In its Covered Business Customer Survey released today, The Cranston Economic Development Corporation (CEDC) reports that a majority of its companies feel Rhode Island has a competitive business environment.
Our companies say that they are optimistic about the future of the state, with 71% of our surveyed companies stating that they feel the best days of Rhode Island are ahead of it.
Although Rhode Island has its fair share of challenges, CEDC has identified five areas where the state’s businesses think they have the strongest competitive advantage. These are: Smaller Incubation Ratio: The smallest companies with an incubation ratio greater than one, believe they have the advantage when compared with their larger cousins.
Consistent Delivering on Expected Performance: Another key part of a successful enterprise is delivering on the expectations of your customers, and the CEDC survey shows the largest companies still have confidence in the state when it comes to delivering on their promises.
Increased Opportunity: The Cranston business environment continues to focus on the middle- and upper-income brackets, which gives the largest companies the confidence to believe that the middle class will continue to flourish in Rhode Island.
Prominent Climate, Policy and Administration: Greater companies consider the education and workforce climate, housing and employment growth, and personal relationships as important factors to their success.
The Report & Key Findings
Growth in the Business Environment, Providence, by Citizens Economic Development Corporation of Rhode Island
Half of the employees in the Rhode Island Business Climate Index are employed by larger companies. Small businesses are feeling the pressure of larger companies as Providence’s job vacancy rate continues to climb. Over 50 percent of the surveyed businesses are still in transition from one business environment to another.
At R&M, these results can be attributed to how we transition our businesses from one environment to another. One example is providing the right workforce with the right skills to grow a business, after a family member leaves. Another example is getting the right types of technology that can help ensure business agility and efficiency.
State of the Business Climate: Providence, by RhodeCan Key Findings: Folks in the business climate of Rhode Island say they are willing to embrace new technology that can allow them to get more done faster. For the fourth consecutive year, more than half of the business climate employees want to work for a company that invests in better technology, and the fastest growing departments are having trouble securing workers. Folks in the business climate of Rhode Island are planning to further adapt their business environments to meet the demands of the current and next generation of employees.
What Went Wrong?
Two key areas were identified as hindering business climate growth and adoption: the expansion of IT and salary. This is a challenging issue, as the software development industry is a multi-billion dollar industry that is growing at a rate 5x faster than the rest of the population. IT outsourcing companies are also expanding rapidly, with approximately $20.3 billion in contracts being awarded last year. Today, professional services companies are also moving to new data centers across the country. This is a huge focus of the industry, with over $26.4 billion in IT contracts awarded in 2011 alone.
Another challenge is the growing gap between salaries. Most recently, nearly 40% of business climate employees report receiving less than a base salary of $50,000 in 2011, a decrease from the 57% who reported this last year. This trend is expected to continue as the industry continues to look for more cost-effective ways to support their increasingly growth-hungry businesses.