Donald Fry: Competitiveness should be at the top of lawmakers’ priority lists

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By Donald C. Fry

For Maryland businesses and private-sector advocates who promote economic growth and job creation, the definition of a good business climate boils down to one word: competitiveness.

Two years ago, the Greater Baltimore Committee launched an ongoing initiative to articulate for Maryland’s elected leaders the basic elements of a competitive business climate. Eight core pillars for business growth were identified by the GBC through a year-long series of focus groups and feedback sessions with more than 50 Maryland CEOs and economic developers.

The eight core pillars detailed in a GBC report, “Gaining a Competitive Edge,” are:

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

The GBC has promoted these core pillars to lawmakers as the framework around which to build a strategic plan for economic growth and job creation in Maryland. And these days it is a positive sign that virtually all elected leaders in the State House profess a commitment to job generation.

However, a disconnect still exists in Annapolis. A GBC analysis of votes during the 2012 session on a dozen key bills impacting business showed that half of the votes by individual state delegates and senators were cast against policies that reflect the core pillars for competitiveness.

For Maryland to fully realize its potential for economic growth and job creation, policy makers in Annapolis must keep competitiveness at the top of their agenda. They must develop a better sense of what the basics of good policy for a competitive business climate look like and, in the budget process, strategically leverage operational appropriations and capital investments to ensure Maryland’s competitive strength for future success.

Key issues on the legislative agenda for the GBC and business advocates in 2013 include:

• Transportation. Maryland’s transportation infrastructure is a critical asset for economic competitiveness. But stagnant revenue to the state’s Transportation Trust Fund and lawmakers’ inability to adequately address this funding crisis during the last two decades has led to projections by state fiscal experts that, as early as 2018, Maryland will have no funds available for new projects beyond system maintenance.

Lawmakers must address this compelling and urgent need to increase funding for transportation infrastructure and to enact measures to protect that funding from being used for other purposes.

They must pass “firewall” legislation to restore the public’s trust that new revenue to the state’s transportation fund will not be raided by lawmakers for other uses – even temporarily- except in extraordinary circumstances. Lawmakers must also modernize the way the fund’s revenue is generated so that needed projects for roads, bridges, transit, port and airport are adequately funded. In addition to a significant infusion on the revenue side for needed transportation projects any long term strategy should include options such as enhancing public-private partnerships opportunities, mechanisms for achieving balance in using gas-tax revenue for urban and rural community needs in Maryland, and fast-tracking Maryland Department of Transportation approval processes and the construction timeline of infrastructure projects.

• Education. The relationship between robust economies and a highly-skilled workforce is a well-documented element of a competitive business climate. Public policies must foster educational excellence and be responsive to the specific needs of Maryland’s business sector. Such policies should promote learning systems in primary and secondary schools that provide a strong, knowledge-rich foundation that integrates science, technology, engineering and mathematics (STEM) into education.

Education policies should promote the expansion of quality charter schools in Maryland and a sustained investment in higher education programs and expanded learning opportunities for larger segments of the population, including opportunities at community colleges. They should also promote innovative approaches to education delivery that incorporate job training skills and that emphasize career development strategies.

• Bioscience and technology. Maryland is home to more than 500 core bioscience companies, representing approximately 8 percent of the U.S. industry – the second-largest cluster (per capita) in the U.S. – and fourth overall in “core biotechnology” companies.

Maryland should increase the biotech tax credit from the existing $8 million to $15 million as suggested by the state’s Life Sciences Advisory Board. Financing initiatives for early-stage biomedical and medical technology companies should be promoted and full funding should be restored for the Maryland Industrial Partnership (MIP), which has funded 472 product-development collaborations between Maryland companies and University of Maryland faculty.

• Broadening the economic base. The GBC supports policies that open doors for small, minority-owned and women-owned businesses that are playing an increasingly important role in the continued expansion of Maryland’s economy. Use of MBEs for procurements by state agencies should be encouraged and promoted.

Funding for the Department of Business and Economic Development (DBED) should be increased to ensure resources are available to expanding Maryland businesses and others seeking to locate in Maryland. DBED programs such as the Maryland Small Business Development Financing Authority, and the Venture Fund should be aggressively funded.

• Health Care. Lawmakers should support policies to increase employee wellness programs that focus on chronic disease prevention and promote good health in the workplace. Corporate wellness programs benefit our economy by reducing workforce health care costs, reducing absenteeism and increasing productivity. Meanwhile, lawmakers must oppose measures that would restrict scientific research and stifle job creation in the health care industry.

• Energy. Safe, reliable and clean sources of energy are critical to the future economic growth and quality of life Marylanders. The General Assembly needs to enact legislation to address the growing demands for alternative energy sources – wind, solar, and nuclear and other energy sources – and to ensure efficient and cost-effective delivery of alternative energy.

Maryland must cultivate more stable and predictable regulatory policies that balance legitimate environmental concerns while allowing projects to move forward in a competitive and open manner. In addressing our growing electricity and energy challenges, it’s important for state lawmakers to resist re-regulation as a popular solution that may be politically appealing in the short-term, but creates long-term negative unintended consequences.

These are just a few examples of how a focus on competitiveness could be translated into policy.

Maryland has significant strengths as a place for business development and growth. They include outstanding education resources, a major concentration of research activity, a highly-qualified workforce, an exceptional quality of life and the major advantage of our state’s midway location in one of the world’s biggest consumer markets – the densely populated U.S. East Coast.

But these strengths cannot be taken for granted in Annapolis. They must be augmented and built upon for Maryland to be optimally competitive and to take full advantage of its tremendous potential for economic growth.

During any legislative session, lawmakers are called upon to make important decisions, often in a hurry, in an arena characterized by conflicting agendas and complicated issues. This is why it’s vitally important for our elected leaders to develop a keen sense of what constitutes a competitive business climate and to act on it.

Donald C. Fry is president and CEO of the Greater Baltimore Committee. He is a regular contributor to Center Maryland.

Recent Center Maryland columns by Donald C. Fry:

Community spirit: it’s alive and well in Baltimore’s business sector

Two agencies offer roadmap to competitiveness

State funding for new roads approaching zero

A significant step forward looms for Red Line

Minority and women business achievers show entrepreneurial spirit

Sailabration showcased Baltimore’s ‘fun’ potential

Are Maryland’s regulatory rankings about substance or process?

Transportation budget process: a tale of backlog and irony

CSX intermodal facility: Mayor, Governor to the rescue
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Donald C. Fry has been the president and CEO of the Greater Baltimore Committee (GBC), the central Maryland region's most prominent organization of business and civic leaders, since November 2002.

Under Don’s leadership, the GBC is recognized as a knowledgeable and highly credible business voice in the Baltimore region, Annapolis and Washington, D.C. on policy issues and competitive challenges facing Maryland. Its mission is to apply private-sector leadership to strengthening the business climate and quality of life in the region and state.

Fry served as GBC executive vice president from 1999 to 2002. From 1980 to 1999 Fry was engaged in a private law practice in Harford County. During this time he also served in the Maryland General Assembly. He is one of only a handful of legislators to have served on each of the major budget committees of the General Assembly.

Serving in the Senate of Maryland from 1997 to 1998, Fry was a member of the Budget and Taxation Committee. As a member of the House of Delegates from 1991 to 1997 Fry served on the Ways and Means Committee and on the Appropriations Committee.

Fry is a 1979 graduate of the University of Baltimore School of Law. He earned a B.S. in political science from Frostburg State College.