Indexing R&D

Three connected measurements jump out of the new Maine Innovation Index. The amount of venture capital in Maine increased a stunning 479 percent between 1999 and 2000, and is still pathetically low compared with the national average. The proportion of Maine adults with four-year college degrees is up significantly – from 18.8 to 22.8 percent over the last decade, but still behind the nation’s 25 percent average and way behind New England’s 30 percent. State R&D funding hit a record $41 million in 2001, equal to about a tenth of its competition.

The common theme among these numbers is clear enough. Maine R&D investments are running much faster than they did even just a few years ago, but are barely gaining ground on the national average and in some cases are falling behind. The small gains for large effort can be frustrating but might be likened to paying off a mortgage. The first few years of payments move the principal down hardly at all but are nonetheless demanded. Not to take the analogy too far but lining up the infrastructure of researchers and labs, grant writers and funders, start-up businesses and investors, is like covering those initial interest payments. You don’t see much for the necessary effort.

The annual index, released Tuesday by the Maine Science & Technology Foundation, makes note of this: “While the state’s progress in many areas has been matched or exceeded by other states, Maine nonetheless has come a long way.” But it also properly leaves no doubt about where Maine currently stands and where it must go. The level of R&D investment from business sources in Maine continues to fall well behind the national average. The number

of patents issued in Maine per capita is about one-third the national average. The level of venture capital is less than half the average. In 2001, the Corporation for Enterprise Development once again gave Maine an “F” for its performance.

A year ago the Science and Technology Foundation offered 49 specific goals for Maine to succeed in the New Economy. The goals fell into five general areas: an educated and technically skilled work force; a robust research and development enterprise; an environment that fosters entrepreneurial innovation; statewide access to the latest information technology infrastructure; and a supportive public and well-informed policymakers. These are solid requirements for growth, and with them should come a sixth: a more narrow focus on where Maine should and should not invest its scarce R&D dollars to reap the largest long-term rewards.

The R&D fund for the university system was scheduled to increase by $2 million to a total of $12 million next year. The budget shortfall forced Gov. King to cut $1 million

of that, which ultimately means reducing R&D by about $5 million once the federal matching money is counted. If Maine is going to grow out of its “F” rankings, build new industries and make the state more affordable for everyone, it must keep contributing to the steady growth of R&D and persuade the rest of the world that the state is serious about this investment.

That’s hard to do, especially in a recession. But the longer Maine waits, the farther behind it falls.