Independent MTI Assessment Reveals Economic Impact

If the success of its funded companies is revealing, the Maine Technology Institute (MTI) has done well to spur innovative activity in Maine, suggests an independent analysis recently released in the state.

An evaluation of MTI, a state-supported nonprofit, shows the organization's clientele saw employment grow by 11 percent over the last two years. This rate of growth, which surpassed that of Maine's cumulative 3 percent, resulted in nearly 600 jobs added to the economy. The University of Southern Maine's Center for Business and Economic Research (CBER) conducted the evaluation, examining MTI-funded companies that completed their projects prior to June 30, 2004.

Employment in assisted companies increased by an average of 300 jobs in both 2003 and 2004, CBER data show. For every dollar of MTI assistance, more than $26 also is leveraged in external financing. The $8.1 million in MTI funds distributed over a three-year period, including 2002, were matched by $16 million in private funds. Recipients also attracted about $194 million from federal government agencies through grants, contracts and sales.

“This evaluation demonstrates how valuable a little state money can be in helping Maine’s small businesses, entrepreneurs and innovative economy,” said Janet Yancey-Wrona director of the state Office of Innovation.

Because MTI invests in projects during the research and development stage, Yancey-Wrona added, true statewide impact is not expected to be seen for another 5-10 years. Yet, 46 percent of MTI-funded research projects have led to new products and 24 percent of projects have resulted in products that are already offered for sale.

MTI funds companies in Maine's seven targeted technology sectors, but has helped stimulate the most employment growth in composites. The remaining six sectors include aquaculture and marine, biotech, environmental, forestry and agriculture, information, and precision manufacturing. In terms of growth rate, marine technology outpaced all others. Job losses were reported mainly in the forestry/agriculture and precision manufacturing sectors.

MTI's cluster enhancement program, one of a portfolio of such programs dedicated to forming and growing tech businesses, had modest returns on investments made up to June 30, 2004. Eight awards totaling $398,000 were matched with $1.58 million in other funds.

Of all of Maine's technology sectors, the report notes, "those with the highest growth potential have lagged somewhat in their product development." This includes biotech, composites and environmental technologies. The authors suggest future awards could be targeted to the biotechnology sector, which garnered the fewest awards over the measured period. To track the effects of cluster awards, the authors recommend a system in which recipients self-report their awards' impacts on an ongoing basis.

For more information on MTI or its programs, visit http://www.mainetechnology.com. The CBER report is available for download at: http://www.usm.maine.edu/cber/