With local and state cooperation, the Ocean State is considered a great place to run a marine business
Spanning just 1,045 square miles, Rhode Island is the smallest state in the union. Despite its compact geography, however, the Ocean State holds itself up as one of the best places in the country for marine businesses. In fact, many of those connected to the marine industry there say Rhode Island’s size is a major benefit.
“Due to the fact that we have a small state, we have to be more creative in the policies and programs we develop,” says Andy Cutler, a partner with Cutler & Co., which provides communications services to the Rhode Island Economic Development Corp.
The state’s size helps foster the partnerships between government agencies, private companies and educational institutions that are necessary to ensure the success of those policies and programs. “There’s been a high degree of cooperation between all the entities that are economically and vitally linked within the marine industry,” says Steve Kitchin, vice president of corporate education and training at the New England Institute of Technology in Warwick, R.I. “The players at the table have known each other for years.”
Paul Harden, business development manager for marine trades at RIEDC, says the state places a high value on the marine sector. Much of this can be traced to Rhode Island’s rich maritime heritage, dating back to the 1800s. And the state is home to one or the world’s premier yachting centers in Newport. “That heritage has helped grow the marine industry,” says Harden. “We have a broad and diverse base of marine companies.”
Thousands of businesses
A recent study funded by the Governor’s Workforce Board — The Marine Trades in Rhode Island: A Skills Gap Analysis — tallies the state’s marine businesses at 2,300 in a range of categories: boatbuilders, sailmakers, charter and yacht brokerages, marinas, retail outfits, sailing schools, and design firms, along with a large community of professional crew and other support services. These companies employ more than 10,000 people in a state with only 1.1 million residents — less than the New York City borough of Manhattan. Many of these jobs pay higher-than-average wages, which is why the RIEDC’s Economic Growth Plan of 2008 targets marine trades and defense technology as one of six industry segments in which to invest the state’s limited resources.
The RIEDC’s job is to work with industry leaders to develop the programs and tools these businesses need to grow, and to bring all the parties together. The agency also administers government-funded grants, bonds and small-business loans to help companies expand and invest in new technology and job training. These services are available to both long-established Rhode Island companies and those just moving in.
When Goetz Custom Boats of Bristol needed to finance a 43,000-square-foot expansion, the RIEDC helped the company obtain both the financing for the new facility and a workforce grant to train new employees. “Paul Harden helped us through the process,” says Sara Watson, marketing and public relations director for Goetz Custom Boats. “He reviewed our ideas, offered suggestions and connected us with the right people. He was very accessible and helpful.”
RIEDC helped Goetz obtain a $4.3 million bond from the Rhode Island Industrial Facilities Corp. to build the Bristol facility, doubling the company’s plant size. The bond, and a Governor’s Workforce Board grant of $68,000, allowed the company to hire and train 20 new employees. Goetz received the bond in December 2006 and immediately began work on the facility, which was completed in September 2007.
Eric Goetz, founder and CEO, says Rhode Island was a natural place to begin his business 30 years ago. “We like Bristol and Rhode Island,” he says. “There is knowledge and an appreciation of what we do here. If there is a [marine] industry concern, we are listened to.”
It also helps to have a state law that exempts the sales tax on boats purchased and registered in Rhode Island. Harden says the tax exemption benefits dealers, builders and boat owners, and requiring the boats to be registered in-state helps generate business for marine storage and service companies.
Goetz says having no sales tax on boats is definitely a plus. “This is the kind of support we need for our industry,” he says.
Peter Van Lancker, president of Hunt Yachts, moved his company to Rhode Island two years ago, and he echoes those sentiments. “The government gave me training grants and generally has been supportive to make sure we have a friendly, competitive environment to work in,” he says. “They try to help us in any way they can.”
Van Lancker says he was even more impressed when the governor made a personal appearance at the company’s grand opening and cracked a bottle of champagne on a yacht to mark the occasion. Hunt Yachts moved to Portsmouth’s Melville Marine complex when it needed more space than its South Dartmouth, Mass., plant provided.
“This facility was just ideal,” Van Lancker says of the Portsmouth location. “We increased capacity, and the waterfront access has allowed us to expand into a service facility for our customers. It enhances our sales ability, our visibility and the image of the company in terms of size.
