Despite a state economy ranked high for innovation, Maryland’s entrepreneurial activity is lacking, according to speakers at the Greater Baltimore Committee’s Economic Outlook Conference on Thursday morning.
“Innovation and entrepreneurship seems to be taking off more than anything else,” said Greater Baltimore Committee President and CEO Donald C. Fry. “This is one area where we really need to step up our efforts.”
Speakers at the conference emphasized that opportunities for innovation are abundant in Maryland but that policies and the business environment could use adjustment to be more attractive to entrepreneurs.
National rankings reveal the necessity for these adjustments, noted Stephen Ezell, of the Information Technology & Innovation Foundation, referencing his organization’s 2012 State New Economy Index. While Maryland had a high overall ranking for innovation, it was No. 30 for entrepreneur activity.
“Talent is the only sustainable source of any nation or region’s competitive advantage,” Ezell said.
To grow this activity, Maryland will have to market Baltimore to young entrepreneurs, said Newt Fowler, chairman of the Innovation Alliance of Baltimore.
“Baltimore is great as Baltimore,” Fowler said. “We’re not going to be the Silicon Valley or Boston, but we don’t need to be.”
In order to attract young innovators, the area will need to provide the resources they want and need, he said, including opportunities for venture capital, which have recently been less than plentiful for Maryland startups.
“The venture capitalists have moved out of early-stage investing,” Fowler said. “They’re investing in later-stage companies … to shift the risk they’re taking.”
Fry attributed this in part to a culture of caution in the region.
“We are much more risk averse here on the East Coast than they are on the West Coast,” Fry said, adding that with some changes in policy and perspective, that aversion may be able to change.
Ezell recommended creating an incentive for angels to invest in startup companies, citing the results this has yielded in other regions of the country. Tax incentives for angels, he said, work much better for the economy than job-creation tax credits.
On a broader and longer-term basis, Rep. John Delaney, D-Md., who also spoke Thursday, recommended improvements in infrastructure and corporate tax structure.
As the state attracts more entrepreneurs, that community will attract further talent, Fowler said, growing the overall tax base.
“We need to rethink how we market Baltimore,” he said. “The race for talent has begun.”