Increasing economic opportunity for the people of Maine is Governor John Baldacci's top priority. Economic growth occurs through business retention, business expansion, business creation and business attraction. To achieve each, Governor Baldacci said, Maine's economic strategy must embrace four fundamental economic drivers: (1) the creation of a fair and stable business environment to attract investment to Maine; (2) investment in people; (3) a clear focus on key sectors of the state's economy; and (4) building infrastructure.

1. The creation of a fair and stable business environment
   

   A fair and stable business environment is a prerequisite for business growth. For this to occur, the costs of doing business must be controlled. Maine needs to be in a more competitive position in terms of taxes, utility rates and other costs.

   In the short term, the tax advantages associated with the Governor's new Pine Tree Zone initiative will provide a significant competitive advantage. In the long term, Maine needs to lower its overall tax burden to below the New England average by 2008. Moreover, we must once and for all remove the personal property tax on business equipment.

   Additionally, Maine's regulatory burden must be simplified. This will not only make it easier for our existing businesses to operate, but it will provide a competitive advantage in attracting new business.

2. Investment in people
   

   Maine people comprise a workforce that is second to none. They deserve a first-rate educational infrastructure.

   Creating an educational system that moves students from K thru 16 and beyond is now more than a goal; it is a plan in the making. Our objective is to have 60% of our high school seniors go on to college by 2006, and 70% by 2010.

   The most important measure of economic development in Maine is the educational attainment of its people and the opportunities that arise from our people's participation in the economy of tomorrow. The infrastructure is present. Maine has a strong and comprehensive University of Maine system and a new and exciting community college system that together provide an extensive array of educational opportunities to traditional and non-traditional students. Business and commercial entities will find educational institutions in every region of the state, and together with one of the nation's most advanced distance learning programs, workers and the general public will have wide-scale access to education. Helping to ensure that this access is affordable will be the new loan programs delivered by the Finance Authority of Maine.

   This infrastructure will make it possible to Maine to meet the goal of having 30% of our work force with a college degree. Beyond the raw 30% figure, we need to ensure that we focus our efforts in training and education on the areas that hold the greatest opportunity for growth. Our education system must create Centers of Excellence for the skills required for our targeted industries. The new Work Force Cabinet created by the Governor will play a key role in this effort to shape our training initiatives.

3. A Clear Focus on Key Sectors of the Maine Economy
   

   Maine's resources are limited, and we must focus our economic development efforts in those areas where we have a competitive advantage. These break into two groups: our mature industries, and our emerging industries.

   1. Our mature industries:
      
      1. Forest Products Industry
         

         Maine's economic health, traditional landscape and the welfare of many communities are tied to the viability of the forest products industry. However, it is a mature industry, facing intense competition from abroad. To make Maine's forest products industry the national leader it once was, we need to focus on the research and development of new technologies. Moreover, we must increase our emphasis on the commercialization of these new technologies, with special attention to wood composites, the increased development of value added wood products and the continued investigation of by-product technologies. Additionally, we must move Maine-based manufacturers in this industry towards "green certification" with new emphasis on the "certified forest" concept. All of these efforts will benefit from Maine's national reputation as a strong steward of its natural heritage.

      2. Marine Related Activities
         

         Our magnificent coastline is a gift and an opportunity that has fostered a fishing and boat-building industry that has led our nation in past years. We can lead again by targeting and coordinating our marine-related research. With a top-10 marine research institute and a multi-million dollar Federal investment currently underway at the University of Maine, the state has the potential to be an international hub for coldwater marine research and a leader in the Northeast in fisheries science.

         For this to occur, we must create a world-class research capability in marine science by forming a research coalition made up of Maine's leading research institutions. This will not only accelerate the development of new technologies, it will also aid us in attracting federal and private research grants.

      3. Precision and Niche Manufacturing
         

         The state has a long and honorable manufacturing tradition. As our manufacturing sector matures, we must be creative and flexible in developing the manufacturing jobs of the future. This will involve support for research, development of cutting-edge technology and a highly skilled workforce. It will also require innovative financing and participation from the Finance Authority of Maine and DECD.

      4. Tourism
         

         This traditional industry is vital to Maine's economic future. Already, tourism accounts for 15% of Maine's gross state product - compared to 5% for the nation, and 6% for the rest of New England. Tourism leverages our magnificent natural resources in a way that, for the most part, is environmentally friendly. We will: continue to work with local agencies to promote different areas of Maine; work with our higher education institutions to provide degree programs in hospitality; and expand our marketing efforts, utilizing "single image" branding to promote our state.

