By Donald C. Fry
Maryland’s government leaders usually bristle at the suggestion that our state’s tax policy, regulatory environment, or other policy issues detract from its strengths as a location of choice for expanding existing business facilities or for moving a business to Maryland from elsewhere.
But, to virtually everyone on the ground in the world of business and economic development, the notion that Maryland’s strengths in technology, education, workforce, and quality of life far outweigh other significant factors in the tough competition among many states for business growth is, in their words, “fantasy, not fact.”
With Maryland struggling to free itself from a tenacious recession, particularly in terms of job creation, the issue of what specific policy strategy will make for a strong, competitive environment for economic and employment growth should be a fundamental concept for discussion in Annapolis these days.
There is one basic reason for this – no silver bullet exists for resolving the myriad of fiscal challenges that will continue to confront Maryland lawmakers as they convene twice in the next nine months facing another estimated $1 billion deficit for the next fiscal year.
No single new tax, or clever fund transfer, or shift of state expenses to local jurisdictions, will resolve the broad fiscal quandary that has been incrementally building in Maryland for the last five years.
But there is one, grand thing that fiscal experts agree will deliver the degree of revenue enhancement to the state’s coffers that could resolve the fiscal challenges before us – vigorous business growth … and the private investment, jobs, and increased revenue to state coffers that comes with it.
This brings our government leaders back to the question of how best to nurture a sustainable private-sector re-awakening within our boundaries. In essence, that’s what the Greater Baltimore Committee last year asked more than 50 CEOs and owners of businesses of all sizes and more than 20 economic development experts from across Maryland, including eight who headed the state’s economic development department during the past two decades.
Months of focus groups and feedback sessions with CEOs, entrepreneurs, and experts in the field of business development and retention yielded eight consensus principles – core pillars – for economic growth and job creation that the GBC published in its report, “Gaining a Competitive Edge.”
The core pillars include government leadership that partners with business, a highly-educated workforce, streamlined and stable regulatory policies, a fair and competitive tax structure, and competitive costs of doing business. They also include superior and reliably-funded transportation infrastructure, strategic state investments in business growth, and an aggressive, well-funded state marketing strategy.
This is the first of a series of commentaries that will detail specifically what CEOs and economic developers told us about the core pillars and why they are essential prerequisites that will enable Maryland to be a strong competitor in the nation’s post-recession economy.
Business as a partner, not an adversary
Core pillar: Government leadership that unites with business as a partner.
Virtually every business owner in the GBC study told us, without prompting, that a primary core element of any good business environment is government leadership that sets a welcoming tone that communicates positive support for business, respects the private sector as a partner, not an adversary, and reflects a strategic plan for business growth and job creation.
“Maryland government needs to set a top-down tone that says business is welcome,” said one CEO. “This needs to come from the highest levels of leadership in our state, and it needs to project that Maryland’s government leaders respect business – that business is important to them.”
A good environment for business and job creation is characterized by government recognition that the private sector is the state’s primary job generator and that businesses are “the building blocks or foundation of a successful economy,” said a business owner and study participant.
Local economic developers cited frustration from business owners about how state agencies interact with them or address their needs. State agencies demonstrate little sense of urgency and have time-consuming and bureaucratic routine processes, business owners told them.
Many agency employees appear to take a “just say no” approach to business, one CEO complained to the GBC. “It’s safest for them. It’s their first instinct.”
Others voiced the impression that employees at state agencies adopt a view that anything a business needs is inherently bad in some way. Many suggested that, rather than adopting a gate-keeping approach, state agencies should work to reflect a more problem-solving orientation that facilitates the business development process rather than blocks it.
To Governor Martin O’Malley’s credit, he has championed a renewed state government commitment to customer service, including a recently-announced “Maryland Made Easy” initiative to make government more responsive.
But the governor can’t change a perception alone. He needs to lead state lawmakers onto the same page and to develop, with them, a strategic plan for business and job growth that lawmakers act upon. They could start by reading the Maryland Economic Development Commission’s recent recommendations, which also reflect many of the GBC’s core pillars.
There are advocates for the private sector and free enterprise in the Maryland General Assembly. But a significant number of lawmakers express support for policies that foster job creation and economic growth, but don’t reflect that point of view through their actions and, more importantly, their votes.
A more substantive relationship needs to exist between state government and the business community, say economic developers and business owners. “There are many great accountants in this state, but not one was asked about the impact of the tech tax,” complained one business leader.
The fundamental concept that drives growth in any state is that business responds to opportunity. Economic growth and job creation correlate directly to the reality of opportunity and the perception of it among CEOs and entrepreneurs both within and outside of Maryland’s boundaries.
The Maryland Department of Business and Economic Development marketing campaign appears to grasp this concept. Our state’s current marketing tag line is “Maryland: Land of Opportunity.”
It’s essential that our state’s elected officials ensure that our government’s policies nurture the private-sector opportunity that we pitch.
Next week’s core pillar: a workforce that is highly educated.
Donald C. Fry is president and CEO of the Greater Baltimore Committee. He is a regular contributor to Center Maryland.
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