Thursday, November 10, 2011
Maryland’s Competitiveness: Where We Lead, How We Lag
M&T Bank’s Regional Economist Gary Keith discussed Maryland’s economic competitiveness during last week’s Business Policy Conference. His presentation focused on the Maryland’s strengths and weaknesses from an economic development standpoint – where we lead and how we lag.
When it comes to economic competitiveness, all states have positive and negative attributes. From a public policy perspective, Keith said it’s important for Maryland to accentuate the strengths and address the weaknesses.
“Despite where we rank, pro or con on these things, we have to be adult enough to know that our economy here is a unique economy and not be afraid of that uniqueness. We need to embrace it and accentuate the fact that Maryland’s economy has something different that many other states would love to have,” Keith said.
He seemed cautiously optimistic about Maryland’s economic future, largely because of the state’s workforce. He said that Maryland should continue to focus on its workforce because the states that are going to succeed are the ones with the educational and professional horsepower to reinvent themselves on an ongoing basis. Moving forward, he said it’s important that Maryland maintain a workforce with the ability to adjust to meet the needs of a changing economy, and the changing needs of businesses as they work inside the economy.
“What’s really managed to generate the activity in the country and move the country forward is what I’ve termed ‘High Value Added Services,’” he said. “That’s information technology; professional, scientific and business services; health care; and education. If you take what we do in this state relative to those sets of concepts, we’re very well positioned in terms of the structure of our economy here relative to other states.”
While Maryland’s growth has exceeded the national average in recent years, he said momentum had faltered in recent months. The looming federal budget cuts could also hinder near-term economic growth. In addition, given the current economic climate, Maryland should carefully consider the areas where it is weaker competitively, like business costs, tax burdens and regulatory environment.
“Business costs are always an impediment, but more so in an economy such as we’re in right now,” Keith said. “With the inability to raise prices, costs have become the biggest lever that businesses look at. We have to make sure the policies formulated today have an impact, or at least a thought process behind them, that touches on cost competitiveness of Maryland. That is not just direct dollar cost, but also opportunity costs seen from the regulatory infrastructure.”
View the presentation Keith presented during last week’s Business Policy Conference here: Maryland’s Competitiveness: Where We Lead, How We Lag.
