Post-recession, the Mid-Atlantic region retains its reputation as one of the strongest areas of the country. Several sectors are growing, according to Anirban Basu, chairman and CEO of Baltimore's economic policy consultancy Sage Policy Group. As each state builds on historic strengths and develops new niches, positive signs are evident in financial services, defense and homeland security, distribution, and general consumer spending.
Industry diversity is the region's hallmark. Industrial production is rebounding in Pennsylvania, Basu says, and will continue to grow for the next few decades with expansions in the Marcellus Shale and natural gas products. In Maryland, future developments will abound in defense and homeland security due to the proliferation of military bases. Several years ago, in response to Base Realignment and Closure (BRAC), Maryland was charged with accommodating many people reassigned from U.S. military installations. BRAC affected Maryland bases including the Aberdeen Proving Ground, Andrews Air Force Base, Fort Detrick, and Fort Meade. In New York and New Jersey, economic healing is underway in finance, distribution, advertising, and back office operations. Meanwhile, the Delaware Economic Development Office anticipates automobile, chemistry, financial services and insurance, life science and biotech, tourism, agriculture, and corporate legal services companies to spur expansion.
New York has benefited from federal policies supporting banking and financial services, writes Steve Cochrane in "U.S. Regional Outlook: Smaller Areas Lead Recovery," for Moody's Analytics. "The Mid-Atlantic states also showed an encouraging rise in jobs in March 2010," Cochrane writes. Calling this a pattern instead of a trend, the rise indicates improved hiring conditions in areas with a higher concentration of service-producing industries, signaling a broader recovery. Newark, New Jersey, a large Mid-Atlantic metro, seems to have already emerged from the recession, according to Cochrane.
New York industry is expanding across an impressive array of sectors. The list includes the biotech, cleantech, distribution, food processing, industrial machinery and systems, and information hardware and software. Incentive plans are enticing prospective clients from variety of demographics. In July, Governor David Paterson announced a $50 million Small Business Revolving Loan Fund to provide capital to minority and women-owned enterprises, and other entrepreneurs that have difficulty accessing regular credit markets. The Excelsior Jobs Program was also launched this summer to provide job creation and investment incentives to targeted industries such as biotechnology, pharmaceuticals, high-tech, cleantech and green tech, financial services, agriculture, and manufacturing. Companies can pursue four new tax credits in these industries to create and maintain jobs or invest.
Some companies are combining high-tech interests with green initiatives in New York. This year, Internet company Yahoo! completed the first phase of an environmentally-friendly investment in Lockport. The $150 million data center will create 125 well-paying, high-tech jobs. Yahoo! received incentives including 15 megawatts of low-cost hydropower from the New York Power Authority for this phase.
While attracting out-of-state companies like Yahoo!, native New York firms invest in the area. Emerson Network Power, a manufacturer of power quality and surge protection equipment, has been located in Binghamton for almost 40 years. It built a new 40,000-square-foot headquarters facility a few years ago. "Of course there are any number of reasons to place a business in New York, but for us the real differentiator was the depth and breadth of the area's educational infrastructure," said William C. Fierle, company president. "New York's colleges and universities consistently produce an intelligent, creative, and well-prepared work force, and those are the types of people who excel at Emerson Network Power. Simply put, we like New York because it's a great place to recruit new talent and to provide continuous educational opportunities for our existing employees."
Area Development also honored New York with its 2010 Gold Shovel Award, which recognizes states that create the most opportunities for investment and jobs in a given year.
New Jersey is energized by the green power industry, emphasizing in-state production of renewable and traditional energy sources. The state is the top on the East Coast and second nationwide for installed solar capacity. It also has the country's first coastal wind farm, and is seventh in the nation for attracting venture capital investments in clean energy companies. The state government is focusing on wind energy. In June, Governor Chris Christie signed an agreement establishing the Atlantic Offshore Wind Energy Consortium to facilitate federal-state cooperation for commercial wind development on the Atlantic's Outer Continental Shelf. Additionally, the act creates an offshore wind energy certificate program and provides financial assistance and tax credits to businesses that build manufacturing, assembly, and water access facilities to support offshore wind projects. To simplify regulatory processes, the Department of State now handles all of New Jersey's economic development activity, with its Business Action Center covering business permits, licenses, certificates, and other business-related applications.
Long a food processing hub, New Jersey attracted Pinnacle Foods to build a new corporate headquarters in Cherry Hill after outgrowing its previous facility. "Staying in Cherry Hill allowed Pinnacle Foods to retain and build our highly-trained work force," says David J. Socolow, vice president of corporate affairs. "Pinnacle Foods is a key part of the food industry in the South Jersey region, which is a great place to recruit talented employees." Pinnacle owns some of the nation's best-known brands, including Duncan Hines, Aunt Jemima, Lender's Bagels, and Birds Eye Foods. The New Jersey Economic Development Authority awarded Pinnacle $1.1 million in tax incentives over 10 years to retain the company and its 130-person work force. The company expects to create 90 new jobs.
