind in the struggle to develop Rhode Island’s economy. Even as Governor Carcieri seeks to address the current economic crisis, our civic leaders must look beyond today’s apparent despair and see where we are heading. Short-term concerns must not crowd out the need to concurrently look beyond the horizon.

For example, labor economists must determine whether announced job losses are temporary or permanent. When the stock market drops precipitously as it has recently, a company such as Fidelity is apt to cut jobs from its operations in Smithfield but restore them when the market picks up. On the other hand, manufacturing jobs lost to lower-cost Asian producers are probably gone forever, unless currency values change or the productivity of the American worker increases. Energy production and transmission promote stable business activity, but whaling is part of our past, not the future.

It’s nice that EDC can spend some time attracting new or fashionable companies and industries, but it behooves our economic planners to be cognizant of our competencies and competitive advantages. Courting high-tech firms to come to Rhode Island may feel glamorous, but it makes little sense to compete for companies whose requirements are far better met elsewhere. Rhode Island has nothing comparable to an MIT or CalTech so competing for jobs in the computer industry (hardware or soft) is energy better spent elsewhere. Our jobs-growth strategy should be based on the premise that it’s far easier to expand or grow an existing business than it is to import one.

Of course that begs the question: does Rhode Island have any intrinsic advantages due to its size, location or history? If we consider domains in which Rhode Island has done well historically, that list would include defense, graphic and fine arts (including jewelry), marine trades, medical, textiles, and tourism. Economic planners and forecasters must consider the trajectory of societal trends and where they will intersect with our state’s relative advantages. As Joe Biden stated during his debate with Sarah Palin: “Past is prologue.”

One way to see into the future is through books such as John Zogby’s The Way We’ll Be: The Zogby Report on the Transformation of the American Dream. Zogby claims that future changes in fundamental values will have major consequences. His polling suggests that the American dream or notion of success will get redefined. We will be much less materialistic, more willing to live with limits, and look inward to find spiritual comfort. Of course it’s one thing to poll people about their opinions, it’s another to see those opinions in action. While surveys showed that people preferred the taste of New Coke, when it came to purchasing soda, they still bought the Classic version.

While one futurist, James Canton, author of The Extreme Future: The Top Trends that Will Reshape the World for the Next 5, 10, and 20 Years, points toward 10 major trends including climate change and globalization, another, Mark Penn, author of MicroTrends: The Small Forces Behind Tomorrow’s Big Changes, looks for precursors or covert forces that grow to some tipping point where their impact is pronounced. Penn points to a range of micro-trends including longer life expectancy and the demand for clean water; yet no one really knows the future, and there is great risk in predicting it. However, without some sense of where we may be going, we are bound to inaction or muddling through.

The field of population ecology recognizes that environmental conditions enable the growth of certain types of businesses. Changes in technology or societal norms create opportunities for new economic activity. Without cars, there would be no Goodyear Tires; without a preference for quality coffee, no Starbucks. Twenty years ago, no one foresaw the growth of our online economy (Amazon.com, eBay, etc.) but that required the development of the Internet. By 2050, it has been projected that 9 billion humans will walk the earth. Developments in medicine will bring such revolutions in surgery, bionics, cloning, and stem cell research that many of today’s diseases will be controlled or altogether eradicated. Energy sources, including those now considered “green,” will be more varied with greater reliance on nuclear power.

What will be the impact of these trends and how will their trajectory intersect with Rhode Island’s comparative advantages? I’m not sure about the what or the how, but as for the where, why not the shores of our very own Narragansett Bay? The ports of Providence, Davisville, and Newport can support a range of activity from aquaculture to auto transport. The infrastructure just at Quonset is ripe for the development of offshore wind energy, water desalinization, biotech and nuclear power. President-elect Barack Obama’s economic stimulus package is bound to include funds for energy production using new-age technologies. For those pertaining to the sea, what better place to develop them than in the Ocean State?

Meanwhile, in the short-term, what companies can take advantage of the transition from mechanization and the production of material commodities to globalization and niche-specialization? Companies that offer high-end, differentiated products and services that utilize intellectual capital that can’t be shipped or developed elsewhere. Rhode Island does not lack for such firms, e.g. DiLeonardo Hospitality Design of Warwick, Goetz Custom Boats in Bristol, Meridian Printing in East Greenwich, and Precision Source in Smithfield. Such firms may not be flashy or make the Fortune 500, but as small businesses they are the backbone of the new global economy. That’s why news of the decline in SBA loans (The Providence Journal, Nov. 7) should be so disturbing. Instead of bailing out big business due to its political clout, we can do more public good through incentives for small business.

As we go through today’s rough economic period, let us not forget the future; and as we develop our capacity to adapt to tough times, let us not forget that tough times don’t last but tough people do. Finally, if Zogby’s polls are accurate, we may live with less but be happier for it.

Anthony J. DiBella works at the Naval War College, in Newport