News surrounding the recent collapse of 38 Studios has been widely published, and there are many pieces distributing blame among those involved, but there hasn't been much clear writing covering the effects the collapse will have on RI's tech industry. This forum seems as good a place as any for discussing this.
There is this forbes post http://www.forbes.com/sites/ca... which suggests, with fairly little basis, that the blowup of a large tech company could spawn a bunch of startups. There have also been stories about other video game companies, not RI based, I assume, holding job fairs in Providence and actively recruiting people from 38 studios.
Will the collapse have any lasting effect on the potential for tech growth in RI?
I think the direct collapse of 38 studios will have little to no effect on the tech industry. Now I am not a gamer so I am not aware what software game companies are in RI. The only one I know of is (was?) Cronk software (whose website/ company? is no longer active). So I don't really see this being a boost for RI. I do wish all the employees who worked for 38 studios find jobs but I don't see much of a software game industry here in RI. Maybe you or anyone else can correct me if I am wrong on this.
What I do see having an effect on the tech industry is the issues surrounding the EDC. There are various connections between the EDC and the tech community so this is where I expect to see the greatest impact, either positive or negative. One could delve into a deeper conversation about the possibilties there.
I concur. I am a gamer, but considering RI's gaming industry was virtually nonexistent before 38 Studios came to town (minus small hobby and gaming shops like Disposable Heroes and the Temple Games), I don't think the company's failure will have an immediate impact on the tech industry.
That said, a great deal of money was sunk into the company, and the loss of it will certainly have an impact on the state's financial health overall. It remains to be seen whether or not the impact will be minimal. I think the state's population is likely to treat this as a cautionary tale, and call for changes to EDC policies should it move for a similar deal to the one it made with 38 Studios.
I agree with Ed. We all knew the State's decision to guarantee the loan for 38 Studios was a bad idea, most of us in the tech industry in Providence have little to no involvement in the gaming sector. I still see a lot of small tech firms with great ideas chugging along here. Pity that their founders merely have expertise instead of celebrity, as they receive little to no state support.
I'm tankful for betaspring, and wish there were more incubator projects like them to help nourish our tech community specifically, and our entrepreneur community as a whole...
I think there is some logic within the Forbes article thinking. They state the key to this phoenix effect* is a "critical mass of developers". So if there is a signifigant number of game software developers, and I will add companies, then having a large one die the possibility of many smaller companies reborn out of the ashes is likely. The question is does Providence/RI have a critical mass of developers (and companies)?
Again I don't think so in terms of game developers or companies. There does appear to be a number of game companies in Boston. But for rebirth of a game industry here in Rhode Island I don't think we had critical mass. We do have a fair number of software companies and a strong tech community combined with various companies and industries that have strong ties with the tech community.
Speaking of Boston and the idea of concentration of like-minded businesses or industry sectors, it is sometimes posed as a challenge for Rhode Island to compete with large cities like Boston and New York. These large major metro areas often are the hub of specialized industries for which smaller rural and lesser populated areas try to compete with singular focus on one or two industry areas. Rhode Island does have some areas of specialized focus like ocean related industries and tourists based industries. But I think one of our strengths, which should be enhanced, is our broad focus. We will continue to focus in one those areas we concentrate on but we should also play out our brouad strengths. This translates to "How can we in the tech industry can support the wide range of industryies within Rhode Island?" and "What areas across broad range of technology do we have within Rhode Island?"
* The phoenix effect being, using Will's words, "the blowup of a large tech company could spawn a bunch of startups". And calling it a "phoenix effect" might not be the best description as the singular phoenix gives rise to another singular phoenix as compared to a tree dying in a forest fire and its seeds grow multiple new trees.
By far the most important part EDC/38 Studios failure has been laid out in an article within this week's Providence Business News. The article, "Monitoring upgrades at EDC shelved", talks about the efforts of former EDC Director Keith Stokes to bring monitoring to the loans provided by the EDC. I had heard of this effort, I believe through a previous PBN article, and had the opprotunity during Governor Chaffee recent community business forums to speak personally to Mr. Stokes about this effort; that was of course before he resigned. From this article it seems these efforts were just getting off the ground at the time the EDC/38 Studios failure occured; so to me it is inclear whether they would have better prevented the 38 studios failure or not. But, again, this is the most important question how do we best montior and understand our investments.
This question also goes beyond the efforts of just the EDC's loan program but for all money going through this agency as it should be for all state agencies and state funds. One perfect example of this is the Community Service Grants which are designated by the State legislature and then distrubuted, but not monitored, by various state or quasi-state agencies like the EDC. A perfect example of the failure of the state, the state legislator and the EDC failing to monitor Community Service Grants funds was the Westerly- Pawcatuck Joint Development Task Force / Greater Westerly-Pawcatuck Chamber of Commerce mix-up.
I agree with Jim in that many of us thought that the money invested by our government would have done more good spread across 38 different companies at $2M each instead of putting it all into 38 Studios.
We need more incubators like Betaspring and VCs. A more positive business tax structure would help too.
We have a very vibrant arts community. Apple, one of the most successful companies of our age, liked to live at the intersection of Technolgy and Liberal Arts. Something that we are well positioned to do here in RI.