Monday, October 17, 2011

Blog

Blackstone funding brings support for Maine's rural entrepreneurship to scale

By Catherine S. Renault, principal of Innovation Policyworks LLC

At long last: entrepreneurship support in Maine at a sustainable scale. The Blackstone Charitable Foundation announcement on Oct. 7 of a $3 million grant to Maine to support existing entrepreneurship programs has been a long time coming. But this support enables Maine to support its entrepreneurs at a level commensurate with our long-standing investment in research and development. And, since R&D without commercialization, without entrepreneurship, does not by itself create economic growth, Mainers who have been advocating the importance of entrepreneurship to the state’s growth are welcoming Blackstone with open arms.

A bit of history will help put this announcement in context. In the late 1990s, the Maine state legislature inaugurated several programs to promote economic growth in the state through investments in innovation. These included the Maine Technology Institute, a funding source for emerging technology-based companies, the Patent Program to assist inventors with intellectual property, the Maine Economic Improvement Fund and the Maine Biomedical Fund to support research and development, and the Applied Technology Development Centers to start seven technology incubators around the state.

Unfortunately, the legislature also decided where the incubators should be and what technology sectors they should support. In their infinite wisdom, they put the biotechnology incubator in Fairfield, a drive of over ninety minutes from the nearest biomedical research facility. They put the information technology incubator in Orono, rather than in Portland where the majority of the information technology companies were. And so on. The legislature was surprised when, one by one, these incubators failed. And, the legislature then concluded that “Incubation doesn’t work,” and cut funding for the program to subsistence level. By 2009, only three of the original incubators remained.

But Maine’s entrepreneurs and their advocates didn’t give up. The entrepreneurs created a very active LinkedIn group, Maine Entrepreneur’s Network, which has grown to hundreds of members and meets monthly in person and maintains a robust discussion board. The University of Maine, through its Foster Center for Student Entrepreneurship, embraced alumnus Doug Hall and his innovation management system, Innovation Engineering, running three-day long Leadership Institutes, teaching graduate and undergraduate classes in innovation, and coaching Maine companies. The Maine Center for Enterprise Development, one of the original incubators, created Top Gun, an accelerator program for Maine entrepreneurial companies, modeled on successful programs elsewhere in the country like MassChallenge and JumpStart. Now in its third year, Top Gun has served over 30 companies in the Portland area.

While these initiatives are a great contribution, report after report about Maine’s economy has commented on the fact that the state does a great job of creating companies, but has limited success in getting those companies past the 10-employee stage. To a large degree, this is a problem common to rural states, and not unique to Maine. With a relatively small population spread out across a large geographic area, rural states like Maine do not have a critical mass of entrepreneurs in many places outside of their primary cities like Portland. The types of networks, support services (e.g., patent attorneys, accountants, venture capitalists) and C-level executives that entrepreneurs in Boston take for granted are thinner and more dispersed. This means that support programs need to develop a different paradigm for operation than most urban models, one that is both centralized in administration to reduce costs, but dispersed in delivery to reach entrepreneurs in more remote areas. This requires a delicate balance of one-on-one coaching and personal interactions with the use of technology.

The Blackstone Charitable Foundation’s generous support for entrepreneurship in Maine will enable the existing programs to gain the traction needed to offer Maine entrepreneurs access to Innovation Engineering and Top Gun regardless of where they live in the state. Blackstone’s Accelerate Growth project will form a focal point for entrepreneurship in Maine and, for the first time ever, bring funding in excess of $1 million a year. This will ensure that the proven programs like Innovation Engineering and Top Gun will be able to serve many more Maine entrepreneurial companies, and create the jobs needed to move Maine’s economy forward.



 

Catherine S. Renault is the principal of Innovation Policyworks LLC, a technology-based economic development consulting firm. She was previously Director of Innovation for the State of Maine.