The state of Rhode Island might not suggest the glamour of Hollywood, but unbeknown to many, the US’s smallest state does boast a sizeable movie industry, with worldwide box office hits such as 27 Dresses, Me, Myself & Irene and Underdog all shot there.
The latter title could also apply to investors’ perception of the state. As data from greenfield investment monitor fDi Markets shows, FDI inflows in the past 10 years put Rhode Island close to the bottom of the list of American states, ahead only of Hawaii, South Dakota, Alaska, Vermont, Montana and Wyoming.
States with benefits
According to Stefan Pryor, the state’s commerce secretary, Rhode Island might not yet be the most popular among investors – but this is precisely why companies seeking US expansion should take a closer look at it.
“It is an underdog state in many ways, but it represents a state where we think there is greater potential than might be offered in other jurisdictions that are more prominent – and, as a result, oversaturated,” he says.
Among the state’s main advantages over its better known rivals, according to Mr Pryor, is the lowest business tax rate in New England as well as office space at rates significantly lower than in nearby Boston, 80 kilometres from the state capital Providence.
According to Rhode Island governor Gina Raimondo, the state wants to establish itself as more than just Boston’s cheaper cousin. “Rhode Island’s advanced industries – from software to advanced manufacturing to defence – are key to our future growth,” she says.
“And we have seen big moves [in that regard] in the past 12 months,” adds Ms Raimondo, referring to projects such as a new digital office opened by multinational conglomerate GE and submarine builder General Dynamic Electric Boat, which is adding 3000 new jobs to its facility in Quonset Point, a peninsula 33 kilometres south of Providence.
This ambition to go beyond merely luring investments from nearby states could be seen during the trade mission taken by Rhode Island leaders to the UK in September 2016. And while British investors remain to be convinced, their Irish neighbours recently made a big bet on Rhode Island, choosing Providence to host the Ireland West International Trade Centre.
This joint initiative by western Irish trade councils aims to provide soft-landing services for companies from western Ireland looking to establish operations in the US. It was driven not so much by Rhode Island’s eagerness to establish itself as an ideal place for advanced industries, but more by its unique location.
“A key plank of the marketing and sales strategies of participating companies is to access the large Irish diaspora markets that are centred in both New York and Boston,” says John Magee, senior enterprise development officer at Mayo Local Enterprise Office.
Rhode Island’s location between these two large markets means it is the ideal location for small Irish businesses to explore the market from, he adds. Given its size, the state might never be able to attract just on its own merit. Then again, as shown by the examples of Connecticut and Delaware, proximity to economic powerhouses, combined with a favourable business climate, might be just what is needed to give the underdog sharper teeth.