Other global food and beverage companies have been attracted to New Jersey. In South Brunswick, Coca-Cola announced a new environmentally sustainable 230,000-square-foot bottling and distribution center, slated to open in mid-2011. It will also expand its existing Carlstadt bottling facility. Both of these projects will retain more than 1,000 jobs.
Pennsylvania incentives are luring businesses to the state. Its 12 regional Keystone Opportunity Zones offer 49,000 acres of developable land, free of specific state and local taxes within certain underdeveloped and underutilized areas. Additionally, the Ben Franklin Technology Development Authority's (BFTDA) Technology Development Grants help emerging technology firms establish competitive advantages with advanced e-business systems.
Besides incentives, strong industry clusters are nurturing growth. In York, Unilife, a maker of safety syringes, is building a $30 million, 165,000-square- foot manufacturing facility that can produce 400 million safety syringes each year. Slated for completion late this year, the project includes a product development center, a microbiology lab, quality inspection and control rooms, and a fully segregated warehouse for efficient inventory management.
Unilife considered 17 cities in 10 states before selecting York. "In addition to common criteria such as the cost of doing business and quality of life, we also examined proximity to target pharmaceutical industry clusters and the ability to tap into an abundant pool of engineers," said Stephen Allan, Unilife vice president of marketing and communications. "Pennsylvania not only provided the right balance of location, talent, and business affordability, but had a government agency that was proactive in securing our investment and committed to building long-term relationships." Unilife, which is listed on NASDAQ, considered Pennsylvania's proximity to fellow Mid-Atlantic state New York. "It's also advantageous to be so close to the global financial capital of New York. Our decision to select Pennsylvania has thus proved to be a very smart move."
In Delaware, agriculture is expected to sow new projects as poultry, corn, and soybeans are processed into biotech products. The state already has approximately 100 bioscience companies, including Agilent Technologies, AstraZeneca, DuPont, Dade Behring, W.L. Gore and Associates, Schering-Plough, and Syngenta. Delaware also touts one of the largest concentrations of banking operations in the Mid-Atlantic.
The state is doing its part to draw investments. The Delaware Strategic Fund attracts new projects through low-interest loans and grants for businesses that pay sustainable wages. The fund is also the primary source for SBIR Bridge Grants and Brownfield Grants.
Clean energy is also in vogue in Delaware. Modular Carpet Recycling (MCR), a cleantech startup that recycles waste textiles and carpeting for its Renewlon™ nylon, is opening its first manufacturing facility in New Castle. The talented chemical manufacturing work force and standalone Mid-Atlantic location with access to raw materials led the firm to choose the site, says Ron Simonetti, MCR CEO and founder.
Finance companies have long been attracted to Delaware for its favorable tax climate. Sallie Mae, the country's leading provider of student loans and administrator of college savings plans, announced the relocation of its corporate headquarters from Reston, Virginia, to Newark, Delaware. The company will add employees to its existing Newark work force of 900 people over the next five years.
During its 2010 legislative session, Maryland established a three-point economic recovery agenda that included a Job Creation and Recovery Tax Credit, Small Business Credit Recovery Program, and modernizing the Unemployment Insurance Trust Fund. This summer, Governor Martin O'Malley unveiled Invest Maryland, a new proposal to support expansion of the state's knowledge-based industries. The program allocates $100 million through the Maryland Venture Fund for investment in emerging businesses.
Throughout Maryland, companies are finding reasons to grow. QIAGEN, a global provider of medical diagnostic sample and assay technologies, is expanding its North American headquarters in Germantown with 117,000 square feet of new manufacturing and office space, and adding at least 90 full-time jobs by 2015. Sean Augerson, QIAGEN's Senior Director of North American Operations, called Maryland, "a region that is an epicenter of bioscience and genomics research, discovery, manufacturing, and commercialization." The company expects to complete the project by 2012. QIAGEN currently employs 580 people in Montgomery County and nearly 700 workers across the state.
Meanwhile, Limbach Facility Services, a Pittsburgh-based mechanical construction and service firm focusing on green-energy solutions, is expanding its regional office and fabrication facility in Beltsville, and will create 75 jobs in the next three years. The Laurel-Beltsville area is a prime spot for private sector and government customers in the Washington, D.C., and Baltimore metro areas, according to Limbach branch manager Craig Sasser. For a construction and service company, accessibility to transportation infrastructure was vital to the decision.
Across the Mid-Atlantic states, the presence of a highly educated work force, diverse and vibrant industry clusters, and enviable quality of life have positioned the region for economic growth today and for years to come.