Northern Virginia Workforce Development Board
and SkillSource Group
The Roadmap for the Washington
Region’s Future Economy
Stephen S. Fuller, Ph.D.
Dwight Schar Faculty Chair and University Professor
Senior Advisor and Director of Special Projects
Center for Regional Analysis
George Mason University
January 21, 2016
What Will Drive Growth In the
Washington Area Going Forward?
• Re-position the economy away from Federal markets
to national and global markets;
• Build on the region’s competitive advantages;
• Focus on export-based, high-value added, highgrowth potential businesses;
• Identify what these types of businesses need—their
requirements—to grow in the Washington area;
• Formulate a call-for-action to address the region’s
“requirements” for future growth.
Roadmap Research Sponsors
The 2030 Group
George Mason University
Adventist HealthCare
Northern Virginia Chamber of Commerce
Montgomery County Chamber of Commerce
Federal City Council
Metropolitan Washington Council of Governments
Urban Land Institute-Washington Chapter
MITRE
Tech Council of Maryland
Greater Washington Board of Trade
Washington Regional Association of Grantmakers
Washington Airports Task Force
Roadmap Research Team
Center for Regional Analysis,
George Mason University
Inforum,
University of Maryland
Metropolitan Policy Center
American University
The Consequences of the
Region’s Economic Dependency
on Federal Spending
State and Metro Growth Rates and Rankings
2010-2014
(annual
Year
2010
2011
2012
2013
U.S. Maryland DC Virginia WMSA
2.5
2.5
2.8
2.4
3.2
1.6
1.3
1.9
0.6
1.4
2.2
0.4
0.0
0.7
0.2
1.5
0.7
- 0.6
0.4
0.0
Ranking
2014
Ranking
percent change)
2.4
40th
47th
43rd
0.8
1.6
0.0
37th
25th
49th
Source: U.S. Department of Commerce
0.3
U.S. GDP and Washington Area GRP
2007 – 2014
(Annual % Change)
%
4
Washington
U.S.
2
0
-2
-4
2007
2008
2009
2010
2011
2012
2013
Source: IHS Economics, GMU Center for Regional Analysis, Forecast: September 2015
2014
Federal Procurement in the
Washington Metro Area, 1980-2015
$ Billions
90
80
TOTAL = $1,235.9 Billion
70
79.9
76.3
69.1
71.1
60
50
40
30
20
10
0
Source: US Census, Consolidated Federal Funds Report and USAspending.gov
Professional & Business Services
Jobs in the Washington MSA
(000s) Annual Data
30
25
20
15
10
5
0
-5
-10
-15
-20
2009
Annual Month over Year
2010
2011
2012
2013
2014
Dec
Sep
Jun
Mar
Dec
Sep
Jun
Mar
Dec
Sep
Jun
Mar
Dec
Sep
Jun
Mar
Dec
Sep
Jun
Mar
Dec
Sep
Jun
Mar
2008
2005
2002
Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis
Jan-15 Total: 702.2
Professional & Business Services
jobs in the Washington MSA
Annual Month Over the Year
(000s)
Prof., Sci. & Tech. Svcs & Mgt.
Admin. & Waste Mgt.
25
20
15
10
5
0
-5
-10
-15
-20
2006
2007 2008
2009
2010
2011
2012
2013
Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis
2014
Federal Government Jobs
in the Washington MSA
(000s) Annual Data
30
25
20
15
10
5
0
-5
-10
-15
-20
2009
Annual Month over Year
2010
2011
2012
2013
2014
Dec
Sep
Jun
Mar
Dec
Sep
Jun
Mar
Dec
Sep
Jun
Mar
Dec
Sep
Jun
Mar
Dec
Sep
Jun
Mar
Dec
Sep
Jun
Mar
2008
2005
2002
Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis
Jan-15 Total: 362.3
15 Largest Job Markets
Job Change: 2013 – 2014
(000s)
4%
4%
Washington + 0.6%
3%
3%
2%
2%
1%
1%
0%
Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis
Diversifying the Region’s Economy:
What Does This Mean?