“We’re also closer to many of our distributors and subcontractors,” Van Lancker continues. “Rhode Island is kind of unique in that it has a lot of centers of expertise for boatbuilding, all in close proximity. There’s also a good workforce around here. I’ve been very happy with the move.”
RIEDC’s Harden says training the workers needed to run marine operations is a large part of Rhode Island’s equation for success, and the RIEDC has developed partnerships with area educational institutions such as the New England Institute of Technology and the International Yacht Restoration School in Newport. He says members of the marine trades played an active role in developing the curriculum for New England Tech’s Composite Repair & Boat Construction program and IYRS’s Marine Systems program, helping tailor them to the needs of the industry.
The Composite Repair & Boat Construction program began in March. Funding from the U.S. Department of Labor and the Department of Housing and Urban Development underwrote the cost for each qualifying Rhode Island citizen participating in the program. RIEDC collaborated with NEIT, Goetz Custom Boats, New England Boatworks, C&C Fiberglass, Pearson Composites, Monsiaco CDC and the Rhode Island Marine Trades Association to create the program. Representatives from the marine industry worked with NEIT faculty and played active roles in developing the curriculum.
“The program was customized to meet the needs of manufacturers in East Bay [R.I.] for individuals with expertise in composites,” says NEIT’s Kitchin. “It was a great example of how all these entities came together.”
Goetz says the program “reflects a commitment on behalf of the state to deliver in a focused and coordinated way a workforce development program that we, as an industry, were able to assist in the curriculum development.”
This collaborative environment also helped IYRS expand its educational programs for the marine trades, says Susan Daly, the school’s vice president of marketing. IYRS is known for its two-year boatbuilding and restoration program. Last year the school launched a one-year program on marine systems that was developed with the American Boat & Yacht Council and the Rhodes Island Marine Trades Association. The program is broken up into 14 modules that cover such systems as electrical, electronic, fuel, propulsion and steering. After completing the program, students are eligible to take relevant ABYC certification testing.
“We’ve been successful in building and restoration,” says Daly. “Our graduates are always in demand. We talked to the industry about what their needs are, and one thing was more training on systems.”
Daly says the industry support in advising and participating in the curriculum development has been invaluable. Many companies also offered support through in-kind donations to start the program in Newport and IYRS’s Bristol facility, and by hiring and providing feedback on IYRS students.
As for the state’s support, Daly says, “the RIEDC helps connect the dots between business and the school, and in providing funding for the programs.”
The state also provided funding for a youth career program for 14- and 15-year-olds that was held this summer at IYRS. Ten students from Mount Hope High School in East Bay learned the basics of boatbuilding during the internship program at IYRS’s Newport campus. Students started by creating a cardboard model of the wooden rowboat they were to build. Then they broke down the hundreds of steps in a boatbuilding manual into manageable parts, with a project plan for each day. Three days a week they worked at IYRS, and one day each week they went on a field trip to a marine business that allowed them to see real-world application of the skills they were learning.
Daly says the program helps generate interest in the marine trades, providing a new generation of skilled workers that will be needed to meet the increased demand expected in the marine industry. According to the study by the Governor’s Workforce Board, Rhode Island will need to train about 2,400 workers during the next 5 to 10 years. The state’s Department of Labor and Training projects growth of marine-related businesses of about 7 percent over the 2004-2014 period.
The state’s infrastructure also must be prepared for this growth, says Harden. Several large-scale projects are in the works to meet that demand. For example, plans call for converting a tract of Navy land near Hinckley Yachts and New England Boatworks — both in Portsmouth — for boat servicing. The RIEDC is facilitating the transfer of the Navy land, thus helping Rhode Island both preserve its existing commercial waterfront access and expand it.
“Rhode Island’s marine trades sector is a significant part of the state’s high-wage economy,” says Harden. “As such, it is important the state support the sector through strengthening the workforce development system for the industry and increasing the availability of potential sites for marine trade companies.”
Marine trades and more
The Rhode Island Economic Development Corp. has identified six industry sectors in which to invest because of their growth potential and above-average wages:
• information technology and digital media ($69,570 average salary)
• financial services ($64,123 average salary)
• marine trades and defense technology ($63,478 average salary)
• advanced manufacturing and industrial products ($53,391 average salary)
• health and life sciences ($51,852 average salary)
• consumer products and design ($47,165 average salary)
This article originally appeared in the December 2008 issue.