Md. High-tech Firms Grow Despite Labor, Financing Shortages

October 07, 1991|By From Staff Reports ... HC

The high-technology industry in the Maryland suburbs of Washington is continuing to grow despite difficulties in finding workers and financing, according to a survey released today by the Greater Washington Research Center.

Three-fourths of the companies -- located in Montgomery, Prince George's and Frederick counties -- said their revenues increased over the past two years by an overall 27 percent.

That increase was roughly twice the pace of federal research and development spending, according to George Grier, who led the survey as senior associate at the research center.

And despite their proximity to Washington, less than half of the companies received a majority of their revenues from federal contracts. More than a third received no federal money.

"Clearly, they must be doing something right," Mr. Grier said of the 224 companies that responded to the survey. "It's a very dynamic industry."

Nearly half the companies said they had introduced a new product or service in the past year, and nearly one in five expanded overseas. More than 60 percent of the companies added employees between 1988 and 1990, the survey found.

The survey, which was conducted over the summer, found that 84 percent of the companies were privately held. Two-thirds were involved in information technology, and nearly one in five were in the biotechnology industry.

But the growth belied some problems, according to the report.

More than half the high-tech companies surveyed said they had trouble finding skilled workers. And most gave the public schools in their area low marks for preparing students for work.

Of the 20 percent that attempted to raise venture capital in the past year, nearly two-thirds said they had been "totally unsuccessful."

In addition, among the companies that tried to finance the purchase of land or buildings for expansion during the year, 62 percent regarded the experience with their commercial bank as negative.

Mr. Grier said among the most troublesome findings was the lack of money for these growing firms. "There's no better way to choke off the growth potential for the firm than not to have capital for expansion when you have a new product."

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