The Marine Cluster An Investment Agenda for Rhode Island’s Marine Related Economy July 2002 Prepared by the Rhode Island Senate Policy Office 2 Many of the photographs in this document are courtesy of Billy Black Photography www.billyblack.com 3 Table of Contents Precis for Action................................................................................................................. 4 Sector Goals........................................................................................................................ 5 Introduction........................................................................................................................ 6 Methods & Theory to Examine the Marine Cluster ......................................................... 8 Sector by Sector Analysis................................................................................................. 13 Recreation and Tourism .................................................................................................. 15 Marine Events .................................................................................................................. 21 Fisheries and Aquaculture .............................................................................................. 26 Boatbuilding, Boat Servicing and Boating Related........................................................ 30 Shipbuilding ..................................................................................................................... 38 Marine Transportation .................................................................................................... 44 Military ............................................................................................................................. 50 Research, Technology Development and Education ...................................................... 54 Suggestions for Future Research .................................................................................... 62 Key Sources ...................................................................................................................... 63 4 Precis for Action Rhode Island hosts one of the world's most competitive marine clusters. The Rhode Island Marine Cluster is defined as an interconnected grouping of firms, institutions, and people all relying directly or indirectly on Narragansett Bay and the marine resources of Rhode Island. The Rhode Island Marine Cluster is comprised of eight sectors: marine recreation, tourism & events, fisheries & aquaculture, boatbuilding, boating-related businesses, shipbuilding, marine transportation, military, and marine research, technology development and education. The goal of this plan is to give context and direction to future state efforts to develop Rhode Island's marine resource have always been central to its the marine economy. economic development, yet resource managers and policy makers have insufficient guidance to fully coordinate the relationship between marine resources, the marine related economy, and the overall economic development strategy of Rhode Island. As a result, Rhode Island's marine economy shows signs of neglect. The configuration of relevant government agencies is inadequate. Economic data and analysis are scarce. Underlying statutes are antiquated. Coordination among entities is poor. The goal of the plan is to give context and direction to future state efforts in marine related economic development. The plan describes each sector of the marine economy and offers recommendations to stimulate growth in the respective sectors. This plan will contribute to a better understanding of the marine economy, however, it is not sufficient to guarantee progress in economic planning and development. Progress will require partnership and effort from all elements of the cluster, public and private. A coherent and collective cluster initiative will ensure that Rhode Island maintains its regional, national, and international prominence. A role for Government… • To coordinate the relevant government programs and agencies, industry sectors, and multiple public and private entities of the marine cluster • To create an organizational infrastructure to implement the recommendations contained in this report, establish an ongoing policy context for undertaking investments in the marine economy, and carry out future planning efforts • To advance and integrate marine economic development policy and planning at the local, state and regional level • To ensure more routine and systematic analysis of the cluster, and of projects with potential impact for the cluster Estimated Revenues Associated With Narragansett Bay (Rorholm and Farrell, 1992) 700000 Navy (excluding edu) 600000 Marine Education, R & D 500000 400000 Marine Transportation 300000 Commercial Fishing 200000 100000 Marine Industry 0 Marine Recreation 1967 1979 1989 5 Sector Goals This plan proposes goals and strategies for each sector to guide future investment: Invest in policies, programs and infrastructure that… Marine Recreation & Tourism • enhance marine recreational offerings and highlight the ecology and maritime heritage of Narragansett Bay for residents and visitors A coherent and collective Marine Events marine cluster initiative will ensure that Rhode Island • make Narragansett Bay a world leader in hosting nationally maintains its regional, and internationally significant marine events national, and international prominence. Fisheries & Aquaculture • ensure the long term viability of the fishing industry by developing a fisheries management system that provides for fair and equitable access to the fishery while preserving the health of the ecosystem and the associated infrastructure and service; • establish Rhode Island a world leader in the export of aquaculture knowledge. Boatbuilding & Boating Related Businesses • secure Rhode Island's position as a world leader in marine trades by developing and maintaining competitive advantages across the industry sector diamond Shipbuilding • maintain the viability of the shipbuilding industry in Rhode Island by ameliorating competitive disadvantages across the industry sector diamond Marine Transportation • provide for the efficient marine transportation of people and goods to, from and within Rhode Island Military • maintain or provide opportunities for an expanded presence of the military in Rhode Island. Research, Technology Development & Education • maximize the economic development potential of marine research, technology development and education 6 Introduction Background This plan is a strategic document, developed by the Senate Policy Office to give context and direction for state investments in marine economic development. The state is continually making policy and program investments in or that have a bearing on marine economic development. Recent examples include upgrades in wastewater treatment infrastructure, improvements at state piers, and a new system for fisheries management. Rhode Island hosts one of However, there are signs that some necessary investments are not being made: the world's most significant marinas struggle with expansion and lack of adequate depth, foreign factory marine related economic clusters. Promoting the ships operate within state waters, and boatbuilding firms compete for a limited growth and development of supply of suitable land. The good news is that demand for marina space is this cluster should be a state high, opportunities exist to process fish locally, and boatbuilding, unlike other economic development areas of manufacturing, has been on the upswing for the past decade. priority. Investments in or that have a bearing on marine economic development are often evaluated on a case by case basis, without guidance from an economic development planning framework. Traditionally, specific projects or programs are discussed in environmental terms with limited analysis of the potential economic development implications. For example, the discussion of habitat restoration funding in recent years has been limited to the environmental benefits of restored habitat without making explicit linkages to economic development. In reality, the economic development benefits of Narragansett Bay, the dominant geographic feature in southern habitat restoration could be New England, is enclosed in Rhode Island, yet the watershed is quite significant, and primarily in Massachusetts might include better yields for the commercial and recreational fishery, increased value of waterfront property, enhanced opportunities for recreation, and mitigated vulnerability to flooding and other natural hazards. In other examples, environmental and economic considerations in a given program or project are evaluated in economic terms to explore fiscal impact or cost benefit formulas, but seldom in terms of the economic development impacts. Such was the case in the discussions of combined sewer overflow upgrades by the Narragansett Bay Commission. The approach to this project was command and control environmental regulation and finance with little more than peripheral discussion of the implications for economic development. In other instances, economic analysis is stunted by a lack of reliable, longitudinal data. In each example, the absence of an economic development planning context within which to discuss investments leads to an incomplete attempt to link each investment decision with the larger picture. There is no such context and direction for the larger picture, and without it, the individual investment analysis is myopic. 7 In recent years, elected officials, environmental managers, and key decision-makers from the public and private sectors have expressed an interest in some kind of economic development planning for the bay. The idea of a "bay business plan" was supported by some environmental groups and culminated in a sustainable communities grant submitted to the US Environmental Protection Agency by the Economic Policy Council. While the grant was not received, the idea took root. The Economic Policy Council continues to champion the concept of coordinated bay economic development planning and recently included among its ten strategies for Rhode Island's economy to "promote sustainable use of Narragansett Bay."1 The 2000 Bay Summit made several key observations regarding stewardship of Rhode Island's marine resources. Bay Summit participants articulated the economic importance of the bay, the interrelationship between economy and environment, the paucity of usable marine economic data, and the need for sustainable economic development. Among the Legislative Recommendations of the Narragansett Bay Summit report dated May 2000 was to "Realize the Bay's Sustainable Economic Potential." That report goes on to say: The economic role of Narragansett Bay is declining, although the reasons for this trend are not fully understood. Summit participants concluded that opportunities exist to make better economic use of the Bay while improving the quality and productivity of its ecosystem.2 The Rhode Island Senate leadership asked the Senate Policy Office to devise a plan to respond to the general opportunities for environmentally sound economic development identified at the Bay Summit and to provide a context for decision-making around future marine related investments. The Senate Policy Office then initiated an atypical exercise in large system planning that is more characteristic of work that would be performed by a Department or Agency of the state. Rhode Island has never undertaken a comprehensive economic development planning exercise for all marine related industries. Thus, this plan differs significantly from past efforts to describe, in economic terms, Rhode Island's marine resources. Rhode Island has produced several economic characterizations of Narragansett Bay or particular marine industries. For example, University of Rhode Island resource economist Niels Rorholm produced many such studies over several decades. These economic studies continue to be of great value to resource managers and policy makers, however, they are not easily replicable and readily accessible. Indeed, much of the work done for the Bay Summit relied upon and referenced the work of Rorholm because more recent information was not available. These economic studies are necessary but not sufficient for economic development planning; economics is not economic development. The Research Question: What capital and program Marine economic development planning is not without precedent in Rhode investments should Rhode Island be making to ensure Island. The State has done some strategic planning for the growth of specific the long term productivity of marine industries. One examples is the Strategic Plan for Aquaculture in its marine resources? Rhode Island. Other examples include Statewide Planning's look at marine manufacturing in 1980, and the Greenhouse Compact, a comprehensive look at Rhode Island's economy done in the mid-1980s. The most recent discussion of strategic marine economic development using current economic development theory can be found in the Economic Policy Council's 1997 Meeting the Challenges of the New Economy document. However, this effort was restricted to only a few sectors of the marine economy, and thus falls short of what is required to make decisions affecting the entire marine economic system. 1 A Rhode Island Economic Strategy: 10 Ways to Succeed Without Losing Our Soul. The Rhode Island Economic Policy Council (September 2001). 2 http://www.nbep.org/summit/legrec.html 8 Methods & Theory to Examine the Marine Cluster The research underlying this plan was loosely guided by a grounded theory research design.3 The research question was: What capital and program investments should Rhode Island be making to ensure the long term productivity of its marine resources? This plan is built upon the important work done in the Narragansett Bay Summit whitepapers, which provided baseline data for many uses and user groups of the Bay. Starting from this data we proceeded to a literature review - augmenting that work with review of other significant works related to planning, coastal management, marine economic planning and development, including Rhode Island, national and international perspectives. The bulk of the project is based on key informant interviews and semi-structured focus groups, reaching over one hundred members of the business, government, non-governmental organization, and academic communities. Interviews were used to understand and define the cluster, relationships between and among entities, infrastructure needs, labor needs, capital needs, etc. The research did not assume user conflict. There was a bias towards looking at what can be done, as opposed to what should not be done. The research intends to be useful and contextually complete. The researchers were aware of the importance of having a neutral research position to the greatest extent practical; every attempt was made to be neutral and unbiased. While previous work and the work of the Bay Summit provided some important data, overall, marine specific economic data is scarce. Data that is available is disjointed and does not lend itself to easy comparison of trends over time.4 Economic Development This is a plan for economic development, so it is appropriate to spend a moment defining what it meant by economic development. Outside of academic circles, there seems to be no clear and commonly accepted specific definition of economic development despite the increasing use of this term. Some think of economic development as an outcome or objective, such as more jobs, higher incomes, expanded tax base, good business climate, expanded tax revenues, or a redistribution of income.5 Others consider economic development as a process, such as industrial recruitment, business retention, or regional development. The most commonly accepted definition is used in this plan: economic development is the process of creating wealth through the mobilization of human, financial, capital, physical and natural resources to generate marketable goods and services.6 A common thread is that economic development is often considered synonymous to economic growth. While growth is a quantitative change in the scale of the economy, economic development is a qualitative change, which entails changes in the structure of the economy, including innovations in institutions, 3 See: Strauss, A., & Corbin, J. (1990). Basics of qualitative research: Grounded theory procedures and techniques. Newbury Park, CA: Sage, or Strauss, A., & Corbin, J. (1994). Grounded theory methodology: An overview. In N.K. Denzin & Y. S. Lincoln (Eds.), Handbook of qualitative research (pp. 273-285). Thousand Oaks, CA: Sage. 4 Every attempt was made to collate accurate and complete data to discern status and trends of the sectors in this study. In many cases, the best available economic information is found in ES202 data provided by the Department of Labor and Training. However, the Standard Industry Classification (SIC) coding system employed in ES202 data does not lend itself easily this type of analysis because few of the SIC codes are marine specific. To develop a more complete and accurate measure of marine economy impacts will require 1) the development of original data sets through a direct survey (see Rorholm, 1967), or 2) estimates / assumptions about the percentage of marine activity in each less specific SIC (Georgianna, 2001) or other data source (Georgianna, Rorholm). Efforts, however, are underway to analyze the size and composition of the coast and ocean economy at the national level (see Kildow, et al, 2000) which may prove useful to Rhode Island's data needs. 