[Editor’s Note: When I write about reports like this, I feel the need to add a disclaimer. WalletHub is a personal finance website that creates these reports as pieces of content marketing to drive traffic to its website. It’s not a reputable research organization. So why even cover them? Because the underlying data and metrics are still valid and it’s important to not only be a cheerleader for our state and its innovation ecosystem, but take time to highlight where there’s still work to do. Also, perception is often reality, so as long as these reports continue to make headlines, it’s important to acknowledge that at the very least we have an image problem.]

 

Maine ranked No. 39 out of the 50 states and the District of Columbia for its level of innovation, according to a new report from WalletHub, a personal finance website.

WalletHub used 22 metrics across two categories—”human capital” and “innovation environment”—to come up with the rankings, including share of STEM professionals, R&D spending per capita, and tech-company density.

Maine’s overall rank of 39 placed it last among its New England neighbors. Massachusetts ranked No. 2 in the country, while New Hampshire ranked No. 9, followed by Connecticut (No. 15), Rhode Island (No. 24), and Vermont (No. 25).

The most innovative state on the list isn’t even a state—the District of Columbia took that honor, followed by Massachusetts, Washington, Maryland, and Colorado to round out the top five. The five least innovative states are Mississippi, Louisiana, North Dakota, West Virginia, and Arkansas.

Source: WalletHub

 

Human Capital & Innovation Environment

The report also ranked each state on the two individual dimensions—human capital and innovation environment.

Maine ranked No. 28 in the country for human capital and a dismal No. 47 for innovation environment.

In determining the human capital ranking, the report used metrics such as share of STEM professionals, 8th grade math and science performance, projected STEM-job demand by 2028, and scientific-knowledge output.

The innovation environment ranking is based on metrics such as share of technology companies, R&D spending, entrepreneurial activity, average internet speed, tax friendliness, and the number of patents per capita. The full list of 22 metrics and methodology can be found here.

Clickbait or Concerning?

The report does not provide each state’s underlying score on each metric, which makes the report not very useful for state policymakers, according to Catherine Renault, former director of Maine’s Office of Innovation.

Renault called the report “marginally better than clickbait” but said the result shouldn’t be a surprise.

“For at least twenty years, Maine has usually ranked in the 30s,” she said. “Our innovation economy has made many gains in those years, but others have invested more and in more mainstream tech industries.”

She said these reports and their methodology are biased towards traditional tech sectors like software and biotech, but Maine’s strategy has been to foster tech innovation in more traditional resource industries like forestry and agriculture. Also, these reports typically have a low-tax bias that will never benefit smaller and more rural states like Maine, she said.

“I think it’s more meaningful to look at how resilient Maine was during the pandemic, how many folks are choosing to move here, how broad and inclusive our entrepreneurial environment is getting to be,” Renault said. “These are relevant indicators.”

In-migration to Maine is a bright spot. The Census Bureau recently reported Maine’s population has increased by roughly 10,000 people between April 2020 and July 2021, with York and Cumberland counties gaining the highest net population increases. Maine’s population increase of 0.7 percent during that time ranked among the fastest growth rates in the country, according to the Portland Press Herald.

But Bob Martin, former president of the Maine Technology Institute, doesn’t think we should cast off the report so easily. He said it points to some very concerning issues the state and its innovation ecosystem needs to face if it wants to truly be a place when innovation can thrive.

“We’ve been stuck in this rut for years and will likely stay there until we—the collective innovation community: universities, colleges, angels, investors, the plethora of economic development offices—all start insisting on excellence instead of average,” Martin said.

Maine has some very innovative companies led my remarkably creative and entrepreneurial founders, Martin said.

“But the trouble is all of us in the innovation community can name them all. We do not have any critical mass with any aspect of the ingredients Wallet Hub and others use to measure innovation.”

Two weeks ago, Martin judged a venture competition at George Washington University in D.C., and it offered a glaring juxtaposition with the venture competitions he observes in Maine.

“The student ventures I reviewed were light years ahead of any I’ve seen in Maine. That’s not accidental. We have to be more intentional and more demanding of excellence across the board,” he said. “More importantly, we have to stop giving lip service to the topic and pretending we’re creating the next Facebook at TechPlace, or Google at MCE, or Uber at UMaine. We need to be serious about it. These metrics, and others, point to the fact that we are not. We’re more apt to be defensive about what we do have than work on what we do not.”

Whether you find this WalletHub report concerning or not, state rankings such as this create headlines. And sometimes perception is reality. While Maine continues to rank well on lists measuring quality-of-live (U.S. News and World Report ranks Portland as the 8th best place to live in the country), it would be naive to think poor rankings such as this don’t so some damage to the state’s image.

Image is important because Maine needs to attract more high-skilled workers, and a large part of attracting new residents is about marketing the state as a place people can thrive. Sometimes quality of life is all they seek, especially now that remote work is so commonplace, but some will still opt to go where they see promise and progress. Martin worries that we’re losing that battle.

“Look at the shortage of engineers in the state, and the fact that it will increase as Boomers retire. We cannot produce engineers in our university system in sufficient numbers to replace them. We simply cannot. The only way to solve the shortage of engineering degrees is to import them. But into a mediocre innovation economy? Why would I want to come to Maine when I can work in a much more dynamic environment in Massachusetts, or DC, or Austin, or Research Triangle Park?”

 

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