To Build Hi-Tech Businesses, You Need a Middle Class

Natalie Myers has an interesting article in this week's Providence Business News about some local business leaders hoping that hi-tech modeling and simulation becomes a boom industry in Rhode Island…

Steve Swenson stands next to a plasma screen showing an unmanned air vehicle landing on an unmanned boat while skimming the ocean’s surface. The images are crisp and textured, reminiscent of a video game. He explains that this is one of OceanState Technology Corp.’s first jobs for a commercial client.

Like so many modeling and simulation companies, OceanState gets most of its contracts from the U.S. Department of Defense. But Swenson said he’s trying to change that, because he sees the opportunity to leverage DOD investment on the commercial sector....

The medical industry has huge growth potential as a market for modeling and simulation, as do insurance, finance, pharmaceutical, transportation, aerospace, homeland security and cognitive science, he said.

As a result, Swenson led efforts to incorporate the region’s first trade association for the modeling and simulation industry in June last year. It’s called the New England Modeling and Simulation Consortium, and its goal is to draw attention to the region’s capabilities in that field to attract more funding from federal and commercial entities.

The question begged by the article is why Rhode Island should be better for the modeling and simulation business than any other place? You need two essentials to run a successful simulation business…

• Fast computers with lots of memory
• A smart, educated workforce to develop and run the modeling software on the fast computers

These days, no region of the U.S. has an advantage over any other in obtaining hardware and software, so if there is going to be something special about Rhode Island in this economic sector, it is going to have to be related to the people. Rhode Island’s advantage here supposedly lies in its proximity to a large number of universities that can provide the necessary workforce…

One of New England’s great attributes is its high density of universities, Swenson said. “That’s why one of the NEMSC’s agenda items is working with local universities to try to introduce programs and curriculum that would help employers in this industry get the people that they need out of college,” he said.

Here’s the problem. RI won’t be able to attract and retain the educated workforce that the modeling and simulation industry needs, if overall livability in RI stinks for the middle class. Those educated people who can run the modeling software are going to want their kids to be well-educated too. They won’t settle long-term in communities unable to combine affordable housing with good school systems.

This means that a place like Rhode Island, which heavily taxes middle class paychecks, but provides little in return to middle class citizens (like good schools), is facing a permanent disadvantage in developing a hi-tech business base.