PROVIDENCE -- To carry out the new economic strategy for Rhode Island, the state's Economic Development Corporation has hired 16 new people and revamped the structure of the quasi-state agency.
At the beginning of the year, the EDC's new director -- Michael McMahon -- laid off 22 people, citing a need to refocus the organization and staff it with people who have the experience to help Rhode Island businesses grow.
Now, nine months into his new position, McMahon has hired 16 people, ranging from laborers at Quonset Davisville Port and Commerce Park to a high-level director of business development. Most of the hires are filling newly created positions and are qualified to carry out the state's new economic strategy, according to Richard Reed, the EDC's new $85,000-a-year director of administrative operations.
The economic strategy -- unveiled last week -- is focused on expanding the state's large and small businesses, increasing the number of businesses without creating urban sprawl, and building the state's reputation as a friendly place for businesses to create and offer new ideas.
The plan not only lays out far-reaching economic goals for the state, but also proposes six specific statewide projects the EDC will oversee as it attempts to reach those goals.
Those projects will be carried out by an EDC that is focused on "customer service," said McMahon. The new employees are expected to return every phone call and answer every letter, as the state works to encourage companies to grow and create 20,000 jobs in Rhode Island by 2007, said McMahon.
Employees are also expected to go out and find out what companies in Rhode Island need to grow, and to actively recruit companies to the state.
Now the EDC has "lots of people going out there talking to lots of different companies," said Reed. A higher percentage of EDC employees is now focused on talking to companies and helping them expand and create jobs, than in the prior administration, said Reed.
"It's a proactive approach," said Reed, in an interview at the EDC earlier this week. By talking to companies regularly, the EDC wants to be able to help a company handle financing issues before it goes bankrupt or find a company a piece of land to expand before hearing it's moving out of state.
"The model is very different" from the previous EDC structure, said Reed. "It tended to be more of the model of 'let the phone ring.' Now, account managers have to know exactly want's going on in those companies. We don't want to come in in the 11th hour and find out there's nothing we can do," to stop a layoff or a relocation, said Reed.
To do this, account managers will be responsible for addressing the needs of specific companies. And unlike EDC account managers in the previous administration, these people have a minimum of seven years experience in a particular industry, said Patricia Page, human-resources director for the EDC. Account managers are instructed to be more flexible when addressing a company's needs. Instead of saying the EDC doesn't have a program, the managers will work to change a program to fit the requirements, she said.
The account managers will also work with EDC project managers responsible for work force development, company finance and land development to help companies get loans or land, or whatever they need to grow, said Reed.
In addition, the top-level employees have the backgrounds to continue developing the economic strategy, according to Reed, a Brown University graduate, who spent most of his career at Citibank.
For example: Saul Kaplan, the recently hired director of business development for the EDC, is heading one of the economic strategies' main initiatives and has years of experience in the biotechnology industry. He was a partner at in the health and life science practice at Accenture (formerly Andersen Consulting) before coming to the EDC, worked for the pharmaceutical division of Eli Lilly and Co., and has a bachelor's degree in pharmacy from the University of Rhode Island.
Also, the hiring of a new executive director at Quonset, and the decision to stop pursuing a container port, will mean the industrial park is taking up less of the EDC's time and energy, said Reed.
Given the redirection of Quonset, the restructuring is something that could prove highly beneficial to the EDC, according to H. Philip West Jr., executive director of Common Cause Rhode Island, a government watchdog group.
"I think the EDC has been through various kinds of turmoil since the merger of the old economic-development agency and the old port authority, and it's been an agency that's sometimes seemed to flounder," said West. "I do think that the great turmoil over Quonset made it impossible, or very difficult, for the rest of EDC to function."
Ultimately, the EDC has seven fewer people than it did when Governor Carcieri took office and McMahon was appointed in January (while 22 were laid off, one person was transferred to the governor's office). The EDC now has 98 people versus the 105 employees it had at the beginning of the year. And while the restructuring was geared toward finding people qualified to handle the state's new strategic direction, it also resulted in about $980,000 a year in cost savings, said Reed.
"Our goal was to free up $1 million," said Reed. "We wanted to free up a pool of money to be used for project activity."
Those savings will be used to fund projects to study the state's tax incentives to businesses, the feasibility of aquaculture as an industry in the state, and possibly a more formal tax analysis, he said.
"Behind all this, we're really trying to institutionalize things here at EDC," said Reed, who acknowledged that previous governors and directors have regularly changed the agency's direction. "To isolate it from [administration and political changes]."
