With an aging population in a rapidly changing global economy, Maine is in need of an economic transformation. I would encourage those running for governor to set aside partisan incrementalism and think big. A Steve Jobs quote comes to mind: “Those who are crazy enough to think they can change the world usually do.”
Because of underpopulation and low productivity, Maine’s $52 billion economy is underperforming the rest of the country. This underperformance costs the state $98 billion in annual economic output. In other words, were the state performing in line with the rest of the country, its economic output would be $150 billion.
For myriad reasons, it is unrealistic for Maine to reach its $150 billion potential. But through aggressive-yet-careful policy implementation, $90 billion is eminently doable. How? By developing a world-class global technology hub north of Bangor. Let’s call it the “Silicon Valley of the East.”
Two metrics explain Maine’s economic underperformance: people per square mile and output per person. Maine has a population density of 43 people per square mile, and generates $39,000 in economic output per person. In the aggregate, the United States has a population density of 85 people per square mile and generates $57,000 in output per person. If Maine had 85 people per square mile (2.64 million residents) and generated $57,000 in output per person, its economy would be $150 billion.
Eighty-five people per square mile is unrealistic, as it would require an increase in population of at least 100 percent — but with careful planning, a more modest 50 percent increase is feasible.
Maine residents prioritize a peaceful lifestyle and preservation of the state’s natural beauty, both of which demand a limited population. But by mathematical definition, a limited population restricts economic output because there is only so much output each resident can generate (economic output = population x output/person).
Maine’s 1.33 million residents are spread out over 31,000 square miles. With 40 percent of the state’s population living in the Portland area, there is room to expand the population northward while maintaining the vast majority of the lifestyle and geography status quo. The aforementioned 50 percent increase in the population (670,000) would bring people-per-square-mile to 64, still well below the overall U.S. density of 85.
By targeting the high-value tech sector, the 670,000 cohort would yield at least the United States’ $57,000 in output per person, bringing Maine’s total economic output to $90 billion.
A global technology hub 13 percent smaller than Maine but with three times the population, six times the economic output and 1.6 times the output per person ($62,000), the Republic of Ireland is a picture-perfect template for Maine’s tech-focused economic transformation. My father’s long-held belief is that for an economy to be competitive over the long term, it must turn itself into the single best destination for a particular industry. Ireland has done this; Maine can as well.
Three key technologies, with enormous multi-decade growth potential, are in the early stages of development akin to the internet in the early 1990s: artificial intelligence (i.e., robotics); the internet of things (i.e., IBM’s “Watson”), and blockchain (i.e., the technology behind Bitcoin). By focusing its development of a “Silicon Valley of the East” on these three key technologies, Maine will put itself in strong position to attract global investment capital, university R&D funding and a youthful workforce.
With regard to implementation, the two- to three-decade transformation of Greenville, South Carolina, a former textile manufacturing hub brought down by globalization, is instructive. Policymakers worked aggressively to win BMW’s first American factory in the early 1990s, committing to infrastructure investment and college training programs. Its population is now 70 percent larger than it was in 1990. While certainly an outsized success story, directionally it provides a template.
I propose a two- to three-decade, five-pillar implementation program for creating a global technology hub in Maine:
• Expand Bangor International Airport.
• Incentivize economic development in the Bangor area.
• Partner with the University of Maine System’s flagship campus in Orono.
• Develop an autonomous-vehicle lane from Bangor to New Hampshire.
• Aggressively court global tech leaders Jeff Bezos and Masayoshi Son, among others.
I invite Maine’s gubernatorial candidates to steal this template and think “crazy.”
Benjamin J. Michaud is a resident of Cumberland.
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