20 years of plans for Maine’s economy, but where’s the progress?

Posted July 17, 2013, at 1:07 p.m.
Last modified July 18, 2013, at 5:27 a.m.

As Maine struggled to recover from a major recession in the early 1990s, Gov. John McKernan and lawmakers formed the 19-member Maine Economic Growth Council and charged it with developing a long-term economic development strategy for the state.

Council members toured the state and held focus groups to craft a statewide plan. But soon after, the council lost much of its budget and, with it, the momentum to craft a long-term economic development strategy for Maine.

Although Maine law still requires the council to “develop, maintain and evaluate a long-term economic plan,” one has yet to materialize over the past two decades. Its story is one of many examples in which Maine has started a major economic development effort, only to let it fade.

Such as in 1995, when a group of business leaders formed Maine & Company to entice businesses to locate in Maine. The state devoted $350,000 to the organization in 1999. All state funding, however, had evaporated by 2003.

And the Maine International Trade Center formed in 1996 to help Maine businesses grow global trade. The center received one-time funds to open new offices, but, like Maine & Company, its regular state funding stream has since been cut.

“Our history is littered with great programs and investments that were made, and we just peter out,” said former state economist Laurie Lachance, who is now president of Thomas College in Waterville. Lachance is also a former CEO of the Maine Development Foundation, which coordinates the Maine Economic Growth Council. “We just let it die on the vine instead of staying the course.”

Yet setting a course and sticking to it is what Maine must do if it wishes to accomplish its lofty goals of cultivating key industries that can power future job growth, according to economic development experts.

“Take any successful business enterprise in the state of Maine, and I guarantee you they have a five-year strategic business plan,” said John Dorrer, a senior research fellow at the University of Massachusetts and former director of the Maine Department of Labor’s Center for Workforce Research and Information. “They’re going to invest accordingly, they’re going to align accordingly, and they’re going to marshal the resources they need to have a pretty good shot of having that succeed.

“We never marshal the resources.”

The pluses of planning

Maine’s businesses, policymakers and others have a wealth of examples to draw on if they come together to create an economic development plan for the state. Several states, particularly in the Southeast, have crafted and implemented plans to spark job growth within specific industrial sectors they’ve decided to cultivate.

Dorrer said states such as Florida, Indiana, Kentucky, Oklahoma and Tennessee are leading examples of how thoughtful economic planning, implemented effectively, is yielding results. These states have reoriented their workforce training, such as community college and university programs, and tax incentives toward developing those sectors and attracting related businesses.

They’ve also focused long-term on strengthening their public schools. Some plans have been developed by governors and others by chambers of commerce, but effective plans have had broad buy-in.

And their economies have grown faster than Maine’s. In 2012, Maine’s economy grew 0.5 percent, according to the U.S. Bureau of Economic Analysis. Indiana saw 3.3 percent growth, Florida 2.4, Kentucky 1.4, Oklahoma 2.1 and Tennessee 3.3.

“What distinguishes successful states over non-successful states is those folks tend to be aligned,” Dorrer said. “I don’t get the sense in Maine that we have much alignment going on. In the larger sense, how is the business community working with the Legislature? How is the Legislature working with the governor to create this sense of a future?”

Successful state economic plans don’t follow a formula, but they have much in common, said Ted Abernathy, executive director of the Southern Growth Policies Board.

Abernathy, the former executive vice president of the Research Triangle Regional Partnership, played a key role in growing North Carolina’s Research Triangle, an industrial park that today employs about 40,000 people in high-tech fields and feeds off the resources of three nearby universities.

The Research Triangle has helped so-called innovation clusters in targeted fields such as computer systems design, chemical manufacturing and engineering take off in the Raleigh-Durham area.

The region attracts about $203 million annually in industry-funded research and development funds, compared with $150 million for the Silicon Valley and $120 million for the Boston area, according to a recent economic impact analysis. That innovation cluster has translated directly into 80,000 jobs in the region and indirectly into 165,000 more since the mid-1950s.

