Ladies and Gentlemen Start Your Engines: Economic Impact of the Baltimore Grand Prix

August 29, 2011

Daraius

Soon the roar of Grand Prix racing will fill the streets of Baltimore over Labor Day weekend under the auspices of the IZOD IndyCar series.  In total, there are 19 scheduled races this year of which five are held on the streets of their host city rather than a speedway.  While there has been some controversy surrounding this event, it is my opinion that this event will provide a boost to the City’s name and bottom line. 

As it stands, Baltimore City is already becoming a destination choice among many visitors.  Events such as the Baltimore Running Festival, various soccer and lacrosse matches and Artscape provide diverse activities for visitors.  In addition, with the presence of the Orioles, Ravens, the Hippodrome Theater and various museums, there are plenty of opportunities for visitors to enjoy Baltimore’s cultural, recreational and entertainment offerings.

According to the Economic Impact Report published by Baltimore Racing Development, LLC, Baltimore’s Grand Prix and related events are slated to bring over 100,000 visitors to the City.  Visitors attending the event are expected to generate over $70 million in spending on things such as hotel rooms, food and beverage, transportation and other entertainment. In addition, the City is expected to gain $2.2 million dollars in tax revenues.

Photo credit: Baltimore Business Journal

While the three day event has the potential to bring in a lot of new visitors to the area for the event, the real impact will be in terms of the marketing and outreach for the City of Baltimore. For example, races will be broadcast to a national and international audience.  The media exposure and branding of the City as a Grand Prix destination will have long-lasting and reverberating effects.   In a report regarding the San Jose Grand Prix, the estimated value of media exposure for that city was valued at $4.6 million.  Baltimore’s Grand Prix is expected to have a larger audience and races will get TV coverage on major networks such as ABC and ESPN.  In addition to the race coverage, a documentary based on the behind-the-scenes efforts to put on the race will be broadcast on September 11th.

If Baltimore is lucky, the city’s experience will mirror the success of the Long Beach Grand Prix.  The Long Beach event, which began as a small Formula 5000 street race, recently celebrated its 38th straight year and brings more than 200,000 spectators to the area.  I believe Baltimore has the ability to succeed in this venture.  Some of the City’s best landmarks and spectacular views—including the inner harbor and Camden Yards—will be front and center during the whole event.  I would be surprised if that wasn’t enough to put Baltimore on many people’s radar.


One week to go…the debt ceiling debate

July 28, 2011

Raquel Frye

The hottest news story these days is the August 2nd deadline to raise the debt ceiling. The deadline has been set by the Treasury department because after this date, it cannot guarantee payment of all the government’s billions of dollars in monthly obligations.   In other words, if the amount that the U.S. is allowed to borrow is not increased, the nation will not be able to pay its bills.  To put things into perspective, the current debt limit (or ceiling) is set at 14.3 trillion dollars.   We actually hit that limit earlier this year and are currently relying on temporary measures to get around this technicality.    If the U.S. is not able to borrow more money, it will have to choose which obligations to pay.  The list of obligations is long and includes things such as Social Security benefits, interest payments on the national debt, Medicaid and Medicare payments, unemployment benefits as well as federal worker and military salaries.  As you can imagine, trying to decide what is the priority in that list is extremely difficult.

The possibility of the nation defaulting on payments has not gone unnoticed.  Moody’s Investors Service—the credit rating agency—is threatening to reduce the U.S. government’s Aaa bond rating if the debt ceiling is not raised and the nation defaults on its obligations.  Nobody can really foresee what the impact of a credit rating downgrade would mean for the economy.  Some speculate that the downgrade would have very little impact as much of the U.S. debt is held by pension funds and central banks that are not heavily influenced by rating agencies.  On the other hand, others agree that a downgrade could mean a weaker dollar and higher interest rates which could spell trouble for the fragile economy.

