Archives For Finance & Services

Industry and government leaders gathered Oct. 8-9 for CyberMaryland 2013, sponsored by the Maryland Department of Business and Economic Development. The event showcased the state’s growing cybersecurity industry, challenged professionals and students and fostered networking. Find more information on the conference here, as well as the winners of the Maryland Cyber Challenge here.

Mikra Krasniqi is an economist at the Maryland Department of Business and Economic Development.

The federal government shutdown will have an adverse effect on the entire United States economy and especially the Washington, D.C. area. While federal government civilian and military spending makes up about 4 percent of U.S. economic output and federal employment contributes with about 2 percent of all jobs, the effects of the shutdown might have far-reaching consequences given the tenuous state of economic recovery from the recession.

Figure 1 Federal Civilian Employment by State

Source: DBED, BEA 2012

With 6 percent of all jobs in the state, Maryland’s share of federal employment is higher than most states. Over 80 percent of Maryland jobs are in private sector firms across the state, while state and local government make up the remaining 14 percent of jobs in Maryland.

Figure 2 Composition of Employment and Earned Wages in Maryland

Source: 2012 Employment and Wages, DLLR

The Washington, D.C. area is not only the center of federal employment, it is also the largest recipient of federal contracting dollars. The value of federal government contracts was about $104 billion in 2012, according to a report by Bloomberg Government which was based on the locations of headquarters of the 200 largest contractors. This amount represents about 20 percent of all federal contracting, which stood at $517.6 billion in 2012 according to USASpending.gov.

Of the total 2012 federal spending, firms received federal contracts to perform $27.3 billion worth of work in Maryland, making Maryland the fourth largest recipient of federal procurement dollars. The largest federal contractor, Bethesda-based Lockheed Martin Corp., which was awarded contracts valued at $1.8 billion in Maryland and a total of $36 billion nationwide, employs about 5,000 people in Montgomery County alone.

Figure 3 Federal Procurement Top 10 States 2012

Source: DBED, USASpending.gov

While large contractors like Lockheed dominate in terms of the share of employment and spending in the state, there are more than 14,000 Maryland firms that contract with the federal government. Nearly half of those are small firms receiving federal contracts as prime contractors. The halt in federal economic activity means that these firms may not be as well-cushioned as other big businesses are during a prolonged shutdown, which may result in cancellations, investment delays, reduced spending and possible layoffs under a cloud of ongoing uncertainty.

Impact on Workers and Families

While the exact number of furloughed workers from the state is unknown, about 315,000 state residents work for the federal government. Most of those live and work in Maryland, but at least a third of them work in the District of Columbia or Virginia.  These workers earned a total of $25.6 billion in wages and salaries in 2012.

Delayed paychecks for Maryland-based furloughed workers means delayed spending and consumption, which has ripple effects for hundreds and thousands of families, individuals, schools, hospitals, and businesses across the state and industries. It is estimated that a two-week loss of income to federal workers might reduce spending on taxable goods by more than $145 million. In other words, there will be about $15 million in lost economic activity during each shutdown day.

The fallout from the shutdown will also affect government revenues. The Maryland Department of Budget and Management estimates that a two-week loss of income for federal workers in Maryland could reduce state tax revenues by as much as $51 million or about $5 million in state revenue loss for each shutdown day.  And the effects will only get worse as the stalemate continues.  According to Moody’s Analytics, if the shutdown lasts for 10 days and 40 percent of federal workers are furloughed, it would cut 1.2 percent from fourth quarter state GDP growth, owing to the higher concentration of federal employees. In addition, federal workers earn about $92,000 annually compared with about $73,000 in the rest of the country.

Mike Binko, President & CEO of Kloudtrack, Julie Lenzer Kirk, Author and Entrepreneur and Governor Martin O’Malley speaking about the strength of Maryland’s innovation economy on the Startup Maryland Pitch Across Maryland Bus Tour.

Mike Binko, President & CEO of Kloudtrack, Julie Lenzer Kirk, Author and Entrepreneur and Governor Martin O’Malley speaking about the strength of Maryland’s innovation economy on the Startup Maryland Pitch Across Maryland Bus Tour.

Stretching into its second week, the federal government’s shutdown is looming over Maryland businesses.

Governor Martin O’Malley’s blog has featured three accounts of successful Maryland companies now threatened by the budget gridlock in Congress.

