Md. lost high-tech jobs in late '80s Report portrays state as slow to boost industry

November 18, 1992|By Liz Bowie | Liz Bowie,Staff Writer

While Maryland was spending less than other states to develop its high-technology industry in the late 1980s, the number of industry jobs declined sharply in the state, according to a report prepared for the Greater Baltimore Committee.

The report, distributed to members of the business community a year after it was completed, paints a discouraging picture of the local high-tech industry and government's effort to bolster what many at the time were just recognizing as integral to the region's future health.

The only star was the biotech and biomedical sector, which saw employment jump 43 percent from 1986 to 1989, the period covered by the report. But that was not enough to offset the loss of jobs in the information technologies, defense and high-tech research segments.

The scorecard, prepared by the Corporation for Enterprise Development, was intended to provide a benchmark for annual assessments to help measure the progress of an industry that the Greater Baltimore Committee and state officials have since targeted as the basis for the region's economy.

The GBC plans to issue a new scorecard by the end of this year that would be much broader in scope and update this initial study.

The report was not released when it was completed a year ago because "it was designed to be a baseline for this year's study," said Ronald A.J. Wilson, the partner in charge of the high-tech practice at KPMG Peat Marwick, an accounting firm. "So it really, in our view, had little independent significance in its first year. We didn't want conclusions to be drawn from the data."

What was clear was that "there is not a large economic impact" from the life sciences, said Mr. Wilson, who headed the GBC committee that reviewed the scorecard.

"We are behind the curve in terms of our competition," he said. But part of the problem, he said, was that the region began its efforts late, compared with Boston and San Francisco. "It doesn't mean we can't catch up or find a niche," he said.

In 1989, the high-tech industry in the Baltimore region employed 58,104 people, representing about 6.4 percent of the region's jobs.

Those figures have probably dropped since 1989, said Charles McMillion, an economist with MBG, a Washington economic consultingfirm. For instance, from August 1990 to August 1992, the number of jobs in the electronics field in the Baltimore area fell by 21 percent, he said, and the number of jobs in companies that make precision instruments, such as medical or defense-related products, fell 28 percent.

But there might be some good news in the industry, according to Michael A. Conte, of the Jacob France Center for Business and Economic Studies at the University of Baltimore. The most important job-generating industry from 1988 and 1990 was research and testing services, which grew by 2,600 jobs in Maryland, and includes biotechnology firms that service federal labs in the Baltimore-Washington corridor.

Statistics from the GBC scorecard also did not include the thousands of jobs in research institutions. Although the research from those institutions is considered one of the region's most important strengths because it holds promise for commercial development, the report said that little transfer of the technology out of the laboratory had occurred.

The GBC noted that the state spent at least half the money it invested in the high-tech industry on basic research, such as the Maryland Biotechnology Institute, rather than on joint industry-university research, which has been the typical investment strategy for states.

In addition, state per capita spending on high-tech lagged significantly behind that of other regions.

Some of the major findings of the scorecard included:

* The number of adults with high school and college degrees was below the U.S. average, although Baltimore had an above-average number of science and engineering technicians. "The low level of basic skills may constrain the future growth of the high-tech industry in the Baltimore region," the report said.

* Baltimore's high-tech sector was heavily concentrated in the defense and aerospace and high-tech research industries, which declined in employment over the three years.

* The level of research at universities was five times the national average and 2 1/2 times greater than regions that the city competes with to attract high-tech firms. But the level of research and development in its companies was below average.

* Average wages in the high-tech industry in Baltimore were $36,106 in 1989, 80 percent higher than the average wages across all other jobs.

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