Baltimore was recently ranked tenth out of the 20 fastest-growing markets for technology, the only mid-Atlantic city to make the list.1 What has made the city an attractive home for technology jobs? Sam DiPaola, President, Maryland Region, at SunTrust Bank, discusses the factors that have caused Baltimore to emerge as a tech industry leader, as well as how this growth has affected the entire city.
Is the technology boom in Baltimore more apparent in some industries than others?
Baltimore and Maryland’s growth in technology is centered on the know-how and talent in the cybersecurity industry. Baltimore, and Maryland in general, has been a leader in this industry. The National Security Agency (NSA), the Defense Information Systems Agency (DISA) and the new Cyber Command, which is the center of signal intelligence, information technology and cybersecurity for the country, are all less than 20 miles from Baltimore.
Biotech is another area, with more than 500 biotech companies headquartered in and around Rockville, making it one of the largest life sciences clusters in the U.S. These companies enjoy access to talent and leading research conducted at institutions like Johns Hopkins University, the University of Maryland, the National Institutes of Health and the Food and Drug Administration. Plus, the Johns Hopkins Technology Innovation Center, opened in 2014, is helping companies bring technologies and health IT solutions to market. Education technology is another growing industry. Sylvan Learning Centers is based here, and there are a lot of education technology businesses that have their roots nearby.
What makes Baltimore uniquely capable of fostering technology growth?
I would point to three factors: physical assets, the availability of educated labor and the low cost of living and high quality of life in the area.
Baltimore and Maryland are home to the Chesapeake Bay, an intersecting highway network and a major international airport. We are also centrally located to major population centers, being an easy drive away from four other cities with NFL teams. And as I mentioned, Baltimore is close to the NSA. So while it’s definitely the hub for cybersecurity, there is a tremendous network of data pipes that literally bring the world's signals and internet traffic through this area. So those physical assets are key.
Perhaps more important is an educated workforce. Baltimore is home to Johns Hopkins University, the University of Maryland, Loyola University Maryland and more. Many graduates from these institutions are choosing to stay in the geographic area. This is largely because Baltimore has a high quality of living at a low cost. For example, a software engineer living in San Francisco could make $100,000 a year or more and still struggle to afford a home or a car due to the cost of living. Here in Baltimore, the homes and rent are reasonably priced, and there’s an accessible transportation system.
Baltimore has a somewhat unfair bad reputation. How has that perception changed to bring growth to the city?
Whenever I tell people I'm from Baltimore, the first thing anybody says in response is, "Oh, like ‘The Wire.’” Even bad press is good press sometimes, because everybody knows about the city, right? But for a city with a population of 600,000, I think we’ve got pretty widespread recognition.
Historically, Baltimore's been a technology innovation hub. We were the first to have gas street lamps. We were the first to have timed streetlights. We have a history in aerospace technology and shipbuilding. The fact that all of these great technological innovations have occurred in the city is sort of lost under the blanket of the depiction in “The Wire.”
I actually work with a group called the Economic Alliance of Greater Baltimore whose mission is to change that perception. They reach out to different markets and try to attract businesses to come, or at least expand, here. And obviously, they're also interested in supporting and helping raise capital or provide access to capital for the businesses that are already here.
How has growth across technology industries affected the demand for office space?
What's happening is that office space is being transitioned into residential property at a pretty significant pace. A large number of office buildings are being converted into residential properties. The expectation is that the demographic of younger, millennial, skilled, educated workers are going to need and want an urban lifestyle. They're going to choose to live in some of these properties that are coming on the market.
The way that we work, especially in the way the technology companies often work in a collaborative environment, has changed the need for large square footage office space. So there's still availability on the market for Class A and office space downtown, and also an increasing supply as new construction projects like Harbor East and Port Covington have come online.
So how does growth in technology support growth in other fields and industries? How is this technology boom good for Baltimore as a whole?
Well, obviously it helps the real estate market. There are more people and growing wealth in the city. By early 2017, the property wealth and income growth and real estate wealth in Baltimore had outpaced that of the state, and the city has seen six consecutive years of job growth after decades of declines. It helps the local economy when there are more residents with greater wealth. Along those lines, Amazon is opening a new distribution center, among the largest in the nation, in nearby Cecil County. So as the area becomes more recognizable as a growth environment and a more business-friendly environment, more businesses are willing to relocate and expand into this region.