Funding foresight | R&D investments pay off, but their future depends on consistent support
“Charting the Course” is written by GrowSmart Maine, a statewide nonprofit based in Portland that promotes and encourages new ways of thinking about Maine’s future.
In November of 2007, Maine voters approved a $55 million bond investment in statewide research and development. Back then, no one could have foreseen the deep recession that was coming: The campaign for the bond question focused solely on growing the state’s most promising businesses, creating new jobs, raising wages and training a sophisticated work force for our emerging innovation economy.
Today, as Maine struggles with its highest unemployment levels in more than two decades, the decision we made two years ago to invest in our most promising and innovative industries looks like a remarkably foresighted one. Like our own custom-tailored stimulus package, the bond’s investments have financed dozens of projects, created or sustained hundreds of jobs and created new business opportunities throughout the state.
The Maine Technology Asset Fund, which allocated the bulk of those bond investments, is a competitive program designed to help Maine companies and research institutions move promising technologies through research and development towards the market.
The fund made its awards based purely on scientific merit, feasibility, relevance to Maine’s innovation needs and impact on economic growth. There were no political earmarks for specific sectors or geographic areas, which have sandbagged many of the state’s previous efforts. In deciding which investments would have the biggest impact, the fund enlisted experts from the American Association for the Advancement of Science, a scientific organization with broad expertise in moving research and development efforts toward commercialization.
But the grim budget situation has led the state to drastically cut the fund’s allocation, threatening future economic opportunities.
The payoff
In two rounds of grant competitions, the $55 million bond has already leveraged more than $73 million in matching private-sector capital. That’s substantial money for Maine — especially in the midst of a serious nationwide credit crunch.
The fund’s second round of grants, announced in June, included money for the nonprofit Bigelow Laboratory in Boothbay Harbor, which is establishing a new research center to find new commercial applications for the ocean’s microbial ecosystems. The research is anticipated to generate new biotechnologies for medicine, biofuels and aquaculture, as well as patents and possible spin-off enterprises.
Research and development investments also offer ways for Maine to preserve its core, natural resource-based industries by updating their products and production methods for the 21st century. Bond funds passed in 2007 are also being employed at the Gulf of Maine Research Institute in Portland for equipment that will provide more detailed data about the Gulf of Maine’s herring fishery, and another grant to the University of Maine in Presque Isle is funding a geospatial analysis facility that will improve utilization of northern Maine’s agricultural and forest resources.
I’m proud to say that GrowSmart Maine and many of its grassroots supporters were active in the campaign to pass the 2007 research and development bond question. Our 2006 “Charting Maine’s Future” report cited R&D investments — especially ones focused on bringing new ideas and products to commercialization — as a proven method to grow new jobs and a more prosperous work force.
Bond limits
But in that same report, the Brookings Institution warned us that the efficacy of Maine’s efforts was blunted by an “inconsistent” economic development strategy. “Maine has had no shortage of thoughtful leaders and bold ideas on economic development over the years,” wrote the Brookings Institution’s researchers. “However, Maine has frequently failed to stick to and sustain its innovation, with the predictable result that it has undercut the effectiveness of numerous intelligent but under- or un-funded initiatives that might have otherwise made a larger difference.”
The dire budget situation in Augusta this past winter has revived that problem. In spite of the success of Maine’s economic development programs in supporting jobs and enterprise through this recession, the Legislature only had the means to approve $11 million in bonds for statewide economic development programs this year. With the 2007 R&D bond funding exhausted, lawmakers chose to allocate only $3 million for new Maine Technology Asset Fund research and development grants in 2010-2011. A bond question including that money will go before voters in June of next year.
That diminished investment may have helped balance the budget this year, but it represents a missed opportunity to keep growing our state’s income, and the state’s tax base, for the future. We can hope that the economic recovery and increasingly optimistic investors might take up some of the slack that the state is leaving.
Voters will have a chance to approve the next economic development bond in June 2010, and even in its diminished state, the Maine Technology Asset Fund could still make a big impact. In the meantime, we hope that Maine’s business community will unite for stronger, more consistent investments in Maine’s innovation economy.
Christian McNeil can be reached at cmcneil@growsmartmaine.org.
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