The region’s politicians and business leaders are mourning the fact Baltimore stands to lose another headquarters of a prestigious, publicly traded company with the news that Legg Mason Inc. was acquired by Franklin Resources Inc. But investors should remain bullish about the city’s business future. The acquisition of Legg Mason was part of a natural cycle of industry consolidation and not a measure of Baltimore’s business climate. In fact, Baltimore and the surrounding region are poised to lead a business revolution in health.
The business of health is a growing field hungry for innovative products and business solutions, and Baltimore is uniquely positioned to be a national hub for innovation and technology. The global health and wellness markets are estimated to be $4.2 trillion, and U.S. health care spending is more than $3.6 trillion and growing. In 2018, health spending accounted for 17.7% of the nation's gross domestic product. Work is already underway to harness this business potential in Baltimore, which would continue to make the city a beacon for health entrepreneurs the way Silicon Valley became the go-to area for technology innovators.
Many of the key ingredients for Baltimore’s success are already in place. First, our region boasts a highly educated and technically skilled workforce with one of the highest concentrations of doctoral scientists in the country. Maryland is also home to many top-ranked research universities, including Johns Hopkins and the University of Maryland. In recent years, both institutions have invested heavily in biotech infrastructure with Maryland’s BioPark in West Baltimore and the Eager Park innovation district in East Baltimore near Johns Hopkins. These hubs around our anchor institutions enable research discoveries to become impactful commercial ventures. Ample competitive research funding from the federal government and philanthropy also helps, which is a benefit of our proximity to the nation’s capital and government agencies like the National Institutes of Health.
Today, the state has more than 500 biotech companies and 2,700 life sciences firms. The health technology firm emocha Mobile Health, for example, developed mobile video technology to help tuberculosis patients adhere to their medication schedules. The company was launched in 2013 by two Johns Hopkins Carey Business School graduates and is based on technology licensed from Johns Hopkins University. Thrive Earlier Detection, which is working on a blood test that can detect cancers early as part of routine medical care, was launched last year with more than $100 million from premier health care investors and now has a 40-person (and growing) R&D operation just off the Johns Hopkins campus.
There is no shortage of innovation on which to build companies; Johns Hopkins investigators alone report over 400 inventions per year. What Baltimore lacks are people who can make these innovations a reality. Baltimore needs more innovative business leaders who are equipped to develop and bring products to market, build dynamic teams, tackle regulatory and reimbursement hurdles, and attract capital. Last year, Johns Hopkins Technology Ventures created 16 new startups and raised $525 million in venture funding, but many ideas are waiting to be turned into successful businesses. We need help from those aforementioned business leaders and politicians if we want to change the Baltimore skyline.
Johns Hopkins Carey Business School is working to close the business skills gap by educating business leaders who understand everything from managing health providers to managing organizations that deal with the cost of providing health coverage to employees. In addition, Carey faculty are researching the systems, organizational structures, policies and regulations that contribute to the health economy.
Recently, Carey reimagined its MBA program with a new “Health, Technology and Innovation” pathway of study. The new MBA curriculum trains students to find technology-driven, human-centered solutions to complex health problems with emphasis on business analytics and leadership development. Students can also leverage the power of Johns Hopkins University’s health ecosystem and gain real-world experience working with emerging health technologies and innovations through campus programs run by JHTV. Carey’s efforts recently received a $25 million boost from the W.P. Carey Foundation, which will be matched by another $25 million from Johns Hopkins University and other donors.
The future for Baltimore is bright, and we are entering an exciting new chapter of business development. The next publicly traded company headquartered in Baltimore is just on the horizon.
Alex Triantis (firstname.lastname@example.org) is dean of Johns Hopkins Carey Business School. Christy Wyskiel (Twitter: @cwyskiel) is senior advisor to the President of Johns Hopkins University for Innovation and Entrepreneurship. In this role, she also serves as executive director of Johns Hopkins Technology Ventures.