5 Philip M. Burgess and Delore Zimmerman, "High Performance Communities: New Economy Ideas Into Action," Center for the New West. 1996. 6 American Economic Development Council, 1984. 9 behavior, and technology.7 Economic development produces changes in the economy "as are not forced upon it from without but arise by its own initiative from within… By this we should mean that economic development is not a phenomena to be explained economically."8 The practice and expected role of the government in economic development has changed over time. Economic Development as a public function only became accepted in the latter half of the twentieth century. During the 1970's, economic development theory and practice consisted primarily of industrial facility location or "smoke stack chasing." To attract industry, localities would prepare suitable land for development and offer significant tax The numerous examples of advantages for site relocation. During the 1980s, economic development regional clustering provide theory migrated into national industrial policy debates with an emphasis on evidence that even as private sector entrepreneurs. As power devolved to state and local competition and economic activity globalize, competitive governments, the function of economic development became increasingly advantage can be localized. important. The 1990s saw the emergence of several important theories which -Enright & Roberts influenced government; together these theories can be called the entrepreneurial government movement. Under this view, which continues to dominate current thinking, local and state government can and must become a player in economic development. The public sector is expected to participate in setting the stage for economic development. Three important concepts emerged: • linked agents of innovation -firms, research institutions, end users- often concentrate in geographic areas known as clusters; • workforce skills are essential for a strong economy; • command and control systems are dysfunctional. Michael Porter articulated the cluster concept in his 1990 work, The Competitive Advantage of Nations. Described by Porter, a cluster is “a geographically proximate group of interconnected companies and associated institutions in a particular field, linked by commonalities and complementarities.”9 Subsequent work provided a more basic definition for a cluster offered by Doeringer and Terkla as “a geographical concentrations of industries that gain performance advantages through co-location.” Some of the more prominent examples of industry clustering include the northern Italian ski boot industry, or the Silicon Valley computer and electronics industry. While Porter set out to examine the elements of national competitiveness, he acknowledged that clusters are often local or regional in scope and are thus applicable to city and regional economic development. The cluster concept provides a useful explanation for the manner in which industries grow and become competitive, and establishes a context for local and regional economic development policy and planning. As one author put it, "the numerous examples of regional clustering provide evidence that even as competition and economic activity globalize, competitive advantage can be localized."10 The policy implications for cluster growth flow from an understanding of the function of clusters.11 Porter, for example, in discussing Canada argues: 7 Roger Vaughn and Peter Bearse, "Federal Economic Development Programs: A Framework for Design and Evaluation," in Robert Friedman and William Schweke (eds), Expanding the opportunity to produce: revitalizing the american economy through new enterprise development (Washington, DC, 1981). 8 See: Schumpeter, The Theory of Economic Development: An inquiry into profits, capital, credit, interest and the business cycle , 1911, and Economic Doctrine and Method: An historical sketch, 1914. 9 http://www.msmec.com/cit/part1/citpartone_files/slide0761.htm 10 Michael J. Enright and Brian H. Roberts, "Regional Clustering in Australia," Australian Journal of Management, Vol. 26 (Special Issue, August 2001). 11 Clifford Bekar and Richard G. Lipsey, "Clusters and Economic Policy," revised version of a paper presented at Policies for the New Economy, Montreal, June 26-27, 2001. 10 There is room for governments to… support clusters, whether in providing specialized training and research institutions, specialized infrastructure, or incentives for related and supporting industries to co-locate. Governments should seek out cluster participants and proactively understand their needs at a time when early action can have a transformative impact…[G]overnments can and do promote the health and development of clusters by understanding their specialized factor requirements, determining which have such high levels of externalities involved that individual firms will not invest to create them, and proactively invest on behalf of the industry. Such investments can include specialized educational programs, specialized infrastructure, or special regulatory regimes.12 Since the publication of two of the most recent and influential Rhode Island specific economic development documents (the “Greenhouse Compact” and the “Meeting the Challenges of the New Economy”), Rhode Island has been referring to clusters and applying some cluster centric strategies. The Economic Policy Council has also recommended using the industry cluster strategy to guide state development efforts in a way that recognizes the state’s connection to the Boston Metro.13 The cluster framework applied to Narragansett Bay is thus The emerging network consistent with the current theories and practices in Rhode Island’s economic economy leads toward more tightly coupled, more intense, development efforts. more persistent and more intimate relations among The industry cluster approach is also used in this plan for pragmatic reasons: firms and between firms and cluster analysis provides a good foundation for understanding the governmental organizations. interrelationship of the marine industries in Rhode Island which has not been The cluster concept embraces this new paradigm and helps adequately addressed in existing work. For example, the boatbuilding sector us to understand it in a includes more than boat building companies, it also includes marinas and coherent and systematic way. related suppliers and facilities. Spin-off industries of boat building, including -Roelandt many small, specialized firms have emerged with products that lead the market in design and innovation. Several significant yacht designers have offices in Rhode Island. Non-production entities also contribute to the cluster in Rhode Island. The national governing body for the sport of sailing, for example, is located in the state. The influence of these boating related businesses on the competitiveness of the boatbuilding sector is not accounted for in traditional analysis. The Rhode Island Marine Cluster: A System Assessment The Rhode Island Marine Cluster is a concentration of firms, institutions, and end users all relying directly or indirectly on the marine resources of Rhode Island, with strong formal and informal linkages among themselves and to other units in the supporting technological, business, and research infrastructure. The Marine Cluster can be divided into eight sectors: 1) Tourism, Recreation & Events, 2) Boatbuilding, 3) Boating Related Business, 4) Marine Transportation, 5) Fisheries & Aquaculture, 6) Military, 7) Shipbuilding, 8) Research, Technology Not all firms in the coastal Development & Education. Within each sector are the various elements of the zone are marine related, and cluster that have a bearing on its competitiveness. not all marine related firms are located in the coastal Rhode Island's Marine Cluster is what Porter describes as a horizontal cluster, zone. or one in which a natural resource provides the connection. The geographic concentration of particular industries involves the presence of unique natural resources, economies of scale in production, proximity to markets, labor pooling, the presence of local input or equipment suppliers, 12 Roger L. Martin and Michael E. Porter, "Canadian Competitiveness: A Decade After the Crossroads," March 2001. 13 Clusters, not niches, urged for future RI Development. Providence Business News, 5/7/01. 11 shared infrastructure, reduced transaction costs, and other localized externalities.14 Accordingly, the marine resources of Rhode Island are the common natural resource that sparked the development of the earliest entities of the cluster (e.g. shipbuilding) and continue to support and link the cluster, albeit in a constantly evolving manner. Bait Design Fiberglass & plastics Nets & gear Fine Woodworking Cold Storage RI Seafood Council Metalworking Fishers Mags & publishing EDC/DEM Brokerage & charter Fisheries and Growers Boatbuilding Aquaculture Spars & rigging Processors Engine Repair URI RWU Research & Mooring & dockage Boat-Related Development Brown Sails and canvas Slater Yacht Clubs NUWC Tourism, Military Recreation Marine Retail SWOS & Events Boating NWC Rec fishing Naval Station Diving Marine Naval Education Shipbuilding Transportation & Training Center US Sailing Waterfrnt Attrns Suppliers Congress. Del. Waterfrnt Fod & Lodng Beach Pilots Cruiseships Terminal operators Ship Equipment Not all of the industries and institutions that comprise the Marine Cluster are located within the coastal zone, but all can attribute their existence, growth and continued success to the existence of the Bay. While some elements of the cluster no longer require direct access or use of the Bay (boatbuilding), the presence of the Bay continues to provide a competitive advantage, and the absence of the Bay would certainly result in diminished competitiveness if not complete collapse. Other elements of the cluster, such as fishing, continue to require direct access. The boundaries to the cluster do not necessarily reflect the political (state) or environmental (watershed, ecosystem) delineation. The earliest evidence of the regional nature of the Marine Cluster can be seen in the work of Rorholm, who studied and defined the Southeastern New England Marine Resource Region, or an economic region spanning Eastern Connecticut, some of Southeastern Massachusetts, and all of Rhode Island.15 This work articulated a region bound by similar geography, resources, labor and market forces, and called for planning and development of this region as an economic system. Perhaps somewhat ahead of his time, this scholar’s observations in many ways remain valid today. While the same region contains important elements of the cluster, and indeed warrants treatment of the whole, the limited resources for this study restrict consideration to Rhode Island. It should be noted, however, that given the convergence of transportation, economic and environmental concerns, the concept of the marine resource region remains valid and could provide a framework for understanding the marine cluster and advocating for programs and policies at a regional level. 14 Michael J. Enright and Brian H. Roberts, "Regional Clustering in Australia," Australian Journal of Management, Vol. 26 (Special Issue, August 2001). 15 Rorholm, Niels. 12 Application of the cluster concept to marine industries within a geographic area is not a unique approach. Connecticut recently completed a similar exercise, as did the Maritime Development Center of Europe.16 General Findings on the Rhode Island Marine Cluster: • Marine related firms are linked by a connection to marine resources, and this connection is best understood using the concept of the horizontal industry cluster. • To understand the marine cluster you must understand the complex systems that influence the cluster, including the regional economic system (marine resource region), the larger environmental systems of the watershed and Rhode Island Sound, and the local, state and national political system. • Marine economic development must complement the economic development needs and goals of local communities and be consistent with the overall state economic development needs and goals. • The current configuration of state economic development policy and planning is ill suited to plan for and execute a multifaceted marine cluster strategy. • Cluster specific economic information is limited. • Formal linkages between the cluster and institutions of higher education are, in aggregate, quite weak. • Markets and competition are global for certain sectors of the marine cluster, such as boatbuilding and fisheries & aquaculture. • Firms and sectors do not identify themselves as part of the cluster, yet many have an implicit understanding of the interrelationships that The Cluster Strategy: A Role for Government Future planning and development of the Rhode Island Marine Cluster will require full governmental participation. To carry out a complex cluster strategy Rhode Island must configure state economic development programs to complement the marine cluster concept. The foremost challenge is to provide leadership capacity for cluster development and coordination. Similarly, government must play a leading role in establishing an organizational infrastructure that: • …coordinates the relevant government programs and agencies, industry sectors, and multiple public and private entities of the marine cluster • …implements the recommendations contained in this report, establishes an ongoing policy context for undertaking investments in the marine economy, and carries out future planning efforts • …advances and integrates marine economic development policy and planning at the local, state, and regional level 16 See Connecticut Maritime Coalition Strategic Cluster Initiative, Final Report, July 2000, and http:www.maritimt-udviklingscenter.dk.html, respectively. 13 Sector by Sector Analysis Each sector of the Rhode Island Marine Cluster is analyzed and presented using the following format: Element Essential Questions Sector Description What companies and other entities are considered a part of this sector, and what is the relationship between and among them? What are important considerations for demand, firm strategy, structure and rivalry, and other inputs or factor conditions? Status and Trends What qualitative and quantitative indicators can be used to measure the sector? What are the observable trends? What are the overall market trends, and how might RI’s share of the market be affected by those changes? SWOT Analysis Strengths: What gives competitive advantage to this sector? Weaknesses: What are impediments to competitive advantage? Opportunities: What could be done to improve competitive advantage? Threats: What are the risks to maintaining competitive advantage? Strategy What capital, program, or policy investments could be made to ensure the long term productivity of this sector? 