BANGOR – The University of Maine System is continuing to boost the economy thanks to a 9-year-old state fund that helps pay for research to develop new products, technologies and companies.

Last year, the University of Maine and the University of Southern Maine used the $12.7 million allotted them from the Maine Economic Improvement Fund to attract almost $42 million more in federal and private-sector grants and contracts.

“Those funds support hundreds of jobs, purchase millions of dollars in goods and services, and lead to the creation of new technologies and industries that will fuel Maine’s economy,” according to a new report that UMS Chancellor Joseph Westphal plans to present to the UMS board of trustees during a meeting at USM on Monday.

Established by the Legislature in 1997 with $500,000, the Maine Economic Improvement Fund now provides millions of dollars each year in matching funds and in money for equipment and facilities.

The university system’s two research institutions use this funding to compete for research dollars in seven areas of strategic importance to Maine.

As Maine’s primary and most diverse research institution, UM receives 80 percent of MEIF money. In fiscal year 2005, which ended July 1, the flagship campus was allotted $10.4 million that helped it obtain another $40 million in federal and private-sector grants and contracts – “a 5-for-1 return on investment for every MEIF dollar it received,” the report states.

The University of Southern Maine used $2.3 million in state funds to generate another $1.9 million in research grants and contracts.

Overall, a total of $54.6 million was invested in university-based research and development in MEIF’s targeted areas, according to the report.

“More than ever, Maine’s economy is dependent on innovation, partnerships and brainpower,” Chancellor Westphal said this week. “Working together, our universities, government and private sector are playing a major role in spurring economic growth. Our faculty members continue to come up with new ideas that will lead to new public and private investment. That, in turn, will result in new jobs, products, technologies and economic growth. Given our potential, there are even more public benefits to be realized.”

Required annually by the Legislature, the newly released report indicates that MEIF money and the resultant grants and contracts created or supported a total of 743 positions – 624 at UM alone – for faculty and student researchers and professional and technical staff.

Some of the jobs are at the universities and some are at the companies and labs with which the universities work to commercialize the products being developed, said UMS spokesman John Diamond.

As part of a ripple effect created by university-based research, hundreds more jobs are provided “in fields where goods and services are being sold,” he said.

People hired to work on the grants and contracts “go out to dinner, buy mortgages and spend money. That’s how the economy works.”

Diamond emphasized that MEIF serves different purposes for UM and USM. The fund helps the Orono campus “extend and expand a well-established research capacity that goes back decades.”

Down south, the fund enables USM to build and develop the necessary infrastructure to compete for research funding in a narrower range of fields.

The two institutions are the only ones within the seven-campus system that provide graduate-level education, which is a major component of university-based research.

At the University of Maine, where MEIF funds accounted for $50 million of the total $65 million research and development expenditures, Michael Eckardt, the vice president for research, said the flagship campus is unique because it’s involved in research and development in all seven areas on which MEIF focuses.

Those areas are: aquaculture and marine sciences, biotechnology, composites and advanced materials technologies, environmental technologies, information technologies, advanced technologies for forestry and agriculture and precision manufacturing.

Among the UM projects, according to Eckardt, researchers are involved in developing halibut for commercial purposes, exploring climate change and glaciers, examining the effects of acid rain, and looking at ways to treat diabetes.

The university’s Advanced Manufacturing Center is considering working with Maine companies to develop longer-lasting nozzles for insect sprayers.

“We want to be a good steward for the money we’re privileged [the state] invests in us,” said Eckardt, noting that there are other projects waiting in the wings “that we could invest in tomorrow if they gave us more money.

“We’re a primed engine. We’re ready to go. We’re sitting here idling, and we’d like to go faster,” he said.

The full report can be found at http://www.maine.edu/ppa/pdf/meif05annualreport.pdf.