  • Baltimore-based Fyodor Biotechnologies Corp. was forced to place an important medical research project on hold after the shutdown prevented them from processing a National Science Foundation grant. The project could be shuttered permanently. Read more here
  • M. Luis Construction in Baltimore, which performs many paving and road construction projects across Maryland, is facing stalled bidding processes and possibly postponed payments as result of the shutdown. Read more here.
  • Kloudtrack, with offices in Rockville and Annapolis, is an information technology subcontractor within the Defense Information Systems Agency, the Department of Veterans Affairs and the Department of Homeland Security. They’re now uncertain how long they can continue to provide their high quality product without the promise of future payment. Read more here.

Tell us how the shutdown is impacting your business on the Maryland Department of Business and Economic Development Facebook page.

Maryland Department of Business and Economic Development Secretary Dominick Murray presents a proclamation during MEDA's fall conference.

Maryland Department of Business and Economic Development Secretary Dominick Murray presents a proclamation during MEDA’s fall conference.

Looking to boost your community’s economy? Consider sprucing up the town’s welcome sign, organizing an outdoor farmers market or printing T-shirts with the town name on them.

These actions and more, shared during Tuesday’s Maryland Economic Development Association fall conference in Frederick, may not directly translate into new jobs, but the sense of place they create will help deliver sustainable long-term growth. Experts—ranging from a innovative mixed-use land developer to a social branding consultant—spoke on the importance of improving place to attract higher skilled workers, foster entrepreneurship and increase an area’s overall quality of life.

“Why would anyone invest in a city that doesn’t want to invest in itself?” asked keynote speaker Ed McMahon, Senior Fellow for Sustainable Development at the Urban Land Institute.

McMahon discussed the importance of basic aesthetics. “Every single day in America, people make decisions about where to live, where to work, where to retire, based almost entirely on what communities look like,” he said.

Frederick Mayor Randy McClement said he hoped the backdrop of his city would help inspire fellow community leaders to devote resources to place making.

Developing Frederick’s unique character has been a conscious ongoing effort for the city, which boasts a growing selection of restaurants, outdoor markets and festivals, following a sort of “Mayberry theme,” McClement said.

“You’ve got to find that niche, that thing people would want to come see, whether it’s that hometown charm we have here in Frederick, or maybe the excitement of more urban aspects. You need to find what’s good for you, but we can share the example of building on what you have,” he said.

Keasha Haythe, vice president of MEDA and Director of Economic Development of Dorchester City, said she hoped the conference would inspire fellow MEDA members to improve the perception of their own communities.

“Creating a sense of place is extremely important to economic development because that is what the residents and the business community draw on. That’s how they attract new investment,” Haythe said.

She praised MEDA for providing a platform to spread innovative ideas within the state’s business leadership community. “Events like this bring all the players together, the right policy makers and panelists and business leaders. Today was truly a great conference and we had a great turnout,” she said.

On behalf of Governor Martin O’Malley, Maryland Department of Business and Economic Development Secretary Dominick Murray presented a proclamation to MEDA, recognizing its support of Maryland’s third annual Economic Development Week.

“It’s such a pleasure to work with all of you as a team—we’ve got a tremendous team. All of us are dedicated to doing things that make Maryland a better place to live and work, it’s my honor and privilege to work with all of you,” Murray said.

Robert Walker is Deputy Secretary of the Maryland Department of Business and Economic Development.

Supporting Maryland manufacturing is a top priority here at the Maryland Department of Business and Economic Development, and a recent event organized by Walmart shed some light on revitalizing industry in our state and across the nation.

Walmart has a goal of creating $50 billion in new manufacturing in the United States over the next decade, much of it by encouraging its suppliers to bring outsourced manufacturing back home. This plan was detailed in a summit attended by more than 1,500 participants, including the U.S. Secretary of Commerce, the Honorable Penny Pritzker, and eight governors, as well as the CEOs of General Electric, Walmart, Sam’s Club and other corporate leaders.

The Good News: U.S. exports in the first six months of this year were $1.2 trillion, the total of all U.S. exports in 2003. Increased exports means increased manufacturing jobs as well. The output of U.S. workers is up 9 percent on average since the 2008 recession due to improved productivity, continuing innovation, research and development and the important economic development activities of U.S. universities.  Manufacturing processes are being done with less labor, cheaper natural gas and at a lower cost of credit (thanks to the Federal Reserve).  And three jobs are created for every one manufacturing job.