Although dealing with the possibility of default is urgent, what is more important is dealing with the long-term problem of the national debt (which is why we need to borrow in the first place).  Just like households have had to make difficult decisions regarding their spending and debt over the last couple of years, the same thing must happen at the government level.  Making the process even more problematic, the government is trying to make difficult choices amid a tight and looming deadline.  Currently, there are two plans to raise the debt limit and cut the deficit:  one plan has been devised by the Republican House Majority Leader John Boehner and one from Democratic Senate Majority Leader Harry Reid.  Several very daunting hurdles remain for both plans, but as of last night, Speaker John Boehner’s plan seemed to be nearing the number of votes necessary to pass the House (217).  If it does pass, the hard part will not be over.  The most challenging part will begin once the bill enters the Senate and encounters Senate Majority Harry Reid’s competing plan.

Photo Credit: Associated Press


Maryland’s Business Climate—the factors and how we rank!

July 20, 2011

Daraius

As I have written in the past, Maryland is viewed (fairly or unfairly) as having a poor or less than friendly business climate.  Some have suggested that Maryland’s motto is “If You Can Dream It, We Can Tax It” which is not exactly a ringing endorsement for a business friendly state.   First what determines the business climate and is someone or some entity measuring the business climate?

According the International Economic Development Council (IEDC), the essence of a business climate is “how states state, regional and local policies, relationships and local communities support business development.”   What are some of the major factors associated with a business climate according to IEDC?

Major Factors

1. Business and income tax levels
Business and income tax levels allow prospective businesses to gauge their investments when seeking places to expand or incorporate. According to the Tax Foundation’s 2011 State Business Tax Climate Index (8th Edition), “States with the best tax systems will be the most competitive in attracting new businesses and most effective at generating economic and employment growth.”

2. Workforce availability
This factor does not necessarily need to focus on the amount of able body individuals a state currently has but rather the skill level of those within the state. Maryland’s accessibility and continued efforts to support technology driven education will continue to make us a viable contender with other surrounding metro areas. The Kauffman Foundation (New Economy Index) commented on the technology driven workforce stating, “…(states with) a solid innovation infrastructure that fosters and supports technological innovation, and many(of the highly ranked states) have a good quality of life coupled with high levels of domestic and foreign immigration of highly skilled knowledge workers.”

3.  Energy costs
A hotbed issue right now, rising energy costs not only are seen harboring our monthly electric bills but also at the gas pumps. Continually rising energy costs are added into the final cost of a product, often assisting in the loss of possible consumers. Maryland currently is ranked in the Small Business and Entrepreneurship (SBE) Energy Cost Index (2010) as being one of the highest energy cost states along with New Jersey (rank 44), Washington, D.C. (rank 42), and Delaware (rank 38) overall.

4.  Market size
The Kentucky Cabinet for Economic Development’s 2008 Kentucky Business Climate report
referred to this factor as “market access.” The more accessible the state can be to either employees via public transportation, or business imports we will continue to see a growth in those that wish to invest in developing within Maryland borders. Factors such as roadway miles, number of airports, and waterway access are just a few factors that attract new business to states.

5. Cost of living
Cost of living plays a crucial role in exhibiting key trends that will decide if a state has a “good” business climate. States with lower costs of living allow residents to feel the significant increase in their purchasing power as opposed to those states that have high costs of living, per IECD’s key findings.

Other Contributing Factors

  • Quality of life
  • Environmental regulation
  • Permitting, licensing, and various reporting regulations
  • Real estate costs and availability
  • Infrastructure
  • Access to financing and capital
  • Incentive
  • Quality of services

So how does Maryland measure up?

Factor Indication Rating/Rate
Business Tax Levels State Business Tax Climate Index 4.25 (Rank 44)
Workforce Availability New Economy Index 3rd (MA ranked 1, NJ-4, DE-6, PA-22)
Income Tax Levels (State) Comptroller of Maryland MD 2.00-6.25%
DE 2.2-6.95%
PA 3.07%
VA 2.0-5.75%
D.C. 4.0-8.5%
Energy Costs SBE Council Energy Cost Index 39 (tied with Maine, DE-38)
Cost of Living MERIC Composite Cost of Living 44 (VA-24, PA-32, DE-35, DC-50)

So it would seem that Maryland faces some challenges to its business climate, but at least our state motto is not Massachusetts’ motto “Our Taxes Are Lower than Sweden’s (For Most Tax Brackets)”.


