Notes from Innovation Policyworks


A few weeks ago, I attended a conference in Nashville, TN. The meeting was instructive on several fronts. First is the resurgence in Nashville itself. The Mayor himself addressed our group and talked about the investments that the city made in a new convention center downtown, built during the recession. He reminded us that they saved millions of dollars in interest by getting bond funding during this time, and created 7000 construction jobs during the worst of the recession. It's an amazing story of political and financial foresight and bravery!


The mayor also talked about the importance of diversity and inclusion in the revitalization of Nashville. Like many other Southern cities, Nashville is culturally and ethnically diverse, and they are working hard to make sure that all their citizens have the education and skills necessary to take advantage of the new jobs that are emerging. To read more about the importance of diversity and inclusion, click HERE.    


The View from Augusta


As this legislative session winds down, I have reviewed all the bills previously identified as relevant to Maine's science and technology sectors. Unfortunately, the legislature has not yet finished work on the most critical bills, with the deadline for the end of the session rapidly approaching.


As of June 6, the Appropriations Committee has not finished its work on the budget, although it will likely finish today. This is by no means the end of the drama, as threats of vetoes are still being issued. The somewhat encouraging news is that the DECD budget (and by implication the MTI and incubator budgets) and the University of Maine budgets have remained intact, and do not appear to be part of the negotiations.


Unfortunately, the extension of the Seed Capital Tax Credit is tied up in the budget negotiation. The bill itself, LD 743, was voted out of committee this week Ought-To-Pass, but since it has a fiscal note, its fate is tied up with the budget.


Similarly, the Appropriations Committee has not yet dealt with bonds at all. This will also be part of the budget negotiation, as the amount of bond interest is part of the budget. Once this amount is set, then the cap on possible bonds is set, and the various parties can sort out what percent would go to transportation, R&D, etc. Again, the Governor has not signaled that he's keen on R&D bonds, so this is still a work in progress.


Just this week, the Energy, Utilities and Technology Committee pulled together an Omnibus Energy Bill (LD 1559) to include many of the various bills they have been considering all session. This bill was voted out of committee 12-1 and has since passed the House and the Senate. Key provisions of interest to Maine's Clean Technology sector are a broadening of the types of energy efficiency projects that Efficiency Maine can work on to include reductions in heating costs, not just electricity. Also, there is a provision, somewhat controversial, to basically kick-out the PUC Power Purchase Agreement (PPA) with StatOil and potentially allow the University of Maine offshore wind project to get a Maine PPA.


Other bills that did become law include LD 1276 that increases MTI's allowed administrative amount from 7 percent to 10 percent, a long-needed change, and adds Maine Maritime Academy to the list of institutions that can get R&D funds under the Maine Economic Improvement Fund (MEIF). Also, LD 876, a resolve that forms a working group to study issues related to broadband infrastructure development was enacted and became law without the Governor's signature.


Two related and controversial bills about genetically modified food and seed stock (LD 718) and marine organisms (LD 898) were voted out of committee with a divided report. They have not been taken up by the full legislature yet.


Several interesting bills have been carried over until next session, including LD 1512, An Act to Increase Funding for Start-ups, which has provisions allowing start-ups to raise small amounts of capital from unaccredited investors. Also carried over is LD 1393, An Act to Encourage Entrepreneurial Investment in Maine. 

Business Climate Rankings Based on Flawed Data; Have No Policy Value


Periodically, people call me to ask about the latest ranking or rating to come out about the business climate in the states. An organization called Good Jobs First has recently published a detailed study of the most popular business climate studies and finds them to have "profound and elementary errors." According to the author, Dr. Peter Fisher, "They have no predictive value." All of this is academic speak for saying what we've thought for some time - these rankings are political and designed for advocacy only. MORE

Call Centers Moving


Ten years ago, call centers were mostly located in small states with low populations and cheap labor - think Utah, Nebraska, West Virginia, North Dakota, and even Maine. Nationally, call centers are growing fast due to many corporations bringing these operations back from overseas. But some of these states are losing call center employment. North Dakota, for instance, has seen a huge drop, but this is because call center jobs are not as attractive as those related to natural gas which are booming. In Maine, however, there is 81% growth since 2002, largely in centers that require more skilled workers such as those supporting healthcare (AthenaHealth; NotifyMD). MORE 

Where are the Big Companies?


The Kauffman Foundation continues to keep its eye on the companies that grow to significant size and change our economy. Defined as scalable, quickly reaching $100 million or more in revenues, these companies generate jobs quickly. Kauffman's new report finds that around 125-250 companies a year reach this goal, out of over 500,000 new firms founded each year. The most productive regions are the Southeast and Pacific. Of these companies, the US averages only 20 per year in the technology sectors, most of which are in California, Florida, Illinois, Massachusetts, New York, North Carolina and Texas. MORE

Big Data Means Big Data Centers


The emergence of Big Data means that a fast growing segment of the IT sector is data centers. Forbes recently reported that General Motors has opened a $130 million enterprise data center in Michigan, and will open a second nearby soon. This is an about-face by the automaker who until recently outsourced 90 percent of its IT operations to other companies. But the critical nature of the data has made it a strategic asset, and GM wanted it close at hand. The new data centers have the most modern devices and infrastructure, including alternative technologies for cooling and providing uninterrupted power. MORE

In This Issue - June 2013
The View from Augusta
Business Rankings Flawed
Call Centers
Big Companies
Big Data Centers
Green Energy

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To Cerahelix for its three new patents for filtration technology.


To Maine Angels for getting Maine into the Top 10 places for angel investment as ranked by the Angel Resource Institute and Silicon Valley Bank. Last year Maine Angels invested $3.4 million in 21 deals.


To Pika Energy for securing a $150,000 investment from the Small Enterprise Growth Fund, and subsequent move to a new location in Westbrook in order to launch production.


To Dr. Habib Dagher and the teams at the University of Maine Advanced Structures and Composites Center and Cianbro for the successful launch of the VolturnUS one-eighth scale floating wind turbine. MORE

VolturnUS 1:8 
Ready for Launch

Quote of the Month 


"Do not fear mistakes. There are none."


Miles Davis

What States Use the Most Green Energy?


According to the federal Energy Information Administration (EIA), in 2011, California and Texas led the nation in installation of solar and wind power, but it was Washington State that was the biggest user of renewable energy. Washington's hydroelectric dams provide over 60 percent of that state's energy.


Renewable Portfolio Standards, goals for renewable energy that are set in some states, are believed to be responsible for the differences between states like Washington and Rhode Island, where hardly any renewable energy is consumed.


These renewable energy mandates are under attack in more than half of the 29 states that have them, according to Atlantic Cities. This includes in Maine, where the Governor's initiative to reduce the renewable energy goals has been pushed off until next session. However, similar efforts in other states have met with stiff opposition, including in places like North Carolina, Colorado and Minnesota. MORE

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96 Maine Street, Suite 183 Brunswick, ME 04011 207.522.9028

Innovation Policyworks, LLC, is an innovation strategy firm focused on innovation policy and practice. Dr. Catherine S. Renault has been delivering innovation-based economic development results in rural states for over 22 years, most recently as science advisor and Director of the Office of Innovation for the State of Maine.  She is a Certified Innovation Engineering Black Belt.

Cathy is currently working with the University of Maine to put on a summit with the other New England land grant universities focusing on their role in innovation and entrepreneurship in the 21st century.  For a list of projects, see www.innovationpolicyworks.com/projects.