Ocean State of inertia

These days, though, Fidelity’s campus in suburban Smithfield speaks more to how rarely the state has succeeded in bagging the big game of jobs creation. And Rhode Island’s persistently high unemployment rate - 12.7 percent in July, second only to Michigan, with its rapidly collapsing auto industry - underscores the size of the smallest state’s economic challenges.

Michigan’s troubles, at least, are readily explained. But what’s the problem with Rhode Island? The state is usefully situated between New York and Boston. It boasts considerable assets (Brown University, Rhode Island School of Design, terrific beaches), and a mix of rural towns, suburbs, and cities in uncommon proximity. Providence, once dismissed as a smudge on the way to Cape Cod, now charms visitors with its arts, restaurants, and unpretentious ambience.

The Ocean State’s struggles are all the more striking since, 100 years ago, the state capital - then known as “the beehive of industry’’ - was among the richest cities in America. Giants such as Brown & Sharpe (machine tools) and Gorham Manufacturing (silver) continued the enterprise demonstrated by Samuel Slater when he launched the Industrial Revolution in nearby Pawtucket.

But Rhode Island has struggled to reinvent its economy since the decline of the industrial age and has never found the right formula. Due to distrust of their government, voters rejected an ambitious 1984 plan to use $750 million in public spending to seed the high-paying jobs of the future. Twenty-five years later, Rhode Island’s central challenge remains unchanged.

There are myriad reasons: an undereducated work force, underperforming public schools, a revolving door in the top job at the state’s economic development agency. Local communities resist the regionalization that could make government more efficient. NIMBYism gets in the way of major public projects.

A lack of effective political leadership has also held Rhode Island back, far more so than the state’s periodic bouts with corruption. University of Rhode Island economics professor Leonard Lardaro coined the phrase “paro-pic’’ - a combination of “parochial’’ and “myopic’’ - to characterize state leaders’ lackluster economic-development efforts.

Some critics also point to Rhode Island’s strong unions and its high cost and tax structure. But South Carolina’s place among the job-creation laggards (it had 11.8 percent unemployment in July) shows that a warmer, lower-cost, “pro-business’’ climate is no guarantee of constant success.

Not coincidentally, many of the most encouraging economic-development efforts take place away from government.

One such effort is Runa LLC, a prize-winning company launched by two recent Brown graduates as part of a course. Runa’s for-profit focus is making an energy drink caffeinated with an Ecuadorian plant, and the company also has a nonprofit foundation to help sustain Ecuadorian farmers. The Brown grads, who expect their drink to be sold in the Northeast next year, hope to establish their bottling plant in Rhode Island.

Providence, meanwhile, has a small but significant “geek’’ sector - people skilled in design, digital media, information technology, and other of-the-moment fields. The shared sense of collaboration for these creative types, as well as Providence’s grit, funk, and relative affordability, are more of a catalyst than any government policy. So building upon this sense of a desirable culture - perhaps by encouraging the development of low-cost, shareable office space - could yield big dividends over time. It would also jibe with how small businesses supply most of the jobs in Rhode Island.

Every state wants to land such big employers as Fidelity Investments. That’s understandable. But as a friend notes, expecting to fix Rhode Island’s longstanding economic problems by luring a few mega-companies is like treating obesity with gastric-bypass surgery.

Rhode Island needs to pursue the complicated long-term equivalent of exercising and eating right: simultaneously pursuing a broad variety of small efforts that capitalize on the good things already happening in the state.

Ian Donnis is the political reporter for WRNI, Rhode Island Public Radio.