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R&D bonds are essential; competition for funds is, too

Kurt Christiansen, BioRepository Supervisor at The Jackson Laboratory, opens one of the liquid nitrogen refrigerators in the Bio Bank, where 7,000 different strains of mice (sperm and embryos) are stored using cryopreservation, in this May 2013 file photo.
Linda Coan O'Kresik
Kurt Christiansen, BioRepository Supervisor at The Jackson Laboratory, opens one of the liquid nitrogen refrigerators in the Bio Bank, where 7,000 different strains of mice (sperm and embryos) are stored using cryopreservation, in this May 2013 file photo.
Posted March 23, 2014, at 1:42 p.m.

Since Gov. Paul LePage took office, Maine’s investment in economic development driven by research and development has plummeted. This is due to the governor’s veto of a small research and development bond bill two years ago and his unwillingness to propose investments in science and technology-based capital investments last year.

As a result, after 15 years Maine’s investment in this critical part of our economy has languished. It is well documented that 60-70 percent of economic growth comes from innovation and new knowledge. Equally undisputed is the fact that building laboratory and related facilities at companies and educational institutions that perform research translates into new knowledge.

Up until 2010, Maine’s R&D investment was evaluated every year by independent, outside investigators. They consistently found a 14:1 return on the investment by Maine taxpayers.

One successful investment was $4.5 million in bond funds used to build the new Bigelow Laboratory facility in East Boothbay, where Maine’ funds were matched by more than $14 million in federal grants. Similarly, at the University of Maine, the Advanced Structures and Composite Center’s recent 37,000 square-foot addition was funded by Maine taxpayers, with a major infusion of matching funds from the federal government. This facility is at the center of the state’s ocean wind power project, and could result in hundreds of millions of new dollars in economic activity for Maine.

In 2006, the evaluation found that earlier R&D bond monies that were earmarked by the Legislature for specific purposes had less impact on the Maine economy. This is because those funds were allocated according to political pull, rather than scientific merit or economic impact. This inefficiency was fixed in 2007 with the introduction of the Maine Technology Asset Fund, or MTAF, administered by the Maine Technology Institute, or MTI.

The MTAF process was rigorous. Companies and educational organizations applied once a year for funds for long-term capital investment projects. These applications were reviewed by the American Association for the Advancement of Science for scientific merit and rated by a panel of Maine experts for economic impact. Applicants were required to demonstrate that the research that resulted from these new projects would be commercialized in Maine, and would result in Maine jobs. The process was well received and won an award from the State Science and Technology Foundation in 2010 for expanding research capacity.

Now, the Legislature’s Appropriations Committee is considering a number of new R&D bond investment bills.

Only one puts funds into MTAF. All the others are being pushed by individual research entities that want a handout without the responsibilities that competing through MTAF would bring. They want their hands on Maine taxpayer funds without having to show Maine economic impact or scientific merit. They want their research toys without any strings.

And the Legislature seems to be willing to go along.

It’s hard to understand what has happened to MTI’s reputation as a nonpartisan, well-run institution. In any case, the lessons learned from the wasted R&D investments in the early 2000s seem to have been lost to term limits and staff turnover

While it is past time for a new round of R&D investment, circumventing the MTAF process sets us all back 15 years. It’s essential that the Appropriations Committee return the R&D bonds to the MTAF model of competition and let the best proposals win.

Catherine Renault is former director of the Office of Innovation at the Maine Department of Economic and Community Development, where she oversaw the Maine Technology Institute and the transition to the Maine Technology Asset Fund. She now operates her own firm, Innovation Policyworks, in Brunswick.

 

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