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Thinking Globally Boosts Local Business Prospects

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Last month, Howard County Economic Development Authority (HCEDA) officials completed what they called a “successful” trade mission to Europe, and part of that success was securing a new agreement with Fraunhofer, Europe’s largest application-oriented research organization.

Headquartered in Munich, Germany, Fraunhofer will work with the HCEDA to open an office in Howard County. Fraunhofer develops technology for a variety of industries, including communications, health and environment, production and supply of services, mobility and transportation, energy and security.

The overseas connection was all part of the local effort to remain competitive. “We must think globally to successfully attract these new technologies,” said Howard County Executive Allan Kittleman.

From Fraunhofer’s perspective, “working with Howard County’s rich and diverse technology ecosystem is an ideal way for us to meet our goals,” said Adam Porter, executive director of the Fraunhofer USA Center for Experimental Software Engineering.

‘Best and Brightest’

It’s not only European companies that are looking in from the world beyond, but Asian- and Indian-founded firms that tend to locate in the Baltimore-Washington region, too, said Daraius Irani, vice president of the Division of Innovation and Applied Research at Towson University.

“There are already strong communities of Asian-Americans and Indian-Americans here in the region, and there is a strong education system, both K–12, [and] through college and graduate school,” said Irani.

As this trend grows, it bodes well for continued growth and job creation, he said, since “startups are the engine of economic growth.”

Just how quickly are immigrant-founded businesses starting in the U.S.? In 1996, 13.3% of all startup owners were immigrants; by 2014, that number had increased to 28.5%, according to the 2015 Kauffman Index of Startup Activity National Trends report. And according to a May 17, 2016, article in The Wall Street Journal, immigrants founded 51% of all startups valued a $1 billion or more. About 16.1% of these startups were founded by Indians.

“There are two probable reasons why this is the case,” said Irani. “First, self-selection: Those who emigrate from a country to a new country are probably very well motivated and intelligent. We are getting the best and brightest who immigrate to the United States. Second, in many instances, the foreign community helps their startups with funding.”

New Export Markets

In Anne Arundel County, immigrants who come to start businesses are from all over the globe, said Julie Mussog, CEO of the Anne Arundel County Economic Development Corp. “We have a diverse base from many different countries.”

Mussog also shared her thoughts on the major opportunities opening up outside the U.S. in export markets: “Over 80% of global economic growth is projected to occur outside the United States from 2015–20, and fully two-thirds of the world’s middle class population is projected to reside in Asia by 2030,” she said.
“This represents major opportunities for U.S. regions (and their firms) to grow and diversify by opening up new export markets and attracting new investment from rising foreign multinational firms,” said Mussog.
“U.S.-based affiliates of foreign-owned enterprises (FOEs) pay higher wages, provide greater employee benefits and invest more in worker training,” she said, “and while FOEs represent 5% of total U.S. employment, they are responsible for an outsized share of U.S. research and development (19%) and U.S. exports (20%).”

Such information wasn’t lost in March 2014 on the top executives at Shimadzu Scientific Instruments when it opened its new Shimadzu Solution Center in Columbia. The company develops and manufactures analytical and monitoring equipment for scientific and medical laboratories. It also showcases more than 30 scientific instruments and serves well-established companies and startups in various industries, ranging from pharmaceuticals to food safety and toxicology.
“Shimadzu chose Howard County for multiple reasons,” said company spokesperson Kevin McLaughlin. “One key factor is its unique location in the United States, being in close proximity to government agencies, renowned universities and industry leaders.”

McLaughlin listed The Johns Hopkins medical institutions, National Institutes of Health, the University of Maryland, the Food and Drug Administration, the Environmental Protection Agency and the U.S. Department of Agriculture as being among the area-based institutions that influenced the corporation’s decisionmakers.

“This type of proximity fosters collaborations and partnerships, and provides us with opportunities to develop relationships that help us engineer new solutions to evolving market demands,” he said.

‘Great Places’ to Live

Shimadzu’s Howard County location has been a very important factor in its growth, McLaughlin said. “In addition, the county and surrounding areas are great places in which to live,” he said. “This is important from a recruitment aspect as we strive to hire and retain the best employees.”

In addition he said, “The proximity to the Port of Baltimore and its success in recent years is also vital to sustained growth.”
Some Shimadzu employees are lifelong residents of Maryland, whereas others have come from other states. “The ability to live in a wonderful region of the country while working with exceptional colleagues doing important work,” he said, “is certainly a winning formula for growth and success.”