The state has a new campaign to retain and attract business but is it enough?
Standing confidently in the brightly lit dining area of his Volt Restaurant, co-owner and television "Top Chef" finalist Bryan Voltaggio faces the camera, as a block of text beneath asserts: "Living here isn't everything, it's the only thing."
A final statement goes on to describe how Maryland contributes to businesspeople such as the Frederick restaurateur, by having the "best schools, finest hospitals, highest incomes" and, of course, "top chefs."
Voltaggio is one of the business stars featured in the Maryland Department of Business and Economic Development's latest marketing campaign. The MaryLand of Opportunity campaign represents the department's cultural shift from using its internal expertise to sell the state to using the voices and stories of the state's businesspeople.
But while the department fights for the resources it says it needs to keep its marketing efforts in the spotlight, some business leaders question whether those efforts are enough to retain current companies and lure new ones.
"Maryland has 49 predators ... trying to seize our gazelles the fastest-growing companies," said Georgette "Gigi" Godwin, president and CEO of the Montgomery County Chamber of Commerce. "We think Maryland could be doing more, but we cannot underestimate how determined these predators are .... We have to guard against being complacent."
She said the DBED campaign is only one of the many steps Maryland must take to attract businesses and grow its tax base.
"In our experience, word-of-mouth marketing is often most influential, and local professionals frequently discuss business issues in person and via social media," M. Richard Adams, president and CEO of the Frederick County Chamber of Commerce, said in a statement. "Right now, taxes are a major concern for businesses, and recent reports show that Maryland's ranking is not favorable when compared with other states."
Showcasing state's attributes
"The story of Maryland business is best summed up with location, innovation and education," said Andrea Vernot, DBED's assistant secretary for marketing and communication. "We are a land of opportunity, and we want to showcase why."
Vernot stressed the state's enviable proximity to Washington, as well as the presence of many federal agencies, such as the National Institute of Standards and Technology in Gaithersburg and NASA's Goddard Space Flight Center in Greenbelt. She also pointed to Maryland's well-known institutions of higher education, such as the University System of Maryland and Johns Hopkins University.
"We're working to solve tuberculosis and find cures for cancer," Vernot said, referring to the state's innovation strengths, which play well off the universities.
She also added that Maryland's highly educated work force helped keep the state's unemployment rate lower than the national average during and since the Great Recession.
"There was no better time to have a more proactive campaign," Vernot said, emphasizing that her department works to capture all these attributes in its latest marketing efforts.
The MaryLand of Opportunity campaign reaches an estimated 12,000 people daily through conventional advertising, such as business publications and outdoor transit displays, and digital media, although DBED lacks the budget to pay for as many placements as it has in the past, Vernot said. The department spent $1.2 million in earned media placements in fiscal 2010, increasing its mailing list subscribers from 5,000 to 18,000.
More than marketing needed
While business leaders generally approve of DBED's direction, they urge that more must be done to make Maryland competitive.
"Maryland needs a sustained, consistent campaign or message displayed about the assets the state has, with respect to why businesses should grow here," said Donald Fry, chairman of the Greater Baltimore Committee.
The committee released a report in December that called for eight "core pillars" for business growth, highlighting the need for a business marketing strategy that is aggressive, coordinated, long-term and well-funded.
Fry said DBED has shown improvement in the past year and a half, but the department must continue to help key policy figures recognize the value of marketing Maryland's business community and fight budget cuts.
"This is a good foundation," he said, "but we need a consistent message so companies realize these campaigns aren't just quick hits."
M.H. Jim Estepp, president and CEO of the Greater Prince George's Business Roundtable, said the state's biggest hurdle is a perception that it is not as "business-friendly" as others in the region. Because of this, Estepp said the legislature should not introduce bills that burden the business community. Even if certain bills are not passed, their time in the spotlight can be enough to deter businesses, he said.
"This is a competitive thing. Virginia will beat the pants off us if we don't work hard," Estepp said.
He also emphasized the strong outreach efforts by DBED Secretary Christian S. Johansson and the efforts of Comptroller Peter V.R. Franchot (D) to embrace business interests.
When it comes to its business climate, Maryland remains a blank slate to some businesspeople. A 2008 survey by Development Counsellors International in New York found that among 181 executives surveyed, Maryland was seen as most favorable by 0.5 percent and least favorable by 1.6 percent, compared with Virginia's 5.8 percent and 0.5 percent, respectively.
Against such a backdrop, marketing campaigns can help show a state's assets, said Andrew Levine, president of the organization. Development Counsellors International works with 400 jurisdictions nationwide to focus on economic development marketing.
The organization's surveys show a capable work force is the No. 1 factor in a company's decision to locate, with overall operating costs No. 2, Levine said.
Emphasizing the positive
Emphasizing positive assets such as Maryland's educated work force can help offset the areas where the state still struggles, such as its tax and regulatory structure, said Kathleen T. Snyder, president of the Maryland Chamber of Commerce.
In comparison to Virginia, Maryland has higher corporate taxes, combined sales taxes, real property taxes and combined income taxes, according to an Ernst & Young study issued by the chamber. In some cases, the difference is as much as 2 percentage points between the states, according to the study.
Snyder said she has been glad to see DBED working with other agencies to streamline state regulatory processes, such as the time it takes to secure construction approval.
"We need to be able to say Maryland is open for business," she said. "Public policy has to be made with an economic focus in mind."
Richard Parsons, president of Parsons & Associates in Derwood and former president of the Montgomery Chamber of Commerce, argued that a company's location decisions are influenced more by the business climate than marketing efforts.
"The state does a good job marketing our attributes, but where we need to work is improving our business climate," he said. "Companies have to decide if our work force and proximity is worth spending the extra time and money."
Parsons also questioned whether Maryland has the resources to put into its marketing strategy.
Companies hire site location consultants to study overall costs, said Greg LeRoy, executive director of Good Jobs First, a corporate and government accountability organization in Washington. He said these consultants rarely pay attention to marketing.
"As long as Maryland is perceived as a state that taxes its citizens higher than neighboring states and one with a negative regulatory climate, we will continue to lose to others," said Ellen Sauerbrey, chairwoman of Maryland Business for Responsive Government in Towson. "No matter what campaign we wage, those businesses considering location have people that specialize in looking at these factors."
But LeRoy also acknowledged the value of marketing in tempering perceptions of a jurisdiction's business climate. Campaigns, such as DBED's, that involve business leaders addressing their peers can be particularly effective, he said.
DBED goals for 2011 include to:
-Create a statewide public-private funding collaborative (CyberMaryland Marketing Consortium) to develop and mount an aggressive 18-month marketing campaign to: brand Maryland as the nation's epicenter for cybersecurity; and elevate Maryland's profile as national hub for information security, cyber and defense employment opportunities and education
-Launch and promote "Maryland Made Easy," an ongoing effort to communicate state's initiatives to streamline regulations, simplify processes and provide accessible, predictable and transparent information on doing business in Maryland.
-Utilize the BIO International Conference in Washington, D.C., in June to elevate Maryland's identity as a world class hub of biotechnology and life sciences through a sustained promotion, public relations, outreach and advertising.
-Unveil "Business of Space," a research-based analysis of Maryland's space and satellite assets; develop communications plan to address report recommendations.