MTI REPORT CARD

Maine was among the last states to grasp the role of state government in promoting research that would lead to development that would lead to commercialization of products and to little businesses becoming larger and more prosperous businesses. The evidence that it understands now, however, can be found in an encouraging early report on the performance of the Maine Technology Institute, the nonprofit that hands out much of the R&D money from the state.

Handing out the money, however, doesn’t begin to describe what MTI does. Its review of potential products, mentoring programs and connections for new businesses with potential investors makes it a conduit for Maine’s newest technology ideas. Its first-year report, required by the Legislature as part of the nearly $6 million MTI gets to provide seed and development grants to businesses, shows a program that works but will require commitment over the next several years to ensure a maximum return on the taxpayers’ investment.

Maine’s small but growing technology business sector describes a broad range of companies, from applications in aquaculture and other food production, to an electronic pet door opener, to laser research and medicine. One of the better known recent products made by Hydro-Photon of Blue Hill. It is a pocket-sized device that uses ultraviolet light to sterilize a glass of water in seconds. Popular with campers, it also has the interest of the Army. Another promising product comes from the Target Technology Center in Orono, where Stillwater Scientific Instruments makes a device that quickly analyzes chemical compounds through a modified version of mass spectrometry.

Since beginning in 1999, MTI has approved 280 projects for funding, all over the state, with grants totaling $14 million. For the evaluation, 69 projects, those that had been completed by June 30 of last year, were reviewed for the amount of additional funding they leveraged, their patent and intellectual property activity and employment, among other issues. The results, during a distinctly slow time in the technology field, was that $1.81 million in MTI loans raised another $13.6 million in additional grants, loans and equity investments. This includes more than $5 million in venture capital and investor funding, an area in which Maine has been among the worst states in the nation.

Patents, another measure of whether an economy is vibrant and another area where Maine lags badly, were well above the average – 33 U.S. and foreign patents so far, with intentions to file another 70. The only unimpressive figure was in employment: In a comparison of companies before and after the grants were issued, employment fell from 843 to 825. The downturn in the economy may adequately explain this drop, and so might the newness of the grants or the fact that most of the losses were at only a few of the companies.

One issue for the part of Maine above about Exit 27 on I-95: MTI gives small seed grants of up to $10,000 and larger development grants of up to $500,000.

Of the grants evaluated, the majority of the larger grants went to Cumberland and Lincoln counties. Penobscot did well with the seed grants but received none of the big ones, and one measure of the success of this program might be whether those seed grants help establish ideas that later will be in a position to qualify for the development grants.

The Legislature was right to insist on an annual accounting of the money going toward R&D, but it and the public will also need patience. Positive outcomes already are being seen, but Maine has a lot of catching up to do and the state should commit itself to staying on this path for the long term.