Maryland, the deficit and the debt limit

June 21, 2011

Daraius

Many people have heard me state that Maryland’s economy is based on “Eds, Beds, Feds, and Meds,” and this is one of the reasons why Maryland has suffered comparatively less during this most recent recession.   However, this insulation from economic events may be coming to an end and may have a severe impact on Maryland’s economy. Maryland by virtue of geography has become the home of many federal agencies, and by virtue of its highly educated workforce Maryland has received a disproportionate share of federal funding in research, cyber-security, defense, medicine, and other areas.

While the debate in Washington rages regarding the role of government and the need to shrink it, we Marylanders should feel especially vulnerable.  The Federal government directly employs approximately 130,000 civilian or over 5% of Maryland’s labor force. Moreover, Maryland is home to eleven agencies as well as ten military installations with over 80,000 military personnel, and the state receives over 1.5 billion dollars in federal research dollars, over ten billion dollars in federal expenditures, and over twelve billion dollars in private sector contracting opportunities. Finally, numerous Maryland citizens work for the federal government in Washington, D.C. and Northern Virginia.

It has been estimated that for every federal job in Maryland, two other private sector jobs are created. These private sector jobs include IT contractors, teachers, retail clerks and other professions.

A 10% cut in federal employment could potentially  result in the loss of nearly 40,000 jobs in Maryland, or about 1.6% of the total workforce.

Moreover, the federal workforce tends to be older on average and therefore will likely have a higher salary. As a result, a 10% loss in jobs will also have a disproportionate impact on Maryland’s income tax collections of those federal workers who live in Maryland.

To lessen the state’s dependency on the federal government, Maryland needs to encourage the growth of private sector jobs and companies.  There are hurdles from public policy to perception regarding Maryland’s business climate and tax rates. Hopefully, this is outweighed by our highly educated workforce. According the Department of Labor, Licensing and Regulation (DLLR), Maryland created only 4,400 net new private sector jobs between April 2010 and April 2011 (a growth rate of 0.2%), a very modest number, to say the least .

This growth rate suggests that Maryland is in a precarious position in these latest deficit and debt discussions. Maryland’s economy would perform better if the federal cuts were targeted towards entitlement programs—Medicare and Social Security, for example—rather than agencies (NIH, NIST, DoD, etc.) as cuts to entitlement programs would be felt nationwide while cuts to agencies would be more acutely felt in Maryland. While I am not advocating government for government’s sake, we Marylander’s need to be aware of just how closely tied our economy is to the Federal government.

Image credit: World Travel Guide


Going On a Mission: Governor Martin O’Malley’s Asia Trade Mission

June 20, 2011

Clay

Developing personal relationships is crucial for success when doing business in the Asian region, and that means spending quality face-to-face time on the ground.  In an effort to encourage foreign investment, stimulate economic development, strengthen commercial ties, Maryland Governor Martin O’Malley led a trade mission to Asia May 31-June 11.  Towson University Interim President Marcia Welsh, Asia Studies Director Stephen Phillips, and I were privileged to be among the 68 people chosen to represent the State on this productive trip through China, South Korea and Vietnam.

This 11-day trip was the perfect opportunity, not only to improve existing relationships, but to showcase what Maryland and Towson University have to offer and how our ties can benefit all parties.

During our travels through Shanghai, Nanjing, Beijing, Seoul, and Hanoi, we attended some key events like the 13th Shanghai Bio-Forum, BioCapital Leadership’s Luncheon, the Maryland-Jiangsu Partnership Banquet, and the Vietnam-Maryland Cooperation Ceremony and Luncheon. Shanghai’s Tasly Group announced a $40 million investment in Maryland, the largest direct investment ever in our state by a Chinese company.

Additionally, Marlin Steel Wire, a Baltimore steel wire basket manufacturer, signed a collaboration agreement in Vietnam with a state-owned steel production firm.  AmeriSure Pharmaceuticals, a Rockville based company, signed an agreement to collaborate with one of Vietnam’s largest state-owned pharmaceutical firms. In addition, the Vietnam Natural Resources and Environmental Corporation agreed to promote Ellicott City’sBlue Wing Environmental Solutions & Technologies floating island products.