14 15 Recreation and Tourism Cluster Description Marine enhanced or dependent recreation and tourism activities include visits to coastal parks and beaches, boating, fishing and other water related sporting activities, and marine and water related historical and cultural sites. These activities and attractions in the Narragansett Bay coastal zone support related tourism industries such as restaurants, hotels, retail stores, museums, and transportation providers. Regional tourism councils and the state tourism division of the Economic Development Corporation (EDC) provide an important marketing and promotion function. The EDC, URI, and Johnson and Wales University are important areas for research, with JWU supplying management expertise. Demand for recreation and tourism is local, regional, national and international. Firms range from small, independent operators to large, international corporations. Most of the activity in marine related tourism is concentrated in the lower Bay, with Newport and South County beaches being the primary attraction. However, upper-bay communities are beginning to attract and promote marine related tourism. RISWA Museums & Attractions Transportation charter & tour boats Marine Events tourism Promotion marinas / yacht clubs councils Development Marine Recreation Research historic preservation groups EDC & Tourism URI Boating & Fishing JWU RISG parks (DEM) Hospitality Industry Coastal Recreation Facilities bikeways/ferries (DOT) navigation (USCG) food & lodging harbor management (cities/towns) RIHTA RITDAC Status and Trends Tourism is often claimed to be the state’s second largest, and fastest growing Annual Visitors to Rhode Island (Millions) industry.17 The EDC Rhode Island 20 Tourism Division reports that the state's travel and tourism industry set a record in 15 2000 sales revenues of $3.26 billion, representing a 16.4% increase over 1999. 10 The state's travel and tourism industry has 5 increased its sales in the past several years, generating total sales receipts of $1.87 0 billion in 1996, $2.26 billion in 1997, $2.5 1975 2000 billion in 1998, and $2.7 billion in 1999. While it is difficult to segregate marine related tourism from general tourism figures, marine activities and attractions likely contribute directly or indirectly to a significant portion of the overall tourism revenues, not to mention the marine image of the state that is a crucial element of Rhode Island’s unique “brand”. Statistics gathered from Rhode Island’s state parks and beaches are an indication of the intensity of tourist activity in the state. 17 EDC based this on the number of firms in this industry. 16 Marine Recreational Fishing Trips in RI (Source: NMFS MRFSS) • The Rhode Island parks and beaches currently have the highest park visit 1,800,000 1,600,000 per acre ratio in the country of 1,400,000 approximately 750 visitors per acre. 1,200,000 • The annual revenue generated in 2000 1,000,000 800,000 from the Division of Parks and 600,000 Recreation (from entrance fees, 400,000 camping fees, etc.) was $3,126,037. 200,000 0 • In 2000, 4,050,801 people visited Rhode Island State Parks and Beaches 81 83 85 87 89 91 93 95 97 99 on Narragansett Bay. (based on car 19 19 19 19 19 19 19 19 19 19 count data for Colt, Fishermen’s, Fort Despite the importance of recreational fishing and the limited size Adams, Goddard, Roger Wheeler, of Rhode Island, the state continues to rely on NMFS telephone Scarborough N and Scarborough S.) survey data. The annual value to the state’s economy generated by recreational activity was estimated in the Bay Summit Whitepaper on Tourism and Recreation to be: • outdoor recreational activities in the state: $6.7 billion • outdoor recreational activities and shoreline areas: $4.3 billion • Bay-related outdoor recreation activities: $2.0 billion18 Rhode Island Department of Labor and Training Labor Market Information projects increases in employment in all tourism related sectors in the ten year period from 1998-2008: • Water transportation: 17% • Transportation by air: 30% • Eating/Drinking establishments: 14% • Hotels/lodging: 33% • Museums/gardens: 25% Rhode Island is part of the New England tourism market, a market that has been growing faster than the national average. Within the New England market, Rhode Island continues to do well. According to a 1999 report from the Travel Industry Association of America (TIA), the number of visitors to Rhode Island increased at a rate nearly double that of the national average in recent years. 18 Narragansett Bay Summit 2000 White Paper, p. 10 17 2000 RI Boat Registrations by Length (Source: DEM) 23866 9,800 Under 20' 20'-29' 30'-39' 83 2705 40'-49' 38 605 50'-59' 25 60'-69' Total: 37,122 70 and over 18 SWOT Analysis Strengths: Opportunities: • Location between Boston and New York with good • Expand linkages between Providence and Newport transportation linkages • Increase market share of nationally and • Deep bay, sheltered harbors internationally significant marine events • Fair seasonable climate • Improve development, linkages, and packaging of • Rich historical, cultural and natural attractions in marine attractions, events, and resources close proximity • Capture a larger share of the New England tourism • International recognition of maritime heritage market Weaknesses: Threats: • Adverse winter climate • Sudden or gradual degradation of environmental • Seasonal overcrowding quality, or change in perceptions of environmental • Lack of cohesiveness and public understanding of quality19 the industry • Exceeding the carrying capacity of coastal areas • Poor public understanding of importance of marine- results in a reduction in the quality of life for related tourism and the maritime tradition as critical impacted communities and attractions to Rhode Island’s brand • Lack of planning, coordination, support, and public awareness for marine events Goal Invest in policies, programs, and infrastructure that enhance marine recreational offerings and highlight the ecology and maritime heritage of Narragansett Bay for residents and visitors. Recommended Strategies & Actions Set the policy context for marine recreation and tourism • Foster recognition of marine recreation and tourism as 1) a key component of the tourism industry that contributes to the economic wellbeing of Rhode Island, and 2) a key component of the quality of life that Rhode Islander's enjoy. As such, this sector requires appropriate investment in infrastructure and management. Promote public access and participation • Invest in infrastructure (such as boat ramps, waterfront trails and bikepaths) and programs (such as Sail Newport, Providence Community Boating Center) that provide active and passive marine recreational opportunities. • Promote the dedication and use of public rights of way to the shore. • Support school and university sailing programs, recognizing the importance of local talent to the long term competitive advantage of the marine industry. Create ecotourism opportunities • Improve interpretation of natural 19 For example, perceptions of water quality may have a profound impact on tourism: events such as oil spills or toxic algae blooms may deter tourists from visiting Rhode Island. 19 resources at State parks and beaches (both through signage and through ranger or volunteer interpretation programs). Establish better tourist transportation systems • Encourage alternative transportation schemes for moving tourists to tourist destinations. • Support the development of a viable commuter ferry system, funded by revenues generated from continued and increased service to tourists. Develop linkages • Develop linkages between cultural tourist attractions and marine recreational uses. • Develop linkages between tourism and other sectors. • Develop products and programs that link marine recreational offerings to promote increased use and understanding of the system as a whole. Include the upper Bay • Encourage recreation and tourism in the upper bay. Ensure federal recognition and support • Work with the congressional delegation to support programs beneficial to the development of marine recreation and tourism planning, development, and management. Bike paths—usually financed through transportation funding— serve as coastal paths that provide significant recreational opportunities for residents and visitors. 20 21 Marine Events Description Marine events are water dependent sporting or cultural events, conventions, or trade shows. For example, the America’s Cup, a famous yacht racing event, clearly falls within the category of a sporting event, while the Newport International Boat Show or a specific boat rendezvous might fall into the category of trade show. However, both events demand similar marine infrastructure and can stimulate economic development in the tourism and marine trades industries. The impacts of marine events have long been recognized for the associated benefits to the tourism and marine trades sectors in localities that host such events. Some studies on past Rhode Island events demonstrate substantial economic impacts, including: • $9 million gross economic impact - 1989 International Boat Show; • $6.5 million gross economic impact - 1992 20 Newport-Bermuda Race. A recent report estimating the economic impact of the 1999-2000 America’s Cup Event in New Zealand resulted in: • $640 million of value added to the New Zealand economy • $473 million in value added to the Auckland economy • 10,620 full time equivalent years of 21 employment. The estimated impact on the Baltimore-Annapolis stopover of the last Whitbread Around the World Race estimate: • $26.2 million in direct economic impact; • Over 200,000 spectators; 22 • American press coverage valued at over $370,000. The University of Florida conducted a joint study with an expert consultant to examine the economic impacts of the 1997 Annual Fort Lauderdale International Boat Show. According to this research report, the Fort Lauderdale show yielded: • $436 million in sales; 23 • $406.9 million of that was attributed to economic output throughout the state of Florida. One press article accompanying the figures stated: Although long thought of as an important sales vehicle for boat dealers and manufacturers, boat shows also have a major economic impact on the areas in which they are held. According to one research group 20 Tyrrell, Tim. “The Rhode Island Framework for Evaluating the Economic Impact of a Tourism Event,” University of Rhode Island Office of Travel, Tourism and Recreation. 1997. 21 The Economic Impact of the America’s Cup Regatta Auckland 1999-2000, p. iv. McDermott Fairgray Group and Ernst & Young. October 2000. 22 Whitbread Round the World Race for the Volvo Trophy, Sports Marketing Surveys Ltd., 1998. 23 http://www.boatbiz.com/article.asp?indexid=6610905 – Boat shows beat bowl games for economic impact, by Michael Farrell. 22 in Florida, the financial impact of a major consumer boat show can even dwarf that of the granddaddy of 24 sporting events, the Super Bowl. Regardless of the methodology applied, the results indicate that marine events have positive economic impacts both through expenditures and labor. This says nothing, however, to the desirability of hosting such events. It would be naïve to conclude that because of the positive economic impact such events are desirable. Outside of the academic discourse there are few examples of cost benefit analysis to assess the attractiveness of such events. Such an analysis for Rhode Island would need to be locally specific and include qualitative assessment of community impacts, both positive and negative. Marine events can have significant secondary impacts for economic development; both with tourism and more generally within the marine industry cluster. Secondary impacts are less tangible and therefore harder to assess qualitatively and quantitatively. Nevertheless, to understand the potential economic impact of marine events it is important to attempt to understand the secondary benefits. Secondary benefits include: • “Advertising equivalent” global, national, and/or regional media exposure; • Opportunity for leveraging the economic energy of events to stimulate investment in, and development of, marine infrastructure planning and projects; It is essential to recognize that the strength and • Impacts on host community quality of life; competitiveness of the • Impacts to the marine cluster. marine trades industries in Rhode Island can be Regarding the impact to the marine industry, it is essential to recognize that the correlated with the presence strength and competitiveness of the marine trades industries in Rhode Island can of past and present marine events. be correlated with the presence of past and present marine events. Many of today's marine industry innovators and leaders came to Rhode Island to compete in events such as the America's Cup. Ongoing exposure to and connection with marine events continuously upgrades local demand conditions and points to industry trends and opportunities. The attraction of future, nationally and internationally significant marine events will continue this positive feedback loop. The failure to do so could break this virtuous cycle. Status and Trends During the middle 1990s Rhode Island failed to attract, or otherwise lost market share as a host for many stopover marine events such as the Around Alone (formerly the BOC), the Volvo Ocean Race, and the EDS Atlantic Challenge. However, each year Rhode Island continues to host many nationally and internationally significant marine events. Success in attracting and developing these events is due to the work of Yacht Clubs (such as the New York Yacht Club) and organizations such as Sail Newport. The RI State Yachting Committee, whose mission is to facilitate the attraction of yachting events, has been constrained by a lack of financial resources and limited power to negotiate contracts and participate in creative financing schemes. However, a new non-profit corporation was formed recently to provide a vehicle to accept and expend funds in support of the State Yachting Committee. This entity could reenergize the Committee and alleviate some of limits to its effectiveness. With the formation of the Partnership for Rhode Island Marine Event Development during the 2001 legislative session, the State recognized the importance of a legislatively chartered vehicle to attract, coordinate, bid, develop, promote, and otherwise facilitate the growth of marine events in Rhode Island. The success of this entity will depend upon the: • interest and willingness of the private sector (marine & tourism industries) to participate • access to preliminary funding to hire at least one FTE to carry out initial objectives • ability to increase awareness of the importance of marine events to economic development • ability to change the perception of marine events as providing benefit only to the affluent • willingness of state and municipal leaders to embrace the necessary actions and contribute resources 24 ibid. 23 24 SWOT Analysis Strengths: Opportunities: • Natural assets: good sailing conditions; deep bay, • Expand linkages between Providence and Newport sheltered harbors, easy access to offshore sailing through co-location of stopover marine events. from lower bay, scenic coastline, and clean water. • Exploit the extant industry knowledge and influence • Human Resources: some strong local fleets, good of Rhode Island residents to bring nationally and race committees, internationally significant marine events to the State. • Support Industries: world-renowned marine trades • Promote collaboration among communities and industries to service boats, established tourism yacht clubs to increase bidding capacity. infrastructure to host associated visitors. • Focus planning efforts on larger scale facilities on • Yacht Clubs (such as the New York Yacht Club) and Narragansett Bay available to host marine events Community Boating Centers (such as Sail Newport) (Providence waterfront and the West side of provide access to the sport for youth and attract/host Aquidneck Island). most marine events. • Connect schools and community groups to marine events. Weaknesses: Threats: • Infrastructure: many cities and towns have • Local demand could become less sophisticated or inadequate facilities to host marine events due to diverge from international trends. lack of investment or failure to respond to industry • Other national and international ports could more trends (e.g. deep draft and wide berth vessels). aggressively pursue marine events. • Gentrification of waterfronts has resulted in less • Marine event owners/promoters attempt to "game" flexibility to configure dockage and upland areas to ports for more lucrative deals (leading to a host events. disadvantage for smaller states). • Resources: there has been little state and local investment in attracting marine events. • Poor public understanding of importance of marine events • Lack of planning, coordination, support and public awareness for marine events Goal Invest in policies, programs, and infrastructure to guarantee that Narragansett Bay is a world leader in hosting nationally and internationally significant marine events. Recommended Strategies & Actions Enhance and expand Marine Events • Achieve a more even distribution of events throughout Narragansett Bay. • Recognize and articulate the connection between marine events and the evolution of the marine trades industry. • Attract future marine events based on the input of local communities and the marine trades and tourism industries. • Invest in policies and infrastructure that support the development of major national and international marine events. • Provide access to state parks and properties Marine events require public access and dockage for boats, and commit the resources of state which when not used for events, can provide recreational departments and agencies to support the amenities for residents. 