The expansion of the seed capital tax credit, a cornerstone of the state’s new ten-year economic plan

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[Editor’s Note: This commentary is written by Catherine Renault. She is the former director of Maine’s Office of Innovation, which no longer exists, and currently runs her own consulting business, Innovation Policyworks, in Brunswick.]

Innovation and talent are at the heart of Maine’s new economic development strategy 2020-2029. Developed over the past six months with contributions from over 1,300 Mainers, the stated goal of the plan is that “Maine will be an international leader with a vibrant, sustainable and environmentally responsible economy.”

The plan focuses on the clean energy, aquaculture and bio-based materials sector as areas for growth, noting the University of Maine’s world-class strengths in wood composites, climate change, food and aquaculture, as well as the various biomedical research institutions. in the state,

The specific actions for innovation are:

  • Action 1: Increase levels of R&D investment in Maine;
  • Action 2: Increase the investment cap on the Maine Seed Capital Tax Credit from $ 5 million to $ 15 million;
  • Action 3: revitalize the Maine Innovation Economy Advisory Board (MIEAB); and
  • Action 4: Promote exports, both national and international, to strengthen the climate for startups.

Regarding increasing levels of R&D investment in Maine (Action 1), the plan lacks specific details. He asserts that Maine’s R&D investment levels were 50% higher before the recession in 2009 than today and that “Maine will create a combination of government subsidies, tax incentives and investment in the industry. higher education, to partner with the private sector to raise this total number again.

The Plan states:

“Maine’s strengths position us well to innovate, and innovation opportunities abound across all industries. Now is the time for Maine businesses of all sizes and in all industries to partner with educational institutions, nonprofits and governments to foster this culture of innovation and ultimately , provide solutions that will fuel not only our economy, but also the global economy. “

The innovation is tied to the Plan’s overall goals of increasing the average salary by 10%, increasing the value of what we sell by 10% and attracting 75,000 people to the talent pool. The plan notes that innovation drives economic growth and can make Maine businesses, large and small, more competitive and prosperous.

The full plan is posted on the Ministry of Community and Economic Development website at https://www.maine.gov/decd/strategic-plan. This is the first statewide economic development plan in Maine in several decades.

Funding for the initiatives of the Plan will have to be proposed by the Governor and adopted by the Legislative Assembly in January. The seed capital tax credit proposal in the plan is similar to a bill that was postponed by the legislature last year and could be resumed in January.


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