Washington Region’s
Knowledge-Based Economy
Built on the creation and dissemination of knowledge:
the sources of information, the analysis of information,
the transmission of information, policy formulation,
advanced education and research, the advancement of
ideas and application of new technologies to the solution
of global problems.
Future growth opportunities will be found in building out
the region’s knowledge- and information-based
platforms to extend their business-to-business
transactions into national and global markets.
The Washington Region’s
Competitive Advantages
Washington Region’s
Competitive Advantages
Capital City/Federal Government Center
International Governments and Institutions
Connectivity to the World
Concentration of Government and Business Leaders
High Quality-of-Life
Diverse Population
Breadth of Higher Educational Services
Educated Work Force
High Level of Labor Force Participation
Advanced Occupational Specializations
Core
The Federal
Government
Dependent
Mandated
Independent Agencies
Federal Departments
Federal Laboratories
• Total 103 in the WMA
federally sponsored R&D
with local businesses
and Universities
Congressional Offices
U.S. Courts System
National
Associations
• $3.9B annual
budget of top
5 Associations
Embassies &
Consulates
• 183 Chanceries of
foreign government
Lobbyists
• 11,800 registered
lobbyists spent
$3.24B in 2014
Federal Contractors
• $1.2 trililon awarded
regionally by place of
performance since
1980
Federally Funded
Research & Development
Centers (FFRDCs)
• 13 of the 41 in WMA
Perform only Federal R&D
Government Sponsored
Enterprises
• FHLBanks support 80% of
US lending institutions
• Fannie Mae & Freddie Mac
• Sallie Mae
• Financing Corporation
• Agriculture & Farm Credit
Banks
Locational Assets: Funding & Influence
• Federal funds spent regionally
• Financial services of the Government
• High-tech R&D investment
• Political & Diplomatic Influence
• Business – Government relations
• Cultural Influence & Attraction
Core
Mandated
The Federal
Government
Federal Labs
Universities
Lobbyists
Govt.
Affairs of
Business
Embassies & Consulates
National Associations
Federal
Credit
Banks
Insurance
Services
Campaign
Operations
Think Tanks &
Policy Centers
Philanthropic
Organizations
Federal connection
Patent
System
Investment
Trusts
Government Sponsored
Enterprises (GSEs)
Grant Making
Organizations
Teaching &
Research
Hospitals
Federal
Contractors
Congressional
Offices
U.S. Courts System
Private
R&D
Fed. Funded
R&D Centers
(FFRDCs)
Independent
Agencies
Federal
Departments
Spillovers
Dependent
Non-Government
Organizations
Knowledge Networks
International
Banks
National Media
Outlets
Locational Assets: Knowledge & Networks
• Diverse knowledge production activities
• Density of knowledge spillovers
• Collaborations across multiple actors
• Regional networks of stakeholders
Defining the Washington Region’s
Advanced Industrial Clusters
The Washington Region’s Advanced
Industrial Clusters
Advocacy
Services
The Washington Region’s Advanced
Industrial Clusters
Advocacy
Services
Information &
Communications
Technology Services
The Washington Region’s Advanced
Industrial Clusters
Advocacy
Services
Information &
Communications
Technology Services
Science &
Security
Technology
Services
The Washington Region’s Advanced
Industrial Clusters
Advocacy
Services
Information &
Communications
Technology Services
Science &
Security
Technology
Services
Bio & Health
Technology
Services
The Washington Region’s Advanced
Industrial Clusters
Advocacy
Services
Information &
Communications
Technology Services
Science &
Security
Technology
Services
Business & Financial
Services
Bio & Health
Technology
Services
The Washington Region’s Advanced
Industrial Clusters
Advocacy
Services
Information &
Communications
Technology Services
Media &
Information
Services
Science &
Security
Technology
Services
Business & Financial
Services
Bio & Health
Technology
Services
The Washington Region’s Advanced
Industrial Clusters
Advocacy
Services
Information &
Communications
Technology Services
Media &
Information
Services
Science &
Security
Technology
Services
Business &
Leisure Travel
Services
Business & Financial
Services
Bio & Health
Technology
Services
The Washington Region’s Advanced
Industrial Clusters: 2014 Employment
Cluster
Advocacy Services
Info & Comm. Tech
Sci & Security Tech
Bio & Health Tech
Business & Fin. Serv.
