Notes from Innovation Policyworks


Did you hear about the Indiana electric vehicle plant that closed recently even though federal and state officials granted the company significant incentives two years ago on promises to create 400 jobs? This case, like Kestrel here in Maine, illustrates that economic developers still have a lot to learn about luring start-up high-tech manufacturing to their localities. Read more in my blog at http://www.innovationpoicyworks.com/blog.


Recently I also wrote about the differences in philosophy among Governors regarding what actions will create jobs. Maine's Governor, Paul LePage, said in his State of the Union address, "As Governor, I cannot directly create private sector jobs." He instead is focused on tax cuts. Democratic governors, such as Minnesota Governor Mark Dayton, are proposing increased spending on infrastructure to create jobs. Some are also focusing on innovation. A nice summary of the different proposals is at http://www.stateline.org/live/details/story?contentId=628000.




Start-up America Legislative Agenda


President Obama has sent legislation to Congress designed to assist start-up and small businesses that are creating jobs. A related initiative is designed to attract and retain foreign-born entrepreneurs and highly skilled workers. These initiatives include a permanent tax cut on capital gains in key investments in small businesses, a new 10 percent income tax credit on payroll for small businesses that add workers or increase wages, doubling the amount of start-up expenses that can be deducted from $5k to $10k, and extending the 100-percent first year depreciation for 2012.

The President is also proposing initiatives for crowdfunding, changing rules for Initial Public Offerings (IPOs) and increasing the Small Business Investment Company Program (SBIC) to $4 billion. For more information, check out the White House website:  http://www.whitehouse.gov/economy/business/startup-america.



Innovation and Manufacturing fueled 2011's Best Performing Cities


A new report from the Milken Institute, Best-Performing Cities 2011, finds cities that attract high-tech firms, build effective industry clusters, capitalize on diversified, tech-based economies, cultivate strong manufacturing cores and support export-driven growth had the best economic performance last year. The report suggests that export-driven and manufacturing-based metro economic performed significantly better than their counterparts due to strong foreign and domestic demand for heavy manufacturing equipment and export of IT and software-related products. By the way, four of the top five metro areas in 2011 were in Texas! Read the report at: http://bestcities.milkeninstitute.org/

Where Did All the Workers Go?

If you only click on one report in this newsletter, this is the one. This shows the composition of the economy between 1947 and 2007, showing employment by sector. Just after World War II, manufacturing and agriculture employed one in three workers in the US. Now, these sectors employ only one in eight. During the same time period, output from US manufacturers rose spectacularly, so much of the change in employment is attributable to productivity gains. And, many new, technology sectors are not classified as manufacturing. Still, worth a look at: http://www.theatlantic.com/business/print/2012/01/where-did-all-the-workers-gp-60-years-of-economic-change-in-1-graph/252018/

In This Issue
Start-Up America Legislation
2012 Best Performing Cities
Where Did All the Workers Go?
Tidal Energy
Local Economy Article

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To Liquid Wireless, a mobile lead generation company in Portland, who has been acquired by Publisher's Clearing House, but will retain its Maine location. This company was formed in 2008 and graduated from the MCED Top Gun program in 2009.


To John Voltz, newly named Executive Director of Blackstone Accelerates Growth, an innovative Maine entrepreneurship program.


To TJ Dupree, an Idexx veteran, newly appointed chief operating officer of Putney, Inc., the Portland-based pharmaceutical firm developing generic prescription medicine for pets.


To Kennebec Technologies, a high precision manufacturer, on the completion of a 4,000 sq. ft. expansion of its headquarters in Augusta.


To online veterinary pharmacy Vets First Choice of Portland, on its acquisition of VetCentric, a Maryland-based competitor. The combined company serves more than 25 million pet owners and 6,000 veterinary practices. 


New Report Lauds Maine Tidal Energy Potential


A new report from the US Department of Energy has found that Maine has "considerably high kinetic power density," with only Alaska having more. The total theoretical available tidal power in Maine is 675MW. The report outlines the results of a project that generated a national database of tidal stream energy potential. Maine's tidal capacity was reported to be primarily Downeast in Coobscook Bay, Lubec Channel, Grand Manan Channel, Western Passage, Knubble Bay, Hockmock Bay and the Kennebec River. The report, and its companion report on wave power, is available at: http://www.eere.energy.gov/water


Local Economy Article

An article I wrote last year called, "US economic development alters course because of the recession" was just published. I discuss six new areas of economic development practice. You can read the abstract and download the pdf at http://lec.sagepub.com/content/27/1/50.abstract.


96 Maine Street, Suite 183 Brunswick, ME 04011 207.522.9028
Innovation Policyworks, LLC, is an innovation strategy and evaluation firm focused on the development and measurement of effective state and regional technology-based policies and programs. Dr. Catherine S. Renault has been delivering innovation-based economic development results in rural states for over 20 years. She has been a technology-based economic development practitioner in two states and consulted with many more, most recently as science advisor and Director of the Office of Innovation for the State of Maine.   For a list of projects, see www.innovationpolicyworks.com/projects.