It's been an unsettling month as Maine's innovation community watches the apparent dismantling of our most effective investment organization, the Maine Technology Institute (MTI). First, the Governor vetoed a small R&D bond that would have funded a new competitive round of the award-winning Maine Technology Asset Fund for capital costs for new laboratories and other research infrastructure. Then, existing R&D bond projects were stopped because the Governor has refused to issue bonds approved by the legislature, ratified by Maine voters and selected through competitive processes. Finally, MTI President Betsy Biemann stepped down abruptly.

All of this is happening at the same time that the bright spots in Maine's economy are innovation-based companies like Cash Star and others that have received more venture capital investments than Maine has seen since 2000. All of the companies that have received these investments have also been supported by MTI, and many have worked closely with Maine's universities to pursue R&D projects.

What's next? I'd love to hear your thoughts on my blog.

Cathy

I'm in training to earn my Black Belt in Innovation Engineering, and so I've been thinking a lot about the application of innovation in individual companies. It's clear that senior leadership can make or break an innovation culture, and often the sabotage is quite unintentional. Here are five ways that leaders crush innovation, courtesy of the Harvard Business Review blog:

1. Innovation is episodic. It will work better if there is a repeatable process, so that innovation is not over if a particular new idea doesn't work out.
2. Resources are held hostage by incumbent businesses. You have to be willing to admit when a product line is starting to fade, and reallocate resources to the new products that will replace it.
3. Trying to fit innovation into your existing structure. It's more effective to create new structures.
4. Too little diversity of thought and isolation from customers' experience.
5. Treating assumptions like knowledge. Test, experiment, question, fail, revise. Repeat. Nothing will be right the first time.

Professor Calls Tax Credit "Soviet Thinking"

Things are getting heated down in Pennsylvania where Gov. Tom Corbett (R) is asking lawmakers to approve a $1.7 billion tax credit to lure a new petrochemical plant to the western part of the state. This would be the largest tax credit ever for PA, and would benefit Shell Chemicals to the tune of $66 million per year for 25 years. Shell is planning to develop natural gas derived from the Marcellus Shale deposits northwest of Pittsburgh. The plant is expected to create up to 10,000 construction jobs, and 500 permanent jobs. PA officials expect that the plant will lead to the growth of other companies in the region, much like SC and AL deals with automakers BMW and Hyundai, respectively, which have sparked entire clusters and supply chains.

Professor David Brunori of George Washington University described the idea as "Soviet thinking." His opinion, as a professor of public policy and expert on state tax policy, is that the best tax systems have low rates, are broadly based, and treat all businesses equally. Similarly, Chris Edwards of the conservative Cato Institute argues that it's better to giver lower tax rates for all businesses in a state, rather than just for a single company or industry.

The Importance of Strong Universities to Regional Economic Development