Making Md. a Better Place for Tech Firms

Competition between Maryland and Virginia grew furiously through the technology boom, when every state yearned to be the next Silicon Valley. During those heady times, Virginians said: "We’ve got all the dot-coms." Now, Marylanders proclaim, "We never had any of those dot-coms."

By Shannon Henry Washington Post

Still, Virginia managed to secure a better-known spot on the map with the help of a much stronger technology council, gobs of promotional money spent by Fairfax County especially and the attraction of marquee companies such as AOL and WorldCom.

As regional activists tried to get the two states and the District to work together to form a stronger technology front, politics often intervened. Virginia’s secretary of technology, for example, couldn’t be expected to encourage companies to move to Bethesda. Now many people are hoping biotechnology — always the jewel in Maryland’s crown — will revive both the state and the region and attract new technology companies of all kinds to the area.

This month, Maryland’s governor-elect, Robert L. Ehrlich Jr ., made an early economic development move by creating the Governor’s Commission on Development of Advanced Technology Business and naming George Pappas, a partner with Venable, Baejter, Howard & Civiletti in Baltimore, to head the group. The two have known each other since the late ’70s when Ehrlich was a law clerk for Pappas.

"If Virginia has done better, we want to find out why," says Pappas. "We could do a lot better to make [Maryland] more competitive."

Before inauguration day, Pappas, who built Venable’s Intellectual Property Litigation Group, will work with the governor to choose about a dozen commissioners, all Maryland experts in areas such as business, investment banking, venture capital, workplace and higher education. None of the posts will be full time or paid, he says. In July, Pappas is expected to give the governor recommendations on how to position Maryland as a stronger place in which to do technology business. The governor will then consider the ideas for the 2004 legislative agenda.

Pappas says that after the commissioners are chosen, he will interview the top leaders of Maryland companies to rate the strengths and weaknesses of the area and its government. He’s aware that a complaint about Maryland is that while it has well-respected research institutions, particularly Johns Hopkins University and the University of Maryland, not enough technology ideas move from university or government research lab to commercial enterprise.

"That’s one of the issues we’ll look at quickly," he says. "I want to find out factually the nature and effect of the problem."

Next, he’ll visit technology-rich areas around the country — Pappas named Boston, North Carolina, Austin, Michigan, Georgia and Silicon Valley — to learn from their accomplishments and mistakes.

"We’re going to understand how successful tech corridors are run," he says.

The decimation of the technology sector has not stopped regional economic development authorities and politicians from increasing their attention to high-tech businesses. Pappas says the competition is stronger than ever, with some states stepping up established programs and others just beginning to make new investments.

So how will Maryland increase technology investment when there is less money to spend?

While some ideas may have a hefty price tag, others could require few funds, Pappas says. He mentioned potential changes in legislation and regulation that could make doing business in Maryland more attractive, including possible tweaks to tax laws. There could also be softening of laws that govern trade secret litigation that could encourage more people to leave one company and start another, Pappas says. He wants to figure out how to strengthen partnerships between federal labs, especially the National Institutes of Health, universities and private organizations, and hopes the soon-to-be-appointed commissioners will help develop such plans.

"You can create an environment that encourages entrepreneurial activity," Pappas says.

Penny Lewandowski, director of the Greater Baltimore Technology Council, says the appointment of Pappas sends a good signal to the state. However, she added, "that doesn’t always translate into money."

There are a few low-budget things Pappas could do, she says, including keeping close tabs on Maryland’s tech companies and praising them for new contracts won or big deals closed. If a company is wooed by another state, a call from the governor’s office could forestall a move.

"It doesn’t cost a cent and it goes a long way," Lewandowski says.

Still, nothing talks like financial incentives. Pappas says he just doesn’t know yet if he’ll be able to set aside more pools of money for technology investment in Maryland.

As Pappas begins his mission, Lewandowski cautions against focusing solely on biotech.

"The most important thing Maryland can hang its hat on is the diversity of the industries," she says. "The pendulum always swings."

Shannon Henry’s e-mail address is [email protected].

© 2002 The Washington Post Company