25 development of marine events. • Recognize marine events as critical to Rhode Island's unique brand of tourism and promote these events using the state tourism budget (especially in the European market). • Conduct a resource inventory to assess the State’s capacity to attract and host events. The inventory would address such issues as: Infrastructure – what are the essential facilities, transportation links, etc.? Economic – what is the corporate and public interest in marine events? Personnel – who has the expertise to successfully produce events and manage infrastructure? • Be proactive in searching out, attracting, and/or stimulating the creation of new events, especially events of actual or potential importance to Rhode Island firms or development opportunities. 26 Fisheries and Aquaculture Cluster Description The seafood and aquaculture sector in Rhode Island is comprised of commercial fisheries, seafood processors, wholesale distributors, seafood packaging, and aquaculture. The majority of firms in this sector are small and located near the state’s two largest fishing ports, Point Judith and Newport. While the seafood industry is heavily clustered in Rhode Island, the aquaculture component is relatively small. Research capacity for aquaculture in Seafood processing is over Rhode Island is quite large, and most firms in the state have some present or past three times more connection with one of these programs.25 The Policy Council estimates that seafood concentrated in Rhode processing is over three times more concentrated in Rhode Island than in the U.S., Island than in the U.S. and that wholesale fish and seafood firms are over four times more concentrated. The Policy Council characterizes this cluster as more vertically integrated than other industries, with blurred boundaries between producers, distributors, and retailers, as many wholesalers, for example, have become involved in manufacturing raw product. Linkages to the research institutions, marketing and export efforts (e.g. Seafood Council), and regulatory entities (National Marine Fisheries Service) are critical. ship repair / maintenance fishers equipment suppliers aquaculture RI Seafood Council URI RISG Research Fishing & processors marketing & export & Design Slater RWU Aquaculture wholesalers regulatory NMFS resource management EDC infrastructure CRMC DEM Status and Trends Statistics gathered from the Rhode Island Department of Labor and Training indicate significant shifts in the seafood industry cluster during the 1990’s. The number of commercial fishing companies increased slightly, as did the total employment in the industry. The average wage for finfish increased steadily over the last ten years, from $19,128 in 1990 to $44,015 in 1999. The average annual wage in the shellfish industry, however, decreased from 1990 to 1995, from $35,236 to $29,707 and has remained hovering around $30,000 per year. Annual wages for fish processors for both canned and cured seafood and fresh or frozen seafood increased steadily during the 1990’s. However, the wages for canned and cured seafood processors increased significantly from $21,457 to $37,460, while the wages for fresh or frozen seafood processors increased only slightly from $21,797 to $25,134. It is interesting to note that the number of processors engaged in canning and curing seafood decreased from 5 in 1995 to only 1 in 1999. The firms may have consolidated into one larger firm. The number of seafood processors preparing fresh or frozen seafood increased by 35%, while the number of firms remained consistent over the last decade at 10. For the wholesale sector of the industry, both the number of firms and employees decreased gradually during the 1990’s, while the average wage rose steadily from $23,226 in 1990 to $38,728 in 1999. The Policy Council reports that over 25 Rhode Island companies store over 8.5 million pounds of seafood in cold storage facilities outside of Rhode Island each month, representing $1.2 million of investment leaving the state. 25 Patrick Healy, "RI aquaculture company luring out-of-state business," Providence Business News, March 27, 2002. 27 Total Commercial Fishery Landings: Pt. Judity, RI (Source: NMFS) 100 90 80 70 60 Millions of Pounds 50 40 Millions of Dollars 30 20 10 0 82 84 86 88 90 92 94 96 98 00 19 19 19 19 19 19 19 19 19 20 28 SWOT Analysis Strengths: Opportunities: • Research and Design programs at URI/RWU have • Use of state owned land for aquaculture (EPC great potential. document), • Improvements and flexibilities to state fishing piers and facilities to allow for multiple use and more direct retailing – harness the economic power of tourism to preserve fishing, • Develop Quonset Aquaculture Technology Park concept, further development of aquaculture siting map developed by CRMC, shellfish transplant pilot project Weaknesses: Threats: • Lack of cooperation among industry segments—little • Increased pollution, failure of management cooperation between the commercial fishing and aquaculture industries. • Regulatory inconsistencies and burdens— inconsistencies among the state and local health, environmental, and land and water use zoning regulations. Some of the primary issues are: wastewater from seafood processing plants and aquaculture facilities, zoning and permitting issues, multiple use conflicts, and the general lack of understanding and knowledge of local officials about the requirements of businesses in the seafood and aquaculture industry. • Increased Competition—further development and expansion of export markets is essential to the overall Northeast industry. Lack of Cold • Storage Facilities—cold storage is required by every type of seafood company and the lack of cold storage facilities puts Rhode Island at a competitive disadvantage. Local processors and wholesalers must ship their products out of state for storage, adding additional costs for transportation Goal Ensure the long term viability of the fishing industry by developing a fisheries management system that provides for fair and equitable access to the fishery while preserving the health of the ecosystem and the associated infrastructure and services. Make Rhode Island a world leader in the export of aquaculture knowledge. 29 Recommended Strategies & Actions Improve Fisheries management • Provide opportunities for present and future Rhode Islanders to participate in the fishery. • Develop management systems that promote sustainable fishing. Ensure adequate Federal cooperation • Work with the congressional delegation to ensure that the interests of Rhode Island fishermen are respected in federal fisheries management efforts. • Ensure that Rhode Island experts are included in congressional research panels or other national research initiatives. Develop infrastructure & marketing • Assess present and future infrastructure needs for maintaining a vibrant fishery. • Develop entrepreneurial and creative uses for state ports and piers that provide fishers with necessary infrastructure while maximizing complementary uses. • Stimulate value-added processes that increase employment in fishing related industry. • Support local, national, and international marketing efforts for Rhode Island products. Enhance ecosystems and stocks • Invest in programs to enhance stocks of both commercial and non-commercial value. • Invest in habitat protection and/or enhancement that contributes to the health of commercial stocks. Establish Rhode Island as a world leader in the knowledge of aquaculture • Create an aquaculture research and technology facility on Narragansett Bay. • Promote inter-university and inter-departmental cooperation on research and development of aquaculture. • Provide a regulatory environment that allows for the growth of aquaculture. Total Commercial Fishery Landings: Newport, RI (Source: NMFS) 20 18 16 14 12 Millions of Pounds 10 8 Millions of Dollars 6 4 2 0 19 5 19 6 19 7 19 0 19 1 92 19 3 19 4 19 5 19 6 97 98 8 8 8 9 9 9 9 9 9 19 19 19 30 Boatbuilding, Boat Servicing and Boating Related Cluster Description For decades, Rhode Island has considered itself the recreational boating capital of the US East Coast. Certainly, the state’s geophysical attributes have played an important role in the development of the marine industry cluster. Recognizing this connection, the 1997 Economic Policy Council’s report states that “given the state’s reputation for a quality sailing environment, it was only natural that a flourishing boat building industry develop.”26 The boating industry can be considered in three distinct yet interrelated components: boat building, boat servicing, and boating-related businesses. • Boat manufacturing businesses include manufacturers of both boats and specialized, ancillary components such as sails, cordage, and electronics, many are nationally and internationally competitive. As the primary exporters, these businesses are at the center of the boating cluster. • Boat servicing businesses are engaged in boat repair and maintenance or service, including marinas and boatyards (often one in the same). It would be possible to include in this category but difficult to quantify the hundreds of seasonal and year round jobs provided by professional yacht managers, captains, and crew, many of whom receive unreported salary or salary from foreign accounts. • Boating related businesses include the myriad businesses that are engaged in activities that are related to, and enhanced by, the boating industry such as magazines, crew services, marine insurance and brokerage companies, the national governing body of the Sport of sailing etc. RIMTA CRMC Slater Research, Regulatory, Advocacy EBEI DEM EDC US Sailing yacht clubs Plastics/resins Retail Sail Newport Boating Boatbuilding / Boat Manufacturing Electronics Magazines Related Boating Industry Metalworking Insurance & Brokerage Boat Servicing Sails and Canvas Professional Crew Design Rigging Maintenance & Repair Marinas & dockage 26 Meeting the Challenge of the New Economy, The Economic Policy Council, 1997, p. 117. 31 Rhode Island's niche in the boatbuilding industry appears to be RI Employment in Boatbuilding SIC 3732 - Source RIDLT in high value, custom, racing one design, and cruising boats 1,400 (e.g. Hood, Alden, TPI, and Carroll). Some competition is 1,200 found in the Northeast Region, especially in Maine. Demand 1,000 800 for products in the boat building industry varies from firm to 600 firm. For custom, high-end boat building, especially racing 400 200 boats, firms must be among the best in the world (e.g. Goertz 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 and New England Boatworks). Some firms in Rhode Island have started to move into power craft in response to a market demand for popular "picnic boats." RI Boatbuilding Firms SIC 3732 - Source RIDLT Many of the outfitting businesses and specialized component manufacturers compete on an international level as well, 60 50 especially in the sailing industry. The production boat 40 industry (higher volume) are forced to compete with oversees 30 production that offers cheaper labor. Production of high 20 performance small sailing (organized sailing) craft seems to be 10 0 an area that Rhode Island dominates, with one firm having a 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 significant portion of this market (Vanguard). High-end boats, frequent design innovation, and continuous retooling characterize the boatbuilding industry. Boat servicing businesses compete on a regional basis; the New England climate and relative safety from tropical storms attracts many seasonal boats that winter in the tropical climates. Here, Rhode Island’s scenic, cultural, and historic amenities are important. The marina industry appears to remain strong, with reports for 2001 indicating that many have completely sold out for the season.27 Boats, especially charter and luxury yachts, are attracted to the areas that offer proximity to good coastal cruising, safe harbors and anchorages, necessary services, and appealing amenities. Yachts that come to Rhode Island for these amenities and attributes remain here to be serviced and vice versa. Boat servicing of mega-yachts has a particularly large economic impact, but requires specific infrastructure. There are only a few locations on the East Coast that can accommodate these yachts and Rhode Island has been successful in capturing a portion of this business in recent years. Together, the boating cluster is a globally competitive vertical marine cluster in the context of Michael Porter’s work. The evolution of the cluster over time, the related and supporting industries, the frequent innovations and design changes, and many other variables fit perfectly to the Porter Diamond.28 27 Providence Journal, March 2, 2001. Sitting on the dock of the Bay. 28 The boating cluster is reasonably addressed in Chapter 6 –Marine: Boat Building and Marinas - of the 1997 Economic Policy Council document, Meeting the Challenge of the New Economy. 32 Status and Trends Boat sales in the United States declined 1% from 1999 to 2000, Value of Product Shipments ($1000) for NAICS 3366127 (excluding military selling a total of 578,000 boats.29 However, the value of new commercial and power) source: US Census Bureau, 1997 Economic Census, 8/99 boats continued a 10-year expansion in discretionary spending, Cal. Flor. Maine RI SC and showed a 15% gain from 1999-2000, with a total value of 120000 $25.5 billion.30 It is difficult to gauge the growth in boating 100000 80000 related businesses because specific data is generally 60000 unavailable because the SIC descriptions group these 40000 20000 businesses into larger, more general categories. However, a 0 database maintained by the Economic Development 1992 1997 Corporation lists a number of businesses that might fit into the boating-related business section. Industry members are RI Boat Registrations - Source: DEM cautiously optimistic that demand for their products (many build to order and do not carry inventory) will continue despite 39,000 the near term economic slowdown.31 Companies that supply 37,000 35,000 products overseas may actually experience an increase in 33,000 overseas demand if the dollar weakens against foreign 31,000 currencies, especially in selling to the European market.32 The 29,000 27,000 marina industry appears to remain strong, with reports from 25,000 2001 indicating that many sold out for the season.33 Some 93 94 95 96 97 98 99 19 19 19 19 19 19 19 informal estimates indicate that there is a backlog of demand of approximately 3000 slips in Rhode Island.34 In general, Rhode Island has done a good job in bringing the industry the national market share for sailboats and boats otherwise not classified (NAICS 3366127) back to where it was in the 1980s. The favorable tax climate for buying and keeping boats in Rhode Island has helped to stimulate demand for products and services. Rhode Island’s share of US Contrary to the general sailboats product shipment values increased from $20,025,000 in 1992 (about trend in manufacturing 7.7% of the US total) to $46,104,000 in 1997 (about 12.4% of US total). The employment, boatbuilding total US value of product shipments in NAICS 3366127 grew during this period jobs have been increasing from $259,095,000 to $376,515,000. During this period California declined since a slump in the early 90s. significantly in terms of the percent contribution to national total; Maine lost, Florida maintained its position, and Rhode Island and South Carolina gained significantly. Recently, Escape, the manufacturer of a popular line of small sailboats, announced that it will be closing its Rhode Island facility and moving operations to the parent company facility located in the Western United States.35 The loss of this company should yield lower numbers for product volume in subsequent years because it was one of the highest volume producers in Rhode Island. 