January 26, 2009

Spot the Missing Factor

Justin Katz

No doubt thinking of that right-wing conspiracy to fool Rhode Islanders into believing that our state is facing a dire economic situation requiring drastic change in policies, Russ Conway asks why nobody's talking about this (emphasis added):

While Massachusetts' share of the venture capital economy dwarfs that of other New England states, Rhode Island and New Hampshire managed to post significant gains in 2008. Rhode Island's venture capital funding grew by a factor of more than ten, from $4.2 million in 2007 to $51.8 million this past year, while New Hampshire investing grew to $158.8 million, an increase of 19.4 percent. Connecticut's VC investment fell precipitously, dropping 60.1 percent to $142.9 million. Vermont posted $14.7 million, a 33.7 percent drop; while Maine saw investing fall off by 74.1 percent, to $2 million.

In the comments, Bobby O suggests that it has something to do with our ties to the U.S. Navy, and I can't say but that the military plays the key role, here. What's interesting, though, is what's not mentioned in the discussion. Not once.

Here's a hint: It's something against which RI Futurites prefer to rail.

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Tax cuts for the r-word?

Posted by: Monique at January 26, 2009 2:29 PM

What jumps out at me is that New Hampshire, with about the same population as Rhode Island, and also abutting MA, has over three times the VC funding.

Could it be that tech companies are more inclined to locate in income and sales tax-free New Hampshire?

Posted by: Tom W at January 26, 2009 2:36 PM

And could that perhaps be a factor why New Hampshire's unemployment rate is less than one-half that of Rhode Islands: 4.6% vs. 10%?

I guess those New Hampshire "tax cuts for the rich" and everyone else are working pretty damn well for "working families" ...

As compared to Rhode Island's "unemployed families!"

Posted by: Tom W at January 26, 2009 2:40 PM

Hmmm. I wonder if any of those RI venture capitalists are looking to "gain" anything......

Posted by: Marc at January 26, 2009 3:23 PM

Most tech, biotech and medtech companies in MA, including VC funded startups, are located north of the Mass Pike and inside 495, hence the spillover to NH.

And most startups are founded by people who left similar companies grew and succeeded, in the same geograhical area.

I continue to marvel at how many companies are cofounded by people with MIT ties.

Bob W

Posted by: Bob W at January 26, 2009 3:23 PM

95 dumps right into 128.

Those spinoff companies in Waltham etc. could just as easily head to RI, and certainly would if RI offered a better value proposition.

Quite the opposite.

Our income and sales taxes, crappy roads and bridges, notorious political corruption and the unskilled product of our sub-average public education system make staying in MA and/or going to NH a no-brainer.

Rhode Island is a welfare magnet, not a tech industry magnet.

Posted by: Tom W at January 26, 2009 4:00 PM

Even though our venture capital investments went up 10 fold, it is still a blip on the radar compared to Mass.

RI: $ 51,800,000
MA: $3,100,000,000

So RI has 1.67% of the VC investments MA does. Not a lot to brag about there.

I would be very curious to see how our VC went up 10 fold. That could be investments in a very small amount of companies accounting for the increase.

Posted by: Don Botts at January 26, 2009 5:46 PM

Deepwater wind farm.

Posted by: David at January 26, 2009 7:06 PM

"New Hampshire's unemployment rate is less than one-half that of Rhode Islands: 4.6% vs. 10%"

I guess liberals are right: former president Bush was never really President of the United States afterall. According to Billy Lynch and the RIfuturistas; Bush must have only been President of the states with high unemployment.

Posted by: George at January 26, 2009 10:42 PM
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