Maryland's boom set to continue this year; Explosive growth seen in computers, biotechnology and pharmaceuticals; High Technology


When Christopher McCleary launched U.S. Internetworking Inc. last year, he started out with 11 employees and a brash dream to tap the Internet's power.

His goal: create a market for "renting" business software applications over the Internet to small and mid-size companies that can't afford to install them or don't want the headaches of operating the complex array of software for accounting and other back-office operations.

U.S. Internetworking is on a blindingly fast-growth track. The company employs 375 in the United States and Latin America, more than 200 of them at its Annapolis headquarters. Michele Perry, vice president for marketing, says the company expects to triple its work force in the year ahead.

The start-up is one of the more stunning examples of the exploding job market in Maryland's high-technology sector, which includes such jobs as information and computer programming, robotic manufacturing, biotechnology and pharmaceuticals.

Job growth

Fueled by fast-growing companies such as USi, as it's known, the pace of that job growth is expected to continue on track this year, though a bit slower than it did in 1998, experts say.

The Regional Economic Studies Institute at Towson University forecasts that Maryland's high-tech sector, which employs an estimated 175,000 people, will grow 3.5 percent in 1999, or double the growth of the state's economy as a whole, adding about 6,100 jobs.

That's down from a 4.2 percent growth rate, or an estimated 7,050 jobs created in 1998, according to the institute.

Factors expected to contribute to the slowdown: consolidation in some niches of the sector; lost business from the Asian economic crisis; and the shrinking motor vehicle manufacturing industry. This year "will be another year of steady, but slower, growth for high tech in Maryland," said Anirban Basu, an economist at the institute.

Basu predicts big growth in these segments of the high-tech sector: engineering, where about 800 new jobs will be created; communications, where about 400 new jobs will surface; and electronics, where 300 new jobs will be fostered.

Still, that pace will exacerbate the region's high-technology "hiring gap," experts warn.

That's good news for people being trained in high-tech skills, but bad for the state's economy. Every job that goes unfilled means the state loses out on the "multiplier effect" -- ensuing home and retail sales, taxes, and spending on services, said Basu. For high-tech jobs, the multiplier effect is stronger than in other industries, notes Basu, because of the typically high wages the sector pays.

The Maryland High-Technology Council estimates that as many as 15,000 high-technology jobs in Maryland can't be filled because of a lack of qualified applicants. "I've been in the industry 30 years, and I've never seen it like it is today. There are new jobs being created faster than anyone can fill them," says Ken Snyder, director of technology for Villa Julie College's Center for Advanced Technology and Competitiveness, one of a number of college programs created in recent years to offer training in computer programming and information technology skills.

"Nothing short of a deep recession or maybe even a depression is going to stop the growth. The reason is simple: We've come to rely on these systems to run just about everything."

Some employers have established training programs to recruit and retain workers. For example, James Warmkessel, director for the new Baltimore office for CoreTech Consulting Group, a growing computer systems consultant based in Philadelphia, says CoreTech has set up an extensive training program that takes on entry-level workers and helps them master the skills needed to meet the company's client needs.

"In this industry, training isn't just about recruiting new people. It's about retaining your best workers and giving them the skills needed to keep up with the intense demands of the industry," says Warmkessel.

Y2K spending

But Christine Wallace, director for the Baltimore office of Ajilon Services Inc., a computer systems consultant formerly known as CompuStaff, expects mid-size and large companies to pull back on hiring and spending on computer programming and network needs as they recover from big expenditures on recoding computer systems for the Year 2000 change.

"I think it could be a tougher and tighter market than a lot of people are expecting because of Y2K spending," said Wallace.

Another wrinkle in the job market, said Wallace: Corporate clients are getting a lot more selective about the type of programmers and information technology professionals they are interested in.

"You no longer can have just the technical skills. Our clients are looking for people who can think critically, have common sense and an understanding of the needs for the business world," she said.

David Weis, technology coordinator for the Maryland Department of Business and Economic Development, says high-tech job growth in Maryland is being driven primarily by the information technology fields, which include telecommunications, Internet development, electronic commerce and systems integration.

Other growth fields

But another group of industries in the Baltimore-Washington area, from banking and finance to retailing, health care and manufacturing, is also driving growth, says Weis.

"Most companies need more people in these fields. There's a tremendous demand." And that's driving up wages. A September report by the state economic development department and the Greater Baltimore Committee Technology Council put the average annual wage of an employee in Maryland's technology sector in 1997 at $49,000 -- almost 60 percent higher than the state average of $32,848.

Wallace, a 16-year veteran at Ajilon, estimates wages in the industry are 20 percent to 30 percent higher than they were two years ago.

Experienced mainframe computer programmers are commanding salaries of $75,000 to $80,000 a year, while recent college graduates with programming certifications are demanding annual salaries of $35,000 to $40,000.

Basu forecasts wage levels for high-tech jobs to rise "dramatically" as a result of the growing hiring gap.

"The labor force for these jobs just can't grow rapidly enough to keep up with demand. That's going to have a strong upward effect on wages. There's just a lot of demand for these people," says Basu.

Pub Date: 01/24/99

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