What do L.L. Bean, Front Street Boatyard, Dream Local, Stonewall Kitchen and Maine Community Health Options all have in common? They’re all rapidly growing and innovative companies in Maine. And the best news is that they’re the leading edge of an economic transformation that is gaining momentum every day and offering us a window into Maine’s future.
Through that window is what Maine could become, if we’re bold enough, and determined enough, to take the right steps over the next few years. It is a state that is famous not only for its rock-bound coast and wilderness recreation, but because it is a hotbed of innovators and entrepreneurs, and a place where we both honor our heritage and eagerly embrace the future.
It is a place that people who left Maine to create successful businesses elsewhere are returning to, and a magnet for young go-getters looking for the perfect place to start a new business and raise a family. Where innovation and energetic entrepreneurs are growing companies, big and small, and sending Maine-made high-quality products to all corners of the globe.
After years of struggling to build a new economy in Maine, the wheels of change are finally turning. The question now is: How can we accelerate that change to become an innovative, entrepreneurial state? The good news is that we’re already headed in that direction and the foundations of tomorrow’s economy are all around us, arising in hundreds of companies around the state, some old and most new.
L.L. Bean recently announced record revenues for 2013, spurred in part by the way it’s been reinventing itself and the iconic Bean Boot. By daring to make the company’s original product in a rainbow of bold colors, it’s developing a new market among trendsetters and kids alike, who now consider the boots a must-have.
Front Street Boatyard started in the middle of the recession on a narrow strip of waterfront in Belfast that once housed a cannery. With the expertise of three veteran boat builders and a composites manufacturer, Front Street has become the biggest large-yacht yard on the East Coast, with over 100 employees.
Shannon Kinney, at Dream Local in Rockport, left Silicon Valley to return to Maine, where she is running a vibrant and fast-growing Web marketing company that is rapidly expanding around the country.
Stonewall Kitchen started with two guys selling jam at the local farmers market and has exploded into the high-end food market across the region and the country, while both benefiting from and reinforcing Maine’s brand for quality and wholesome products.
If you signed up for health insurance on the new exchange recently, chances are you picked Maine Community Health Options, a startup insurance cooperative. Maine Community Health Options is Maine’s first nonprofit, consumer-operated health insurance plan, and it has garnered an 80 percent share of their market.
What are the common characteristics of these success stories, and hundreds of others like them? They all started small, rooted in local communities. They all have great entrepreneurial leaders and teams of people who care about Maine. And they all found a way to create and implement new thinking within their markets.
Here’s a little-known secret about the economy: Innovative companies grow faster, have higher profits and pay higher wages. It doesn’t matter whether they’re big or small, high tech or no tech, in a city or in rural areas. Innovation can happen in new industries or older ones, in for-profits or not-for-profits and in multigenerational companies that are constantly reinventing themselves, or startups and build-ups working in garages, small offices or new campuses.
All together, they are the places where the best new jobs are being created and where hope and optimism about Maine are overflowing.
Now we need to create more budding entrepreneurs and help more existing businesses to innovate and to believe in themselves enough to become tomorrow’s success stories.
The first step is to understand what our competitive advantages and assets are, here in Maine. We live in a beautiful place, of course, but we also work hard and pay attention to the quality of things we produce. We’re honest, straightforward and trustworthy. Many of us are skilled craftsmen and women. Above all, we’re resilient and resourceful. In other words, Mainers are perfect 21st-century innovators and entrepreneurs, even though we don’t always see ourselves that way.
It turns out we’ve been small-business entrepreneurs for hundreds of years, going back to a time when virtually everyone in Maine was running a family farm or a small business by the water, in the woods or in town. Being resourceful and innovative is part of our DNA. Now, with the world changing around us, we’re once again tapping into that part of who we are.
There are two distinctly different paths forward for Maine’s economy. One is to continue to chase the dream of attracting big companies that will provide thousands of jobs overnight. Think of that as the “hitting the lottery” approach, or a fishing expedition that’s all about catching the big tuna, where we dangle lots of tax breaks and goodies on the end of a line.
