PARIS – Maine must boost research and development spending to create higher-paying jobs and retain skilled employees, Rep. Nancy Smith, D-Monmouth, said Friday.
“If we want higher-paying jobs, if we want kids to stay,” she told members of the Oxford Hills Chamber of Commerce, “research and development, both public and private, is the way to go.”
Smith, chairwoman of the House Business, Research and Economic Development Committee, spoke at the chamber’s monthly breakfast at the Paris Fire Station. Each month, the chamber invites a speaker to address its members on a business-related topic during a breakfast gathering.
Smith said Maine ranks last in the nation in per capita spending in research and development in the public and private sectors. The newly created Office of Innovation, part of the state Department of Economic and Community Development, has a goal of boosting the state’s research and development spending to $1 billion per year by 2010.
That goal would put Maine at the national average for state research and development activity of 3 percent of gross state product. In recent years, total research and development activity in Maine has been closer to 1.1 percent of gross state product, according to the Maine Economic Growth Council, a group that includes business people, educators and legislators.
According to an “Action Plan” distributed by Smith, Maine will achieve the $1 billion mark by targeted state investments in technology areas including biotechnology; composite; environmental; marine and aquaculture; information; precision manufacturing; and agriculture and forestry.
The plan calls for state investment in research and development to reach $120 million per year by 2010. It also calls for the development of research universities and institutions that will serve as hubs for entrepreneurial activity.
Following her address, Smith said at least part of the reason for Maine’s sluggish business climate is a perception that the state’s geography makes it too remote for businesses to thrive.
“The perception of Maine is that we are behind the eight ball because of where we’re located,” she said. But she said Maine’s proximity to Canada and nearby populous states actually makes it a good location for businesses.
Still, the state Economic Growth Council recently reported that Maine’s overall tax burden, the highest in the nation, continues to be a drag on economic growth. Maine’s state and local taxes were 13 percent of income in 2005, compared to a national tax burden of about 10 percent.
Smith said wages need to be raised to reduce the tax burden. “Research and development will pay off with higher wages,” she said.
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