UB Viewpoint - Think global, Maryland!


August 6, 2004

By CHRISTINE NIELSEN,

Special to the Daily Record


International business activity plays a vital role in Maryland's economy. From global giants to entrepreneurial exporters, the international context of the state's commercial base is palpable.


Statistics help put this economic activity in perspective. Maryland exports reached $4.94 billion in 2003, a 10 percent increase over 2002. And 2004 promises even more dramatic gains: First-quarter exports are up more than 17 percent over last year.


For many of us, the impact on employment and job creation numbers may be even more persuasive. International business is responsible for more than 220,000 new jobs in Maryland, with about half of these generated from Maryland exports and the other half from foreign investment in the state.


According to a U.S. Department of Commerce report, for every $45,000 in export sales, one job is created -- more than double the rate of jobs created by domestic sales. So that $4.94 billion in Maryland exports last year translates into 110,000 Maryland jobs.


Add to this number the 112,000 people employed by foreign companies that have invested in Maryland, and you begin to grasp the contributions that international trade and investment bring -- not only to the state's economy, but also to its social welfare.


 
And international activity adds not only to the quantity of jobs available, but also to the quality of employment opportunities. Jobs supported by export activity pay 13 percent more than jobs in non-exporting sectors.

 

Beyond this impact on job creation and growth, evidence suggests that exporting firms grow 20 percent faster than those that don't, and these same firms that sell abroad have a higher survival rate. In fact, most businesses cannot survive without a global market and/or production base.


As we learned from Gov. Robert L. Ehrlich Jr.'s 2004 State of the State speech, the Port of Baltimore alone provides 18,000 jobs.


Perhaps even more important to those responsible for providing our citizens with public services in times of severe budget constraints, international trade provides $1.5 billion in annual tax revenues. Let's take a look at one leading example of international business activity in Maryland.



Northrop Grumman: a global business leader


Northrop Grumman Corp. is a $26 billion global defense company with 120,000 employees and operations in all 50 states and in 25 countries.


The company employs 11,000 people here in Maryland, most of whom are located at the company's Baltimore-based Electronic Systems (NGES) sector headquarters. About one-third of sales are generated yearly from international business. For 2003, that translated into about $2 billion in international sales for NGES.


Northrop Grumman is a high-technology business with several thousand engineers and scientists among its ranks in Maryland operations. Salaries and benefits for its engineering-related staff are competitive with those in the aerospace and defense industry.


Currently, there are job openings in Maryland for several hundred professional engineering personnel, especially those with systems and software engineering expertise and experience.


In addition to NGES' contributions to the state economy, it is significant to note its contributions to national defense and homeland security through international aerospace and defense products and programs. Here are just two of many examples:

 

v       New radar systems and upgrades for several thousand F-16 fighter aircraft serving the U.S. Air Force and 22 allied nations

 

v       Communications, navigation and surveillance systems operating in airports, control centers, test ranges and mobile systems in 167 countries.


Northrop Grumman takes pride in its ongoing education and training initiatives tailored for employees engaged in international business activities. Through a program called IMPACT (International Management Program and Compliance Training), more than 2,100 employees have benefited from seminars on various international business topics, taught by professors from the University of Baltimore, Loyola College and the University of Maryland, College Park.

 


UB: a leader in international business education

 

According to its mission statement, the University of Baltimore's Robert G. Merrick School of Business is preparing students to succeed in the dynamic global economy. In fact, it is essential that students understand the world of international business if they are to succeed in their professional careers.


Beyond the school's responsibility to the individual goals of its students, the institution has an added responsibility to serve Maryland's education requirements in its role as a member of the state's higher education system.


The Merrick School's international business specializations develop managers and business leaders for rewarding careers in international businesses, government agencies and multicultural organizations.


Students gain a theoretical basis for understanding key aspects of international management, as applied to both small companies and multinational corporations.


Courses emphasize human-relations skills, such as cross-cultural communications and negotiations, as well as technical skills, such as those required for the strategic operation of global organizations.

 


The market-driven rationale


In a way, the University System of Maryland is itself engaged in international business activity.


Take, for example, the number of foreign students who attend the University of Baltimore, accounting for 20 percent of enrollment in graduate business programs there.


UB's international students come from around the world, literally from A (Albania) to Z (Zimbabwe). And these students pay considerably more per course, at out-of-state tuition rates.


One estimate of the annual tuition revenues contributed by foreign students to UB's coffers topped $2.5 million (granted, this number errs on the high side because a substantial number of foreign students work their way through graduate programs as research and teaching assistants.)


Now multiply this revenue figure across higher education institutions in the state, ranging from relatively small universities such as UB to large ones such as the University of Maryland, College Park.


Revenues from foreign students add to the resource base of the universities at a time when local sources of funding are shrinking. These revenues positively contribute to state institutions' abilities to provide educational services to Maryland residents at lower, in-state tuition rates.

 


International education as a public good


Since Sept. 11, 2001, there has been a paradigm shift in the views of public and private leaders toward international education.


The majority view now is that international education is essential to the national interest, both for the United States' continued leadership in the world economy and as a matter of national security.


Paraphrasing remarks by University System of Maryland Chancellor William "Brit" Kirwan to the Maryland International Education Association annual meeting Nov. 18, 2002:


Higher education must produce a new generation work force that is worldly wise, culturally aware and foreign-language literate.


At the national level, 9/11 was a wakeup call to this generation as Sputnik was to mine. We have gotten a wakeup call that we are not creating a generation of internationally educated students.


We must learn about foreign countries' economies, customs and cultures, language and politics or we certainly will be at a large disadvantage. They certainly know everything about us.


Our national security depends on creating specialists educated about different regions of the world. International issues are on Maryland university presidents' minds as they never have been before ...


So, think global, Maryland.

 

The future of this state's economy depends on it.

 

The state's potential for advancing opportunities for its citizens depends on it.

 

Safeguarding the public welfare depends on it.


Acknowledgments: Many thanks to Pete O'Neill and the expert foreign-trade staff in Maryland's International Operations Office for updated statistics on Maryland trade and foreign investment; to Merrill Pritchett, institutional research at the University of Baltimore; and to Jack Martin, sector media relations at Northrop Grumman Electronic Systems.


Completing this article, I have learned that C. Lloyd Carpenter, one of the finest global business leaders in Maryland, has passed away. As vice president of international operations and marketing at Northrop Grumman Electronic Systems, he made substantial contributions to advancing Maryland's leadership role in the global economy. I dedicate this opinion piece in his memory and to furthering his far-reaching initiatives on Maryland's behalf.


 

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Christine Nielsen is a professor of international business and strategy at the University of Baltimore and academic director of the Northrop Grumman International Management and Compliance Training Program (IMPACT).

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