The ranking game: a matter of perception Business climate in Md., Baltimore gets mixed reviews

November 04, 1990|By David Conn

The reviews are in: Inc. and Money magazines say we're worth a look. Two thumbs up from World Trade magazine. Financial World thinks we're the best. Fortune magazine liked the earlier version better. Grant Thornton, the accounting and consulting firm, and Cushman & Wakefield, the real estate company, panned us.

And just exactly what does this all prove? It proves that just about any city or state, no matter how dynamic or dreary its business environment, can find a good review somewhere.

That's not to say that the business climate in Baltimore or Maryland is pathetic. For instance, World Trade, a California-based monthly, said in its August/September 1990 issue that Baltimore is one of the 10 best cities in the nation in which to locate an international company.

Credit goes to the city's port, its "well-traveled Rhodes scholar" mayor, its "brainy labor force," Baltimore-Washington International Airport and, as one local businessman is quoted as saying, the fact that Baltimore is a "hell of a lot cheaper than New York and within hollering distance of Washington."

Inc. magazine's March 1990 issue said Baltimore is the 23rd most entrepreneurial city among 192. Last year it came in 35th in the survey, which rates cities on the basis of new businesses, job creation and percentage of young companies with high growth rates.

By the same token, no matter how loudly development officials rave about their hometown, there's a critic out there with a different opinion.

Grant Thornton, an accounting and consulting firm, ranks the states each year according to their manufacturing climates.

Not only did Maryland not make the list of 29 "manufacturing intensive" states this year, it came in 16th among the 21 low-intensity manufacturing states in the survey released in June. Last year the state came in 11th among the 21 low-intensity manufacturing states.

Low-intensity states are those which contributed less than 2 percent of the value of the nation's manufacturing shipments for the last four years, and those with less than 16.4 percent of their workers engaged in manufacturing.

"Obviously, we don't like the Grant Thornton study," said J. Randall Evans, Maryland's secretary of economic and employment development.

He said the study "has focused on the issue of costs and not so much the issues of quality."

People comparing Maryland with a lower-cost state such as North Dakota, which was first on the list of low-intensity states, should bear in mind that "you get what you pay for," Mr. Evans said.

Maryland officials have less to criticize in Financial World magazine's April 17, 1990, edition, which labeled the state the best managed financially. "Generally top-notch, competent management," the magazine crowed.

Because of their popularity, the surveys get the attention of economic-development officials.

"Yes, we take them seriously," Mr. Evans said. "And when we find criticisms or flaws that we think are valid, we try to make


Three years ago, for instance, the Corporation for Enterprise Development gave Maryland low grades for a general lack of access to money for start-up businesses.

The result, Mr. Evans said, was the Maryland Venture Capital Trust, a state fund the Maryland General Assembly created in its 1990 session to invest in venture-capital companies that finance new companies, mostly in Maryland.

The Corporation for Enterprise Development since has given Maryland straight A's for its business-development climate.

When criticisms are perceived as unfair, Mr. Evans said, his office does what it can to counteract them.

Two years ago, for instance, Money magazine called Maryland "a tax hell" compared with most other states but failed to subtract the "piggy-back" income tax from the level of state taxation.

The piggy-back tax is the local tax that Maryland collects for, and distributes to, the counties and Baltimore City.

Money refused to retract its evaluation, but Readers' Digest agreed not to reprint the article after Maryland complained about it, Mr. Evans said.

In its "Best Places" survey this September, however, Money ranked Baltimore 39th out of 300 cities, up two notches from last year. The magazine looked at factors such as health, crime, weather, economy, transportation, leisure and arts.

Fortune, in contrast, apparently sees a Baltimore in decline. Last year, the city was among the magazine's top 10 places in which to do business, but this year Baltimore was dropped from Fortune's list of top 10 labor markets.

The magazine's Oct. 22 issue did say that Baltimore's labor costs are "lower than in many Northeastern and Midwestern cities, making the area attractive if it's important to locate your business in the New York City-Washington corridor and gain access to a highly skilled labor force."

But the magazine criticized Baltimore for its education problems and noted that its students' Scholastic Aptitude Test scores trail those in the suburbs by almost 200 points.

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