Donald Fry: Facing the disconnect over the concept of ‘business climate’

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By Donald C. Fry

Maryland has many strengths as a place to do business. The state’s strong points include quality public schools, top-ranked universities, a highly-educated and trained workforce, a major concentration of research activities, high rankings for technology development potential, and a superior geographic location and quality of life.

Many in our state believe that businesses should, and will, locate or expand here based primarily on the merits of these significant assets.

Government leaders in Annapolis bristle at the suggestion that Maryland’s tax policy, its regulatory environment, or other policy issues could detract from our state’s substantial strengths as a location of choice for expanding businesses or for establishing operations from elsewhere into our state.

In an ideal world, that point of view might seem entirely logical. But to virtually everyone engaged in the rough and tumble world of business and economic development, the notion that strengths in technology, education, workforce, and lifestyle by themselves far outweigh other factors in the tough competition among states for business growth is, in their words, “fantasy not fact.”

That, in a nutshell, frames a continuing debate in Maryland over the concept of “business climate” and the question of how competitive is Maryland’s. 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.

As a former legislator and current business advocate, I’m familiar with both sides of what has become a chronic disconnect between our state’s government leaders and members of the business and economic development communities.

I watch as lawmakers’ eyes glaze over when advocates contend that a legislative or policy proposal is, or isn’t, “business friendly.” And I witness the frustration from many CEOs and business owners who acknowledge that state lawmakers, as a group, are well-intentioned but that they “just don’t get it” when it comes to issues that affect businesses.

The term “business friendly” has, no doubt, been bandied about for so long that it’s lost any tangible meaning for lawmakers.

It begs a fair question: what, specifically, does the private sector seek from policy makers?

That’s what the Greater Baltimore Committee set out to discover and articulate during the past 12 months as we held lengthy discussions with more than 50 prominent CEOs, executives and small business owners. We also talked with, and listened to more than 25 economic development experts, including seven former secretaries of the state’s economic development department who collectively served under four governors.

The goal was to develop a private-sector consensus of key policies that define a business environment that would give Maryland, or any state, a competitive edge as a business location.

The GBC found that almost all of what they told us fit into eight core “pillars” of a competitive business environment for economic growth and job creation:

Government leadership that unites with business as a partner. Maryland leaders must set a welcoming tone that communicates positive support for business, respect for the private sector as a partner, not an adversary, and reflects a strategic plan for business growth and job creation.
A workforce that is highly-educated and meets Maryland’s business needs. Maryland’s secondary and higher education institutions must offer access to quality instruction at all levels and cultivate a workforce that is well-suited to a modern economy and to the specific needs of Maryland’s business sectors.
Regulatory policies that are streamlined, stable and predictable. Maryland must project to businesses within and outside the state that its government regulatory policies are reasonable, relevant, free of surprises or redundancy, and considerate of businesses’ sense of urgency.
Tax structure that is fair and competitive. Maryland’s tax policy must be perceived by business as being competitive and devoid of elements that unreasonably target specific businesses or business sectors.
Competitive costs of doing business. Public policies must reflect a government predisposition to nurture business growth and to avoid arbitrarily or disproportionately imposing additional overhead upon the business sector.
Superior transportation infrastructure with reliable funding mechanisms. An essential prerequisite of a competitive business environment includes well-funded and maintained highway, transit, port and airport infrastructure that provides reliable and efficient options to move people, goods and services.
Strategic and effective state investments in business growth. The state must commit to substantive strategic investments, leveraged with capital assets, to nurture business and job growth. Investments should include competitive and effective tax credits, business development incentives, and tactical initiatives to nurture private investment in industry growth.
A business 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 strengths and the state’s assets as a place to live and work.

More details on these consensus prerequisites can be found online in a report entitled “Gaining a Competitive Edge,” issued this week by the Greater Baltimore Committee.

This list of core pillars isn’t the Magna Carta. But we hope that it will serve as a starting point for closing the disconnect that exists between business and policy makers.

We hope that it, and the report from which it is excerpted, will help generate a better-defined dialogue between Maryland’s business leaders and policy makers around the recession’s most compelling lesson: a thriving private-sector ultimately drives our economy and quality of life.

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

Previous Center Maryland columns by Donald C. Fry:

Tax commission delivers refreshing change of pace

‘Reform’ commission to mull tax increase for Maryland corporations

No tsunami in Maryland, but voters deliver ripple of transition

Why isn’t transportation infrastructure crisis on lawmakers’ radar?

Market expert tells a pre-Halloween scary story

Entrepreneurs provide inspiration in a recession

Military is driving Maryland’s anticipated biggest economic spurt in 60 years

MedImmune CEO frames bright future for bioscience

Making transportation a top-tier priority

Primary voters in a mood for transition

Reading Maryland's fiscal tea leaves

Getting beyond sound bites and bumper stickers

Biotech tax credit more popular than ever, but the ‘rock-concert’ lines are gone

Bad timing for upcoming business tax report

For economic indicators, the ‘whipsaw’ effect continues

Do census data foretell a Baltimore city population rebound?

Remember the value of business after the election

New report ranks Baltimore among stronger regions to weather the recession

New living wage proposal: wrong idea, wrong time for Baltimore

Northeast needs more attention from federal rail planners

New national report has familiar ring for Maryland bioscience advocates

New report underscores Maryland’s work force development challenges

State’s health initiative: a ‘win-win’ for employers and their workforces

As Baltimore hikes taxes, are state’s counties next?

After the ‘fiber from heaven’ scramble, what’s next?

BRAC growth no longer a future event – it’s happening now

Economic development is a contact sport

Despite the recession, bioscience growth still percolates in Baltimore

State stumbles in enacting new education collective bargaining process

Wind power has potential in Maryland, but solar emerges as early renewable option

It's not good to be clueless in cyberspace

Amid fiscal shuffle, Maryland lawmakers pass measures to spur business growth

Thankfully, Baltimore leads with substance over style in luring Google

Leave damaging transportation provisions out of the budget

Amended budget continues recession-induced fund shifts and stimulus rescue

General Assembly setting stage for combined reporting push in 2011

Wrong timing for proposal to change Baltimore City school board

Baltimore City isn’t alone in facing pension funding challenges

A government investment program that delivers

Proposed transportation fund raid -- a bad habit continues

Where's the outrage over crime?

Small business is where innovation lives
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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.