Successful plans, Abernathy said, lay out strategies to develop a skilled workforce for a state’s future economy, build up the infrastructure businesses require and customize development by region.

They focus on marketing the state, growing global trade and attracting foreign investment. They set out metrics to measure success.

And most important, Abernathy said, successful plans involve input from a wide range of people while concentrating on a narrow range of initiatives.

“In the end, you can’t do everything,” he said. “There are never enough resources or enough money. The hardest part of the plans is making the choices. That’s why a good process really helps.”

Is a statewide plan right for Maine?

The need for a long-term, statewide economic development plan in Maine is not universally acknowledged, however.

Maine needs to directly address the issues that underlie its economic weakness, such as an aging workforce and lagging educational levels, said Charlie Colgan, a former state economist and now a public policy professor at the University of Southern Maine’s Muskie School of Public Service.

“I think strategic plans more often wind up distorting what you need to do,” he said. “I prefer, particularly in a situation like this, to zero in on what are the obvious issues and focus on those.”

Others fear a statewide plan that originates in Augusta wouldn’t appropriately reflect the state’s regional economic diversity.

“A top-down approach could be harmful because it risks the failure of engaging each region’s Mainers in a process that they can own and drive themselves,” said Jess Knox, a former Small Business Administration official who now runs a business consultancy in Portland.

That’s the thinking behind Mobilize Maine, an effort that started in 2009 with a focus on crafting region-specific economic development strategies based on cultivating existing local resources rather than external solutions, like attempting to entice businesses to relocate.

In Aroostook County, for example, the Northern Maine Development Commission, or NMDC, has recently targeted two sectors for future growth: renewable energy and information technology.

Since its 2009 start, Mobilize Maine, which NMDC spearheads, has spread to the rest of the state, building on a structure the federal government uses to allocate economic development funds that divides Maine into seven Economic Development Districts.

This year, for the first time, the nonprofits that oversee each district are parlaying their regional planning into a statewide effort. They’ve started writing their plans using a common template and using their regions’ existing assets as a starting point.

It’s “moving away from concentrating on things we don’t have and building an economy based on the assets each region does have,” said Robert Clark, the commission’s CEO.

That’s an approach that’s favored by Abernathy, the planner who worked on North Carolina’s Research Triangle. He recommends planners take a look at the businesses that have been most successful over the past 10 years.

“The easiest way to determine what you’re competitive at is to look at what you’ve got,” he said.

For Lachance, Maine’s best shot at prospering comes from building on the sectors that have traditionally performed well in the state: agriculture, forestry, manufacturing, fishing and tourism.

“If you add innovation to our heritage, that’s where we’re going to have the strongest opportunity to grow, rather than bringing an industry to our state that we have no history in,” said Lachance.

Another committee

Gov. Paul LePage’s administration has set boosting Maine’s competitiveness as its first economic development priority — with long-term strategizing to come later.

Two years ago, the administration and lawmakers undertook a “red tape audit” and passed legislation in hopes of removing unnecessarily burdensome regulations from the books. LePage has also set his sights on lowering taxes, including eliminating the state income tax.

“A good solid strategy will have more teeth if we can simply make Maine more competitive as a first step,” said George Gervais, LePage’s economic development commissioner.

LePage’s economic advisers aren’t sold on Maine’s need for a major economic plan, but that’s not to say the governor doesn’t want to put his stamp on the state’s long-term strategy.

To that end, the administration is turning to a tried-and-true tactic for Maine policymakers searching for economic strategies: another committee.

Gervais is now starting work on The Governor’s Economic Development Action Committee, which will bring together representatives from state government, the economic development community and businesses.

The Maine Economic Growth Council, Gervais said, should still focus on its annual Measures of Growth report, which annually tracks Maine’s progress toward measuring economic benchmarks. The goal of the governor’s committee, he said, “is to give the private sector a loud voice in determining what the state’s economic development strategy should be as we move forward.”

Only time will tell if this new effort, unlike those that preceded it, will succeed in crafting an economic vision for the state that has staying power.

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