State turns to promotion with economy in better shape

January 24, 1999|By Jay Hancock | Jay Hancock,Sun Staff

To fix or to flack? To patch or to peddle?

It's the marketer's dilemma. In a world of limited resources, should you massage the product to perfection and hope it sells itself? Or drill the ad campaign and worry about quality when you get the chance?

In selling Maryland as a business address, packaging is starting to get as much attention as product. Some would say more attention.

"I thought to myself, where is the marketing element of the department? And I came here to find that it was fairly low, among the various agendas," said Richard C. Mike Lewin, Maryland's new secretary of the Department of Business and Economic Development.

Lewin wants the legislature to drastically beef up his advertising budget, which he says is less than a fifth the size of Virginia's and barely a tenth the size of North Carolina's.

At the same time, the Greater Baltimore Alliance, a regional development organization, is also talking loudly about promotion.

"Maryland has a tremendous amount of competitive assets," said Keith Watkins, the alliances's vice president of corporate locations. "Its only challenge is, how do we package those assets and comprehensively sell them to the proper audiences?"

This is a different tack for Maryland's business leaders.

Four years ago, when the state was badly lagging behind the country in job growth, the debate was about how to repair fundamental business problems. Cut taxes. Ease permitting problems. Reduce regulations.

Now, as Maryland has caught up with the national performance, the sizzle is getting as much attention as the steak.

To be sure, Lewin talks about the need "to improve what we offer businesses and tell our story simultaneously." But he signals a basic change in style from predecessor James T. Brady, whose instinct was to constructively criticize first and attend to public relations later.

Many in the business community believe the initiatives will help.

"You have some good news going on," said Richard Clinch, program manager of the Maryland Business Research Partnership, an analysis group. "You have the alliance going out there and putting the Baltimore brand name out there. The state has been fairly anemic in its funding for marketing support. Maryland had not been a particularly effective marketer of itself."

But at the same time, concerns linger about Maryland's competitiveness in luring and retaining businesses. And some fear that the current economic good times and Lewin's concentration on publicity will cause state leaders to ignore what are perceived as continuing, fundamental flaws.

"I don't want to be abrupt and dismissive with regard to his intentions," said Robert O.C. Worcester, president of Maryland Business for Responsive Government. But, he added, "they market the state irrespective of addressing the underlying business problems. That's what's going to happen coming out of Annapolis. And that's what's going to happen coming out of the Greater Baltimore Alliance. We've been there. Done that. Somebody lost the file folder on it."

Worcester also criticized Gov. Parris N. Glendening's continuing promotion of the unionization of state workers.

"The signal that this sends out is that this is clear evidence that big labor dominates the public policy of this state," he said.

Many business groups believe Maryland needs to continue lowering its personal income taxes, clear out the welter of state and local business regulation and work hard to improve the quality and quantity of Maryland workers.

"The hardest sell, the one that's going to be the toughest to focus the legislators on, is the need to make continuous reductions in the personal income tax," said Champe McCulloch, president of the Maryland Chamber of Commerce.

But Worcester and McCulloch say that Maryland is better for businesses than it was four years ago. Lewin counts 17 business taxes that have been reduced or eliminated over the past four years, and McCulloch praises the Maryland Occupational Safety and Health agency as being much less difficult to work with.

"MOSH is probably the one that most people would point to," he said. "MOSH is not pointed to as a problem anymore."

In an interview, Lewin agreed that excessive, overlapping or contradictory regulations are still a problem in Maryland. And he promised to continue making the permitting process easier.

"We're ready to start a major effort on regulation analysis leading to regulation reform," he said. But the biggest problem for Maryland's business climate, almost everyone agrees, is one that many states face: the lack of skilled workers to help employers needing them.

"Businesses still have concerns about tax levels in Maryland," said McCulloch. "They still have concerns about our overabundance of regulatory zeal. But if you ask them to sort it out, they'll put that one at the top of the list."

Clinch's Business Research Partnership conducts quarterly surveys on employers' perceptions of Maryland as a place to do business.

With the state's unemployment rate below 5 percent, complaints about worker availability, he said, "have gotten worse every quarter in our survey," Clinch said. Most recently, 70 percent out of 250 employers surveyed said they had had trouble finding the kind of workers they needed.

Low unemployment is also prime evidence that Maryland's business fortune has turned around, analysts grant. And if the state is going to work harder at selling itself, they said, it certainly has some assets to boast about.

Noting Maryland's high incomes, fine universities and closeness to Washington, Lewin said, "nowhere else in the nation can you find that concentration of both power, money and intellectual talent. I think the thing businessmen care about more than anything else is the availability of highly trained people. And we have that."

Pub Date: 01/24/99

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