We’ve been trolling and casting for those big fish for decades and it hasn’t produced much of anything. Even if it had, it’s an extremely expensive way to grow an economy that leaves us vulnerable to the ups and downs of a few, large employers.
The other approach is to build tomorrow’s economy from the ground up, on a firm foundation of our strengths and skills, our powerful brand and our talent for invention. By taking that path, we embrace the idea of building the next economy one new job at a time. We invest in ourselves rather than in big tax breaks for others. We commit to improving education, providing more grants and loans to start and expand businesses and funding research and development to fuel new products and services, invent new business models or streamline their operations.
While that approach doesn’t promise many quick-fix, ribbon-cutting opportunities for politicians, in the end it produces a more diversified and resilient economy, less dependent upon any particular industries, rooted in our own soil and strengthened by the values that have defined Maine for centuries.
Getting behind the ‘do-ers’ among us
To grow a new prosperity in Maine we need to commit ourselves to the idea that innovation and entrepreneurship are the twin engines of the next economy, and not just something that we tack onto a long list of things we’re interested in. And we need to get behind our innovators and entrepreneurs – the “do-ers” among us – to ensure that they have the tools they need to succeed.
We’ll need to create a culture that encourages and supports innovators and entrepreneurs, where we’re not afraid to think big, take risks or stumble a time or two on the path forward. And, we’ll need to create an “innovation infrastructure” that makes starting, running and growing businesses easier.
Some of that infrastructure is already in place, with organizations like the Finance Authority of Maine, the Maine Technology Institute, the Maine Center for Entrepreneurial Development and promising initiatives in education. But to become a state that is really an incubator of new ideas and products, we’re going to need to put that small infrastructure on steroids, and build a seamless “feeder system” that encourages budding entrepreneurs and startups to move toward becoming tomorrow’s success stories.
What’s the Role of Government?
The best thing that government can do is to focus on that innovation infrastructure, so that small businesses and entrepreneurs can flourish. While the building blocks of the 20th-century economy were rivers, roads, ports and industrial parks, the next economy requires us to focus on some other things, including:
n An educational system that provides both kids and adults with the skills they need to move from declining industries to growing ones, and that produces more future employers who have learned how to innovate, work in teams and build their own jobs and companies for the future
n Expanded grant and loan support to startups and smaller businesses with demonstrated growth potential,
n High-speed Internet service and good cell connections everywhere in Maine
n A vibrant network of organizations that teach, coach, mentor and support innovators and entrepreneurs
n Continuing research and development investments at our colleges, universities, and nonprofits, with an emphasis on bringing new products to market
n Greater incentives for private seed capital and longer-term investments in new ventures and expansions.
Paying for these Investments
Every time we give a company a tax break, or write down the cost of higher education, extend a road or invest in schools and roads, the taxpayers of Maine are making an investment in the economy. We do less of that than most other states, but our relatively low incomes make it hard to do more.
Compared to similar rural states, we’re not investing enough in the things that may matter most, including higher and technical education, economic development and research. So how can we do better? We could be a lot smarter about where our investments in the economy are going, to make sure they’re delivering the best return for taxpayers.
That will mean making some tough decisions about what works and what doesn’t, and weeding out redundancy and inefficiency in programs that are obsolete or ineffective. It means measuring the results of everything that we do, including unfocused tax breaks and so-called “growth zones” that in too many cases deliver little more than reshuffling the jobs we already have. And it means redeploying the savings to strategies that actually produce jobs and grow prosperity.
We have a moment of opportunity today to build a new economy in Maine, propelled by the twin engines of innovation and entrepreneurship and relying upon the resourcefulness of Maine people. It offers the best hope we’ve had in generations to improve our lives and the lives of our children and grandchildren. All that we have to do is find a way to work together, putting aside whatever differences we have, for a brighter future, for all of Maine.