29 NMMA: Annual Retail Boat Sales 2000 Statistics. 30 Providence Journal, January 1, 2001, Boat Sales Weathering Economic Uncertainty. 31 Providence Business News, March 5, 2001, Boat businesses backlog may provide recession proof base for Rhode Island. 32 Ibid. 33 Providence Journal, March 2, 2001. Sitting on the dock of the Bay. 34 Personal Communication. 35 Johnson Outdoors Inc. to Consolidate Escape Sailboat Manufacturing with New Watercraft Facility. June 18. 2001 PR Newswire. 33 Estimated U.S. Recreational Boats Owned (Source: NMMA) 18,000,000 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 13 50 70 85 88 90 92 94 96 98 00 19 19 19 19 19 19 19 19 19 19 20 34 35 SWOT Analysis Strengths: Opportunities: • Maritime tradition, many sheltered harbors, a deep • Expand boat storage space and marina capacity to bay, close proximity to the urban centers of New grow the domestic market. York and Boston, a seasonal climate that is • Study the use of the West Side of Aquidneck Island conducive to marine recreation, and the area is for an expansion of the marine trades. relatively protected from the tropical storm zone that • Reposition Rhode Island's unique natural attributes more directly threatens the southeastern United and maritime history to attract national and States. internationally significant marine events. • Vertical cluster has high order advantage which • Connect marine events to the industry. gives competitive advantage. While the products from many boat builders are sold on the international level, the home demand for these products is highly sophisticated. • Local demand is fueled in part because of Rhode Island’s summer climate that attracts many boating enthusiasts. • Availability of national and internationally significant regattas also leads to a continuous flow of sophisticated demand that forces local industry, especially the services sector, to be high quality. • Another closely related element is the professional sailing talent that congregates in Rhode Island either seasonally or permanently. Over the years, the quality of life, availability of work, local level of competition, etc have resulted in many of the world’s leading competitors relocating to Rhode Island. This brain trust of sailing expertise fuels the boat building and servicing industry with new ideas, labor and demand for products. The sophisticated local demand has been of central importance to the evolution of the cluster over time. Many of the most prominent and successful businesses are owned and operated by people who came here for the America’s Cup, or other key events. Weaknesses: Threats: • Labor not in synch with market, • Subsidies in competitor nations such as France. • Lack of space: There is presently a need for more Continued growth of foreign competitors such as space for many boat building businesses that are New Zealand. trying to expand in Rhode Island, but they all desire • Inability to expand in Rhode Island due to lack of to be located in the same general area. available industrial space. • Facilities in the Melville Complex are limited in • Regional competitors develop equally advantageous growth by restricted water supplies that drive up the tax policies that erode Rhode Island's advantage. price of the fire systems that are required by state • Neighboring states supply marina space that Rhode building codes. Island can't provide due to lack of dredging. 36 Goal Invest in policies, programs, and infrastructure that secure Rhode Island's position as a world leader in marine trades by developing and securing competitive advantages across the industry sector diamond. Recommended Strategies & Actions Establish the necessary policy context • Recognize the direct and indirect importance of the boatbuilding and boating related industries sector; establish an appreciation for the vertical integration and global competitiveness of the sector. Connect the related and supporting industries and activities • Define the specific firms that comprise the boatbuilding, boat servicing and boating related industry and promote better linkages among related and supporting industries. • Recognize firms within this sector as a unified cluster and develop policies and programs that reinforce the identity of this cluster. • Reestablish a dedicated, full time marine sector Account Executive at the Economic Development Corporation to galvanize the cluster and act as the central government point of contact for the industry. Improve factor conditions that impede growth • Undertake a systematic analysis of available properties within the "boatbuilding triangle" and develop suitable space for expansion. • Supply workforce training and development. • Guarantee a more "business friendly" environment recognizing that many firms in this sector compete on an international basis (e.g. problems with workers compensation). • Work with the congressional delegation to ensure trade policies at the national level that support domestic boatbuilders. Maintain sophisticated demand • Support competitive sailing programs and infrastructure, including community and collegiate sailing. • Attract and promote marine events of national and international significance. • Reinvigorate the East Bay Economic Initiative (EBEI) and provide for a coordinated approach to marketing at major national and international trade shows for local marine industries. • Establish better connections between the East Bay Economic Initiative and the Economic Development Corporation, Export Assistance Center, and other institutions and programs. • Rather than trying to establish a Rhode Island Brand, focus the East Bay Economic Initiative's efforts on establishing market power from scale: 1) use the EBEI to help firms create and promote their own brands (e.g. marketing materials assistance); and 2) use the EBEI to ensure representation at major boats shows and events worldwide, especially for companies that might not otherwise be able to establish a presence at such events. Promote a local context that encourages investment in upgrading and innovation • Develop tax incentives to promote innovation and constant retooling within the boatbuilding industries. • Simplify existing tax incentives or other forms of business assistance to make it easier for companies to reap the associated benefits. • Foster linkages between events, competitors, and firms within the industry to promote "cross- fertilization." 37 38 Shipbuilding Cluster Description The shipbuilding sector in Rhode Island consists of those companies and entities engaged in either the construction of ships or the structural repair of ships. For our purposes we will distinguish between ships and boats by defining ships as large ocean-going vessels with steel hull and deck construction. We will include barges as ships. It should be noted that this cluster is heavily dependent both on government shipping regulations and, in the case of electric boat, defense contracts, making the congressional delegation particularly important for this sector. Once considered an undesirable industry by some, the Demand conditions in the shipbuilding cluster do ship repair firm of today is a clean and welcome addition to the waterfront landscape, even in scenic areas like have some characteristics that depend on Newport Harbor. localization. For instance, the Quonset Point operations of Electric Boat are in effect a supplier to the main Electric Boat plant some 40 miles away in Groton, Connecticut. Certainly, the Quonset site was desirable due to it proximity to the “mother ship”. Likewise, SENESCO’s barges are sold almost exclusively to companies in the northeast US. Interestingly, Blount creates its own demand for the cruise ships it builds through its subsidiary American Canadian Caribbean Line. Demand conditions in this shipbuilding cluster are also strongly related to government-driven requirements. The most important federal government demand in our cluster arises from the US military’s need to maintain the health of General Dynamics / Electric Boat, our nation’s only submarine manufacturer.36 The firm structure differs dramatically between the extant shipbuilders of Rhode Island. There is the submarine monopoly of Electric Boat, a division of a corporation that now owns four of the six largest shipyards in the United States (Groton, CT; Bath, ME; Newport News, VA; and San Diego, CA) and is completely dependent upon the largesse of the federal government. Then there are SENESCO and Blount, small, almost-boutique operations that seek to meet the needs of niche markets and, as a consequence, there is no competitive tension between SENESCO and Blount. American Shipyard PROMET Shipbuilding Slater Blount Congressional USCG Electric Boat Delegation Navy SENESCO EDC The best illustration of how this requirement manifests itself can be seen in the ill-fated Seawolf program. Despite the end of the Cold War, and President Bush’s request to cancel the original thirty submarine program, the US Congress went ahead with construction of three Seawolf-class subs at a cost of over $14 billion primarily because a decision not to would have put Electric Boat into “mothball” status, a difficult condition to reverse should an urgent need have developed. Center for Defense Information publication: http://www.cdi.org/adm/Transcripts/1106/. 39 Status and Trends Global Industry Status and Trends Because the demand for ships is predicated on the demand for world trade in manufactures and commodities, it is useful at this initial stage to quantify the recent growth in world trade activity. World goods trade went from $2.9 trillion in 1988 to $3.7 trillion in 1992 and to $6.2 trillion in 200037. While economic troubles in Asia in 1998 and slowdowns in the developed world during 2000 were cause for concern, over the past 15 years, the dollar value of global trade has grown at the vigorous annual rate of roughly 6%. Likewise, growth in tonnage shipped was rapid, about 4% annually from 1993 and 1997, with a total of about 5.5 billion metric tons now being shipped every year around the globe38. To service this ocean transportation network is the current world inventory of large, commercial, merchant vessels (those vessels heavier than 1,000 gross tons), numbering 28,000 ships with a total of 745 million DWT39. Within this fleet of 28,000 are about 6,600 tankers; 5,800 dry bulk ships; 2,200 container ships and 13,000 “other”. Significantly for the shipbuilding industry, more than half of these vessels are more than 15 years old and will need replacing over the next decade40. Accelerating the demand for new ships are United Nations – International Maritime Organization safety requirements being phased in over the next decade requiring double hulls on tankers as well as other structural improvements necessary for crew safety. Annual world shipbuilding deliveries went from about 10 million GT in the mid-1960’s rising to 34 million GT in the 1975 (a spike in tanker construction due to the OPEC oil shock), steadying at about 17 million GT through most of the 1980s and early-1990’s but rising steadily for the past eight years to a total of 30 million GT in the year 200041. Virtually all of the increase since 1988 has been met by expanded East Asian production. Four countries: Japan, Korea, China and Taiwan now account for 84% of world shipbuilding output. In 1964, these countries had collective market shares only in the 30%-ile range but since 1985 have never had less than 70% of the world market. The decade of the 1990’s has also witnessed a dramatic shift in the type of ships being built. In 1989, container ships were only 10% of world deliveries while in 2000 they constituted over 28%42. A ship of 5,500 TEU capacity currently costs about $60 million43. National Industry Status and Trends Over the past forty years, the US share of world output has averaged 1.7%, but since the US Congress unilaterally discontinued the Construction Differential Subsidy Program in 1981, this share has been lower than 0.6%44. This has led a recent blue-ribbon panel to conclude “the US shipbuilding industry is not yet 37 Figures not adjusted for inflation. Data available from Appleyard and Field, Trade Theory and Policy, Irwin, 2nd, 1995 and WTO 2000 annual report: http://www.wto.org/english/news_e/pres01_e/pr226_e.htm 38 USDOT, An Assessment of the US Marine Transportation System: A Report to Congress, September 1999. 39 The alternating usage of the units DWT (deadweight tonnage) and GT (gross tonnage) seem confusingly arbitrary to the uninitiated. DWT is a measure of cargo capacity (water displacement) whereas GT is more representative of the volume of the ship’s hold – and thus of the ship’s size. 40 USDOT, MARAD, Maritime Trade and Transportation, 1999, pp 6 – 8. 41 See Lloyd’s World Fleet Statistics data excerpt at http://www.coltoncompany.com/index/shipbldg/world.htm 42 See “2000 Taiwan Industrial Outlook: Shipbuilding Industry”, Industrial Technology Information Service, 2001, http://www.itis.org.tw/english/rep0015.html 43 See Container Ship Review and Forecast; http://www.fairplay.co.uk/markets/MFContain.htm 44 The CDS was implemented by the Merchant Marine Act of 1936 and paid-out about $4 billion in subsidies to ship operators who bought their ships in the US. The subsidy could be as large as half the cost of the ship. See American Shipbuilding Association document http://www.americanshipbuilding.com/stats-commhist.html 40 able to compete internationally”45. The reasons for this apparent lack of success are variously ascribed to the higher costs of doing business in the US: primarily stricter labor, safety, and environmental regulations. Indeed, the US share of the world market has continued to shrink despite a continuing (though reduced) influx of Navy shipbuilding dollars and three other significant federal assistance programs: • Title XI Maritime Guarantee Loan Subsidy Program, established in the 1930’s, that provides government-subsidized loans for ship construction; • Cabotage or coastwise laws mandating that all passengers (the Passenger Vessel Services Act of 1886) and cargo (the Jones Act of 1920) shipped between two US ports be done so only on US-built, US-owned, US-flagged, and US-crewed vessels; and the • Cargo Preference Acts of 1904 and 1954 that mandate that at least half of all non-defense government-owned cargoes and 100% of all defense-related cargoes be carried on US- flagged vessels. SENESCO facility at Quonset The US Maritime Administration has identified 19 active major US shipbuilders that it refers to as the Major Shipbuilding Base (MSB): five companies on the East Coast; three on the West Coast; three on the Great Lakes; and eight on the Gulf Coast46. There are another 73 shipyards classified by MARAD as major repair yards. As of January 1, 1999, a total of 100,300 employees worked in the private shipbuilding / repair sector (SIC code 3731) plus another 14,500 working for the five government-operated shipyards (four Navy and one Coast Guard) for a total payroll of 114,800. The US is ranked #11 in the world for merchant vessel registrations and #3 in the world for vessel ownership, reflecting the popular practice of “flag of convenience” or “open registries” (Panama, Liberia, Malta, etc.). In the US-flagged fleet, there are 160 tankers, 14 dry bulk ships, and 85 container ships and 217 other for a total of 447 ships with 16 million DWT. This makes up the Jones-Act fleet. There are currently forty active shipbuilders in the United States: only ten of which build ships over 400 feet (four of those are now divisions of General Dynamics – EB, Bath, NASSCO, and Newport News). The total revenue of this sector is about $10 billion annually, of which ¾ is new ship orders (the remainder being repair). While the US Navy and US Coast Guard continue to be supporters of the domestic shipbuilding industry, orders from the US Merchant Marine, those cargo vessels sailing under the US flag, has dwindled and now handles only 1.8% of the world’s cargo tonnage. The talk in the early-1980’s of a 600-ship Navy has now butted against the 21st century reality of a 325-ship force. Since 1977, the Navy has consistently purchased between 10 and 20 ships per year. The merchant marine, however, has taken delivery of only 38 ships since 1984. 