One speaker said we hear a lot about China’s robust economic growth and how it will “sink” the U.S. economy. The same thing was said of Japan in the 1970s. Today, the U.S. has 2.5 times more manufacturing value-added than five years ago. Chinese labor costs continue to rise, although still well behind average U.S. wages. However, the cost of transporting products continues to rise. In addition, import duties and delays in backfilling orders makes U.S. manufacturing increasingly more competitive with the fully-loaded cost of Chinese imports. In the case of flooring material, the U.S. now has a $.03 advantage over China and the product can be delivered to buyers within a matter of one to three days.

Some of the governors said they have eliminated state taxes on utilities, cut corporate taxes by 20-plus percent, provided tax incentives, improved infrastructure and implemented programs to provide the workforce needed to meet the demands of tomorrow’s job market. In fact, all of the governors who spoke said that the quality and availability of the workforce were the most important factors for companies looking to expand or relocate to their states. One governor spoke of a high school program in his state that allows qualified students to also complete a two-year associate degree at the same time that includes a mandatory internship in the skill area chosen by the student. Another state provides a certificate of “readiness” that confirms for an employer what it is that the prospective employee can do as a result of education and on-the-job training, certified by a professional trained in that skill area.

The CEO of General Electric commented that the U.S. can compete with any country anywhere in the world, and that manufacturing is getting better. The speakers concluded that we are at a tipping point and we should challenge our old assumptions about the capability and capacity of U.S. manufacturing. U.S. manufacturing can and will rebound and grow in light of U.S. leadership in research and development, innovation, productivity improvements and changes in China and elsewhere that will work to our advantage.

The good news that Maryland added 1,800 manufacturing jobs in July, the most of any job sector in the state, underscores the vitality of, and opportunity for, manufacturing in Maryland.

BALTIMORE, MD (September 5, 2013) – Governor Martin O’Malley today via video kicked off the 2nd annual InvestMaryland Challenge, a national business competition that supports Maryland startups and strengthens a climate of innovation and entrepreneurship that has been ranked #1 in the country by the U.S. Chamber of Commerce for two years in a row. The Maryland Department of Business and Economic Development (DBED), through the Maryland Venture Fund and the BioMaryland Center, will award $400,000 in top prizes spread across four categories — Life Sciences, IT, General Industry and a new Cybersecurity category — as well as secondary prizes and awards from partners and sponsors. DBED is continuing its partnership with Inc. magazine to promote the Challenge to a national audience of entrepreneurs and small business owners. The application period opens immediately and will close December 6 and applications are available here.

“The future of Maryland’s economy is the entrepreneurs, innovators, startup founders and small business owners all across our State. The InvestMaryland Challenge is a central piece of our strategy to provide the critical resources to help these men and women succeed,” said Governor O’Malley. “The winners in the New Economy will be those states and countries that make the smart investments in the people, technologies and companies that will lead their economies for decades to come. The InvestMaryland Challenge is one way we are doing just that, while showing entrepreneurs everywhere that Maryland is the best place to start and grow their businesses.”

“We are excited to bring back the InvestMaryland Challenge for a second year, build on the success of the first competition and continue our efforts to reach and support Maryland’s diverse and growing community of innovators,” said DBED Secretary Dominick E. Murray. “The Challenge is an opportunity for us to connect in a unique and impactful way to Maryland companies on the cutting edge of life sciences, social media, cybersecurity, big data, green energy and the other high-tech fields at the forefront of Maryland’s Innovation Economy. We look forward to meeting an exciting new crop of entrepreneurs and helping them strengthen and grow their businesses.”

“We at Inc. have been watching innovation and fast-growing private companies blossom in Maryland for more than 30 years,” said Editor-In-Chief Eric Schurenberg. “Like our partners in the InvestMaryland Challenge, we like nothing more in life than to help our favorite people—entrepreneurs—succeed.”

The benefits of the Challenge stretch far beyond the cash prizes and other awards that companies will receive. Contestants will have their companies evaluated by teams of expert judges comprised of successful entrepreneurs, angel investors, venture capitalists, high-tech and scientific researchers, top-level executives and others who work with startups. Connections forged with judges and fellow contestants can pave the way for partnerships, new customer relationships and further investment.

