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last modified: Saturday, December 17, 2005 12:07 PM

Industry Clusters: Maine's Next Step

Anne Nadzo


Many of Maine's major industries have struggled in recent years.  Fishing, the state's earliest industry, has declined considerably except for lobstering.  Lumbering, shipbuilding, and textile production have all at one time thrived in Maine [1] but changes in technology and competition from other states now undercut the state's economic position.  In addition to, and perhaps partly a result of this lagging economy, Maine is also facing a “brain drain.”  Even though the state boasts three well respected private liberal arts colleges - Bates, Bowdoin, and Colby - and the expansive University of Maine system,

young professionals are leaving Maine as quickly as they can to find brighter lights and higher paychecks.  Indeed, three out of every four of Maine's best and brightest students ultimately choose to live and work outside of Maine [2] .  This exodus has left Maine one of the oldest states in the nation: the median age in the state is 40.6 years, according to federal census estimates.  Currently, 13.9% of Maine's citizens are age 65 and over. This percentage is expected to increase to 21.4% by 2025.  The fastest growing segment of the population, sometimes called the old-old, is those over 85. By the year 2010, Maine Census projections predict at least a 33 percent increase in people aged 55 to 85 or older. [3]  


Finding a way to encourage economic growth that will revitalize the economy, attract young professionals, and stabilize the state enough to eventually care for the growing population is a sizable task.  One way to tackle the problem is to organize the economy in industry clusters. Focusing on developing industry clusters will help capitalize on resources already present in Maine, and encourage new partnerships and job opportunities to attract educated, young professionals. 


What are Industry Clusters?


The Economic Development Administration defines an industry cluster as a group of collaborating industries in a geographic region that are able to create a network of buyer and suppliers, and can rely on a shared foundation of specialized economic institutions.  One of the most famous industry clusters is Silicon Valley in the southern part of the San Francisco Bay Area.  The concentration of high technology businesses in this area has become legendary for its impact on the industry and the thousands of young fortune seekers it has enticed to move there. 


Industry clusters, unlike most economic development plans which often introduce tax incentives, funding or grants acquired from outside agencies into a depressed area, grow from industries that already exist and have a strong foundation in the region.  Industry clusters are used to improve and expand what already exists by attracting new wealth and jobs, creating stability for the region.


What Industry Clusters Exist in Maine?


Charles Colgan and Colin Baker of the Edmund S. Muskie School of Public Service at the University of Southern Maine conducted an assessment of industry clusters in Maine, A Framework for Assessing Cluster Development.  In this study, Colgan and Baker used three factors to determine the most prominent industry clusters in Maine: the speed of employment growth, the share of total employment, and the geographic area covered by this industry.  The clusters they identified were: Information Technology, Biotechnology, Advanced Materials and Composites, Forest Products, Agriculture, Marine Technology and Aquaculture, Environmental Technologies, and Precision Manufacturing.


Colgan and Baker note in their study that Maine has lagged far behind other states in measures of research and development activity related to technology.  The state government has recently expanded its support for research and development in order to encourage technology innovation to drive economic growth.  While this government support is a positive and necessary step to encourage industry cluster growth, much more work needs to be done. 


Why Should Industry Clusters Exist in Maine?


The state of Maine and its economy is well prepared for growth based on industry clusters for the following reasons:


Demographics Maine's population

is concentrated in the southeast section of the state. Most of the states residents, social welfare resources, and technical, professional, and tourism industries are located in this area.


The city of Portland, located in this region, is the only city in the Northeast to rank among the top 20 best performing cities on the Milken Institute's "Best Performing Cities 2004" index.  Unfortunately the economic growth that Portland is enjoying has not impacted the rest of the state.  Portland has been able to woo members of the "creative workforce," which can include not only artists but also technology workers, entrepreneurs, and even lawyers [4] , with its vibrant downtown, attractive neighborhoods, and parks with easy access to the ocean and other outdoor activities.  The rural and largely undeveloped northern part of the state is unable to provide the same incentives.



Due to Maine 's rural landscape, small population, and isolated towns, focusing economic development efforts on one community or municipality is not far-reaching or helpful for the entire state's economy.  Regional coalitions such as industry clusters would be best suited for this type of landscape.  The development of industry clusters would provide a reason to create and support the infrastructure necessary for long-lasting economic growth.  If people are attracted to an area for jobs, that will provide a catalyst and increased funding available to build the amenities that a thriving community needs.

A Blank Canvas

As has already been described, the industries that once supported the Maine economy no longer exist.  No longer is the state defined by one industry or another. Thus there is great opportunity to redirect the resources once devoted to these industries towards new and more relevant industries.

For example, the first sawmill in America was built in 1623 on Maine's Piscataqua River [5] .  Maine dominated the lumber industry and the export trade when the white pines so prominent in Maine forests provided masts for the British navy, but with the big trees largely exhausted and the disappearance of wooden ships and the related timber trade, Maine loggers now produce chiefly pulp for papermaking.

Developing an industry cluster in Forest Products would allow the state to capitalize on the historic significance and reputation of Maine lumber.  To encourage innovation within the lumber industry, it would behoove the state to develop stronger partnerships with the several world-class timber firms that currently own parts of Maine forest.  The state would benefit from increased research and development funding, jobs, and publicity while the firms would be able to expand their presence in the global market.

Strong Resources

Maine citizens are proud of their state and are eager to protect it as “The Way Life Should Be.”  Industries that do not complement the existing landscape are not embraced by the state's population.  Consequently, venture capital is weak in Maine and thus the state can not rely on the steady stream of new money that venture capital can provide.  Fortunately, Maine can rely on the impressive and vast natural resources it has such as a massive coastline, sprawling forest, existing manufacturing infrastructure. In addition, there are emerging industries in Maine named by Colgan and Baker that are not being used to their full potential.


For example, The Jackson Laboratory holds a prominent place in the biotechnology industry of Maine.  In order to grow the biotechnology cluster, the state of Maine must advertise the strength of Jackson Labs nationally.  Within the state, a science program between the laboratories, high school students and the University of Maine system could be developed to attract students to the hard sciences when they are in high school, encourage them to enroll at the University of Maine, and remain in the state to eventually become part of the biotech cluster.  This type of program would require minimal new funding and would provide a clear path of education and employment within the state.


Perfect Timing

Maine's struggling economy is something that has been noted and state government and other organizations are eager to help break the cycle.  The Brookings Institute has just kicked off a year long research initiative that will recommend policies to help the state grow in economically sound, fiscally responsible, and sustainable ways.  The governor has also just launched Realize!Maine, his initiative to attract young people under the age of 35 to live and work in Maine. 


In addition, besides the prestigious private higher education institutions in the state, Southern Maine Community College (SMCC) was ranked the 5th fastest growing community college in the country.  SMCC has been essential in the reeducation and reemployment of Mainers who have lost their jobs when industries left the state.  Industry clusters would be able to rely on the state's extensive higher education system to offer education for workers needed for the industry clusters to thrive. 



Much of the infrastructure needed for industry clusters already exists in Maine.  Now, Maine must continue to organize regional government and industry coalitions to make the connections which will bring these clusters together.  Industry clusters would greatly benefit Maine's economy but will not happen spontaneously.  Maine government and its economic development agencies should work with the leaders of the strongest industries in the state as described in Colgan and Baker's study and provide some guidance for forming partnerships and promoting these industry clusters.  Strong leadership is necessary for Maine to be able to realize its potential and capitalize on the opportunities that exist in the state. 








Moosehead Lake in Fall: