'Maryland's High-Tech Future': Still on Hold

TIM BAKER

December 09, 1991|By TIM BAKER

Four years ago this month, this page ran a series of eight columns called ''Maryland's High-Tech Future'' which I wrote with Robert C. Embry Jr. We asserted that the extraordinary scientific research base in the Baltimore-Washington corridor gave this state the opportunity to develop into a technology-driven economic powerhouse.

We argued, however, that Maryland could only capture the full economic benefits of its scientific assets if significant changes occurred. We made a number of recommendations based on studies of northern California and other areas of explosive high-tech growth.

Now's a good time for an interim report on Maryland's progress.

Those eight columns emphasized the ingredients in the mix which seem to create a high-tech high-growth economy: technology transfer, economically relevant brainpower, the entrepreneurial spirit, small innovative companies, venture capital, experienced high-tech business managers, large home- grown models of high-growth success, new state economic-development strategies, first-class school systems and outstanding higher-educational institutions.

In the last four years Maryland has seen some significant achievements in some of those areas. Johns Hopkins University and the National Institutes of Health have both taken significant strides to push science out of the laboratory and into the marketplace. UMBC's incubator and College Park's tech-transfer office have led the University of Maryland in the same direction. The Christopher Columbus Center of Marine Research and Exploration, the Maryland Information Technology Center and the Mary- land Bioprocessing Center all demonstrate that the state government has learned the importance of technology transfer.

Catalyst Ventures and Triad-Zero Stage now focus seed venture capital on Maryland start-ups. Last year, the state set up the Maryland Venture Capital Trust to support the creation of more privately managed seed venture-capital funds. Last month, the Maryland State Retirement and Pension Systems announced they would invest $15 million in the project.

Entrepreneurs have started new companies like Genetic Therapy, Medimmune, Microprose, Biotrax and ChekTech. Promising companies have grown, like Integrated Health Services, Martek, Nova Pharmaceutical and J.L. Wickham. Thirteen Maryland companies made Inc. magazine's 1991 list of the 500 fastest-growing privately-owned companies in America.

A new economic dialogue has started in the state. The Greater Baltimore Committee's High-Tech Forum has focused attention on its vision of Baltimore as a global life-sciences center. The Schaefer administration has abandoned smokestack chasing and has initiated new state strategies for supporting the biotechnology and information-processing industries.

These are significant accomplishments. Maryland has clearly changed direction. And yet. . . .

In comparison with other states, Maryland has taken a long time to move a short distance. For example, it took the stodgy state pension system four years to decide to invest even $15 million in venture capital. This is not exactly a ''bet-the-ranch'' gamble for the $12 billion portfolio. Nor is venture investment some wild-eyed revolutionary concept. Other public and private pension funds have profitably invested in venture capital for years.

The state congratulates itself as if the rest of the world has stood around waiting for us to catch up. In fact, in the meantime other states have spent more money and placed a higher priority on developing high-tech economic infrastructure.

Our new seed venture-capital funds had trouble raising $22 million. Since 1985, Pennsylvania's Ben Franklin Partnerships have invested more than $25 million every year in state venture funds and high-tech enterprises. The new Institute for Biotechnology and Advanced Molecular Medicine in Philadelphia plans to raise $100 million in venture funds to invest in local market-driven research into diagnostic products. No wonder the Philadelphia-South New Jersey region has generated 95 biotech start-ups since 1986.

Maryland remains too complacent about its economic future. Real-estate development and financial services still dominate the state's economy. In fact, during the 1980s, growth itself in a sense became the state's principal industry. The recession has exposed the vulnerabilities inherent in that preoccupation.

We have few product-oriented companies. We don't have a large, rapidly growing, market-driven technology company to play the germinal role of a Hewlett-Packard, which collaborated with Stanford, spun off start-ups and trained generations of technology business managers in northern California in the 1950s and 1960s.

The administration and the legislature have allowed the budget crisis to stop rather than merely to slow the process of building the outstanding higher-education system required by a global knowledge-based economy whose principal capital asset is now brainpower.

The state's traditional business community remains dominated by men with little experience in product companies and none in technology ones. Nevertheless, they are self-congratulatory, rather than self-critical. There's too little new blood and too few new ideas. Except for the GBC, the state's business organizations haven't emphasized the need to build the components of a high-tech infrastructure and instead concentrate on narrow business goals. Some of Maryland's largest and most profitable corporations simply ignore their home state's problems.

The full development of Maryland's potential for a technologically advanced high-growth economy takes patience. But it also demands energy, investment, determination and major commitment. In short, it's going to take a lot more than we've given it so far.

Tim Baker writes on issues of city and state.

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