For example, SocialToaster, a Baltimore company that helps organizations amplify their social media messages by deputizing their most ardent followers, landed a $200,000 venture capital investment from DBED’s Maryland Venture Fund after being named one of the three finalists in the IT category in the first InvestMaryland Challenge. The company has also partnered with DBED to help promote the second Challenge. North East-based i-Lighting, a producer of home lighting systems, has moved into a larger facility, expanded its manufacturing operation and added staff since it won the General category in the first InvestMaryland Challenge in April. The company has also signed on to provide a $5,000 prize and help judge the second Challenge.

“Winning the InvestMaryland Challenge has been a huge advantage to i-Lighting. The influx of cash that we needed to expand our business and grow it in so many categories has been huge,” said Scott Holland, i-Lighting’s founder, president and CEO. “The funding was the end result, but it would be very difficult to put a value on the exposure we have received from outside sources after winning the InvestMaryland Challenge. It was almost brand recognition all by itself.”

The inaugural Challenge awarded more than $425,000 in cash prizes and services and drew 259 contestants from 10 states and Washington D.C., with companies applying from as far away as California, Georgia and Massachusetts. As required last year, out-of-state companies are eligible to apply in the General Category but would have to establish an office in Maryland and spend a majority of the funding here if they claim the top prize. The Life Sciences, IT and Cybersecurity categories are open only to Maryland companies. Every category is limited to companies with fewer than 25 employees and less than $1 million in annual revenue. After businesses turn in their entries, including a business plan, by Dec. 6, they will be evaluated in January by panels of judges. The top 10 companies in each category will move on to face-to-face interviews with judging panels in March. Winners of each category and the special awards and prizes will be announced at the InvestMaryland Challenge Finale in April.

 

How has Maryland’s economy and quality of life improved since Governor Martin O’Malley’s inaugural speech in 2007?

A new video, released on Wednesday, details developments in health, education, public safety, the environment, job growth and innovation since the governor took office.

The video is part of an ongoing “Better Choices, Better Results” forum series. The first, held Wednesday at Goucher College in Towson, focused on jobs and the economy. Information on future forums is available on the governor’s website.

BALTIMORE, MD (August 26, 2013) – Governor Martin O’Malley today joined with Montgomery County Executive Isiah Leggett and City of Frederick Mayor Randy McClement to announce the expansion of a Montgomery County life sciences company which plans to add new jobs in Montgomery and Frederick counties over the next several years. Precision for Medicine, a leading provider of specialized services, technology and infrastructure for life sciences companies, will consolidate and expand its headquarters in a new location in Bethesda and will also expand its operations in the City of Frederick to be used for biorepository and lab operations. In total, the company will retain 81 jobs, and will create 170 new jobs between the two locations.

“By working with our partners in Montgomery County and the City of Frederick as well the leadership of Precision for Medicine, we are preserving 81 jobs, creating 170 new jobs and ensuring that this company will continue to grow and invest in Maryland,” said Governor O’Malley. “Our most important priority continues to be creating and retaining the kinds of highly-skilled, innovative jobs that will help sustain Maryland’s economy for today and for decades to come.”

“Today’s announcement that Precision for Medicine will remain and expand in Montgomery County is exciting news, and reinforces why we are one of the top biotech clusters in the country,” said County Executive Leggett.  “By strategically partnering with the State of Maryland and the City of Frederick, we show the regional and national business community that Montgomery County and Maryland are indeed business friendly and stand ready to assist companies who have demonstrated their ability and desire to grow here and add coveted, knowledge-based jobs to our local economy.”

Continue Reading…

An upcoming forum seeks to help American businesses navigate new opportunities with Mexico.

Scheduled for Tuesday, Sept. 17, at the Johns Hopkins University Montgomery County Campus, the Global Trade Forum will include a keynote address by Mexican Ambassador to the United States His Excellency Eduardo Medina-Mora. Panelists will include Trevor Gunn, Managing Director of International Relations for Medtronic, Inc., Catherine Robinson, Esq., Senior Manager of International Government Affairs for Amgen, Inc., a representative of the U.S. Commercial Services and a representative from ProMexico.

