By: Donald C. Fry
While Maryland’s recent two-place drop to 29th in CNBC’s 2011 “Top States for Business” gained media coverage in this publication and elsewhere, these and other rankings serve not only to gauge economic development challenges facing our state. They also illustrate the vagaries of measuring and communicating perceptions of a state’s competitiveness as a business location.
CNBC’s report is one of dozens of rankings published each year by news organizations, academic institutions and policy-related nonprofits. For the record, Maryland’s neighbor competitor, Virginia, ranked first overall on the 2011 CNBC report.
Last year, Maryland’s overall rankings in such reports ranged widely from 3rd to 45th, depending on the criteria and the weight assigned to criteria. Business climate rankings vary so much because no two sets of criteria used by any of them are alike.
The CNBC report, for example, measures 10 categories, assigning the highest weight to cost of doing business as measured by tax burden and key operating costs, workforce quality and availability, and quality of life.
Other CNBC categories, in order of their weight, are infrastructure and transportation, economy, education, technology and innovation, legal and regulatory “business friendliness,” access to capital, and cost of living. Technology and innovation – a major strength for Maryland – is assigned less than two thirds the weight of workforce, for example. Cost of living is assigned only a seventh of the scoring weight of any of the three highest-weighted categories.
Maryland’s top CNBC category rankings were technology and innovation (10th), education (11th), economy (12th), and access to capital (12th). Its lowest rankings were for cost of living (44th), cost of doing business (39th), infrastructure and transportation (39th) and, surprisingly, workforce (38th).
So, what’s to make of all this?
The truth is, Maryland shouldn’t focus on how it ranks on any particular survey. But what we can, and should, do is decide specifically what we want to be as a competitor for business location and expansion.
Last year, the Greater Baltimore Committee distilled eight months of focus group discussions with business leaders and economic developers from around the state into eight core pillars for a competitive business environment and job creation.
Core pillars included 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 included superior and reliably-funded transportation infrastructure, strategic state investments in business growth, and an aggressive, well-funded state marketing strategy to business.
When you get right down to it, the ultimate mission of government leaders and policy makers in Maryland is not to score well on national surveys. It’s to nurture job growth. It’s to ensure that solid strategic policies are in place – whether based on the GBC’s core pillars or other bedrock economic principles – to generate economic growth, jobs, and a continuing high quality of life.
If we can manage to do that together, the rankings will take care of themselves.