Economic Development Data Analysis and Assessment

1.1.7 The Analysis: Diversity
Diversity includes measures that relate to the overall
economic, social and cultural diversity of a location.
Economic, demographic and cultural diversity
has strong associations with economic growth,
performance and sustainability. Diversity in a
population and economy helps to generate new
ideas, perspectives, and innovation. Therefore,
even though traditional business rankings pay little
attention to diversity measures (as demonstrated
by the fact that the CFED ranking is the only one
we analyzed with any real diversity measures), it is
nevertheless critical for states to consider. PolicyLink,
a national research and action institute, was
conducting a more detailed examination of diversity
in Rhode Island as FEC was developing this business
climate study, but we have also highlighted a few key
diversity measures.
What’s Holding Rhode Island Back?
Rhode Island generally ranks low in key diversity
measures, such as Four-Year Degrees by Race,
Unemployment by Race, and Homeownership
by Race, i.e. there is a greater disparity between
non-Hispanic whites and people of color in rates
of educational attainment, employment, and
homeownership. This is most likely a function of its
overall demographic structure. Rhode Island has a
higher percentage of non-Hispanic White residents
(76 percent) as compared to the U.S. average (64
percent). While low rankings in measures related to
diversity are not a direct indicator of failing policies
or a lack of a welcoming environment, they should
be examined closely to determine if there are any
conditions or policies creating unintentional barriers
to the State performing higher in these areas. This
is especially important given the shifting dynamic of
Rhode Island’s demographics, according to research
done by PolicyLink. Over the last 30 years, the
percentage of Rhode Island residents of color has
increased from seven to 24 percent. In just the last
decade, Rhode Island’s Latino population grew 44
percent, the Asian population grew 28 percent, and
the African American population grew 23 percent.
Meanwhile, the non-Hispanic white population
declined by six percent.
The Upside
Rhode Island scored in the mid quintile for Business
Value by Gender and Business Ownership by Race.
The Beacon Hill Institute (BHI) also ranked Rhode
Island 21st for Openness, which it defines as “a
measure of how connected the firms and people
in the state are to the rest of world.” BHI based
this measure on the level of exports as well as the
percent of population born abroad. Each of these
key diversity measures present Rhode Island with a
solid core upon which to build.
Furthermore, Rhode Island has experienced income
gains for all levels of earners. Whereas nationally,
the bottom half of earners have actually experienced
wage decreases over the past three decades, Rhode
Islanders’ wages have been increasing. This has
contributed to Rhode Island’s lower than average
income inequality and poverty rates.
+
“We need to pay particular attention to minority-owned businesses.
Immigrant populations especially are often very entrepreneurial but
have higher barriers to start-up to include language skills and business
planning.”
#
Rank Resource Rank of Rhode Island
FIGURE 6:
Diversity Measures [ latest year data available ]
Diversity Measures [latest year data available]
51
50 50
Business Ownership by Gender CFED
47 46 46 43
21 21
32 30
41 40 39
Homeownership by Race CFED
Homeownership by Income CFED
Homeownership by Family Structure CFED
Underembloyment by Race CFED
Four-Year Degree by Race CFED
Uninsured by Race CFED
Uninsured by Gender CFED
Business Value by Race CFED
Uninsured by Income CFED
Unemployment by Race CFED
Business Value by Gender CFED
Openness BHI
Business Ownership by Race CFED BHI
Bottom Mid Top
Quintile
ECONOMY RI: Economic Development Data Analysis & Assessment | February 2013
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