45 See “Maritech Program Impacts on Global Competitiveness of the US Shipbuilding Industry and Navy Ship Construction”, The Potomac Institute for Policy Studies, July 1998. http://www.potomacinstitute.org/pubs/pubs.htm 46 See Maritime Trade & Transportation, 1999, p. 36. 41 42 SWOT Analysis Strengths: Opportunities: • Rhode Island shipbuilders have been good at finding • Welfare to work to get employees. and using market niches within the industry. • Apprenticeship programs might provide a labor • Manufacturing equipment tax credit, ISO 9000, and supply. HRIC training tax credits are all helpful to the • Opportunity to sneak away some of the Gulf market industry. which dominates shipbuilding, especially in barge • Narragansett Bay and its location and access to the industry. Northeast companies want to build product sea are an advantage. in northeast. • Direct HRIC monies to upgrading mid-level managerial skills. • Labor shortage could force these companies to become technology users to overcome labor shortage and become more productive. • New CCRI Training facility at Quonset. Weaknesses: Threats: • Electricity prices higher than for competitors. • Become regressive manufacturers – must keep pace • Workers comp system is burdensome; people game with lean manufacturing practices. Must capture the system to get both federal and state advantage. market niches faster and better than other companies • Persistent shortage of skilled or even interested or will lose opportunity. labor. Failure of training programs to direct labor to • No solution to labor supply may continue to drive up this industry. costs. • Depth at bulkhead is restricting ability to capture • Government funded big construction projects in the emerging markets for larger products; northeast could further restrict labor supply. • Regulatory process at ACOE level is burdensome, • Shifts in Jones Act could crush industry. cost prohibitive (over 1 million for sampling alone), • Neighboring states, if they invest in infrastructure, limited dredging window. could grow at our expense. • Federal construction projects in northeast siphon off employees. Goal Invest in policies, programs, and infrastructure that maintain the viability of shipbuilding in Rhode Island. Recommended Strategies & Actions Ensure Federal support • Employ the congressional delegation to support Electric Boat contracts. • Work with the congressional delegation to ensure that modifications to the Jones Act are favorable for local shipbuilders. Improve the regulatory environment • Provide timely and cost effective regulatory processes to allow for dredging in suitable areas. Improve workforce conditions • Facilitate the development of mid-level management skills. • Establish workforce development strategies that fulfill the industry demand for workers. Develop regional strategies • Work with neighboring states to develop policies and programs that support shipbuilding on a regional basis. • Link research and development needs of industry to Rhode Island research institutions. 43 44 Marine Transportation Cluster Description The Marine Transportation cluster consists of those activities surrounding the commercial transportation of cargo and passengers on Narragansett Bay. This includes: • International and domestic tanker and barge transportation • Ferries, lighterage, towing and tugboat service, and sightseeing boats • Dock facilities and cargo handling Commercial marine transportation on Narragansett Bay relies on an infrastructure that consists of two channels and three public ports. The two channels are the Providence River Channel and the Quonset/Davisville channel. Pilots tankers Marine firms barges consumers ferries Transportation support systems Ports & Infrastructure Regulatory and Waterways Policy Entities: Congressional USCG, USACE, USDOT Delegation Intermodal Connections Currently, the Port of Providence is more active than either the ports of Fall River or Quonset/Davisville. This scenario may change in the future depending on the outcome of two proposed marine infrastructure projects, the maintenance dredging of the Providence River Channel and the development of a container port at Quonset/Davisville. While there are no Rhode Island carriers actually involved in the ownership and operation of ships, tankers or barges, the associated activities on shore still involve a large workforce. If it were not for the presence of the Bay, it is unlikely that many of the activities listed above would be found in Rhode Island. A cluster is strengthened to the extent that demand conditions Em ploym ent in Marine Transportation - RIDLT within the local area contribute to a concentration of companies. An example of this dynamic is the 300 presence of oil tanker and barge traffic in Narragansett 250 Bay. The concentration of population in the Southern 200 New England region creates the demand for petroleum 4489 150 products that is met by the tankers, barges, tugs, and oil 4731 100 depots active in this cluster. Demand also plays a role in the other types of cargo most-commonly shipped in 50 and out of Narragansett Bay. The sand and salt shipped 0 into Rhode Island reflects our winter requirements for 90 91 92 93 94 95 96 97 98 99 00 19 19 19 19 19 19 19 19 19 19 20 highway safety. Ferry services provide another example of how local demand conditions can stimulate the marine transportation cluster. Because of a high population density and the quirks of geography that have provided us with a rich supply of attractive offshore islands to visit, several ferry operators have found a lucrative market for their services. To the extent that tourism can be stimulated by State investment, the derived demand for ferry services will also be increased. 45 It is important to note that the related and supporting industries are different for each of the different segments of this cluster (cargo transport, tugs/ferries/sightseeing, and docks/ports). Supporting activities for the Port of Providence include the shore-based oil distribution network, and the administrative services that make processing of the cargo possible, such as insurance, freight forwarding, and US Customs inspection. Shipbuilding and repair is another supporting industry. For example, Blount shipyard builds small cruise ships used by their subsidiary, American and Canadian and Caribbean Lines, a component of the marine transportation cluster. SENESCO builds the double-hulled barges used in the Atlantic coastwise trades. Companies such as PROMET provide ship repair services for various segments of the marine transportation cluster. Status and Trends In this section, our focus is on commercial marine transportation. Hence, fishing boats, pleasure craft, and military vessels will not be discussed. The most readily Num ber of Firm s in Marine Transportation available shipping data is for the Providence River and 40 35 Harbor, and our discussion emphasizes this area. Notably, 30 vessels periodically visit Quonset Point/Davisville to deliver 25 automobiles and for fish loading, and vessels also pass 20 15 4489 4731 through the Bay to service Brayton Point and Fall River in 10 Massachusetts. Though the information described herein 5 reasonably captures Rhode Island marine transportation 0 activity on Narragansett Bay the omission of data for Fall River, Brayton Point, and Quonset/Davisville understates total 90 91 92 93 94 95 96 97 98 99 00 19 19 19 19 19 19 19 19 19 19 20 vessel activity on the Bay. 1. Cargo Traffic An analysis of cargo movements on Narragansett Bay was done. It relies on data supplied by the U.S. Army Corps of Engineers' Waterborne Cargo Statistics. Data for harbor areas provided by the Corps includes the combined traffic at both public and private terminals, and are reported in thousands of short tons (2,000 lbs.) Review of the data for the Providence River and Harbor suggests several trends: A. Marine transportation on Narragansett Bay primarily involves delivery of petroleum products, especially gasoline and distillate fuel. Of the 8,780 thousand metric tons of cargo delivered in 1997, fully 86 % by volume was petroleum or petroleum products (Figure 2). Of these cargoes, 60 % was gasoline and 28 % distillate fuel. Crude materials and primary manufactured products (e.g., cement, chemicals, preformed steel, lumber, asphalt, and bulk salt) made up 13 % of the volume B. Vessel traffic on the Bay has steadily declined over the past two decades, although cargo tonnage has increased. The number of inbound and outbound trips in the Providence River and Harbor fell from 5,614 in 1980 to 2,893 in 1997 (Figure 3). With the exception of 1991 – 1993, the decline in vessel traffic has been continuous, with a smoothed rate of decline of about 3 percent from 1980 to 1997. Over the same period, however, cargo movement through the Bay has increased from 7.5 million tons in 1980 to 8.8 million tons in 1997, a smoothed annual increase of about 1 % (Figure 4). 46 C. Most of the vessels using the Bay are domestic, non-self propelled tankers In 1997, most of the vessels inbound to Providence River and Harbor were tankers (39 %) and tug and tow vessels (42 %). Most tankers (77 %) were non-self-propelled (i.e., they were barges). Only 5 % were non-self propelled dry cargo vessels. Most inbound vessels are domestic, reflecting the fact that the vast share of petroleum and petroleum product comes from domestic sources, and by law, coastwise shipments must be carried on domestic vessels. D. Access by deep-draft vessels to the Providence River and Harbor is limited and has diminished with the decrease in depth and width of the federal channel. Sediment buildup since the last major dredging project in 1976 generally limits access to vessels with a draft of less than 35 feet. In 1988, for example, some 80 vessels with a draft of over 35 feet visited the Providence River and Harbor; in 1997 that number was about 25. Due to depth limits, deep-draft tankers (up to about 50 feet) must lighter onto smaller vessels before entering the Bay, light load (i.e., carry less than full loads), or await a high tide in order to meet bottom draft limits. Deliveries on deep-draft vessels (>35 feet) have diminished over time, and most vessels now using the Providence River and Harbor have shallow drafts (73 % < 18 feet in 1997). 3. Passenger/Cruise Ship Traffic Two ports, Newport and Providence, have historically served as ports-of-call to large cruise ships entering Narragansett Bay. Newport is the primary port for cruise ships, since it is a destination site well known for the mansions and other historical sites. In the recent past, few ships have visited Providence. Twenty three different cruise ships greater than 100 dwt (deadweight tons) came to Narragansett Bay from 1992 to 1999. Overall, cruise ship activity has been growing since 1994. In the period under study there were a total of 230 port visits. The depths of water in the channel of lower Narragansett Bay are sufficiently deep to allow all cruise ships in service to enter the Bay, and anchor at Newport. However, if in the future it becomes necessary to accommodate cruise ships at berths constructed at other sites (for example at Providence), then minor dredging might have to be undertaken. 4. Passenger/Ferry Traffic There are several year-round ferry services in Rhode Island waters. Such services are provided to Block Island and Connecticut, with several vessels departing from Point Judith. Another service connects Bristol with Hog and Prudence Islands. A ferry service began in 2000 between Providence and Newport. There are currently three existing water taxi operations on the Bay. A service is Marine transportation and tourism infrastructure should, provided in the northern reaches of where possible, be configured to provide recreational Narragansett Bay, with two boats. amenity for local residents. This waterfront path at Ft Within Newport Harbor, one firm has Adams, financed with TEA-21 funding, is accessible and well lit with ample space for parking. 47 several water taxis available. A small ferry/water taxi service connects Jamestown with Newport. Many metropolitan areas throughout the United States are experiencing a resurgence in interest in passenger water transportation. Two factors that have accelerated the implementation of ferry plans are the increase in waterfront real estate development in urban areas and the inclusion of obsolete or underutilized maritime transport facilities in development plans. Additionally, highways have become increasingly crowded. The potential for the provision of new ferry services on Narragansett Bay into the 21st century will be dependent on future studies identifying passenger transport demand. SWOT Analysis Strengths: Opportunities: • No harbor maintenance tax is a strength for car • Improved marine transportation for commuters import business, most other east coast ports have • Expanded port uses at Davisville one, • Proximity to Europe on NA trade route, • Low rates of sedimentation, • Good intermodal linkage opportunities Weaknesses: Threats: • Shoaling in channels and at piers has limited draft • Lack of improvement in infrastructure may deplete • Failure to invest in infrastructure leaves RI behind the commercial marine transportation system other ports, • Opposition to using industrially zoned waterfront for • ProvPort management structure problematic – future marine industrial development. investment not being considered by private sector with signal from Providence being that water- dependent industry is unwanted Goal Invest in policies, programs, and infrastructure that allow for the efficient transportation of people and goods to, from, and within Rhode Island. Recommended Strategies & Actions Assess infrastructure capacity and needs • Undertake a comprehensive assessment of marine transportation infrastructure and develop a plan for the long-term development of marine transportation systems in Rhode Island. • Coordinate waterfront redevelopment efforts in upper Narragansett Bay across communities. • Further coordinate these redevelopment efforts in upper Narragansett Bay with state requirements for petroleum storage capacity. • Relate marine transportation systems to economic develop opportunities. • Recognize Rhode Island's connection to the northeast transportation corridor and assure adequate state participation in future planning and development of this system. Research capacity • Develop the capacity of the URI transportation center and other associated academic programs to provide research and development of innovative marine transportation solutions. 48 Public Forum • Establish a public forum to discuss developments and opportunities in marine transportation with wide public involvement. Commuter water transportation • Continue to develop water-based transportation alternatives to alleviate congestion on roadways. • Guide investments in water-based transportation by ensuring that such systems have the speed and frequency to comprise a viable commuter network. 