Jody Harris: Bonds are an investment in Maine’s future

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On Nov. 4, voters will consider $50 million in bonds that will help Maine companies innovate and compete, provide job-creating small business loans, and finance clean water infrastructure projects.

Those investments are vitally important to boost Maine’s place in regional, national and global marketplaces.

Innovation drives new business. Without it, economies stagnate. Maine is no exception. Absent new ideas and new products, Maine’s businesses and entrepreneurs will fall behind, especially in rural areas. Public investment in research and development is one way to spur innovation.

In its widely respected annual assessment of Maine’s economy, Measures of Growth, the Maine Economic Growth Council identifies R&D investment as one of five indicators of innovation and the only one with a red flag, signifying that Maine lags the rest of the U.S. and New England.

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Yet, it has been almost a decade since the governor and Legislature put a meaningful R&D bond proposal before voters. Over the same period, voters have approved, on average, $60 million a year to upgrade roads and bridges, railroads, and cargo and airports. While transportation enhancements are vital for long-term economic growth, so, too, is R&D.

States with higher levels of R&D investment also have higher average wages. Nearly 28 percent of workers over the age of 18 in Maine today are in low-wage jobs. That number jumps to a staggering 80 percent among young workers (age 18-24). Workers in these low-wage jobs earn less than $11.20 per hour.

In contrast, R&D jobs, such as researchers and scientists, earn on average $28 per hour. Supporting better paying jobs through more robust investment is one way to make Maine a more attractive place for younger workers.

While innovation tends to occur in urban places with young, diverse populations, Maine has proven that a rural state with an aging work force can deploy innovative practices to more traditional industries.

The growth in agriculture and remarkable increase in the number of Maine farms during the past decade can be attributed, in part, to new ways of selling, distributing and marketing agricultural products.

Question 2 on this November’s ballot targets additional resources to support Maine agriculture.

Strengthening Maine’s academic institutions and nonprofit research centers by investing in R&D can deliver powerful results as well. According to the Brookings Institute, “A single top-notch research institution could invent ideas that transform an economy for generations.”

R&D investments also attract researchers whose work can give rise to new job-creating discoveries. The Georgia Research Alliance and Eminent Scholars program has sought out and brought professors and scientists to their state, resulting in 6,000 new jobs and 300 new companies.

Research funds at the University of Maine system support the work of over 1,000 researchers and faculty, including the groundbreaking work of the Advanced Structures and Composites Center, Maine Aquaculture Research Institute, and Forest Bioproducts Research Institute.

Maine will also benefit from substantial federal matching funds and private investment that these bonds secure. The $50 million bond package before voters this fall will bring to the state an additional $44 million in private and public funds. State R&D dollars, in particular, attract private investment.

The Maine Technology Institute, which will administer bond funds from Questions 4, 5 and 7, generates $14 in private investment for every dollar it invests in research and development projects.

Maine can’t afford to pass up the opportunities the proposed bonds offer. With 40,000 Mainers unemployed and another 40,000 forced to work part-time because there are not enough full-time jobs to go around, Maine has a job deficit and wages remain stagnant.

Maine has still not come back from the Great Recession, having recovered barely 65 percent of jobs lost during that downturn. Meanwhile, the rest of the U.S. and New England have recovered all of their lost jobs and more.

Investment in R&D is vital to Maine’s economic future. State R&D investment will act as a catalyst for other spending. The resulting investment will ripple through our economy, create new business start-ups, and employ hard-working Mainers in good-paying jobs.

These bonds are seed money that will yield a bumper crop of benefits across Maine.

Jody Harris is associate director of the Maine Center for Economic Policy in Augusta.

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