For more than a century, Black & Decker has been a part of the Maryland business community, and so this week's announcement that a planned merger with rival toolmaker The Stanley Works will mean the loss of a corporate headquarters and 250 high-paying jobs is far from welcome.
Baltimore-area residents have long taken pride in home-built Black & Decker. The Towson-based company is not only an important employer but a major force in local philanthropy. And losing a Fortune 500 headquarters represents no small blow to the community's prestige.
Gov. Martin O'Malley and Baltimore County Executive James T. Smith Jr. have already taken the appropriate action of reaching out to officials from both firms in an effort to preserve Maryland jobs. B&D; expects its power tool division and an estimated 1,250 jobs to remain here, a significant consolation prize.
The merger appears driven chiefly by the economic advantages gained from bringing the two companies of similar size, ambitions and assets together, a cost-cutting opportunity that the economic recession surely made more attractive. Why the controlling interest should go to Connecticut-based Stanley and not partner B&D; is not entirely clear, but it's difficult to believe that the often-repeated bugaboo - that the local business climate is poor - is particularly relevant. Connecticut's unemployment rate is higher than Maryland's, and its tax burden (the ranking of the major individual and business taxes in aggregate) is high, too. Those who urge Maryland to adopt the policies of supposedly business-friendly states probably don't have Connecticut in mind.
Still, such an unfortunate event is grounds for some soul-searching in the economic development field. Are we doing enough to attract and grow the well-paid, technology sector jobs of tomorrow? Are the tools available for this century's B&D-like; start-up to rise in its place?
Maryland's chief asset is an educated work force. In a knowledge economy, it's not only K-12 education that counts but the relative quality of its institutions of higher education. Proximity to Washington helps, too, as does a reliable transportation network, but education is the key.
This state has performed better during the recession than most of its peers because of this. While industries such as new home construction and retail sales have suffered considerably in the downturn, Maryland's federal contractors and information technology, cyber-security, health care and biotechnology firms have continued to grow.
Are we taking full advantage of these assets? Public spending on schools and colleges has increased substantially this decade, but that growth has slowed over the past two years as tax revenues have declined. The need to carefully target such spending has only become greater.
This week, the U.S. Department of Energy awarded $151 million in the first round of stimulus funding for energy research projects including wind and solar power. Not a single grant went to a Maryland company, a sign that in at least one field of potential growth, the state is not at the forefront.
Biotechnology has so far yielded a better result. Maryland is home to more than 400 companies in the field and represents about 8 percent of the nation's biotech investment. The presence of the Johns Hopkins University, the University of Maryland and the National Institutes of Health in Bethesda have proven helpful, but are these collective efforts and assets sufficient?
Those are the kinds of questions that need to be asked repeatedly, because the answers are liable to change as these industries evolve and the marketplace reacts. The loss of 250 B&D; jobs in Baltimore County is not necessarily a disaster for a jurisdiction where 375,000 people are employed, but failing to seize the job opportunities the region's considerable economic assets warrant would be disastrous indeed.
You raise a valid point that we must nurture our intellectual capital. But, to keep up with the agricultural motif, what is Maryland doing to maintain a fertile business climate to plant our intellectual seedlings or to prevent other states from harvesting our talent?
Have any Fortune 500 or Fortune 1000 companies moved their headquarters to Md. because of our bumper crop of intellectual talent? My guess is no. When was the last Md. start-up that caught fire that didn't move out of state to a friendlier business climate? Aren't we all just watching Under Armour and waiting for them to make the jump?