No one is a fan of household debt, so we understand the concerns of many Mainers about state government using bonds to purchase things that are considered wants, not needs. However, research and development bonds are debt for purchases that will benefit Maine families in the long run, like your house or education. It is appropriate for Maine to use bonds to fund R&D that leads to innovation for Maine companies and therefore create more jobs for Maine residents.
Innovation is the source of as much as 80 percent of economic growth, so states across the country are supporting innovation-based economic development in order to recover from the recession and to help their local companies grow. Maine is no different.
In Maine, we have had a strategy to support research and development for almost 15 years, and our science and technology sectors have maintained their strength as our traditional manufacturing industries have cut back. Almost 60,000 Mainers work in one of the targeted technology sectors, which contribute higher-than-average wages to Maine’s economy.
A key element of that strategy has been to support our research institutions and technology companies, including the University of Maine, with funding for research infrastructure (buildings and capital equipment) financed through bonds. Past bond investments have brought in $10 to Maine’s economy for every state dollar invested.
The Maine Technology Institute administers the $53 million of bonds invested since 2007 under a program called the Maine Technology Asset Fund. This is a competitive process where only the best proposals are funded. The criteria include scientific and technical excellence, collaboration with Maine companies, support for Maine’s technology clusters and impact on Maine’s economy.
These are some of those success stories from the asset fund.
Biovation, a Boothbay biotechnology manufacturer of anti-microbial formulations and nonwoven fiber products for food packaging and wound care, expanded, received outside funding through a federal grant and recently received the “Rising Star” award from the Small Business Association of New England, the first Maine company so recognized since 1994.
Bar Harbor Biotechnology, a Trenton company that is commercializing technology developed at The Jackson Laboratory, has seen sales expand dramatically and has hired several employees since its asset fund award in 2008.
The Bigelow Laboratory leveraged its 2009 award into several other major construction grants from two federal grants and now is constructing a new campus in East Boothbay, including incubator space to work with marine biotechnology companies.
The University of Maine’s Advanced Structures and Composites Center is building a new addition to its building on the Orono campus with its award and other funds secured from the federal government. Expected to open this summer, this new facility will allow for testing of extremely large composite wind blades, a unique resource for the emerging wind energy sector, and is helping the center expand its international reputation as a leader in composite materials.
Despite this progress, Maine continues to lag the country and our New England neighbors in R&D activity and innovation. New ideas, new processes and new products are what drive the economy. Maine’s low ranking in R&D activity hurts our economy and in turn our job growth and incomes.
Maine businesses need partnerships with state, federal and local governments to grow. R&D investments are one of the few economic development programs that Maine evaluates every year. Consistently for the past 10 years, the evaluation shows that firms that benefit from Maine’s R&D investments pay higher wages and have faster job growth than other firms. Those investments in R&D are paying off in firms all across the state.
Maine has real tangible opportunities, making windmill blades, creating biofuels from wood sugars and making bioplastics from potatoes. Bringing these ideas and products to market is more than possible if we are consistent in Maine’s support of research and development.
Maine’s Legislature needs to maintain a consistent and substantial investment in research and development through the Maine Technology Asset Fund process. The process has been proven through three rounds of competition; no special set-asides for one technology or sector are required that would deviate from the concept that only the best proposals should be funded. The asset fund, a national award-winner for investments in research capacity, continues to provide a mechanism for critical investments in Maine’s future. This is a need, not a want.
Catherine Renault is the principal of Innovations Policyworks and former director of Maine’s Office of Innovation. Lauralee Raymond is the sustainable economy program manager at the Environmental Health Strategy Center.