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Notes from Innovation Policyworks

 

Someone asked me recently why I'm not blogging more, and my answer was that I'm too busy working around the country in states that get the importance of innovation to spend time complaining about the state of Maine. On the other hand, the bi-partisan support for the R&D Bond is heartening, and perhaps Augusta does understand the need for continual investment in our economy. And, last night's Top Gun 2012 Showcase showed that the innovation community is alive and well here - against all odds, a large crowd stayed to network and celebrate for an hour after the food was gone and the bar was closed! Maybe we've turned a corner afterall.

  

Cathy

Maine Legislature Adjourns; No Cuts to R&D; Bond Passes

 

At this writing, the Maine legislature adjourned last night, having completed its work for the biennium. In the final hours, the Supplemental Budget passed with major social service cuts, but minimal damage to key science and technology-related investments such as the Maine Technology Institute (MTI) and the Maine Economic Improvement Fund at the University of Maine. In addition, the legislature passed a number of bonds, including $20 million for the Maine Technology Asset Fund, a competitive program administered by MTI. If Governor LePage signs the bond bills, they will go to the voters in November.

States Getting Smarter About Economic Incentives

 

Whether it's the effect of the recession, or just that legislators are starting to ask the right questions, two recent reports suggest that the long-standing economic development practice of recruiting companies from other states and localities using tax incentives (buffalo hunting to those in the biz) is getting well-deserved scrutiny.


First comes a report from the Pew Foundation entitled, "Evidence Counts: How well as states evaluating tax incentives for economic development." This report (I know you are shocked!) says, "policy makers spend billions of dollars annually on tax incentives for economic development, but no state ensures that policy makers rely on good evidence about whether these investments deliver a strong return."

 

Only a few weeks later, Brookings issued a report on the use of incentives in Nevada, and Jed Kolko at the Public Policy Institute for California found that no more than 2 percent of annual job gains across states nationally can be attributed to business relations anyway, while more than 95 percent come from the expansion of existing businesses or the birth of new establishments.

Kenan Fikri summarized the situation in the New Republic, stating, "Reform is long overdue. Incentives are a legitimate tool for catalyzing economic development, but too often they have been irresponsibly deployed."
 

Older Entrepreneurs Start Companies Too 

 

Maybe I'm just getting older, but I was thrilled to find that Kauffman Foundation, the organization responsible for much of the country's research on entrepreneurship, has revealed that the share of entrepreneurs in the 55-64 year-old age group is up sharply over the past fifteen years. In 1996, 14.3 percent of this age group were entrepreneurs, and now (2011) it is 20.9 percent. Dane Stangler suggests that the US could be on the "cusp of an entrepreneurship boom - not in spite of an aging population but because of it." Perhaps this is because us older folks have experience, or are not ready for a traditional retirement. On the other hand, researchers are not sure if this cohort of entrepreneurs will be job-creators, because many are sole proprietors with a small number of employees.

 

The same Kauffman report cites the Generation Y cohort as the most entrepreneurial with 29.4 percent of entrepreneurs being between 20-34 years old. This is a generation facing an unpredictable job market, and holding different views of the traditional career ladder; starting their own company just makes sense. 

 

 

In This Issue
R&D Bond Approved
Economic Incentives
Older Entrepreneurs
Congrats
IP Counts
Maine Policy Review

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Congrats

 

To Wright-Express who has purchased London-based Corporate Pay in an all cash transaction.

 

To Newfield Design for its closing of $662,000 in a Series A round of equity financing led by the Small Enterprise Growth Fund and other investors such as Maine Angels, Boston Harbor Angels and several individual investors.

 

To the Top Gun class of 2012 for their very successful Showcase event and conclusion to this spring's accelerator program. For the first time, companies in the Portland area and Bangor region came together during bi-weekly learning sessions, shared mentors and collaborated. For more info, see http://www.topgunmaine.biz

 

Intellectual Property and the US Economy

 

A new report out by the US Patent and Trade Office is quantifying the impact of intellectual property (IP) on the US economy. While they found that virtually every US industry either produces or uses IP, 75 out of 313 are considered IP-intensive. These industries accounted for 27.1 million jobs or 18.8 percent of all employment, and 34.8 percent of US gross domestic product. Pay in these industries is 42 percent higher than the average wages in other, non-IP-intensive private industries.

These finding echo the findings in Maine of science and technology-intensive industries - these sectors with unique ideas (i.e., those that are patentable) create more value that commodity and me-too sectors. Just one more reason to invest in science and technology and innovation.

Maine Policy Review on Sustainability

An article that I wrote with Linda SIlka from the Margaret Chase Smith Policy Center and Jake Ward from the University of Maine called, "Sustainability and Workforce Development in Maine," was just published in the Winter-Spring 2012 edition of the Maine Policy Review. You can read it online at: http://www.mcspolicycenter.umaine.edu/?q=MPR

 

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96 Maine Street, Suite 183 Brunswick, ME 04011 207.522.9028
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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.  For a few months, Dr. Renault is helping the Maine Center for Entrepreneurial Development  (MCED) with the Top Gun program and other operational matters while the search for a full-time Operations Manager continues.