Donald Fry: Maryland funding for DBED lags behind competing states

By Donald C. Fry

Ohio’s commitment to spending $1.4 billion on economic development this year to revive its economy raised some eyebrows. It attracted a spate of media coverage and sparked a debate among policy experts over whether these new fiscal resources, driven by a massive increase in bonding authority for business development, would be successful in jump-starting business growth.

The scale of Ohio’s financial commitment to economic development is what made it news. It “appears to be the biggest intervention in the private economy by a state government since at least the Great Depression,” reported USA Today in an April article.

Ohio’s new $1.4 billion economic development budget dwarfs the amounts that other states, including Maryland, budget for their economic development departments. For example, it’s 14 times more than Maryland’s FY 2012 economic development operating budget for a state that has only twice the population of our state.

I’m not suggesting by any stretch that Maryland should increase its economic development budget 14-fold.

But the issue of how Maryland funds its business marketing agency – The Department of Business and Economic Development – was raised by participants in a series of Greater Baltimore Committee focus groups on business competitiveness that included more than 50 Maryland CEOs, entrepreneurs, and experts in business development and retention.

One of the consensus eight core pillars for job creation and economic growth developed by the focus groups addresses the issue.

Core pillar: A marketing strategy that is aggressive, coordinated, long-term, and well-funded. Success breeds success. Competitive states celebrate their businesses’ achievements by investing in comprehensive communication and promotion to internal and national audiences of business successes and the state’s strengths as a place to live and work.

Marketing our state also involves strategic planning. “Anticipating how we take advantage of future opportunities is an essential component to a competitive business marketing strategy,” said GBC study participants.

Some participants thought that Maryland hasn’t been able to brand itself aggressively enough. One participant in a brainstorming session even suggested a branding slogan along the lines of “Come to work, stay to play.”

Maryland’s current branding tagline is “Maryland: Land of Opportunity.”

At DBED, the mission of marketing our state as a business location goes beyond slogans, as it should.

Good communication starts with listening – to business owners, managers and entrepreneurs and then developing resources for businesses to draw upon to help them grow. It involves communicating information about these resources and about our state’s many strengths to small and large businesses that are already here, firms elsewhere seeking to expand, and to visitors to our state.

Part of the challenge for any state seeking to strengthen its marketing efforts is the inherent contrast between the nature of government and the marketing exercise itself. Legislative bodies are set up to deal with the present – this year’s budget – and with the immediate future – next year’s budget.

Marketing focuses on the future. Long-range planning is something that governments, including Maryland’s, struggle with, particularly when it comes to funding things. Legislatures have difficulty appropriately matching funding to long-term priorities.

Just a small, overly simplistic example comes to mind. Virtually all Maryland lawmakers have pledged to make job creation their top priority. And, reflecting that, Governor Martin O’Malley’s web site lists “creating and saving jobs” as the state’s top priority.

Yet DBED’s $93.9 million FY 2012 operating budget is dwarfed by the more than $574 million currently budgeted for the operations of Maryland’s two top regulatory agencies – the Department of Labor, Licensing and Regulation and the Department of the Environment, according to state data

Another way of putting this is: Maryland budgets six times more money for agencies that regulate businesses than for the agency that promotes business growth and markets our state as a business location.

I understand that there are many operational and logistical reasons for these budget levels, but I’m only asking the question: Does this funding ratio accurately match our elected leaders’ priorities?

Also, getting back to the GBC study’s core pillar for economic development marketing, does this level of financial resources qualify as “well-funded?”

Among seven Mid-Atlantic competitors, Maryland’s funding for economic development ranks ahead of only Delaware, a state with one-sixth the population of Maryland, according to the Council for Community and Economic Research’s state expenditures database.

During the last four fiscal years, DBED’s budget has been reduced by 20 percent. Admittedly, they were recession years. But Maryland’s general fund budget increased 8 percent during those years.

DBED needs to be consistently well-funded to have an impact and its marketing plan needs to be coordinated and long-term, said members of the GBC focus groups. The experts agreed that, despite the challenges of a reputation as a high-cost state “Maryland has significant advantages, including location and education. We should promote these things to keep an edge, use these to our advantage,” said a former DBED Secretary.

It’s encouraging to note that, despite significant budget limitations, DBED is currently showing creativity and smart use of technology in marketing the state. The agency manages an aggressive social media plan and takes full advantage of Twitter, Facebook, LinkedIn, Flickr, blogs and e-newsletters.

It recently launched its fifth targeted e-newsletter – The CyberPulse. DBED has also formed unique partnerships, leveraged advertising dollars, and ramped up its public relations program.

To combat what some consider as uneven business news reporting, DBED has launched its own in-house news reporting.

The department is not without business development resources and talented professionals to pursue its mission. But given the tenacious recession, our lawmakers should consider finding a way to more proportionately fund the department’s business development and marketing efforts.

Granted, government programs cannot themselves force our state’s economy to grow. In the current precarious state of our economy, there are no guarantees of success.

But strengthening government investment in nurturing and marketing business growth is a much more preferable approach than the alternative – doing nothing.

Donald C. Fry is the President & CEO of the Greater Baltimore Committee. 

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