Q&A With Maryland DBED Secretary Christian Johansson

Secretary Christian Johansson was recently tabbed by Gov. Martin O'Malley to lead the Maryland Department of Business and Economic Development (DBED) to draw on Johansson's varied background, which encompasses experience in economic development, as well as management consulting, technology and health care.

Before joining DBED, Johansson served as managing director of Continental Equity, where he focused on investing in diverse-owned companies and teams. Previously, he served as president and CEO of the Economic Alliance of Greater Baltimore (EAGB) for five years, during which time the public/private partnership was recognized for its strategies and investment track record.

Earlier in his career, Johansson was a senior consultant for the Sag Harbor Group in Boston; founded and served as CEO of Inka.net; served as a management consultant for Booz Allen Hamilton in London; and co-founded and operated Dola Health Systems, a medical assessment and consulting company with operations in Maryland and Sweden.

Johansson earned a bachelor's degree in Biology from Brown University and received a Master of Business Administration degree from Harvard University. In addition to serving as co-chair of O'Malley's Transition Committee for DBED, he is co-chair of the Education Committee and a member of the Executive Committee of the Hippodrome Theatre.

He also serves on UMBC's President's Board of Visitors and is a board member of the Greater Baltimore Committee's "The Leadership" program.



What do you think are the best attributes that you bring to your new position?

I feel that I bring a unique perspective to the role of DBED secretary. Having served as a management consultant to numerous Fortune 500 companies, I certainly understand the challenges facing big business. On the other hand, as an entrepreneur and small business owner, I recognize the concerns facing Maryland's small and medium-sized businesses, including raising capital, making payroll and surviving a difficult economic climate.



Maryland does not have a reputation as a business-friendly state. What do you want to do to improve Maryland's business profile?

During the past 90 days I have talked at length with hundreds of Maryland business owners, and I think your readers would be surprised to know that most have very positive views on business in the state. Most understand well that cutting services to lower taxes has not been a recipe for economic success in other states and that we must continue to invest in the foundations of our economy to be successful in future years.

And, once they are familiar with it, most business owners agree that Gov. O'Malley's comprehensive long-term economic growth strategy is an effective plan to expand our world-class workforce and make the best public school system in the country even better, among other points.

The key to improving misperceptions like this is constant and effective communication. To that end, during my first 90 days we launched three interactive web sites, produced two new online publications, designed a business confidence campaign and doubled media outreach to help in-state businesses better understand the significant value of a Maryland location.



What is your department doing to heighten international trade efforts?

Earlier this year, Gov. O'Malley announced his international growth strategy. It includes a new Maryland International Business Center, which will be a one-stop shop for foreign companies looking to expand their operations into Maryland, as well as provide Maryland companies with export assistance. The center, which will be managed by DBED, will bring together for the first time key state, federal and private sector partners to give companies significantly improved access to essential resources needed to grow.

The governor also announced the creation of Maryland's first incubator dedicated exclusively to growing foreign-owned companies, as well as the Governor's International Advisory Council, which brings together, for the first time, a diverse group of seasoned Maryland business leaders to guide the state's international efforts.

During the past year, Maryland has attracted 14 foreign-owned companies, which have the potential to create up to 250 new jobs. The wins are a result of a number of targeted economic development missions to promote the state as a hub for global companies, including a blitz effort in September 2008 when the team visited Russia, China, South Africa and Finland. As a result, numerous foreign business delegations from China, Finland, South Africa, India, Montenegro, Japan, Russia and South Korea have visited Maryland to learn more about the state's advantages for foreign companies.

We have also opened seven new foreign offices on a contingency basis since August, bringing the state's total number of foreign offices to 11. The new offices include locations in India, South Korea, Japan, Montenegro, Canada, Brazil and South Africa.

Today, more than 550 foreign-owned companies from 30 countries call Maryland home. In fact, foreign-owned firms employ roughly 105,000 Marylanders, or 3.5% of the workforce.



Numerous professionals from the film industry are upset that the state and the legislature have not funded an updated incentive package that could have resulted in millions of dollars in economic impact for Maryland, as they have for many other states like Louisiana and New Mexico. Does your office plan to work with the legislature toward that end?

I recognize and value the importance of the film industry and its workforce in Maryland's creative economy, but this year was an exceptionally challenging time for all state agencies and programs. Tough decisions and spending reductions had to be made.

To your second point, the legislative budget committees have requested that DBED convene a stakeholder workgroup to review the issue of film incentives, and make recommendations back to the committee and the General Assembly. We are in the process of forming this group.



In a continuing effort to sharpen your business marketing focus, should tourism, film and the arts become a stand-alone function of state government?

Tourism offices generally reside within state economic development/commerce departments; from a national standpoint, the Office of Travel & Tourism Industries is located in the International Trade Administration of the U.S. Department of Commerce.

In 2007, visitors to Maryland spent $13.6 billion on tourism industry products and services (lodging, food service, transportation, retail and attractions), which generated more than $1.7 billion in state and local taxes. More than 140,000 Marylanders are employed in the tourism industry. Investing in our cultural industries not only provides an excellent quality of life for our citizens, but is also a critical for business retention and expansion.



How do you respond to critics who feel that the secretary of DBED should be someone with far more experience in business and government positions, instead of someone who has spent so much time working on entrepreneurial efforts like yourself?

I believe that an entrepreneurial mindset is critical for today's DBED secretary. In these economic times, it is equally important to be able to identify and nurture emerging sectors of our economy while addressing issues in traditional industries. While it's very important to learn from the successes and failures of the past, we must continue to look to the future. We are not selling yesterday's economy.



Gov. O'Malley announced his new biotechnology initiative about a year ago. What's happening with that program?

Building on Gov. O'Malley's bio and life sciences investment strategy released last year, Maryland's Life Sciences Advisory Board recently unveiled BioMaryland 2020, a comprehensive industry growth strategy to leverage our amazing assets: people, research institutions and federal facilities. For complete details or to download the full report, visit our web site, www.choosemaryland.org.



The legislature was not very financially supportive of DBED's incentives programs during the recent session. Is the state out of the running when it comes to competing for corporate headquarters like Volkswagen, Hilton Hotels, etc.?

While across the board budget cuts were necessary this year, Maryland legislators were very supportive of DBED programs overall and most were very eager to listen to our concerns.

However, many legislators were unaware of the value of DBED programs in their community so we have to do a better job of communicating in coming years. I do believe that will make a huge difference in funding when we surface from this tough fiscal environment.

When it comes to incentives, I feel strongly that, while they can help in securing a deal, they are not the only reason why a company considers an area. Most companies develop their short list based on the fundamentals - like transportation, workforce skills, operating costs (taxes, wages, etc.), available real estate, etc. Incentives come into play much later in the selection process, usually after the short list of locations has been developed. If two or more jurisdictions are equivalent based on fundamentals, it's fairly common to see incentives used as a tiebreaker.