The nation’s smallest state has been working hard to nurture technology breakthroughs with several ambitious economic development programs.
Although diminutive in size, there is nothing small about Rhode Island’s efforts to encourage innovation in the state. Over the past few years, Rhode Island has set in motion several initiatives to advance high-wage, high-growth industries with much success.
One such endeavor is the state’s Science & Technology Advisory Council (STAC), managed by the Rhode Island Economic Development Corporation (RIEDC). Created in April 2005, STAC is a coalition of business, academic, and government leaders committed to strengthening Rhode Island’s research platform, attracting and retaining entrepreneurs, and facilitating collaborative innovation and public/private partnerships.
To this end, STAC created the competitive, merit-based Collaborative Research Award Program in 2006 to support joint projects that have significant scientific merit and are positioned to receive additional public and/or private funding. This program has encouraged much collaboration within the state’s research community because no one researcher/institution can apply for these awards.
The recipients of the 2008 Collaborative Research Award program were announced earlier this year; the funds doled out will support nine projects involving 24 scientists from 14 research organizations across the state. The projects—which span a variety of disciplines, including medicine, police forensics, engineering, chemistry, biology, oceanography, and environmental science—include endeavors to develop better medicines for breast cancer, heart disease, and asthma and technologies that will assist police in obtaining high-quality evidence from low-resolution video, to name a few. Since its inception, the Collaborative Research Award Program has handed out nearly $1.5 million in grants for 17 projects involving 56 scientists.
Another program proposed by STAC to help companies develop novel technologies is the Rhode Island Innovation Tax Credit, enacted into law by Governor Donald Carcieri and the General Assembly in 2006. The program offers investors in the state’s targeted industries up to a 50% credit on eligible investments, with a maximum tax credit of $100,000. The targeted industries include biotechnology and life sciences; communication and information technology; financial services; marine and defense manufacturing; professional, technical, and educational services; and industrial and consumer product manufacturing and design. To be eligible to receive the credit, an investor must devote funds to a Rhode Island business that produces traded goods or services and has annual gross revenues of less than $1 million in the prior two calendar years.
Late last year, six Rhode Island companies were pre-approved for the state’s Innovation Tax Credit program, including Bionica Corp., Lighthouse Security Group, Ocean State Solutions (doing business as mPay USA), Providence Health Solutions, Public Display, Inc., and Tizra, Inc.
“This is an incredibly important tool for our state’s entrepreneurial community in attracting private capital investments,” says Ken Kirsch, director of finance of mPay USA. “In a relatively short time, the investment community has taken note of Rhode Island’s Innovation Tax Credit.”
The companies/investors pre-approved for the credit have six months to make the investment and provide proof of investment to the RIEDC board of directors. Upon completion of this process, the RIEDC will certify the investor’s eligibility for the credit with the Rhode Island Division of Taxation. The RIEDC, which will review applications for the credit quarterly, may not approve more than $2 million in credit applications in any two-year period. The credit expires in 10 years.
Rhode Island-based Biotech Player Sets Its Sights on Expansion
Neurotech Pharmaceuticals, Inc., a biotechnology company focused on the development of sight-saving therapeutics for chronic eye diseases, announced earlier this year that it will locate a new manufacturing facility in Rhode Island. Neurotech was approved for a $4 million financing deal through the Rhode Island Economic Development Corporation (RIEDC), Rhode Island Industrial Facilities Corporation, and Rhode Island Industrial-Recreational Building Authority that will enable the company to purchase new equipment, including two modular manufacturing suites (clean rooms), and expand into a new 27,000-square-foot office and manufacturing site at the Highland Corporate Park in Cumberland, RI. The manufacturing facility expects to be in operation by the second quarter of 2008.
“We are thrilled to expand our operations in Rhode Island. The state of Rhode Island’s leadership and our partners at the Rhode Island Economic Development Corporation have been very helpful in enabling us to initiate our expansion efforts,” says Ted Danse, president and CEO, Neurotech Pharmaceuticals, Inc. “We look forward to working with the state to continue our growth and development, and to further strengthen our R&D and manufacturing capacity in Rhode Island.”
The company’s main operation is located in Lincoln, RI and employs 21 professionals. In the next three years, the company anticipates it will increase its employee base substantially.
“Supporting promising biotechnology companies like Neurotech is a winning strategy for Rhode Island and important to our effort to grow an innovation economy that produces good, higher-wage jobs for our citizens,” says Saul Kaplan, executive director, RIEDC. “Neurotech is an excellent example of how the public and private sectors can work together to help great companies grow. We are proud of Neurotech’s success and look forward to its continued growth in Rhode Island.”