Towson University representatives (Steve Phillips, Clay Hickson, Ohoe Kim, and Marcia Welsh, 2nd – 5th from left, respectively) and Inha University representatives, Incheon, South Korea

Not to be left out, Towson University also signed three MOUs in Shanghai to provide faculty training and school management services programs in the Pudong area.  Two other Towson representatives also joined us for parts of the trip.  Alexandria Liu, a Towson University student interning at the Maryland Department of Business and Economic Development, participated in the China leg of the trip, and Mathematics Professor Ohoe Kim was in Korea helping to arrange meetings with various partner universities there.

To develop opportunities for TowsonGlobal Business Incubator and its member companies I met up with representatives of Shanghai Juke Biotech Park, an incubator specializing in helping biotech SMEs.  I also met with Ningxia Yinxing Energy Co., which focuses on green technologies and is exploring expansion to the US.  In Beijing, I met with Xin Feng Zhuoqun Technology Co., a professional circuit board processor that may be able to support current members.   These meetings were important steps to open doors for future collaborations between Asian enterprises and TowsonGlobal.

Despite a few hurdles – our bus got stuck on a mound of dirt and broken asphalt – we also had the opportunity to visit historic landmarks like the Presidential Palace in Nanjing and the Great Wall and Forbidden City in Beijing, to go hiking in Seoul, and to tour around the city of Hanoi.

Clay Hickson (center) and delegation members at the Presidential Palace, Nanjing, China

Clay Hickson and Marcia Welsh at the Great Wall, Beijing, China

I was honored to be a part of such significant efforts to bring Asia and Maryland together.  Being a part of the Governor’s delegation offered business and educational professionals opportunities to expand their networks and strengthen existing ties while gaining credibility.  The mission brought many opportunities for technology development and economic growth to our state.  Maryland’s future in these foreign markets looks bright, but success will all depend on the efforts we make to continue building ties in the region.


VIDEO: Meet Our Team – Fred Schroeder

May 24, 2011

Dawn

Fred Schroeder has to be the calmest person I know.  No matter what is happening in the Business Analysis & Project Management unit of DECO’s Information Systems Solutions, Fred remains calm.  That is no easy feat since he is not only the Associate Director for the unit, but also performs work as both a business analyst and a project manager, not to mention he is responsible for writing all of ISS’s responses to RFPs.  I can say that Fred is a great boss and I really enjoy working with him, as well as for him.  Hopefully this interview will provide you with a peak at just how calm, cool and collected my boss is . . .everyday!


Class of 2011—an outlook on your job search!

May 18, 2011

Raquel Frye

Attention College graduates…tell your parents you are not moving back home!  With the spring semester coming to an end across the nation, a number of college students will soon be stepping out into the real world.   Undoubtedly, recent grads are feeling nervous entering a job market that was battered during the Great Recession. However, unlike the last four years, students have a reason to be optimistic.  According to the Executive Director of National Association of College and Employers (NACE), the job market for new college graduates is gaining momentum. For instance, employers are planning to hire 19.3 percent more new college graduates—with a starting average salary of $50,462—this year compared to the same time a year ago. This is by far one of the best spring outlooks since 2007, when employers increased hiring of new college graduates by 19.2 percent.

Also, don’t forget that possible job prospects could be sitting right under your nose.  If you are currently an intern at a company, it might be a good idea to ask for a full-time promotion.  According to a survey completed by NACE, employers recruited more than half of their interns to full-time positions. This marks the highest rate of intern-to-staff hiring in a decade.

TU students preparing for commencement next week!

Around Maryland, job fairs and job prospects are also starting to pick up speed.  According to an article by the Baltimore Sun, Loyola University and John Hopkins University have both seen an increase in employer interest for career fairs.  In fact, a record number of 130 employers attended Loyola’s spring career fair.  At Johns Hopkins, they have also seen an increase in employer participation at their own career fairs as well as on-campus interviews.

