Economic Alliance revising its strategy

Nonprofit group to woo businesses by matching needs with city strengths

October 26, 2004|By Jamie Smith Hopkins | Jamie Smith Hopkins,SUN STAFF

A nonprofit group charged with promoting economic development in the Baltimore region will unveil tonight a change in its strategy it thinks will be more effective in wooing new business.

The Economic Alliance of Greater Baltimore has begun hunting for business prospects by investigating the specific needs of companies in three primary areas where it thinks Baltimore has an advantage: life sciences, homeland security and financial and health services.

"We modeled ourselves more on an investment bank," said alliance President Christian S. Johansson, who left a New York investment advising company last year to join the group. "Instead of selling real estate, we're selling a business opportunity."

The group, formerly the Greater Baltimore Alliance, will detail the changes at its annual meeting tonight before an expected crowd of more than 300 at the Renaissance Harborplace Hotel.

It believes the region has significant advantages in the sectors it's targeting, from the plethora of medical research at institutions such as Johns Hopkins to contractor-friendly federal installations such as the National Security Agency. Alliance leaders, aiming for the high-end "back offices" of financial and health services firms, are also hoping to capitalize on Baltimore's relatively easy commute by train to New York as financial companies continue to decentralize operations from Manhattan.

The alliance is narrowing lists of candidates to pursue by searching for corporations that have the financial wherewithal to expand and seem likely to consider a satellite office in the Mid-Atlantic. Then it looks for matches between company initiatives and Baltimore region assets.

The alliance is putting together a two-day "executive sales mission" to New York next month to give local leaders a chance to talk to some of the corporate prospects.

Formed about 10 years ago, the alliance grew from county and city government leaders' concern that the region needed a more aggressive approach to compete with other areas of the country, some of which were luring corporate headquarters with large tax breaks and other financial incentives. Local governments and companies contributed to the alliance out of concern that without ample business growth, the tax base would suffer, hurting the businesses and people already here.

As corporate upheavals and government cost-cutting have greatly changed the nature of business recruiting, the alliance has remained as the nonprofit complement to government-run economic development agencies.

Targeting sectors is old hat for groups that market cities and regions. But David M. Gillece, chairman and chief executive of the alliance, thinks the level of information gathering is unusual. He sees a substantial difference compared with his experience running Baltimore's economic development agency in the early 1990s.

"We didn't understand what we were selling," said Gillece, now president of real estate firm Colliers Pinkard. "We had not done the analysis work on the assets in Baltimore. ... We didn't know who we were selling to, either."

Economic development agencies typically collect basic statistics such as the cost of real estate and the education levels of the work force, said Jeffrey Finkle, president and chief executive of the International Economic Development Council.

"This sounds like a different kind of portfolio management research than I've heard before, but everybody is trying to build their own competitive edge through figuring out how they can connect best with the company," he said. "Time will tell - time and sustained effort."

A more focused approach sounds like a good idea to Richard P. Clinch, director of economic research for the University of Baltimore's Jacob France Institute. The alliance's sector targets "are the same ones everybody's targeting," but he thinks the Baltimore area has a better case than most places.

"These are a natural fit for the region," Clinch said.

In life sciences, the weak link for the Baltimore area is commercializing the research that universities are doing. Aris Melissaratos, the state's secretary for business and economic development, is counting on the alliance to help bridge the gap by bringing in companies. That's an especially pressing mission with 3 million square feet of lab and office space planned in two new Baltimore bioscience parks.

"The infrastructure is here, the lawyers understand startups, the money is here," said Nora Zietz, assistant provost for economic development at the Johns Hopkins Institutions. "So it's just going to take a little more mixing of research and industry."

Johansson, whose resume includes running a startup software company and consulting to a Swedish hospital, said the philosophy behind the alliance's new strategy is simple: "You need to show how you create value to these companies."

John Frisch, chairman and chief executive of the Baltimore law firm Miles & Stockbridge, sees value in that. Last year, while considering whether to stop investing in the alliance, his firm met with Johansson to hear the new plan.

"We increased our investment," he said. "What they're doing really resonated with us."

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