June 24, 2018
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Legislature, LePage can help Maine’s small businesses add jobs

Nick McCrea | BDN
Nick McCrea | BDN
Gov. Paul LePage

Everyone loves small business owners and entrepreneurs. They are creative. As engines of economic growth, they generate jobs. They think up and make products that keep us healthy, informed, entertained and safe.

But as much as lawmakers appreciate entrepreneurs and enjoy promoting their work, they have a harder time providing another necessary support: money.

Fifty percent of small businesses fail in the first three to five years, according to the Small Business Administration. Why? Most often it’s due to management inexperience and insufficient capital.

One way for the state to support Maine’s small business leaders is to award funding for research, development and commercialization projects. That last word — commercialization — is key. As Muskie School of Public Service professor Charles Colgan has often pointed out, Maine is good at starting small businesses but not as good at helping them grow into big businesses.

Maine must do more to ensure the funding it spends on important research makes it way into forming new products or technologies that have a market — to incentivize businesses to mature and add more jobs. And instead of picking specific winners and losers, the Legislature should approve a robust package that lets groups compete for the funding.

Several proposed bills would focus funding on research, development and commercialization: LD 1223 sponsored by Sen. Emily Cain, D-Orono; LD 1492 sponsored by Sen. Roger Katz, R-Augusta; and a few others that prioritize revitalizing downtowns. The Joint Select Committee on Maine’s Workforce and Economic Future is also developing a bond bill that would help businesses gain access to capital. The Appropriations Committee must consider them all and put forward a recommendation to the full Legislature.

Cain’s bill proposes that the state bond for $50 million to provide funds for R&D. Katz’s bill proposes that the state bond for $85 million for a variety of development, training and infrastructure projects, with $20 million of the total devoted to R&D.

Both bills specify the funds for research, development and commercialization be allocated through a competitive bid process to the follow sectors: biotechnology, aquaculture and marine technology, composite materials technology, environmental technology, advanced technologies for forestry and agriculture, information technology and precision manufacturing technology.

It’s past time for the state to devote funding to key industries to generate large and long-lasting returns. And that means directing it not only to important research but to methods to transform that research into products.

As the state’s 2010 Science and Technology Action Plan politely points out, “We have invested since the late 1990s in building research capacity, but have done little in terms of building our capacity for innovation and entrepreneurship. This means that we need to do better at converting ideas into products and processes, growing new, sustainable companies, and integrating new concepts into our traditional industries in a way that creates new jobs.”

It hasn’t helped that, in 2012, Gov. Paul LePage vetoed a $20 million bond package that would have allowed the Maine Technology Institute to award competitive grants to Maine businesses, nonprofits and universities; the Legislature allowed LePage ’s veto to stand. The most recent bond packages sent to voters for approval last November contained no R&D.

One of LePage ’s complaints was that R&D funding too often doesn’t generate a specific return on investment. While R&D has consistently been shown to leverage considerable returns, and we considered his veto foolish, we agree that there is a need to put greater focus on the business development and growth stages of product development, to help products gain market traction and generate economic activity. The Legislature, and LePage, should approve a bond package that prioritizes research, development and all-important commercialization.


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