Investors know that there is no such thing as a low-risk, high-gain investment. Which brings us to 38 Studios LLC.
More than five years after the state backed $75 million in bonds to bring the video game developer to the Ocean State from up the road in Massachusetts, the ripples continue to influence debate and public policy here.
It's easy today to forget that Rhode Island was deep in the throes of the Great Recession when the idea came into being, with an unemployment rate that was among the worst – and at times the worst – in the nation. The state's leaders were swinging for the fences when they saw the opportunity to bring Curt Schilling's enterprise here. Just look at how the money was scheduled to be disbursed – in stages only when certain employment goals were met. It was about jobs.
That they missed on this investment is a sign that they didn't understand the nature of the risk involved. Clearly this type of investment is not something a state government should undertake.
But investment by the public sector is a necessity in today's world. With each state a sovereign political entity, there is competition for economic development, so Rhode Island must make certain kinds of investments if it hopes to be competitive. The current plan for infrastructure investment is an absolute necessity, both for job creation and for competitiveness.
New economic-development incentive plans should be viewed individually. No doubt, some will be found to be lacking and should be abandoned. Others should be implemented. But it's time get over 38 Studios. •