AUGUSTA – Eight technology-intensive business sectors targeted to be the keys to the state’s future economic prosperity are not doing enough to consolidate resources and capture a competitive national advantage, according to a new report.
A 144-page document released Tuesday by the Maine Science and Technology Foundation assesses in depth the strengths and weaknesses behind how these businesses collectively operate in Maine. The report’s authors say that the eight sectors should work harder to form what are called clusters or “high performance centers of economic activity that drive investment, business formation, productivity and job growth.”
The word “clusters” is the latest in economic development jargon being spoken nationwide. Joel B. Russ, foundation president, said Tuesday that the term came about from the success of such areas as Silicon Valley in California, Route 128 near Boston, and the Research Triangle in North Carolina.
And those areas are being held up as models of how other states should form technology clusters, Russ said. In Maine, the eight clusters would be on a smaller scale yet gain competitiveness by focusing on specific segments in their industries, he said.
The eight technology sectors within the state poised for growth are information technology; biotechnology; advanced materials and composites; forestry; agriculture; marine technology and aquaculture; environmental technologies; and precision manufacturing.
To be classified as a cluster, businesses in each sector would have to develop a network of relationships between companies, suppliers, service providers and supporting institutions such as universities, colleges, research laboratories and trade associations, Russ said.
Two of Maine’s traditional industries, forestry and agriculture, are better coordinated under the definition of clusters, Russ said. Forestry is noted as a cluster because of its extensive research on improving production processes to lower average costs rather than creating new products, and agriculture because of its product diversity and its development of specialty food businesses. Both sectors too have a strong network of relationships between businesses and other organizations, and forestry in particular has a pool of skilled labor to draw from whereas the lack of labor is a weakness in the agriculture sector.
But agriculture and forestry are two maturing industries that are having difficulties gaining a greater market share nationally, according to the survey. Better marketing of both sectors’ assets should strengthen the industries, the report stated.
The Maine Science and Technology Foundation asked Charles Colgan, a University of Southern Maine economics professor, to evaluate the eight sectors marked by the organization as vital for a strong Maine economy. Colgan and his research team interviewed 170 people in the sectors to get their thoughts on how each one could develop stronger relationships or clusters.
“No sector is entirely weak and no sector is entirely strong,” Colgan said. “I don’t know if there’s any place [nationally] that’s perfect.”
Colgan said each of the eight sectors have experienced economic growth, and state investment in research and development soon should start paying off in terms of job growth.
But, both Colgan and Russ agreed that the state should be doing more to foster further growth in these sectors because they are the ones that will bring job opportunities for Maine’s youth.
Colgan said what is vital to the success of the eight clusters is a strong marketing campaign by each. He mentioned that numerous software developers like working in Maine but have mail drop boxes in the Boston area so they can promote their proximity to Boston’s technology sector.
“They don’t want to be known as coming from Waldoboro, Maine,” said Colgan, noting that instead it should be an asset to market that the business is located in Maine.
The foundation hasn’t presented the report, which includes suggestions on how to improve each sector and form clusters, to any of the five gubernatorial candidates, Russ said.
He acknowledged that his report is another in a string of studies released recently by economic development groups as to what the state should do to improve its economy and create good-paying jobs.
“We know more about the Maine economy and the science and technology economy than we’ve ever known before,” Russ said.
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