Gov. John Baldacci is pretty skilled at assembling committees. His latest creation, the Governor’s Council on Competitiveness and the Economy, is a star-studded lineup of Maine business heavies chosen to inject capitalist wisdom into public policy.
Some have noted the council tends to lean Democratic, ala the governor. We’re unconcerned with this description as long as members consider their political adherences secondary to their devotion to the green — the color of cash, that is, not the left-wing political party.
Our loudest cheer is saved for the longest word in the council’s title: competitiveness. This is oft-overlooked in economic development for other phrases, like “incentive” or “credits.” Policies derived from these words can breed accusations and hurt feelings, because they can take pure competition out of the equation.
Consider the factory or store, paying full property and equipment taxes, confronted with a competitor receiving lofty incentives from the government. There’s little competitive about it; the new arrival has an inherent advantage. Its successes are offset by harm the policies can do to existing business.
Support among the business community for government’s efforts can also evaporate, if it seems the government is tilting the competitive playing field toward new arrivals.
Maine needs both — existing and new business — to thrive. One cannot come at the expense of the other, or the state and its people haven’t gained anything. Creating a competitive environment is the fairest method of developing the economy, and therefore the one which likely holds the most future promise.
This leads to the council’s tallest order — ensuring Maine is not only competitive in the global marketplace, which was specifically mentioned by the governor, but also nationally and locally. Jobs might be lost to faraway locales with cheap labor and cheaper materials, but competition is equally stiff state-by-state and town-by-town, as well.
Maine has lost jobs in recent years to Virginia and Minnesota, for example. Just recently, an Auburn restaurant was lured into Richmond, Maine, with a $20,000 economic development loan. It was the right move for the business (the owners live in Richmond) but it still highlights a salient point:
Competitors can be a world away, but also just a few miles.
A competitive environment, however, is a great equalizer. Improving Maine’s economy is an exercise in striving for mediocrity — imagine if the tax burden (instead of being one of America’s highest) were mediocre, say number 27. Economic improvement would be exponential.
This tangible improvement starts with tangible goals. Investing in amorphous notions like the “creative economy” or “innovation economy” or even “research or development” sound great; but their lack of crisp definition makes it difficult to gauge their success.
For example: how will Maine know it’s achieved a successful “creative economy?” Frankly, it probably won’t.
A competitive economy, though, will be much easier to recognize.
Send questions/comments to the editors.