Trade channels are already active between Maryland and Mexican companies. In 2012, exported goods valued at $344 million traveled from Maryland to Mexico. Currently, Mexico is the United States’ third-largest goods trading partner. The forum will provide access to experts and information to expand the trade relationship, with a focus on bio-tech industries. Public and private sector representatives are urged to attend.

Admission is $49 with advance registration through the Montgomery County Department of Economic Development website required.

BALTIMORE, MD (July 31, 2013) – Governor Martin O’Malley today visited University of Maryland’s BioPark where he highlighted the integral role biotechnology plays in Maryland’s innovation economy. More than 600 people work in 30 companies at the University of Maryland BioPark, moving us toward cures for diseases like cancer, malaria and diabetes.

Maryland is the regional leader in job creation. Together, with our dynamic private sector, we’re creating jobs faster than any other state in the Mid-Atlantic, and we’ve recovered over 99% of the jobs lost in the national recession. What’s more, Maryland is home to the nation’s second highest concentration of STEM workers and has one of the fastest STEM job growth rates in the country. Because STEM jobs are expected to grow nearly twice as fast as non-STEM jobs in the next five years and will likely continue to outpace their non-STEM counterparts in wages, Governor O’Malley is determined to continue his focus on creating STEM jobs and to continue working to prepare Marylanders for those jobs.

Click here to learn how Governor O’Malley is investing in our STEM industries and workforce.

Governor Martin O’Malley visits the University of Maryland’s BioPark, a center for biotechnology research and advancement.

Governor Martin O’Malley visits the University of Maryland’s BioPark, a center for biotechnology research and advancement.

Optoro—a Lanham-based startup specializing in reselling items that have been returned to major retailers—is flexing its fundraising muscles.

Technically Baltimore reports that the 5-year-old company has raised $23.5 million in equity, based on its latest U.S. Securities and Exchange Commission filings.

The company’s innovative approach to asset recovery has attracted multiple investors. In 2010 and 2011, the Maryland Department of Business and Economic Development invested $200,000 in Optoro through the Maryland Venture FundTed Leonsis, a world-renowned entrepreneur and owner of the Washington Capitals, the Washington Wizards, the Washington Mystics and the Verizon Center, has actively invested in the company and serves as a director. Lawson DeVries of Grotech Ventures is another active investor and director. Grotech Ventures, in 2012, was chosen as the state’s first InvestMaryland venture capital firm. Its Hunt Valley office was awarded $12 million to invest in Maryland startups.

Co-founder and CEO Tobin Moore sat down with MD BIZ News in February 2012 to discuss plans for expansion. At the time, it was focused almost exclusively on buying returned goods from Walmart, Best Buy, Staples and other retailers, and reselling them on websites like Amazon and eBay.

The company has since further developed OptiTurn, cloud-based inventory management software that allows the company to “simultaneously post inventory of all categories and conditions across the most popular online marketplaces, instantly connecting our clients’ products to the hundreds of millions of secondary buyers regularly searching for them,” according to its website. Moore said he believes the software is a major step toward growing the startup into a $500 million company.

Watch MD BIZ News’ interview with Moore below:

BioMaryland Center

BioMaryland Center

Baltimore, MD (June 26, 2013) – The BioMaryland Center, a part of the Maryland Department of Business and Economic Development (DBED), today announced that early-stage biotechnology companies and individual investors have until Friday, June 28 to submit an application to be considered for the first round of up to $10 million in Maryland Biotechnology Investment Incentive Tax Credits (BIITC) for FY 2014. Following the application process, a user name and pin number will be given to access the electronic submission for the first queue on July 8.  To access an application and for more information on the application process, click here.

The Maryland Biotechnology Investment Incentive Tax Credit program provides tax credits to promote private investment in qualified Maryland biotechnology companies. Since it was first funded in FY 2007, it has stimulated investment of more than $90 million in qualified Maryland biotech companies, with more than 60 companies taking advantage of the program.  It is a key part of Governor Martin O’Malley’s BioMaryland 2020 plan, the 10-year, $1.3 billion strategy for moving the State’s life sciences industry forward, stimulating investment in targeted fast-growth businesses and encouraging creation and retention of intellectual property in Maryland. The BIITC also helps to position Maryland as a global life sciences powerhouse. Since 2007, Governor O’Malley has steadily increased funding for the popular program, which is now funded at $10 million for FY 2014.

Continue Reading…