Skip Maine state header navigation
A Publication Featuring The Information
Services Technology of Maine State Government
companies are some of the fastest growing businesses in Maine and will likely
play a leading role in job growth in the years ahead.
While currently a relatively
small sector in Maine, growth in the IT sector is important to economic
development. IT-intensive jobs typically pay considerably higher wages than
those that are not IT-intensive (see Chart 1).
By growing and attracting IT and IT related businesses, rural areas can directly
benefit through increased income levels.
Recently the Northern Maine
Development Commission, NMDC, supported a study of the potential for industry
cluster development in Aroostook County. Five industry
sectors were examined including agriculture, forest products, tourism, precision
manufacturing, and information technology. This article presents an overview of
factors used to assess the growth potential of the county’s IT sector. It is
designed to be useful for state and local business and economic development
professionals interested in strategies to grow this increasingly important
sector in rural areas.
Maine business use of the Internet has dramatically increased since 1995, when
only 17 percent of Maine businesses reported using the Internet
(see Chart 2). By 2001, 86% of businesses used the Internet. However, for
today’s businesses, simply having Internet connectivity is not enough. Two
additional IT infrastructure factors are essential for supporting the IT
industry. They are “high-speed” or broadband access and service redundancy.
Businesses are increasingly in need of high-speed Internet connections to
support core business functions and E-commerce strategies. Additionally,
several industries and businesses provide the kinds of products and services
which require little to no connectivity “downtime” over the course of the year.
For these industries and businesses, it is important that the IT infrastructure
connecting rural areas to the rest of the world contain sufficient redundancy,
or alternative broadband pathways, should a key digital cable or IT
infrastructure component be disrupted. Rural areas typically lag non-rural
areas in the deployment of IT infrastructure. The Aroostook study revealed that
investments in IT infrastructure has positioned that rural area well for future
Attract and Retain Skilled & Educated Workforce
Attracting and retaining skilled and educated
employees in rural areas is particularly challenging to the IT sector. Rural
areas, lack “thick” local labor markets from which to attract employees. As a
result, companies in rural areas must often rely on recruitment of talent from
other labor market areas. Experienced IT workers are often reluctant to
relocate to rural areas fearing that if their position doesn’t pan out they will
again have to relocate, as additional local job options may be limited.
Attracting talent to rural regions requires the ability to sell the small-town,
rural lifestyle. For some professionals this lifestyle is desirable, for others
it is not. Institutes of higher education are important resources for creating
greater access to a skilled and educated workforce.
Research and Development
Research and development, R&D,
activity can spur innovation for the development of new products or processes
leading to industry growth. Information technology companies are often engaged
in research and development to create new products and services to compete in
highly competitive national and international markets. Often this R&D is done
in-house and built over-time on a project basis. Therefore, worldwide in this
industry, a great deal of R&D occurs at the street level within the businesses
offering products and services, as opposed to occurring within research
institutions. Part of the reason for this is the demand to get new products
developed and to market as quickly as possible in a rapidly changing market.
Although the IT sector performs much of its R&D “in-house”, access to research
institutions within the rural regions can provide significant competitive
advantage for local firms.
and Trade Associations Areas
experiencing industry growth are characterized by strong networking among
businesses and professionals to share resources, discuss industry trends and
issues, problem solve, and to represent the industry outside the sector to
business and government leaders. These functions are typically performed by
industry or professional associations. Two such resources for Maine’s IT
industry are MESDA, Maine’s association for the software and information
technology industry and The Target Technology Center in Orono. MESDA provides
the IT industry with professional networking, training, user groups, technical
assistance and access to market databases and Web resources. The Target
Technology Center is an IT business incubator that is supported by the State and
the University of Maine. In addition to
providing office space for start-up companies, the Target Center provides
business assistance and training services to IT business throughout the State.
In rural areas, routine networking is challenging due to distances between
businesses and professionals. Statewide and regional industry support entities
are critical for fostering the linkages that spur industry-wide learning and
Organizations Industry sector growth
and development is often spurred by leadership organization(s). Examples of how
leadership companies can perform this function include the creation of
spin-offs, or new companies, which drive investment in new infrastructure that
benefits not only the leadership company, but other companies in the sector, and
fostering partnerships with education institutions to increase offerings.
- Local and Export Demand Because of
the relatively small number of businesses within rural areas, local demand for
IT services is often not strong enough to generate sufficient activity for
significant industry growth. Therefore to grow, firms must compete in other
geographic areas. IT firms can develop regional and national niches based on
experience gained in the local markets. For example, several of the firms
interviewed for the Aroostook study have developed expertise in providing IT
services to the forestry and agriculture sectors, which have traditionally been
important within Aroostook County. This has helped the companies compete for
business outside of the US. Partnering with companies outside of the region is
also an effective means for increasing market share outside of the region.
By examining a region’s
capacity and performance for each of the above factors, leaders within rural
areas can begin to develop strategies to support further growth and development
of the IT sector. Eventually such strategies will lead to increased job
opportunities and incomes.
Jim Damicis is an
independent consultant from Scarborough, Maine providing research and analysis
in the areas of economic and community development and public policy. Jim can
be reached at firstname.lastname@example.org.
Source: 2001 Maine Occupational Wages, Maine Department of Labor,
Division of Labor Market Information Services, March 2003.
Maine Development Foundation, 1995-2001 Survey of Maine Businesses, Maine
[ Up ] [ A Public/Private Collaboration Promoting Maine Businesses ] [ Best of the Web ] [ Challenge for November ] [ Department of Agriculture brings Dog Licensing On-line ] [ GIS News ] [ Growing the Information Technology Sector in Rural Areas ] [ Knitters Needed ] [ Managing Antivirus Software Across the Enterprise ] [ New Legislation ] [ Nexus Management Evaluating Data Center ] [ On-line Aircraft Registration Renewal Service Coming Soon ] [ PC Genie ] [ Security Experts Ready to Help You! ] [ Transitions for November ] [ Work Smarter Using the Power of the Desktop ]