   2. Emerging Industries:
      
      1. Biotech and Biomedical Research
         

         The groundwork in this important area is in place. Maine is already home to several leading biotech and biomedical research organizations. We will work with them to strengthen our hold in this field. Moreover, the state is currently seeing the components of a medical instrumentation "cluster" take shape; we must encourage this development. Additionally, we have an excellent School of Engineering at the University of Maine that includes world-class research and development capabilities in digital information technology. We also have a strong tradition of manufacturing and the existence of a number of Maine companies in this field. With Jackson Labs, the Maine Technology Institute and the Maine incubator program, we have the infrastructure to be competitive in biotech and biomedical product development. In the future, we will call on Maine's biotech community to assist us in identifying other areas where Maine can excel.

         The world of biotechnology is very competitive. To be successful, we must achieve our objective of $1,000 of investment in research and development per Maine worker by 2010. It will be the task of the head of the new Office of Innovation, within the Department of Economic and Community Development, to ensure that we reach this goal.

      2. Financial Services
         

         The financial services sector offers significant growth opportunities, and we will intensify our outreach efforts. Maine is well positioned to grow in this important area. The numerous companies that have already located in the state point to our favorable bank franchise tax situation, our advanced telecommunications network, our strong labor pool, affordable office space and unparalleled quality of life.

      3. Radio Frequency Identification (RFID)
         

         RFID presents significant potential for Maine. It is an important emerging industry in the world economy. An initiative in this field will support Maine's two premier semiconductor companies, one of which has already staked out a leadership position in the field. In addition, two other cutting edge end-use manufacturing companies in Maine have already begun establishing a presence. Properly developed and supported, this industry could become a dominant force in the state.

   3. Building Our Infrastructure
      

      We must also increase our investment in infrastructure, defined broadly to include investments in research and development, transportation, telecommunications and waterfront facilities. State government should serve as a catalyst for securing funds from state, federal, business and nonprofit sources.

      We have developed a telecommunications infrastructure that is advanced beyond much of our competition in the Northeast. We must continue to improve on this advantage.

      Our systems of transportation must be improved to minimize any transportation cost disincentives and to take advantage of our proximity to the Canadian provinces. In this regard, we will strive to complete the NEAR initiative begun last year, with the goal of achieving an agreement with New Brunswick, Nova Scotia and Quebec by the end of 2004.

      Competitive energy costs also comprise an important element of Maine's infrastructure, and it is critical that we reduce the cost of all sources of energy. Additionally, we must develop "green" energy sources, and become an energy exporter by increasing our production and developing transmission capabilities to both the north south.

   4. Cross-Cutting Issues: The following issues cut across the four targeted areas outlined above.
      
      1. Entrepreneurship
         

         We must continue to improve our efforts to promote entrepreneurial enterprises. Critical to this will be the Maine Technology Institute, the state's incubator program, and the state's education system. We will also continue to promote the Small Enterprise Growth Fund and the Maine Seed Capital Tax Credit.

      2. The Creative Economy
         

         Our society is just beginning to understand the importance of this new sector. Highly educated and mobile, creative economy workers have much to offer Maine, and our natural heritage makes the state an obvious destination for them. Maine is a leader among the states in trying to understand and nurture this new force, and the Blaine House Conference on the Creative Economy, scheduled for May 2004, will be an important forum.

      3. Small Business Support
         

         Maine is a state of small business: approximately half of Maine people work for businesses of 20 and fewer employees and over 90% of Maine businesses have 20 and fewer employees. Our system of support for this vital sector must be one-stop and user-friendly. The business-permitting process is especially onerous for these thinly staffed enterprises and must be simplified.

      4. Youth Summit
         

         Maine's aging population is a source of concern. The Youth Summit called by Governor Baldacci will examine the issue and map out strategies for keeping our young people in Maine, as well as strategies for attracting to Maine the additional young and skilled workers we will need for the future.

      5. Indian Tribe Development
         

         The state's Indian Tribes are integral partners in our economic development efforts. Their land ownership and sovereign status present numerous investment opportunities, and the state will work with the tribes to target, coordinate and maximize economic development options.

      6. International Trade and Business Attraction
         

         Together with our Canadian neighbors, we need to promote an "Atlantic Rim" trade corridor to Europe. The creation of trading partnerships, through NEAR, with our Atlantic Province neighbors can increase our trade relations with the European Union, and enhance our ability to attract direct foreign investment to Maine.