While job prospects may be brighter, we must also recognize that the economy is still fragile and your personal job market outlook also depends greatly on your major.  According to the president of CareerBuilder.com, in-demand majors include information technology, sales, finance and accounting – to name a few.  I would go out on a limb and say that economics majors are probably not doing too bad themselves.  After all, it’s a degree that can be tailored to a number of positions and jobs titles.  Regardless of your degree of choice, here’s hoping this year is brighter for all 2011 graduates!


Take it to “The Cloud”

April 18, 2011

Jimmy

The hot topic in information technology is “the cloud.”  You may have heard about it online, the office, or have seen it on various TV commercials.  According to Wikipedia, cloud computing “refers to the provision of computational resources on demand via a computer network.”  The cloud gives organizations, government entities, and even individual users that ability to use highly scalable Internet services and resources for business or personal use.  Some core drivers for “cloud technology” include high-speed Internet, grid computing, utility computing, rapid/thin provisioning, clustering, and server virtualization.

Ok, so that sounds nice, but what can an individual or company expect from cloud computing?

Well, the truth is, a lot of companies are taking advantage of “cloud computing” from a service offering and marketing perspective, and companies like Amazon and Google are taking advantage of the hype!

Amazon offers a full “cloud infrastructure” that allows organizations to lease web services and virtual systems for software development and hosting.

Google has taken a different perspective on cloud computing by focusing its attention to the consumer.  Google plans to propose a browser-driven operating system and computing platform that would essentially be “cloud-driven.”  The Google notebook, which consists of a web-browser operating system (Google Chrome) and some utility software, allows an individual to perform all basic computer functions like browsing the web, using e-mail, or working with documents and spreadsheets.

However, all computer functions are driven by the “cloud” and various web services, so processing and storing (i.e. saved documents) are actually performed on remote systems rather than locally.  Aside from having a Google account, the only true requirement to use the Google notebook is being connected to the Internet.  To learn more about “cloud computing” and see Google’s vision of the technology, check out the Google Chrome OS website .

Photo Credit: How Stuff Works


PureBang Games and My Hopeful Journey Announced as the Winners of TowsonGlobal’s Business Plan Competition

April 14, 2011

Clay

TowsonGlobal’s first Business Plan Competition has found a winner… Two, in fact!   On April 11 five finalists—Hem of His Garment, My Hopeful Journey, Knight Protection Inc., PubRaiders.com, and Pure Bang Games—presented in front of a panel of distinguished judges over the course of three hours.  After careful consideration, Pure Bang Games and My Hopeful Journey were selected as winners.

Each entrant had fifteen minutes to present their business plans, followed by 10 minutes of Q&A.   The finalists were eloquent, confident and most importantly, very passionate about their ideas.  During the discussions, the judges provided insightful financial, marketing and management advice.

The competition was stiff, and in the end, there was a tie between the innovative ideas of PureBang Games and My Hopeful Journey.

Pure Bang Games Website

Pure Bang Games is a social game company poised to grab a chunk of the $1B social games market by creating fun, innovative social games aimed at women and tweens.  Their first title, My Pet Rock, is live on FaceBook and they are raising capital for marketing.

My Hopeful Journey's Website

My Hopeful Journey Website

My Hopeful Journey is a web-based application, much like a personal organizer, that changes the way women integrate infertility treatments into their lives.  It includes a calendar, task list and journal all in one application.   It is highly flexible and is accessible from any computer, phone or other device that has internet access.

Each winner will receive a prize package valued at $7,250, which will include the facilities, mentoring and networking assistance of a three-month Resident Membership in TowsonGlobal, promotional products and services from X-Sell Promotions, and a monetary prize of $2,000.

The support of sponsors has helped make TowsonGlobal’s competition a great success.  Thanks to Katz Abosch, Score of Greater Baltimore, Maryland Department of Business and Economic Development, X-Sell Promotions, Kevin Botsford of Merrill Lynch, Vince Talbert of PayPal, and YouNoodle.

TowsonGlobal’s latest effort in encouraging and strengthening entrepreneurial spirit and innovation in the Baltimore area has surpassed expectations.  The response for the competition has been gratifying and shows the great potential of entrepreneurs in our region.

Look for the next competition in the fall!


