Did it work?
The question was asked in an Aug. 14 report about funding administered by the quasi-state nonprofit the Maine Technology Institute (“Did it work? The elusive impact of a $45 million state grant to grow jobs”). My perspective is as chief financial officer of GWI, a Maine-based benefit corporation that designs, builds and operates fiber optic networks – and a past recipient of a Maine Technology Institute loan.
While I understand the concern around transparency regarding publicly financed projects, there is a general expectation that doctors, attorneys and bankers keep client information confidential. The Maine Technology Institute acts like a bank in many ways; if it violated the confidentiality of its clients, companies would not use it and its mission would not be completed.
The Maine Technology Institute is designed specifically to make job creation-oriented grants and loans that risk-averse banks are unwilling to make. Taking that risk can lead to failure but also large wins. The Maine Technology Institute is in the process of being fully repaid for our loan, plus interest, so it can redirect the money to other loans and grants.
In our case, we took a $500,000 loan, subordinated to our bank debt, to build internal software that would allow us to be more efficient. This was a vital project that banks would be unwilling to loan against because the collateral was intangible. We would have not undertaken the risks of the project without the Maine Technology Institute’s favorable terms. The risk was worth it for us and for Maine because the software has allowed us to almost double our employees – to about 90 – by the end of this year, a goal of the Maine Technology Institute.
It has boosted employment by our local subcontractors in construction, technical support, marketing and other industries which support the broadband infrastructure ecosystem. And it has strengthened our ability to grow our business significantly outside of Maine, resulting in money flowing into Maine; another goal of the Maine Technology Institute.
Finally, in our case, it has contributed to the very real (if indirect) benefit of more fiber optic networks for Maine, particularly in rural areas, allowing us to leverage of tens of millions of dollars in federal funding and private investment in Maine networks.
A $500,000 loan from the Maine Technology Institute allowed GWI to build internal software that enabled the internet service provider to become more efficient and to almost double its workforce by the end of this year. Photo courtesy of GWI
The Maine Technology Institute’s engagement with the business community is immensely important. Taxpayer dollars, judiciously managed and disbursed to private companies, can bring about definable, verifiable, scalable and sustainable public good. We at GWI believe that current reporting mechanisms balance the public good with the requirements of a private company to have its confidential information protected.
The report correctly pointed out that there must be accountability and transparency; we believe there is ample opportunity for both. The Maine Technology Institute must determine how best to use information about its funding, what the target audience is and how much of the data needs to be protected. To be sure, it’s a balancing act.
One possible way to achieve the balance is to bring the Maine Technology Institute, the business community and the public together for a work session (or series of work sessions) to establish a mutually agreeable way forward.
The Maine Technology Institute plays a vital and unique role in the funding of job creation and the growth of Maine’s economy. Fully evaluating the Maine Technology Institute’s benefit requires taking the above factors into account. I am sure peers and colleagues of GWI would participate in endeavors to assist the Maine Technology Institute and the public to determine how to better report these benefits.
Send questions/comments to the editors.