49 50 Military Cluster Description The military cluster in Rhode Island, as it relates to the marine economy of the State, consists of the Rhode Island National Guard and the active-duty and reserve military activities in and around US Naval Station Newport (excluding the Naval Undersea Warfare Center (NUWC) which is covered under the Research and Education cluster). Various factors continue to play a significant role in the military presence in Narragansett Bay. While changing political conditions and technological advances have made geography a less important factor, the nautical culture and traditions of Rhode Island have become even more important. In appreciating that the Navy presence here now revolves around its esteemed educational institutions, it is important to note that the sense of tradition that has both brought and kept these institutions in Rhode Island began during the US Civil War when the US Naval Academy was temporarily moved to Newport. Impressed by the USNA’s experience in Newport, Admiral Stephen B. Luce mounted a fifteen-year effort to re- establish a permanent Naval education here, culminating in the 1883 – 1884 founding of the US Naval Training Station and the Naval War College. Since then, the facilities and folklore that have grown up around these venerable institutions have further cemented the connection between the Navy and Newport in the collective consciousness of our nation’s military leadership. Now, with the appropriate infrastructure to serve the existing student body already in place, the costs of expanding educational programs at Newport are quite small. Because of the centralized administration structure, economies of scale are possible when purchasing supplies and other inputs by buying in bulk quantities for all of the institutions. The Navy has also realized savings in staff costs as functions can be consolidated, avoiding staff duplication. Additionally, the wide variety of educational programs offered here acts to provide faculty and staff with some degree of flexibility in their career paths; a strong selling point when seeking to attract the best candidates. Demand in this cluster comes almost exclusively from the federal government and, as such, it does not fit the standard Porter cluster template. Yet, that does not mean that the State is powerless to affect demand for the services of its military cluster. There is both vertical integration, with the base being almost a self- sustaining community, as well as horizontal integration, as the seven educational units are similar enough to be able to share many common resources. The only rivalry that might occur within the context of the military cluster is competition from other States for the location of various Navy institutions. For instance, the Defense Institute of International Legal Studies at Newport was recently, but unsuccessfully, targeted for a move to Mississippi by a powerful senator from that state. The type of “Porter” competition that would occur within a geographic locale, and would serve to improve the product produced by the cluster, is not present in the military. Status and Trends After a dramatic spike in military spending that brought US armed forces to peacetime record strength during the 1987 – 1989 period, the fortunes of the US military have dramatically changed. Seeking a “peace dividend” after the end of the Cold War, US forces were trimmed substantially. Currently, the US has 1.37 million active-duty personnel, down from a high of 2.18 million active-duty in 1987. This 51 represents a 37% reduction in active-duty personnel in about 12 years47. The following table breaks down the decreases by the armed services branch: Army Navy Marine Corps Air Force Total 1987 780,000 590,000 200,000 610,000 2,180,000 2000 480,000 370,000 170,000 350,000 1,370,000 Change - 38% - 37% - 15% - 43% - 37% Likewise, over the same period, several measures of military spending have shown steep declines: • Civilian employees in the armed forces went from 1.1 million to 680,000, a reduction of 38%48. • Ready reserve forces have fallen from about 1.6 million to about 1.35 million, a 16% decline49. • Another measure, the number of active ships in the US Navy has decreased from a high of 594 in 1987 to a sixty-five-year low of 317 in 2001, a 47% decline50. • Inflation-adjusted defense spending in constant 1992 dollars, shows that after the peak of 1989, budgets have decreased from $338 billion to $237 billion in 1998, a 30% decline. While documenting all of the above declines is important in understanding the current state of affairs in the military sector, it would appear, however, that the Bush administration is determined to solidify a recent reversal of this decade-long downsizing trend. The most-recently published Bush defense budget requests a total of $343.5 billion for FY2002, adding almost $20 billion to the FY2002 budget submitted by the outgoing Clinton administration51. The Bush increase would act to further amplify the previous increase in the defense budget, from about $280 billion in FY2000 to $300 billion in FY2001, which was the first increment to outstrip inflation since the Persian Gulf War52. Along with the increase proposed by the Bush budget, Defense Secretary Donald Rumsfeld has launched a Quadrennial Defense Review that is expected to result in dramatic changes in the mission of the US armed forces and may result in dramatic reductions in the almost 300,000 US troops stationed abroad53. The Active-Duty US Navy In Rhode Island During the years of World War II, at the height of the Navy presence in Rhode Island, over 162,000 people worked for the Navy and over 100 “capital” ships (carriers, battleships and cruisers) were based here. As recently as the early-1970s about 60 destroyers, attached to the Cruiser-Destroyer Force of the US Atlantic Fleet, were based in Newport. When those ships were moved away as part of the Shore Establishment Realignment Program in April 1973, the population of the base declined precipitously54. The current figure, 47 The figures are from the DoD Directorate for Information Operations and Reports, Statistical Information Analysis Division; “DoD Active Duty Military Personnel Strength Levels: Fiscal Years 1950-2000”, See http://web1.whs.osd.mil/mmid/military/ms9.pdf 48 Also from DoD Directorate for Information Operations and Reports, Statistical Information Analysis Division; “Civilian Personnel Statistics”, See http://web1.whs.osd.mil/mmid/civilian/tab1.xls 49 See the Statistical Abstract of the United States, Census Bureau, 1999; Section 11, Table 596, p. 378; http://www.census.gov/prod/99pubs/99statab/ 50 See “U.S. Navy Active Ship Force Levels, 1917-1998” by the Naval Historical Center; http://www.history.navy.mil/branches/org9-4.htm and “Status of the US Navy as of July, 2001” http://www.chinfo.navy.mil/navpalib/news/.www/status.html 51 Thom Shanker and James Dao, “Rumsfeld to Seek $33 billion Rise for Military”, The New York Times, June 23, 2001. 52 See DoD Press Release on budget: http://www.defenselink.mil/news/Feb2000/b02072000_bt045-00.html 53 See military personnel report dated 12/31/2000 by Directorate for Information Operations and Reports, http://web1.whs.osd.mil/mmid/m05/hst1200.pdf Also see New York Times article by Thom Shanker, “Defense Chief Will Propose Military Change in Course”, June 15, 2001. 54 See “The Navy & Rhode Island: A Shared History”, op. cit and “The Navy in Narragansett Bay”, op. cit. 52 according to the US Census Bureau, is about 7,800, (3,300 military and 4,500 civilian) the majority of whom are stationed in Newport55. The latest accounting by the US Navy is 7,410, if employment at NUWC is included. If NUWC is excluded, as is intended in this chapter, the figure is about 4,750 – consisting of 3,000 permanent employees and a transient population of about 1,750 students56. Naval Station Newport, NAVSTANPT, is under the operational command of the US Atlantic Fleet (CINCLANTFLT), also known as the Second Fleet. Yet, in reality, NAVSTANPT is only the administrative shell that enables the base’s varied tenants to meet their logistical (security, medical, financial) needs. Less than 60% of the base’s permanent employees actually work for NAVSTANPT while the remainder work for the other 31 administrative units housed at the base, including the seven educational institutions that serve the 1,750 students. The Naval War College attracts international experts and scholars to Aquidneck Island. Other Rhode Island institutions should tap this resource, where appropriate, to complement class offerings or areas of research. While NAVSTANPT was formally host to cruiser and destroyer commands, no surface ship operations have been based in Newport since the last dozen ships left in May 1994. The loss of these guided-missile frigates and minesweepers resulted in an employment decline from about 12,000 to the current 7,800. About fifty Navy ships still do call on Newport each year, each staying for about a week while its crew attends one of the unique courses offered here57. In fact, in May 1999 the USS Cole, prior to the devastating attack on it in Yemen, served as the “school ship” at Newport58. Lessons learned by the crew at the Damage Control School here certainly played a role in saving the ship. Currently there are two mothballed carriers docked at Coddington Cove’s Pier One: the USS Forrestal (CV-59) and Saratoga (CV-60), both commissioned in the mid-1950s and decommissioned in the mid-1990s. The three US Coast Guard cutters assigned to Newport are also based at the Navy piers in Coddington Cove. The current atmosphere in Newport most closely resembles that of a quiet and attractive oceanfront college campus. In fact, there are seven institutions at Newport that specifically enroll students. Presented in order of student enrollments: • Surface Warfare Officers School (640) • Naval War College (475) • Naval Education and Training Center (257) • Naval Academy Preparatory School (200) 55 See Statistical Abstract of the United States, op. cit, p. 370, Table 580. 56 These and the following figures come from to the US Naval Station Newport 2000 Annual Report. 57 Personal conversation with David Sanders, Public Affairs Director, NAVSTANPT. 58 See U.S.S. Cole home page at http://www.spear.navy.mil/ships/ddg67. 53 • Naval Justice School (69) • Senior Enlisted Academy (59) • Command Leadership School (27) There are also several other similar scholarly entities on-base that provide direct academic and research support to the Naval War College and to the Naval Justice School. The Department of Defense sends a little over $400 million to Rhode Island annually in the form of salaries and wages: $160 million to active duty military personnel, and another $240 million to civilian workers. Contracts let by the DoD in Rhode Island exceed $300 million but these funds are not necessarily related to the Navy or the base in Newport59. Neither of these figures accounts for the “multiplier” effect of the indirect economic activity generated in surrounding communities by Navy employees. SWOT Analysis Strengths: Opportunities: • Deep water port, • Capture active vessels to be stationed in Newport • High brac rating • History and prestige associated with Newport, • Desire for diversification • Land for expansion retained by Navy • Easy navigation • Good quality of life for high ranking officers Weaknesses: Threats: • Lack of public awareness of benefits of navy • Excise of Navy lands on West Side of Aquidneck presence across Rhode Island Island could limit future opportunity for expansion • Underutilized deep water port • Newport Bridge • Lack of outer anchorage Goal Work to guarantee the long-term presence of the military in Rhode Island at present or greater than present levels. Recommended Strategies & Actions • Work with Rhode Island’s Congressional delegation to ensure that the Department of Defense understands the importance of these facilities to our State. • Identify other potential Naval educational institutions that might also be sited here, focusing on those that would benefit from easy access to a bay. • Recognize that many of the Navy’s elite officer corps come to Newport for training at some point during their careers. The State should identify ways to make their experience here one that encourages a positive perception. • Work with colleges and universities in the State, especially URI, to reestablish a Navy ROTC program. 59 It should be noted that both of these figures include NUWC-related activity. See the US Census Bureau publication, Federal Expenditures by State for FY1997, Table 3, p. 15. See also report by Directorate for Information Operations and Reports - Atlas/Data Abstract for the United States and Selected Areas - Fiscal Year 1999 http://web1.whs.osd.mil/mmid/l03/fy99/99ri.htm. 54 Research, Technology Development and Education Cluster Description The cluster of industries and organizations engaged in bay related research, educational activities, and technology development includes public and private sector institutions that develop, apply, and communicate scientific information about the marine environment. Federal agencies, universities, private companies, and non-profit agencies together contribute to bay related research and learning. Federal laboratories that interact with the Bay include the Naval Undersea Warfare Center, (NUWC) the US EPA Atlantic Ecology Division, National Health and Environmental Effects Research Laboratory, and the Northeast Fisheries Science Center Narragansett Laboratory of the National Marine Fisheries Service. Several university programs focus on bay related research such as the Brown University Center for Environmental Studies, Geological and Environmental Sciences, Environmental Geophysics/Hydrology; Roger Williams University, Department of Biology and Marine Biology; University of Rhode Island College of Environmental and Life Sciences, Environmental Data Center, Coastal Institute; Graduate School of Oceanography, Coastal Resources Center, Rhode Island Sea Grant, and the Office of Marine Programs. Private firms such as Raytheon and ASA, Inc. and Rhode Island state agencies such as DEM and CRMC also conduct Bay related research. The types of research conducted include studies of the Bay itself, testing of equipment, and biological and chemical studies. The Bay is also a great classroom for advanced training and academic research. The non-profit sector also plays a critical role in this cluster. Organizations such as Save the Bay and the Audubon Society provide an array of Bay related education and learning opportunities. There are many interconnections in this marine cluster between state and federal agencies, universities and private companies. These groups and individuals benefit from the concentrated cluster of marine related education, research, and technology in Rhode Island. Graduates from marine related programs in state and regional universities supply private companies and non-profit agencies with a skilled workforce, and private companies benefit from working with university faculty member and students in the transfer of bay- related knowledge and research into unique technologies and marketable products.60 Save the Bay Raytheon Audubon Research Education Technology Development Technology NUWC Development Education Slater suppliers URI: SAIC GSO, CRC, EDC, CI ASA Research NMFS Marine Affairs, RISG Brown: Environmental Studies, Geo. and Env. Sciences, EPA Geophysics/Hydrology Lab. DEM Status and Trends Federal military budgets and university budgets allocated to bay related research significantly impact the economic health and viability of this cluster. The Naval Undersea Warfare Center (NUWC) is a key contributor to Bay related education and research. NUWC’s mission is to operate the Navy’s full spectrum 60 Narragansett Bay Summit 2000 White Paper: Research, Technology Development, and Education on Narragansett Bay, 2000, p. 20. 