Latest Updates
HCEDA’s Economic Edge Wins Silver at IEDC Awards
Wednesday, September 11, 2024
Sponsor HCEDA Today: Elevate Your Brand and Boost Your Impact
Wednesday, September 4, 2024
Tuesday, October 25, 2022
Blog by Hannah Seok, HCEDA Intern
The Scientific Research and Development Services industry (R&D, for short) is one of the most important and prosperous business sectors here in Howard County. Our strategic location, proven track record of R&D success, densely concentrated industry cluster, and highly skilled workforce have led to the continued prominence and new attraction of R&D firms in the County.
The R&D industry comprises three core pillars of activity: basic research, applied research, and development. Basic research aims to develop scientific principles and expand knowledge, while applied research focuses more on practical applications of gathered knowledge to solve problems. Both basic and applied research conducted by private and government firms can be utilized by innovating businesses in their new products or production methods. Development is the diffusion of research out to the larger economy to be used in the advancement of products and service. This transfer of knowledge even occurs among competing firms, which in seeking to maximize their profits, spread the net benefits of R&D services to the consumers. The R&D industry is essential to increasing society’s stock of knowledge and promoting technological advancement; the services of this industry are an impetus for economic development, long-run growth, and overall increases in standards of living.
Howard County is at the heart of research collaboration, training, technology transfer, and investment activity. Its proximity to major cities such as New York, Baltimore, and Washington DC allow for networking and commuting with ease. There are, for example, three major airports within an hour’s drive, and a 2.5 hour train ride to New York City. Research institutions such as NASA, NSA, and US Cyber Command headquartered near Howard County further show the County’s potential for R&D activity.
The gross regional product (GRP) of an industry measures its contribution to newly created output and economic activity within a region. As illustrated in the chart below, steady growth in the GRP of Howard County’s R&D industry over the last 10 years points to an expanding industry to which a growing number of resources have been allocated. Statistical evidence of the R&D industry’s prosperity helps firms recognize Howard County as a favorable site in which to locate.
Source: Emsi Data from the Bureau of Economic Analysis (BEA) and Quarterly Census of Employment and Wages (QCEW), 2021.
Another measure of specialization is the employment levels within an industry. A labor supply higher than the national average denotes a higher concentration of available workers, making it easier for firms to find candidates for their enterprises. The yearly percentage change of employment levels in R&D for selected counties can be indicative of the industry’s relative success or decline. In comparison to its peer counties, Howard County’s R&D industry (pictured in blue on the graphs below) has seen the highest average levels of industry employment growth. According to Lightcast, a premiere economic data provider and analytics tool, a 10-year projected growth trend suggests that R&D firms will continue to regard Howard County as a favorable site selection area, with Howard County continuing to outpace both its peer counties and the nation in industry employment change.
Source: Emsi Burning Glass Industry Data, 2021.
Source: Emsi Burning Glass Industry Data, 2021.
A high concentration of a specific industry in a region tends to attract similar firms. During the site selection process, prospective firms will search for areas that already have established industry presence, as these areas are likely to have the economic attributes necessary to foster development and growth for incoming firms in the industry as well. A location quotient is an analytical statistic used to compare a region’s industry share to that of the nation. The location quotient of Howard County’s R&D industry is 9.52, meaning that Howard County has a 9.52 times higher concentration of R&D employees than the national average. This reveals the high degree of specialization and availability of workers to prospective firms. Having a proficient and accessible workforce is essential when considering the large-scale and innovative nature of the R&D industry. Further, Howard County has the 14th highest R&D location quotient out of the more than 3,000 counties in the nation. Thinking more broadly about workforce availability, Howard County’s laborshed ranks third in R&D employment location quotient compared to the other 25 most populous MSAs1.
Information regarding the composition of a workforce can be valuable in identifying a region’s strengths. Concerning educational attainment, Howard County ranks fourth in the US by percentage of population (25 years and up) with a bachelor’s degree or higher (59.9%). In addition, Howard County ranks fifth by percentage of population that possesses a graduate degree or higher (30.5%). Greater levels of education attainment are associated with a more productive and capable workforce. R&D firms searching for skilled intrapreneurs that foster innovation and growth within their industry will benefit from Howard County’s educated workforce.
Changes in real wages, nominal wages adjusted for inflation, account for changes not only living standards but also the capabilities of a labor force. A 10-year trend of mean real household wage growth in Howard County reveals that increases in labor demand have outstripped increases in labor supply; in other words, workers’ productivity increases have raised the marginal revenue productivity of labor and thus, the compensation received for greater levels of efficiency. A workforce in growing demand will help to further attract prospective employers and firms searching for capable workers.
So what does R&D in Howard County look like? By far the largest R&D institution in Howard County is the Johns Hopkins Applied Physics Laboratory. With over 7,000 employees, it is Howard County’s largest private employer and makes up a large portion of its R&D industry. Other major R&D firms in the County include Meridian Medical Technologies, Osiris Therapeutics Inc, Element Materials Technology, and Usra. Notable occupations within Howard County’s R&D industry include biological technicians, medical scientists, software developers, project management specialists, and computer hardware engineers. A wide range of talent across occupations allow R&D firms to employ workers of many specialties.
The scientific research and development services industry is essential to obtaining the knowledge and technology needed for economic growth. Technological advancements from R&D help increase economic efficiency by allowing for low-cost production and a higher-valued mix of goods and services. Overall, the R&D industry is the driving force behind innovation, change, and increases in standards of living. Howard County’s strategic location, history of R&D success, high industry concentration, and educated workforce are all factors that have been conducive to the R&D industry’s prominence in Howard County. The R&D industry in Howard County shows a promising outlook of sustained economic growth and development.
Endnotes
1 To examine Howard County’s laborshed, areas from which Howard County draws at least 1% of its commuting workers, which was then compared to the 25 most populous metropolitan areas. A metropolitan statistical area (MSA) is a region consisting of a core city and its surrounding communities that are linked through socioeconomic connections. Defining regions based on economic activity rather than geopolitical boundaries can be useful for direct statistical comparisons. Within MSAs, for example, workers are able to change jobs or commute, which creates a stable workforce that is able to be analyzed. Using MSAs with similar populations can also aid in making accurate comparisons between regions.
HCEDA’s Economic Edge Wins Silver at IEDC Awards
Wednesday, September 11, 2024
Sponsor HCEDA Today: Elevate Your Brand and Boost Your Impact
Wednesday, September 4, 2024
© Copyright 2024 Howard County Economic Development Authority. All rights reserved.
#hceda