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se·ques·tra·tion

June 2013

A Good Offense is the Best Defense

If you had to look up the pronunciation or definition of ‘sequestration’ before, chances are you can now rattle it off in your sleep. This act of Congress, a scare tactic that no one ever thought would see the light of day, leveled a uniform reduction in spending and budgets across virtually every government program and department with the exception of select family and veteran services. Locally, Harford County is starting to feel the ripple effects.

“Sequestration forced many companies and agencies to put on the brakes,” says Jim Richardson, Director, Office of Economic Development for Harford County. “Many companies have been awarded large contracts, but due to federal budget constraints, no task orders (notice to proceed) have been ordered. This also makes planning and company growth problematic.Right now, I think, we’re in the worst-case scenario locally that we will see.”

SequestionInsulated from much of the economic woes of the last few years, primarily because of the boon to the local economy from BRAC, Harford County is experiencing some of what the nation has suffered from for years. With Class A vacancy at 18 percent, a great deal of office space around the county sits empty as contractors are reluctant to relocate while sequestration is formally in place with everyone taking a wait and see approach.

Richardson admits that OED anticipated two to three contract employees for every DoD job, expecting 12-16,000 new residents to the County. Instead, the number was about 8,000. “The election, the fiscal cliff, and then sequestration. Companies got nervous,” states Richardson. The contractors did come, up from 28 (defense companies in 2005) to 120 defense companies in 2011, but instead of relocating their whole office, they only set up satellites with one to five employees. Sequestration only cemented that cautious strategy. “We want to shift our defense efforts from attracting new entities to connecting what is already here at APG to other industries.”

Maryland ranks second among states in federal obligations for research and development ($15.8 billion) and first when measured on a per capita basis [Source: choosemaryland.org]. Maryland also fares well when looking at other indicators, ranking first in “Entrepreneurship and Innovation,” third in the human capital “Talent Pipeline,” and ninth in “Growth and Economic Performance,” according to the 2013 Enterprising States study, which looks at how states are creating an environment in which the private sector can thrive.

However, overall innovation in Maryland has declined, when measured by the number of U.S. patents and patent applications issued to Maryland inventors, ranking a lowly 37th in commercializing research and development. That’s a statistic that Governor Martin O’Malley is trying to change beginning with programs like the Maryland Innovation Initiative that he signed into law in July 2012. Administered by the Maryland Technology Development Corporation (TEDCO), the Maryland Innovation Initiative will promote the commercialization of research conducted at universities in Maryland.

Parallel to state efforts, County leaders are tackling a similar approach. Richardson explains, “We really want to create the entrepreneurial eco-system that is vital for tech transfers up here in Harford County. APG no longer houses soldiers. It’s become a mega-base of research and development for the military. We have to make sure we have the systems in place to foster that innovation and discovery once it’s released for commercialization.

“We’re renewing our efforts to establish a University Research Park here. While Towson University breaking ground at Harford Community College is a small step in the right direction, we desperately need a university partnership to keep growing. We are trying to connect the research and development contracts to Harford County in areas like chem/bio, communications/electronic and test/evaluation – the areas where APG specializes. Look at the news. You had the ricin scare in April. Mounting reports that Syria has and may be using chemical weapons. Cyber attacks on everything from utility companies to social media accounts. This stuff isn’t going away. These are areas that need vigilant monitoring. And who better to benefit than Harford County through the efforts at APG.”

Cyber security in particular has the potential to become a major economic engine in the region. Hailed as the new “research triangle,” the area between Fort Detrick,

Contracts awarded to Harford County Businesses through APG*• 2012     $660 million
• 2011     $440 million
• 2010     $221 million

*Note – Work was completed in Harford County – Source: FEDMINE.US

APG and the Naval Air Station Patuxent River (PAX), anchored by Fort Meade in the middle, has all the ingredients to become another Silicon Valley. To encourage the type of collaborative environment required for that type of sustained innovation, Harford County leaders are being proactive in their development of resources as they also monitor Department of Defense activity. “While we believe APG has the infrastructure and land to support growth in future BRAC rounds, we want to position ourselves for the future.”

Here are a few ways Harford County is doing just that:

Traffic
Traffic concerns are being evaluated and optimistically abated with the hiring of a transportation coordinator to facilitate and encourage alternatives to driving on Post. A traffic study of MD Route 22 from APG to Bel Air was conducted and critical improvements outlined. And, the improvements to the interchange at Route 40 and MD Route 715 are scheduled for completion in late 2013.

Start-Up Assistance
The Harford Business Innovation Center, conveniently located only a mile from APG, was developed as a fully-equipped landing spot for early stage service companies, international businesses seeking a “soft landing” in the U.S. market, and growth-oriented contractors looking for a place to start. Completely furnished with telephone, mail and Internet services, the HBIC can also arrange mentoring, technical and marketing assistance, business networking and presentation coaching.

Newly opened in Havre de Grace off Route 40, The Ground Floor is a partnership between Harford County OED, the Chesapeake Science and Security Corridor (CSSC), the Economic Alliance of Greater Baltimore, with support from Cyberhive, eMoxie, and Betamore. Designed as a community driven workspace and collaboration center for technology entrepreneurs, freelance developers and startup businesses, The Ground Floor is comfortably furnished with a modern, urban sensibility and is wired for production.

Harford’s Entrepreneurs Edge is another partnership between Harford County Public Library, Harford County Office of Economic Development, Harford County Chamber of Commerce, Harford Community College, Harford Business Innovation Center, Northeastern Maryland Technology Council and the Small Business Technology Development Center to provide resources and support for start-ups and entrepreneurs.

Tech Transfer
The effort to improve the defense-related technology transfer is not hampered by the military – in fact, it’s fully supported and encouraged. The military understands that with the pace of technology and development, insular research and development organizations and companies will quickly lose relevance. They have established technology transfer offices and practices to help streamline the processes for collaboration, patents and licenses.

Optimists predict the end of sequestration by the close of FY 2014. Harford County leadership and business owners are staying on the offense with continued networking, strengthening of infrastructure, and the cultivation of a fertile playground where all industry
will grow. I95

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