State report outlines ways to develop high-tech industry

December 03, 1992|By Liz Bowie | Liz Bowie,Staff Writer

Maryland should stake its economic future on the high-tech industry by making a beleaguered manufacturing base more competitive and by capturing the wealth of the state's scientific discoveries, according to a state report released yesterday.

While the strategy does not set any new direction for the state, which has supported a life sciences initiative for several years, it does make specific recommendations on how to get there. It also commits the state further to a long-term economic course that is intended to make it less susceptible to recessions.

"We would like the Maryland economy never to be caught in the switches again," said Mark L. Wasserman, secretary of the state's Department of Economic and Employment Development (DEED), which has been the primary state agency behind the initiative.

Mr. Wasserman said at a news conference yesterday that he expects some of the recommendations to be followed by proposed legislation or initiatives from the governor's office in the next month. The strategy is also supported by the state's regional technology councils and the Maryland Business Council.

"This document provides the predictability and stability that companies want to make long-term investments," said Walter Plosilla, president of the Montgomery High Technology Council.

State officials acknowledged that though the biotechnology and information-technology industries have grown more rapidly in the past decade than other sectors, they are still suffering from a lack of capital, unfavorable tax laws and a tight banking climate.

Perhaps the major roadblock to getting the state's relatively small biotechnology industry growing, they said, was trying to mine the resources of the federal and university laboratories in the region. The state has 61 laboratories, including Johns Hopkins University, which is one of the largest recipients in the nation of federal medical research dollars, and the National Institutes of Health, which has spun off billions of dollars' worth of new inventions.

Until recently, the University of Maryland system and Johns Hopkins have not aggressively tried to turn the laboratory discoveries and inventions into new companies based in Maryland.

Traditionally, the academic and business communities have viewed each other with suspicion.

"There has been a lack of relationship and rapport," said Donald Hutchinson, president of the Maryland Business Council, adding that DEED could help pull the two sides together.

The state also spends more than $10 million a year to fund four biotechnology research centers in the state, which have been criticized for not emphasizing economic development enough.

As part of the new strategy, the state said it would like to see more direct links between the biotechnology centers and industry and a requirement that they match state money they get with industry money.

The state also wants to create an institute modeled after one in Massachusetts that has successfully formed 14 companies in the past several years. The institute would pick promising scientific research and inventions that were close to commercialization and provide seed capital to start new companies.

The strategy also recommends that the state:

* Provide support and modest grants to encourage banks to set up economic development corporations to provide technology and manufacturing companies with funds needed, for example, to build a factory or for working capital.

* Review the state's tax structure and regulations to find ways to encourage technology companies to grow. Companies have complained, in particular, about the effect of personal property taxes on their research and development laboratories.

* Emphasize science and math from the first grade through college. The local work force does not have the technical expertise to support a new industry, executives say.

The strategy also says that existing manufacturing companies need state assistance in trying to retool with new technology to become more competitive.

State officials pointed to a $1 billion contract that Martin Marietta won recently as an example of how modernizing an industry can benefit the state and the dozens of small private companies that supply companies like Martin Marietta.

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