State technology capacity ranked 36th, lowest in N.E.

In what many experts consider the most thorough of the state-by-state rankings of science and technology capacity and effort, the California-based Milken Institute index places Maine 36th in the nation, the lowest ranking among the New England states.

“Technology is still the most important element in determining regional economic success,” Ross DeVol, director of Regional and Demographic Studies for the institute, and author of the report, said last week. “What is driving today’s economy is fundamentally different from those of the past, and those states that recognize the changes and invest in the future will prosper in the new economy.”

The study, while indicating Maine has a long way to go to be competitive, is praised by state officials as comprehensive and one of the best in the nation.

“This report is extremely well written, “Joel Russ, president of the Maine Science and Technology Foundation, said recently. “It’s really almost a textbook of what is needed in a 21st century knowledge economy.”

The ranking uses 73 separate measurements in five broad categories: Research and Development, Risk Capital and Entrepreneurial Infrastructure; Human Capital Investment; Technology and Science Work Force; and Technology Concentration and Dynamism. The gauges range from the percentage of a state’s population with advanced college degrees to per capita expenditures for research and development.

“Maine has not been very successful in attracting research and development dollars to the state,” DeVol said. “Maine ranks 41st out of the states in our R and D measurement. The research and development infrastructure may not be what it needs to be to leverage technology-based growth.”

Russ agreed. But, he said, there has been important progress in the state. He said that in 1997, less than $2 million in state funds was being appropriated for research and development by the University of Maine System. This budget year more than $40 million has been appropriated. There also has been a significant increase in federal funds for research flowing into the state, from $18 million to more than $42 million.

But, DeVol said, many other states also have increased their funding. In any of the states, the increase has been even more dramatic than in Maine.

“There isn’t an area of real strength that one can point to in the case of Maine; it doesn’t score very highly on any of the individual components,” he said. “But, that doesn’t mean Maine is making proper investments. The area where Maine has shown improvement is what we call the risk capital and entrepreneurial infrastructure. Maine comes up 25th.”

DeVol said in two very important areas, Maine did not do well. In the measure of Human Capital Investment, Maine ranked 38th and in Technology Work Force, Maine was 35th in the ranking. He said the state needs to invest more in educational programs that will support the new economy.

Gov. Angus King, who has spoken often of the importance of investing in the infrastructure to support research and development, said he was pleased with the report.

“I view this as progress, but certainly not where we want to be,” he said last week. “The reason New Hampshire is 13th on the list is because southern New Hampshire is really part of the Greater Boston economy and a lot of the technology businesses in the [Route] 128 corridor around Boston have sort of leaped over the border into New Hampshire, and I think that is going to continue into Maine.”

He said Maine is making key investments in passenger rail service and the widening of the Maine Turnpike that will help facilitate that growth.

“It’s hard for a Maine guy to say that you want to have closer ties to Boston,” King said, “but the reality is that it is the size of the Boston complex that allows the development of the high-tech businesses.”

DeVol agreed and suggested Maine needs to do more to attract what he calls “technology anchors” such as the Fairchild Semiconductor plant in South Portland. He said Maine could attract more high-tech firms based on its quality of life, if it also invested in the education of its work force to support such companies.

“Unless you are willing to make a consistent, concerted effort in making these investments, they won’t pay off,” he said. “You can’t just make them in the good years; you have to make them in the bad years as well.”

David Clough, executive director of the Maine chapter of the National Federation of Independent Businesses, agreed with DeVol. He is very concerned that in the current state budget crisis, research and development funds will be cut.

“The next governor and the next Legislature have to look at doing more so that we can improve the situation in Maine,” he said, “not do less. If we do less, then the Maine economy will limp along somewhere near the back of the pack, and we will lag behind the nation.”

That concern is shared by Russ and by Gov. King.

“I think it is going to be a challenge to maintain it,” King said, “I think that the political support is broad and deep enough. It’s where we have got to invest in order to improve our incomes; we have got to spend money on things like research and development.”

Russ said he is hopeful. He points out that eight years ago none of the candidates was talking about investing in research. This year, he said, all four have discussed its importance.

“It’s very important for Maine’s economy that we continue to move forward and invest in our future,” he said.