Building on Maryland’s potential in a hyper-competitive economy

 

By Donald C. Fry

A recently-issued 84-page report ranking U.S. states for their capacity to succeed in the so-called “new economy” begins with a Charles Darwin quote: “It is not the strongest of the species that survive, or the most intelligent, but the ones most responsive to change.”

That echoes a theme relentlessly pounded home in the 2012 State New Economy Index report released by the Washington, D.C.-based Information Technology and Innovation Foundation.

For Maryland businesses and private-sector advocates – myself included – who promote economic growth and job creation, the ability to adapt to changing times is the essence of a good business climate. It boils down to one word: competitiveness.

Although its ranking has not received much coverage in the media or on state government Web sites, Maryland ranks 5th in the report, which measures how states are positioned to compete in the emerging global economy driven by innovation, technology and entrepreneurship.

Although Maryland’s ranking has slipped two places from its third-place showing in the previous 2010 New Economy Index, our state remains solidly among the top five places in our nation with the most potential to thrive in the emerging global economic environment.

The authors of the most recent New Economy report offer detailed insight into the 26 indicators that went into developing their rankings. They also offer a thoughtful discussion about the state of economic development in what they term is an era of relative decline in the United States.

Maryland gained top-five rankings in eight individual categories. Our state’s highest individual scores were second-place rankings for information technology jobs; managerial, professional and technical jobs; workforce education; and non-industry investment in research and development.

Other categories in which Maryland received top-five rankings were: fast-growing firms (3rd), high-tech jobs (4th), broadband telecommunications (4th), and scientists and engineers (4th).

Maryland suffered no bottom-10 scores and ranked in the bottom 25 in only four categories: percentage of farmers with internet access (34th), entrepreneurial activity (30th), health information technology (28th) and green economy (26th).

Maryland was one of four Mid-Atlantic states to gain an overall top-10 ranking. Delaware ranked second behind Massachusetts, which has ranked first for the last 13 years. Virginia ranked sixth and New Jersey ranked 10th.

The 2012 New Economy report notes that the competitive gap is closing among states. While Massachusetts boasts the nation’s top concentration of software, hardware and biotech firms supported by world-class universities, “it no longer holds the commanding lead” over its high-ranking competitors, according to the report.

While this is encouraging, a more sobering message of this report is clear: the global arena for economic growth is changing rapidly and dramatically. “Old-economy economic development policies must now be adapted to the hyper-competitive new economy,” it states.

For virtually everyone in this freshly competitive world, a new universal tenet is at work. “Our natural advantages have become less vital, while many of our competitors’ weaknesses have ebbed,” the report notes.

This is precisely why lawmakers in Annapolis must keep the issue of competitiveness top of mind. For virtually every policy they enact, they must ask themselves a simple question: “Will this make Maryland more competitive for job creation and economic growth?”

A fundamental yardstick for framing such a question should be the eight core pillars for job creation and economic growth compiled by the Greater Baltimore Committee, working with statewide business leaders and economic development experts, and published in the GBC’s report, “Gaining a Competitive Edge.”

The core pillars are: government that unites with business as a partner; a highly-educated workforce that meets business needs; streamlined, stable and predictable regulatory policies; a fair and competitive tax structure; competitive costs of doing business; superior and well-funded transportation infrastructure; strategic state investments in business growth; and an aggressive and well-funded business marketing strategy.

Competition between states is healthy if it pushes states to boost their infrastructure, education levels, business support systems, and technology development and transfer systems, reasons the New Economy report.

For lawmakers in Annapolis it’s important to remember that the key words relating to these and other economic and business climate rankings are “potential” and “capacity” for success. These rankings only measure prospects and positioning for success.

Maryland is clearly well-positioned for job creation and growth. But to realize our state’s tremendous potential, lawmakers must make it their mission to build and expand on Maryland’s competitive strengths and not take them for granted.

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