WASHINGTON – Maryland is doing a good job overall at promoting economic development, despite a high number of business closings and poor diversity in industry, according to a report released Thursday.
The annual report card of state business indicators by the Corporation for Enterprise Development, an economic development nonprofit, gave generally good marks to Maryland even though the state fell off the “honor roll” this year.
Maryland is “a strong performing state,” said Heather Tyler, a spokeswoman for the nonprofit, who said Maryland’s business closings ranking was likely hurt by the recession.
The organization ranks the 50 states in 68 categories, using Census and other data to come up with overall grades in three big categories: performance, business vitality and development capacity.
Maryland earned A’s in both performance and development capacity, but was knocked off the honor roll when its grade in business vitality fell from a B to a C. The lower grade reflects the fact that Maryland’s grade of A in the subcategory of entrepreneurial energy subcategory could not offset the D in competitiveness of existing businesses.
While Delaware earned the same overall score as Maryland, Virginia earned all A’s in the big three categories for the second year in a row and Pennsylvania made the honor roll with two B’s and an A.
Aris Melissaratos, the Maryland secretary of business and economic development, said he will compare Maryland’s score to the surrounding states to figure out why their grades are lower or higher.
“On the one hand, I’m delighted we got an A on entrepreneurial culture,” Melissaratos said. “I feel very good about that because that’s where we’re putting the emphasis.”
But Maryland ranked 40th for its percentage rate of businesses closed in 2002, and 43rd for industrial diversity.
“The thing that actually knocked us off (the honor roll) was businesses closing and manufacturing diversification,” said Andrea Harrison, spokeswoman for the economic development department.
Melissaratos said he has been talking about manufacturing diversification “every day that I’ve been in office. Frankly, I feel that we deserve better because we got a recent survey that said we had stabilized manufacturing.”
He said that Gov. Robert Ehrlich’s commission on manufacturing competitiveness has been addressing the issue and trying to get manufacturers to be more competitive.
Maryland continued to lead the pack in other categories: The state ranked first in federal and university dollars spent per capita on research and development, in percentage of heads of households with college degrees and in a low level of working poor.
But Maryland ranked in the bottom 10 when it came to private lending to small businesses, percentage of highway miles in poor condition and narrowing of the gap between the richest and the poorest in the state.
The report is “actually designed to be a tool to help folks to sort of get an initial cut at how well your state is doing,” said Bob Schweke, the co-author of the report. “Our . . . view is that ultimately the quality of your economy is going to be based on sort of the quality of your public investments.”
The Corporation for Enterprise Development has been issuing these annual report cards for 17 years. The corporation’s Tyler said she encourages states to take their grades and consult with a state that is doing better in a certain area.
“Search and find two or three states that are doing really well there (in that category) and give them a call,” Tyler said.