New $1.57 Million DOD Economic Adjustment Grant will Help RI Economy Diversify

Press Release

Today, Rhode Island's Congressional delegation and Governor Lincoln D. Chafee announced that the U.S. Department of Defense's Office of Economic Adjustment (OEA) is awarding Rhode Island a one-year, $1.57 million grant to help boost the state's economy and help it diversify. With defense budgets projected to decline in the foreseeable future due to sequestration, this federal grant will help the state better prepare our manufacturers and communities for adjustment, economic diversification, and meeting the challenges and opportunities ahead.

The federal funds are being awarded to the Rhode Island Commerce Corporation (Commerce RI) to help the state map out an economic development action plan to leverage regional assets like defense-manufacturing companies, and pursue market diversification through intensive use of industrial design, engineering, and innovation. The project will: collect data and analyze risks and opportunities for defense companies; develop a network of stakeholders; design and pilot a market diversification program for defense-related manufacturers; develop an innovation strategy to facilitate increased technology commercialization; develop curricula to train all levels of the defense workforce in design-related and engineering thinking; and, plan for the development of shared space for use by industry and partners. The $1,575,000 in DoD OEA funding will be matched by $178,834 in non-federal funding.

"Once again, congratulations to our Congressional delegation for bringing key funding to our state. Through this grant, Commerce RI will continue its ongoing effort to execute a strategy to promote and encourage high-tech research, design and manufacturing in Rhode Island," Governor Lincoln D. Chafee said. "Rhode Islanders are experiencing the payoff of our methodical and pragmatic approach to improving our economy through our investments in education, infrastructure and workforce development -- the fundamentals of building a strong economy."

"Rhode Island has a strong defense and technology industry, but we need to constantly look ahead and ensure we're preparing for the future. This initiative will provide critical economic data and resources to help Rhode Island develop a road map to ensure local companies can adapt and transition to new opportunities," said U.S. Senator Jack Reed, a member of both the Armed Services and Appropriations Committees. "This federal funding will help guide workforce investments and allow the state to take a coordinated, analytical approach to strengthening our economy both now and in the future."

"Rhode Island's defense industry is a major economic asset for the region, with a wealth of innovative businesses and skilled workers," said U.S. Senator Sheldon Whitehouse. "Aligning those resources will strengthen the industry even further, and help to create more jobs in our state. I congratulate Commerce RI on winning this federal support, and applaud its efforts to continue our state's legacy of industrial design and manufacturing."

"The defense industry is a crucial sector of the Rhode Island economy, and this program will go far in supporting defense-manufacturing companies and helping them to grow further," said Congressman Jim Langevin. "This collaborative approach to doing business will benefit all stakeholders, and could prove a model for other industries. I am particularly pleased to see that workforce development and training will be addressed through these funds, making our state an even more attractive place to grow or open a new business."

"Rhode Island's defense manufacturers are an important part of the local economy that support jobs and middle class families," said Congressman David Cicilline. "These federal funds will help Rhode Island plan to ensure that the state's advanced manufacturers continue to grow and are poised to diversify and take advantage of new economic opportunities."

In the fall of 2013, the state received an Investing in Manufacturing Community Partnership (IMCP) federal planning grant. These funds have enabled the state to develop a plan for the creation of a center for industrial design and manufacturing, or "STEAMengine" as a reference to Rhode Island's manufacturing legacy and our state's future in STEAM education and companies. STEAM refers to the opportunity for Science, Technology, Engineering, Art, and Mathematics fields to reshape our businesses and be an engine for economic growth. Overall, STEAMengine is being designed to support manufacturers throughout the state in the pursuit of new approaches to manufacturing research, design, development, and market introduction. As Commerce RI works to finalize this project, this new federal grant will help it better serve some of the unique circumstances and needs associated with Rhode Island's defense manufacturing and supply base.

"We are developing a model to bring design and engineering thinking together with defense manufacturers to open up new markets for their products and services," said Marcel A. Valois, executive director of the Rhode Island Commerce Corporation. "By tapping into and fostering tight-knit networks of existing design and engineering talent combined with the defense manufacturing capabilities in Rhode Island, we will have the opportunity to diversify and grow the defense manufacturing base throughout southern New England. This is about creating the conditions for businesses to thrive and promoting long-term economic health and prosperity in our state and region."

According to Commerce RI, the defense sector in Rhode Island represents $3.7 billion in economic output and supports approximately 32,993 jobs (15,760 direct, and 17,233 indirect and induced). This represents roughly 6.2% of the state's total employment. In addition to Naval Station Newport and the Naval War College, Rhode Island is also home to the Naval Undersea Warfare Center (NUWC) and leading research universities including the University of Rhode Island and Brown University.

And while other areas of the defense budget have been hit hard, earlier this year, the U.S. Navy awarded a $17.6-billion contract to Electric Boat to build ten additional Virginia- class attack submarines. As a result, Electric Boat announced plans to hire up to 3,000 more workers at its facilities in Rhode Island.