I returned to my native state in 1983 to join  Bath Iron Works.  At that time BIW was the largest private sector employer in the state with over 11,000 employees.  Just over twenty years later BIW employs 5,600 and forecasts a continued decline. 

Following the sale of BIW in the late eighties I bought a small wood products company, Paris Manufacturing, out of Chapter 11 bankruptcy.  After two and a half years of struggle, I had to close down the company.  To stay in Maine I started my own consulting company.

So in some ways my career since returning to Maine has mirrored the Maine economy.  I started with a large manufacturing company, now significantly downsized, moved to a small manufacturing company, now closed, and am now a member of the largest segment of Maine business, the service economy, as an independent strategy consultant.  As a strategy consultant I work with global and national clients, none of whom are located in Maine.  I and my family are able to enjoy the benefits of living in Maine while my work makes me a frequent Jetport traveler.  

I am fortunate that previous experience with an international management consulting firm, McKinsey & Company, gave me flexibility to build a solid consulting business independent of where I live.  Many who have traveled a similar path have found these transitions more problematic.

Which brings me to the recent report on the future of Maine’s economy done by the Brookings Institution.  I believe this work to be the most important study of the state’s economy in at least the past twenty years.  It was led by a highly-regarded national policy organization who took a comprehensive non-partisan approach.

The principal recommendations of the Brookings Report have been widely reported since its release in October of 2006:

•    The need for investment in a few significant areas to preserve Maine’s appeal as a unique place to live – building the “Maine brand”.

•    Significant investment in research and development for growing Maine’s technology clusters that hold the key to future growth.

•    Substantial cost reductions in both state government and education to reduce Maine’s tax burden and finance part of the economic development efforts recommended in the report.

The fact that Brookings found something positive to build on in the Maine economy was big news in itself.  Remember just a few months earlier the Boston Federal Reserve Bank reported that Maine was only one of two states to have zero growth in 2005, the other being storm-ravaged Louisiana.

Digging deeper into the report, it is clear that the state’s basis for economic growth is a slim one.  We are a rural state with few of the classic strengths that attract business.  However, we do have one dramatic advantage; Maine is a wonderful place to live – beautiful natural settings, good public schools, little crime, and little road congestion.  In addition we are relatively well-“wired” with lots of fiber optic cable, a must for connecting in today’s world.

That is why the modest inmigration that we have experienced over the past ten years has come, for the most part, from either professionals who can telecommute or from retirees.  That is also why most of the few significant new businesses that have flourished in Maine have been companies that rely on good telecommunications like MBNA (recently purchased by Bank of America), and  Wright Express or CEO’s with strong ties to Maine like Fairchild Semi Conductor and Idexx.

The good news in all of this is that in today’s net-centric world, more people are likely to be able to choose where they prefer to live and to bring their “business” with them.  The Brookings Report points out, however, that Maine’s position as a wonderful place to live is under threat from creeping suburbanization and its heavy tax burden.  Action is needed.

In this arena Brookings puts forth a dizzying array of recommendations. In truth Brookings has perhaps twenty recommendations but they involve creating two major state-wide commissions, several other study groups, and major legislative initiatives.

The Governor has picked up parts of the Brookings recommendations in his latest budget proposals, namely the consolidation of school districts and other state cost-cutting initiatives.  He also has appointed a Council on Jobs, Innovation, and the Economy to advise him on how to best implement Brookings’ recommendations regarding R&D and economic development investment.

We must invest and we must find significant savings to help fund our investments. Hitherto, the Legislature has been much more willing to spend than to make the often unpopular decisions needed to reduce expenditures. As these plans take shape and interest groups decry any attempts to consolidate or reduce services, remember Brookings fundamental message: both kinds of actions are required if Maine is to be successful.