There are indications that Rhode Island may have reached the bottom in the recession. This does not mean that the unemployment rate will decline immediately. The question is how long will the bottom last before positive signs of economic progress are seen in the state. More consumers spending will be the first indicator that the recession is ending.

There has been recent attention to how the state manages economic development activities. Rhode Island has been unsuccessful in increasing jobs and providing the climate for businesses to come and grow in the state.

We need to look at economic growth in the state since 2003. Growth is measured by Rhode Island's gross state product, personal income and per capita income. Gross state product is the monetary value of all of the finished goods and services produced within Rhode Island in a year. The average annual growth rate for gross state product in Rhode Island (bil. 00$) was 0.7 percent for the period 2003-2008. Personal income (bil.$) grew from 35.07 in 2003 to 43.22 in 2008, an average annual growth rate of 4.3 percent while per capita income grew from $32,737 in 2003 to $41,129 in 2008. In 2009, gross state product is forecasted to decrease by 3.1 percent, personal income by 0.1 percent to 43.19 and per capital income by 0.2 percent to $41,060.

The key to growth is increasing productivity by investing in technology. To sustain productivity and make investments, businesses want to operate in a government- business-friendly environment where finance, a well educated workforce and the right infrastructure is present. Creating jobs by itself is not the solution to Rhode Island's economic problems. Productivity is the basis for raising real wages for workers and competing for jobs and new businesses with other states.

Economic development, as distinguished from economic growth, is a process that starts with setting objectives based on the state's available resources and core competencies which leads to preparing a plan that results in a higher standard of living. The way to raise the standard of living is to find new and better ways to use the state's resources and competencies. This has not happened in Rhode Island. The state has one of the highest unemployment rates in the United States, a significant decline in median home prices and an increase in bankruptcy filings.

We need to use the number of firms attracted and retained, quality jobs, wage and income growth, innovation and entrepreneurship as measures of economic development. With the right economic development plan, Rhode Island should be able to distinguish itself from the neighboring states and create jobs that pay higher wages that will retain and attract a diverse educated workforce.

A strong economy will create opportunities that generate revenue to support government expenditures in education and in other critical areas. These opportunities will not come about until Rhode Islanders obtain the skills needed for higher-paying jobs.

Rhode Island needs a pro-business environment that eliminates many of the barriers to conducting business. Any state and local government agency responsible for economic development must be customer-centric.

Economic development needs to be organized in a way that strategy and coordination are centralized in one agency that is also be responsible for assisting businesses in obtaining financing, real estate site selection and providing technical assistance to move the business process. The state should continue to offer incentives to businesses and industries that create jobs such as access to venture capital, financing and direct equity investments and workforce training grants for employees and employers. There is a need for collaborative efforts between government, business, education and unions. Without this collaboration, it would be difficult to form the strategic partnerships necessary for attracting and retaining industry.

An important part of economic development should be the revitalization of cities and towns that lost businesses and their economic base many years ago. Rhode Island should offer a "shovel ready program" designed to help companies locate and develop a site quickly by working with cities and towns in identifying sites as "ready for development." Funds from the federal stimulus program are already helping improve infrastructure such as highways and bridges which have been neglected for many years and critical for attracting industry.

Rhode Island competes in a regional and global economy where information, ideas and technology are important. Our economic development must preserve existing employment, create new employment opportunities, support small business, increase our standard of living and improve the quality of life if we are to have any real economic growth.