Gov.-elect Robert L. Ehrlich Jr. announced yesterday the creation of a commission to study ways to encourage more technology business in Maryland, his first economic development initiative since his election victory a month ago.
Ehrlich named George F. Pappas, an attorney with Baltimore law firm Venable Baetjer and Howard, to chair the Commission on Development of High Technology Business.
Ehrlich said he expects the panel's recommendations by July on whether the state can change regulations to cultivate technology jobs. Maryland leads the nation in the amount of government research money its universities attract but ranks much lower in the commercial licensing of inventions in those labs.
"We've done pretty well, but we can do better," Ehrlich told several hundred people gathered before the opening of a technology conference in Baltimore. He had announced the commission earlier in the day at a legislative breakfast in Montgomery County, where the Interstate 270 area harbors one of the nation's largest concentrations of biotech businesses.
"I've been able to run around the country the last couple of years and sell Maryland biotech," said Ehrlich, who as a Baltimore County congressman co-chaired the biotechnology caucus in the House of Representatives.
Ehrlich said he hopes to use the commission's findings to craft a technology agenda that he can present to the legislature in his second year as governor. Other commission members, still to be named, will represent businesses, venture capital firms and higher education, his office said.
"It's indicative of the importance that the governor-elect is placing on economic development for the state and the fact that we already have what some in the country consider a biotech corridor," said Pappas, who specializes in intellectual property law. Pappas has known Ehrlich for 20 years, since the governor-elect was a law clerk for him.
Technology advocates were encouraged by Ehrlich's focus on their sector, which drastically fell from favor with investors after their stocks soared in the late 1990s. The slippage was evident at yesterday's Maryland Technology Showcase conference, which was held in a smaller room at the Baltimore Convention Center than in recent years because of smaller attendance.
But people involved with the technology industry said that Maryland's main competitive disadvantage is in the amount of funding and support other states provide entrepreneurs trying to turn promising ideas into viable businesses.
"If you look at what other states are spending on technology transfer and commercialization, Maryland is clearly behind," said Phillip A. Singerman, executive director of the Maryland Technology Development Corp., which promotes state job growth in the area. "The big question mark is the budget."
Michigan plans to spend $1 billion in tobacco settlement money over the next 20 years to build a "life sciences corridor." Pennsylvania spends $30 million a year on its network of business incubators and invests another $60 million in venture capital to help some of those companies get off the ground. Maryland, by comparison, spends about $6 million on technology promotion and invests $8 million in tech startups.
"We're seeing a loosening of private venture capital for start-up companies seeking a second or third round of funding, but there are still not a lot of opportunities at the early seed stage," said Ann Lansinger, executive director of the Emerging Technology Centers, a nonprofit network of small-business incubators in Baltimore. Burned by recent flops, private investors are less willing to bet on unproven technologies, she said.
Ehrlich acknowledged that the funding disparity with other states will be difficult to close with Maryland facing a $1.1 billion deficit in next year's budget. More private money will be needed to foster tech development, he said.
Participants at the conference pointed to Ehrlich's approval rating by small-business organizations as a good sign for their concerns. However, the change in Annapolis has caused anxiety for others.
"It's a concern," said Dennis Shankle, who heads a project to bring wireless Internet access to Allegany County in Western Maryland, a sparsely populated, mountainous area largely ignored by private providers.
His group, in fact, won $2 million in state aid to expand its towers to the far-western reaches of the state and began ordering equipment to do so, but it's still awaiting the money while state attorneys sign off on the project, named Allconet 2. Last month's election cost the group its biggest booster when Casper R. Taylor Jr., the Democratic speaker of the state House of Delegates, unexpectedly lost by 76 votes.
"We're on pins and needles," Shankle said.