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Assessment Finds Maine Technology Institute’s (MTI) Impact Positive for Maine Economy

A new study of the Maine Technology Institute (MTI) reveals MTI’s award programs have been effective in contributing to the success of its awardees and in increasing high-tech employment in the state. The MTI evaluation, conducted by the Center for Business and Economic Research (CBER) at the University of Southern Maine, also found that the success rate of MTI’s funded projects improved over the five-year history of the organization. Although the available indicators suggest that MTI is a profitable investment for the state, the CBER report recommends that MTI pursue new methods of tracking its role in high-tech economic development.

MTI is a state-supported nonprofit that serves as Maine’s primary vehicle to provide financial support for private sector R&D. Since its first year of activity in 2001, MTI has funded 791 technology development projects throughout the state and committed $32 million through its award programs. These programs include seed grants for early stage companies, development awards for later-stage projects, Accelerated Commercial Fund awards for previous recipients, Phase 0 SBIR awards, and a Cluster Enhancement program to boost targeted industries.

The CBER evaluation examines the economic impact of the institute by tracking data from the 440 companies funded by MTI that had completed their projects as of June 30, 2006. CBER found that:

* Employment at MTI funded companies grew at a rate of 6.2 percent between 2001 and 2006, compared to 0.9 percent in the Maine economy overall.
* Wages at MTI-funded companies are 20 percent higher than the average Maine wage.
* Awardees leveraged $12 in external financing for every $1 contributed by MTI.
* 60 percent of MTI projects have resulted in marketable products and services.
* Biotechnology and composites materials awardees experienced the strongest growth in employment and revenue, while precision manufacturing companies suffered a small decline.

Overall, 75 percent of grantees said they agreed or strongly agreed that their MTI award was important to their commercial success.

The report, however, also found room for improvement. A previous independent evaluation in 2004 found that MTI’s Cluster Enhancement Award program was ill-suited to the survey-based tracking used for MTI’s other programs. CBER recommended that recipients of the award be asked to design their own sets of milestones and goals to collect data on the award programs effectiveness, as reported in the March 7, 2005, issue of the SSTI Weekly Digest (http://www.ssti.org/Digest/2005/013105.htm#MTI).

The same concern is raised in the latest evaluation, which finds that MTI’s role in high-tech cluster development is unclear and cannot be evaluated with the currently available data. CBER also recommends that MTI improve its follow-up data collection with grant recipients in all of its award programs. The statistics presented in the evaluation would seem to be encouraging; however, further steps must be taken to demonstrate the value of MTI investment in the development of strong companies, CBER states.

The MTI impact evaluation announcement is available at: http://www.mainetechnology.com/?cat_id=260&press_id=379

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Copyright State Science & Technology Institute 2007. Redistribution to all others interested in tech-based economic development is strongly encouraged. Please cite the State Science & Technology Institute whenever portions are reproduced or redirected.

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