The Daily Record: Is climate change for business ahead?

Editor’s note: The following commentary appeared on on October 16.

By Donald C. Fry

Three years ago, a report issued by business leaders at the Greater Baltimore Committee noted a “disconnect” between the private-sector and many government leaders over the issue of Maryland’s business climate.

But the philosophical gap may be closing, if recent events in Annapolis and campaign pledges from candidates for governor and the Maryland General Assembly are any indication.

“Elected leaders generally feel that our state is attractive enough to business as we are. Business leaders and economic developers contend that there is room for Maryland to be more competitive as a business location,” concluded the GBC report, Gaining a Competitive Edge, first issued to state lawmakers during the 2011 General Assembly session.

Maryland’s elected leaders have traditionally felt that the state’s many strengths as a place to do business, including a highly-educated workforce, a major concentration of research activities, high rankings for technology development, superior location and a high quality of life, are sufficient to attract businesses and to generate economic growth, the report noted.

But business and economic development leaders disagreed with that premise.

As a result, the GBC recommended that Maryland’s business climate could be strengthened by framing government policies around eight “core pillars” for job creation and economic growth that include, among other things, top-down support for business growth from elected officials, a streamlined and predictable regulatory system, a more competitive tax structure, and improved support for transportation.

After years of advocacy from private-sector leaders, the issue of strengthening Maryland’s competitiveness for business growth and job creation has been showing signs of gaining traction in Annapolis.

Last year the Maryland General Assembly passed legislation that had been long sought by the GBC and transportation advocates to increase funding for roads, bridges and transit to address the acute and escalating erosion of funding for transportation infrastructure.

This year, the General Assembly passed a first-ever joint legislative agenda for economic growth and job creation championed by Senate President Mike Miller and House Speaker Michael Busch. The two legislative leaders also created a commission to recommend ways to keep Maryland’s business climate competitive.

During the past year, compelling economic data has underscored Maryland’s sluggish post-recession growth, including federal reports showing that in 2013 our state had job growth of less than 1 percent and the second-worst gross domestic product growth rate in the nation.

Meanwhile, Maryland’s business climate rankings currently range from 18th (Forbes) to 41st (Chief Executive Magazine) with most falling somewhere in the middle, such as 27th on the recent Thumbtack small business survey.

However, a closer look at individual survey categories – which often rank Maryland high for its many strengths but low on taxes, regulations and other barriers to business growth – leads to an encouraging conclusion: Maryland is oozing with potential if we can just get our business climate right.

Now, the issue of business climate has percolated to the top on priority lists of both major candidates for governor and virtually all candidates for General Assembly.

Both Democrat candidate Lt. Governor Anthony Brown and Republican gubernatorial candidate Larry Hogan cite job creation and strengthening our state’s business competitiveness as their top post-election priorities.

Going into the November election, business leaders and candidates appear to agree, in principal, that strengthening Maryland’s business climate is fundamentally important to our state’s future. But there is much work to be done by private-sector advocates to ensure that our elected leaders retain that perspective once in office.

Toward that end, I offer the GBC’s eight “core pillars” for business competiveness – developed in a year-long series of workshops and discussion groups that included business leaders and top economic development professionals from across the state – as a framework for that needed policy perspective in Annapolis.  They are:

• Government leadership that unites with business as a partner.
• A workforce that is highly-educated and meets Maryland’s business needs.
• Regulatory policies that are streamlined, stable and predictable.
• A tax structure that is fair and competitive.
• Competitive costs of doing business.
• Superior transportation infrastructure with reliable funding mechanisms.
• Strategic and effective state investments in business growth.
• A business marketing strategy that is aggressive, coordinated, long-term, and well-funded.

It seems as if government leaders and the private sector are beginning to close the long-running “disconnect” over business climate. But campaign pledges must be converted into post-election action.

An overall objective should be to develop a shared strategy, a “Compact for Competitiveness,” endorsed by both business and government, say the GBC’s business leaders, who list tax and spending reform as the top tactical priority. Additional recommended priorities include crafting a 10-year strategic plan for transportation, investing in port and airport resources, implementing regulatory reform, and deploying a coordinated STEM strategy throughout K-12 and higher education systems.

Priorities also should include nurturing innovation and entrepreneurship, strengthening state economic development programs, implementing outcome-driven accountability in public education and leveraging business partnerships for infrastructure development.

These and other priorities for competitiveness will require strong private-sector advocacy and reinforcement after the election.

Whoever emerges victorious from the upcoming election, it’s important that they and private-sector advocates agree on a fundamental reality that elected leaders in Maryland have struggled in the past to grasp: when it comes to a competitive business climate, policy matters.

Donald C. Fry, president & CEO of the Greater Baltimore Committee, writes a monthly column for The Daily Record. His e-mail address is

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