Business Plan Competition: Meet The Judges!

April 5, 2011

Clay

We are only a few weeks away from the final round of TowsonGlobal’s first Business Plan Competition.  On April 11, finalists will make oral presentations in front of a panel of judges, who will then select the winner.  The judges, many of them Towson University alums with entrepreneurial backgrounds, have diverse expertise in a variety of industries, ranging from advertising to commercial lending and information technology.

So let’s meet them:

CallahanMr. Ed Callahan, Creative Strategist & Co-Founder, Planit
Edward Callahan is the creative leader and cofounder of Planit.  With more than 15 years of industry experience, he has worked with clients including CitiFinancial, Crayola, Under Armour, National Geographic, and a variety of other local, regional, and national brands. Recognized by the Baltimore Business Journal as one of “40 under 40” rising stars.  Mr. Callahan is a graduate of Towson University, where he earned a Bachelor of Arts in visual communications.

Mr. Larry Fiorino, CEO & President, G.1440
Mr. Fiorino has over 20 years of experience in the information technology industry.  He was named in the Baltimore Business Journals “40 under 40″ listing and serves on numerous boards including the Emerging Technology Centers, and Towson University’s College of Business and Economics. He also sits on the University of Baltimore’s Entrepreneurship Board.  Mr. Fiorino is a graduate of Towson University, with a Bachelors degree in Accounting, has an MBA from Loyola College and is a CPA in Maryland.

Mr. Jack Lewin, Vice President, M&T Bank, Commercial Banking
Mr. Lewin is a senior relationship manager for commercial lending at M&T Bank in Baltimore, where he manages approximately $400MM in bank exposure to commercial companies.  He serves as a director of The Maryland Technology Development Corporation (TEDCO).  Mr. Lewin also serves as on the board of TowsonGlobal Business Incubator. He received his MBA from University of Virginia’s Darden School of Business, and received his BA cum laude with distinction from The Colorado College.

ParedesMs. Lissell Paredes, B.A. in International Business, Towson University (July 2010)
Lissell Paredes is a recent graduate of Towson University, with a Bachelor of Science in International Business, received in July 2010. She currently serves as a Junior Research Assistant at Towson University’s Regional Economic Studies Institute assisting with marketing and research activities. During her studies, she started as a marketing and research intern at TowsonGlobal Business Incubator, where she conducted market analysis for its member companies. She also attended Universidad Del Pacifico in Peru, where she was an economics major, before transferring to the United States to pursue a business degree.

ParekhMr. Eric Parekh, Vice President, Evergreen Advisors, LLC
Mr. Parekh is a Vice President in the Mergers and Acquisitions practice of Evergreen Advisors.  He has a diverse background in middle market investment banking and brings a breadth of transactional experience to the practice.  Mr. Parekh has an MTS from Urshan Graduate School of Theology in St Louis, Missouri, and a BS in Economics from Texas A&M University.  He is actively pursuing an MBA with a concentration in accounting at Loyola University in Maryland. Mr. Parekh holds his Uniform Combined State Law Series 66 and his Series 7 General Securities Representative Licenses.  He serves on the board of the Towson Global Business Incubator.

Mr. Vince Talbert, Vice President of Merchant Services, PayPal – eBay, Inc.
Mr. Talbert has 20 years of marketing, Internet and credit card experience. Currently, he is the VP of Merchant Marketing at PayPal, an eBay company.  He joined eBay through the acquisition of Bill Me Later, Inc. where he was the VP of Marketing.  Bill Me Later was acquired by eBay for $1 billion. As a founding member and member of the executive team, Mr. Talbert was a key participant in the fund raising activities of the company which raised over $300 million in private equity. He earned his MBA from The Darden School of Business at the University of Virginia and his BS in Economics and Finance from Towson University.

TowsonGlobal launched the Business Plan Competition precisely because our purpose is to strengthen long-lasting entrepreneurial spirit and to support innovation across the Greater Baltimore Region that ultimately create a more vibrant economy.  The panel of judges for this first competition embodies that vision by providing today’s innovators with real and useful feedback from successful entrepreneurs and other experienced business people.


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