OPINION: Think Economic Diversity

Commentary by Bob Schaller, Director, Economic Development, St. Mary's County

(Aug. 10, 2009) "THINK" was a one-word slogan developed by IBM founder Thomas J. Watson, Sr. that became IBM's core value. Generations later Apple Computer adopted the campaign "Think Different" and the evidence is striking in many things Apple does. Both companies are successful today, and both much different than when they started. The true test of long-term economic success is the ability to adapt to change. Economic diversity happens because change happens. This applies to at all levels in the economy, from large institutions to individual households. The purpose of this column is to raise awareness on the possibilities and potential benefits of economic diversity.

As discussed often, we are very fortunate to have a strong local defense economy that employs about 40% of our workforce, represents 60% of all wages in the County, and an even greater share of total economic impact through all the spending for goods and services that flows through the local economy. High-paying jobs are vital to the success of our economy and community. The future workload projections at NAS Patuxent River look bright and we must ensure this continued success. That's our first priority.

Steady defense employment is the chief reason the economic downturn has not been felt as much here as in other places. Local unemployment, while up to 6.1% in June, remains the 3rd lowest in the state through the first half of 2009. Only Howard and Montgomery Counties are lower, and not by much. Over time St. Mary's has gradually gotten relatively stronger in employment. In 2006 St. Mary's ranked 9th lowest in the state. In 2007 we moved up to 8th. In 2008, when the recession settled in, we improved up to 6th. Again, so far this year we are holding at 3rd.

At the same time we need to pursue economic diversity more vigorously to increase the tax base and provide more balance and opportunity to those in the non-defense sector. This is not easy but there are many examples around. Whether it's finding a commercial application for a technology used in defense as some are doing, or experimenting with a new crop or use of a farm such as grapes or wineries, or simply reassessing changing customer needs and offering more or less of something based on shifts in the market. The slowing economy is the time to look hard at things, make adjustments, and set a new course if necessary. For County Tourism, we have attempted to stimulate demand this year with the Maryland 375 campaign.

This is true at all levels in the economy, from large institutions to individual households. It's that "should we do something differently?" mentality that keeps economies flexible and ready for inevitable change.

So ask yourself whether you should be pursuing other markets, attempting new products, trying a new approach to sales and distribution. Are you getting the best use of your resources? Ask yourself and ask others around you. Look around for examples where others, especially your competitors, have asked and answered. Ask them what they did, why, and how. Hopefully you'll find an answer or two worth pursuing. That's good thinking, and with it the basis for diversifying.

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