Pappas panel asks state to encourage tech businesses

Hiring `technology czar,' directed pension funds among actions advised

January 13, 2004|By Dan Thanh Dang | Dan Thanh Dang,SUN STAFF

In a bid to bolster technological enterprise in Maryland, a gubernatorial commission is recommending that the state increase its pension fund investments in private equity, encourage state banks and foundations to invest in small technology startups and hire a "technology czar."

Maryland is tops in the nation in government research funding at universities, supporting more than 50,000 jobs. The state's concentration of laboratories, higher education institutions and other facilities such as the Johns Hopkins University Applied Physics Laboratory in Howard County and the U.S. Army's Aberdeen Proving Ground boast more than 200 major research labs. The Interstate 270 corridor in Montgomery County is considered one of the nation's largest concentrations of biotechnology companies.

Despite such attributes, Maryland continues to struggle to establish a national reputation as a tech-friendly state, according to a report released yesterday by the Governor's Commission on Development of Advanced Technology.

"We now have an opportunity to greatly improve upon Maryland's technology economy," said George F. Pappas, chair of the commission and a Baltimore attorney. "We can, should and must do better."

The report comes more than a year after Gov. Robert L. Ehrlich Jr. established the commission even before he was inaugurated to study ways to encourage more technology business in Maryland. It was his first economic development initiative, coming a month after his election victory in November 2002.

The Pappas Commission, which began meeting in May, includes high-ranking members of state universities, venture capitalists, investment bankers and industry leaders in the state. Faced with a deficit in the state's budget, the commission's goal was not only to find new sources of capital to support high-tech initiatives, but also to rethink how the state should use its existing resources.

For example, one recommendation included encouraging foundations to support research that can be transformed into products that can help patients suffering from various illnesses.

The commission also suggested that Maryland increase its pension fund investments in private equity to increase the rate of return for pensioners. Maryland currently ranks 36 out of 38 states that have pursued private equity transactions for their public pension plans, according to the report.

It also said Maryland should also focus on creating partnerships with private investors and countries such as Singapore, which has set investment in technology as a national priority.

"This is the third such study I have helped with," said Capers W. McDonald, commission member and president and chief executive of BioReliance Corp., a biotech firm in Rockville. "But this is by far the most actionable. It's shorter, more concise and achievable."

Said Robert L. Wallace, founder and CEO of BiTh Group Inc., a Columbia information technology firm, "We have put a lot of work into this, but the hard part begins now with the implementation of these ideas."

In six months, the governor said, Secretary Aris Melissaratos of the Department of Business and Economic Development will report on the commission's progress.

"We see this not as a road map for the next couple months, but a road map for the next several years," Ehrlich said. "I promise that in six months, Aris is going to give me a report on this commission and where we are on our goals. We are into measurement around here."

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