55 of research, development, test and evaluation, engineering and fleet support center for submarines, autonomous underwater systems, undersea offensive and defensive weapons systems, and countermeasures associated with undersea warfare. In the past five years, NUWC hired more than 500 employees, and supports a number of businesses through government contracts. In 1998, NUWC’s Newport Division received more than $637 million of funds, of which over $215 million was awarded to private contractors in Rhode Island, Massachusetts, and Connecticut.61 Another important sector of this cluster are the direct suppliers and contractors to NUWC and to the university research entities. These companies are sustained by the cluster of demand provided by the agencies, organizations and universities whose efforts are concentrated in and around Narragansett Bay. In turn, the concentration of research and development clustered around the bay spins off new companies and technological innovations that strengthen Rhode Island’s competitive advantage in several related industries. Between 1999 and May of 2001, NUWC reported contracts with 235 Rhode Island companies. The companies range from engineering, manufacturing, construction, and research services to catering and hotel service. The regional economy is also significantly bolstered by NUWC’s presence, as 315 Massachusetts companies and 150 companies in Connecticut serve as direct suppliers. The Bay-related research focus of several universities is also increasing. The URI Graduate School of Oceanography’s research budget grew from $19,397,483 in 1997-1998 to $22,423,129 in 1999-2000. One half of all URI grants and contracts are awarded to GSO. GSO offers degrees in the traditional disciplines of oceanography and in interdisciplinary areas such as ocean engineering and atmospheric chemistry. Also the new URI Coastal Institute, developed to address science and policy issues related to coastal zones, and the marine biology infrastructure investments made by Roger Williams University add significant resources to this cluster. Another important university related contributor to this cluster is the Center for Economic and Environmental Development at Roger Williams University, which promotes the development of environmentally-compatible and economically- Naval Undersea Warfare Center 1991-2001 sound, maritime industries. The Center also funds (millions) and conducts research for sustainable uses of the 1,000 Bay. Rhode Island Sea Grant focuses on coastal 800 management, fisheries, aquaculture and seafood 600 science, and communications. URI Cooperative 400 extension is involved in marine and environmental 200 outreach that is specifically Bay related in two 0 programmatic areas: aquaculture and fisheries and 1991 2001 natural resources and the environment. The University of Connecticut is in the process of launching a new Marine Sciences and Technology Center at Avery Point in Groton, CT, which will create linkages between the university and specific industries. There is a similar concentration of military, universities, marine transportation, and marine 61 Providence Business News, April 11, 2001. 56 related industries in the state of Connecticut, which adds significant resources, knowledge, and an employment base to the region, and bolsters the regions competitive advantage. This cluster, however, is also competition for companies and employees that comprise the marine cluster in Rhode Island. Similarly, other universities in the region contribute to this cluster through supporting industries, and contributions of a specialized workforce and technological innovations and research. A new Graduate School of Marine Sciences and Technology will be initiated at UMASS in the fall of 2001.62 The Department of Transportation’s Maritime Administration supports the Massachusetts Maritime Academy in Buzzard’s Bay which offers Bachelor of Science programs in marine engineering, marine transportation, facilities and environmental engineering and marine safety, environmental protection and international marine business. The research and learning efforts of non- profit agencies that focus on 80 Narragansett Bay are also increasing. In the Spring of 2000, Save the Bay 60 launched the ‘Explore the Bay’ campaign. The $6.5 million campaign 40 includes an education center along the 20 Providence River, a satellite learning center on Aquidneck Island, two 0 N O A A /N specially designed education vessels, NUW C EPA URI B ro w n DEM M FS dock access on the East and West Bay B a y-D e p e n d e n t R e se a rch B u d g e ts (M illio n s) 75 1 .6 5 0 .3 7 .4 0 .3 0 .9 and 2 million dedicated to an endowment. Save The Bay’s Narragansett Bay Station in Newport has NUWC is a sleeping giant. Few on Aquidneck Island or in Rhode been opened and a brownfield site for Island understand the size of its research budget or its importance. the education center at Field’s Point has been secured. In 2000, over 16,000 students, teachers and members of the public learned about and experienced the Bay through Save the Bay’s educational programs. Save the Bay partners with the National Estuarine Research Reserve on Prudence Island, URI’s Coastal Resources Center and the Graduate School of Oceanography, Restore the Resources of the Bay, and URI Cooperative Extension.63 Also, the Audubon Society of Rhode Island’s Environmental Education Center in Bristol has served 20,000 students and teachers through classrooms visits, after-school programs, field trips, etc. Save the Bay and the Audubon Society of Rhode Island also provide teacher resources. Unique partnerships in the state have strengthened and will help to sustain bay related research and learning. The Bay Company, for example, is a collaboration between Rhode Island Seafood Council, Rhode Island Marine Trade Association, and the East Bay Economic Initiative that creates linkages between marine industries and vocational and technical education. Their current efforts include field trips, internships and curricula development in aquaculture and marine trades. Their projects include curriculum development at Cranston West High School and Cranston Area Career and Technical Center, and developing lesson plans focused on aquaculture and an aquaculture lab. At Davisville Middle School, the Bay Company initiated “What a Difference a Bay Makes” program for 7th grade students and 62 Narragansett Bay Summit 2000 White Paper: Research, Technology Development, and Education on Narragansett Bay, 2000, p. 14. 63 Save the Bay Annual Report, 2000. 57 teachers. The program is a series of field trips and presentations focused on marine industries. The group is also working with the Providence Maritime Heritage Foundation, Education Advisory Committee to build industry standards and develop a standardized seafood and marine trade curriculum. The Slater Center for Marine and Environmental Technology encourages industry and university cooperation. The specific goals of the center are to encourage entrepreneurial enterprises, facilitate technology transfer between the government sector, universities and the private sector, and nurture young firms through a comprehensive program of research and development grants, marine enterprise loans, and business development initiatives. The Slater Center’s $1.6 million Marine Enterprise Development Program provides low-interest loans to startup companies. They have helped to launch three new RI companies, provided grant funding to seven companies, and provided loans to six others. The center’s new program, the Ocean Technology Transfer Initiative, fosters collaboration of research and development between NUWC and URI.64 The Center’s building is also the home to a small but expanding business incubator site. The Slater Center plans to convert additional space, including a CAD/CAE workspace, to accommodate new startups and ideas. Center sponsored workshops and seminars will stimulate technology transfer from Rhode Island's public and private centers of intellectual capital, giving Rhode Island's innovative ideas a start towards business success.65 In May, 2001, six start-up companies were awarded Research and Development Partnership grants. The innovative work of these companies ranges from hurricane forecasting technology, sonar imagining and chemical sensors that measure the amount of nutrients in sea water to a solar-powered shellfish feeder. Most of the companies that have been funded at the Slater Center for Marine and Environmental Technology are start-ups and therefore small in size. Currently the Slater Center has funded 12 companies, which have a total of 156 employees in Rhode Island. However, a larger Massachusetts based company recently bought one of these companies and another, SENESCO, has approximately 100 employees and is expanding. The largest research and technology employers are the Naval Undersea Warfare Center in Newport with 3,000 employees, Electric Boat in North Kingstown with 1,032 employees and Raytheon in Portsmouth with 950 employees. A survey of private companies, conducted by the Economic Policy Council in March, 2000, estimates that of the companies surveyed, 200 engage in research, technology development, or education. Of the respondents, 37% are engaged in research, 60% are engaged in technology development, and 11% are engaged in education activities. The majority of responding firms indicated that they are increasing their use of the Bay.66 64 Narragansett Bay Summit 2000 White Paper: Research, Technology Development, and Education on Narragansett Bay, 2000, p. 14. 65 For more information: www.slateroceantech.com. 66 Narragansett Bay Summit 2000 White Paper: Research, Technology Development, and Education on Narragansett Bay, 2000, p. 12. 58 59 SWOT Analysis Strengths: Opportunities: • Competitive advantage over other regions and states • Increasing power of congressional delegation, because of the “evolved” nature and linkages • Key players understand importance of sector, between the entities and institutions involved. • EPC working actively on several issues, including • URI is known particularly for the quantity and biotech and OSAT building, quality of graduate degrees issued in marine areas, • Need representation on federal commissions to and the depth of the myriad marine programs and ensure our interests are represented, newly powerful research initiatives. and interested federal delegation could be an • Much of the support for the current infrastructure important voice in DC, and intellectual capacity in this sector is the legacy • New deans at URI, new SG director, new dean at of investments made decades ago using federal GSO assistance. • Oceans and ocean development continue to be vast • Narragansett Bay is another element of global opportunity, while space everywhere limited; “infrastructure” that gives advantage to the sector in if we can become the leader in maximizing use in Rhode Island, along with the strategic location limited space we can export knowledge between UMASS and UCONN. • NUWC facilities and research partnerships are unique and largely underutilized. Weaknesses: Threats: • Barriers to expansion and development – both rules • Competing programs continue to rise while we and mindset, poorly understood by decision-makers remain neutral or decline, esp. research connected to economic development • Loss of NUWC to BRAC • Limited state investment in research, no champion or • Gradual chipping away at strengths of past – death leader willing this to happen, by 1000 blows • FTE cap constraining growth, requires long term • Continue to neglect needed investments vision in short term budget cycle, • No single source of annual information/presentation of ROI to state from research • Poor understanding of navy and confused message of URI • Economic development not specifically part of the URI mission Goal Invest in policies, programs, and infrastructure that will promote the economic development potential of marine research, technology development, and education. Recommended Strategies & Actions Establish the necessary policy context • Work to give an identity to this sector • Articulate the importance of this sector to the economic development goals of Rhode Island • Recognize the regional context of this sector and strategize accordingly Improve linkages between research institutions and firms • Use the Slater Centers and the Economic Development Corporation as facilitators between the various elements in the sector Ensure the necessary infrastructure and environmental conditions to support sector development • Promote the development of a marine technology center • Inventory available resources and establish a plan for maximum utilization 60 Develop a common strategy for marine research, technology development and education • Encourage key players to work together to set a common strategy and agenda for the long term development of this sector Promote an entrepreneurial culture at URI • Work with the administration to establish policies and programs that encourage faculty participation in technology transfer and external business pursuits • Encourage funding sources for faculty that allow students to participate in research, technology development, and education projects 61 62 Suggestions for Future Research Continue to refine and research the Rhode Island Marine Cluster: • Provide a greater understanding of the interrelationships among sectors through a systems dynamics approach • Establish a locally specific database of marine economic indicators using a methodology consistent with that being developed at the national level in the Ocean Economics Project. • Explore a cooperative and consistent program for the entire geographic span of the marine cluster, possibly including a formal interstate agreement with Massachusetts and Connecticut. • Compile and analyze a list of coastal brownfield properties, and establish programs and policies to facilitate cleanup and reuse. • Undertake a coastal land use analysis for Narragansett Bay to determine major trends in coastal land use. • Develop an action plan to preserve working waterfronts statewide; channel development of marine related industries to working waterfronts. 63 Key Sources A Rhode Island Economic Strategy: 10 Ways to Succeed Without Losing Our Soul. The Rhode Island Economic Policy Council (September 2000). Anderson, J. et al, 1997. A Strategic Plan for Rhode Island Aquaculture. Prepared for the Rhode Island Legislative Commission On Aquaculture. This plan provides a thorough overview of problems with and prospects for the aquaculture industry in Rhode Island. The plan also issues specific recommendations for developing this industry. Comprehensive Conservation and Management Plan for Narragansett Bay: Final Report. State Guide Plan Element 715; Report Number 71. September 1992. Connecticut Maritime Coalition, Michael Gallis & Associates, and the Connecticut Economic Resource Center, Inc., 2000. Strategic Cluster Initiative: Linking Connecticut's Future with the Emerging Global Trade Grid. Final Report July 2000. Connecticut Strategic Economic Framework: Defining the issues, relationships and resources necessary to compete in a global economy. A report of the Connecticut Regional Institute for the 21st Century. Prepared by Michael Gallis & Associates, 1999. Georgiana, Daniel, 2000 (Center for Policy Analysis, University of Massachusetts Dartmouth). The Massachusetts Marine Economy. University of Massachusetts Donahue Institute. Kildow, Judith T. et al, 2000. The National Ocean Economics Project: The Contribution of the Coast and Coastal Ocean to the U.S. Economy; Research Strategy and Work Plan. USC, Wrigley Institute, January 25, 2000. Marine Institute: Foras Na Mara, 1998. A Marine Research, Technology, Development and Innovation Strategy for Ireland: A National Team Approach. Meeting the Challenge of the New Economy: Keys to Bulding Hope. Rhode Island Economic Policy Council, Annual Review 1997. Rhode Island Comprehensive Economic Development Strategy, 2000 Annual Report. Statewide Planning Program, Rhode Island Department of Administration. Rorholm, Niels et al, 1967. Economic impact of marine-oriented activities : a study of the southern New England marine region. University of Rhode Island, Dept. of Food and Resource Economics. Rorholm, Niels, 1963. Economic impact of Narragansett Bay. University of Rhode Island, Agricultural Experiment Station. Rorholm, Niels and Burrage, David, 1983. Economic impact of the Rhode Island boating industry: University of Rhode Island. Rorholm, Niels and Farrell, Joseph H., 1992. Narragansett Bay and the surrounding economy. Narragansett Bay Project. Sustaining America's Coastal Communities and Resources: A Strategic Framework for the Coastal Zone Management Program. Prepared by The Coastal Programs Division and the Coastal State, Teritories and Commonwealths. US Department of Commerce.