Media & Info Services
Leisure & Business T.
All Clusters
Jobs %Change1
115,731
19.0
204,489
5.5
123,785
18.6
55,396
25.1
190,128
38.9
35,745
- 20.1
85,919
- 1.3
811,193
14.5*
LQ2 Wage3
3.5
1.7
2.7
1.4
1.8
1.6
2.0
1.6
1.8
1.6
1.5
1.7
1.1
1.3
2.0
1.6
Sources: U.S. Bureau of Labor Statistics, JobsEQ, University of MD’s Inforum
12003-2014 Percent Change; 2percentage of local employment in a cluster divided by its respective
percentage nationally; 3WMSA/US wage ratio; *total job change for WMSA, 9.3%;
The Washington Region’s Advanced
Industrial Clusters
200,000
Financial
150,000
100,000
Business Operations
50,000
Management
0
The Washington Region’s Advanced
Industrial Clusters
200,000
150,000
Science
Engineering
Computer & Math
100,000
Financial
50,000
0
Business Operations
Management
The Washington Region’s Advanced
Industrial Clusters
200,000
Media
Legal
150,000
Healthcare Provider
Science
100,000
Engineering
Computer & Math
50,000
Financial
Business Operations
0
Management
The Washington Region’s
Advanced Industrial Clusters
200,000
150,000
100,000
50,000
0
Other Occupations
Education
Community Service
Media
Legal
Healthcare Provider
Science
Engineering
Computer & Math
Financial
Business Operations
Management
The Washington Region’s Advanced
Industrial Clusters: Job Growth Forecast
Cluster
2014-2025 Job Forecast
Low
%
High
%
Advocacy Services
122,303 5.7
138,868 20.0
Info & Comm. Tech
213,621 4.5
224,872 10.0
Sci & Security Tech
135,707 9.6
147,104 18.8
Bio & Health Tech
58,388 5.4
67,929 22.6
Business & Fin. Serv. 218,851 15.1
269,053 41.5
Media & Info Services 36,292 1.5
41,667 16.6
Leisure & Business T. 87,807 2.2
91,512 6.5
All Clusters
872,969 7.6
981,005 20.9
All Jobs in WMA
3,092,270 4.0 3,402,570 14.4
The Washington Region’s Advanced
Industrial Clusters: Job Growth Forecasts
(percent change over the period indicated)
2003-2014
Sum of Clusters
14.6%
2014-2025
Low 1 High2
7.6% 20.9%
Total Metro Job Growth
9.3%
4.0%
14.4%
US. Job Growth
5.1%
9.5%
9.5%
1continuation
of 2011-2014 trends.
2reflecting historic growth patterns plus reversals based on national forecasts for
declining clusters.
Source: Inforum, University of Maryland, December 2015
Requirements for and Constraints
to Future Economic Growth
•
Talent development, attraction and retention;
•
The region’s quality-of-life;
•
Transportation flexibility and adaptability;
•
Access to capital;
•
Regional branding and national and global marketing;
•
Entrepreneurial culture;
•
Competition among local jurisdictions; and,
•
Public costs and disincentives.
Business Requirements for Growth
• Talent Development, Attraction and Retention
Provide the region’s current and future workers
with educational and training resources required
to succeed in a competitive knowledge-based
economy. Strong public school systems and
educational institutions that foster continued skills
and professional development are needed to
advance the region as a desirable place to live
with excellent career pathways at all levels and
stages of employment.
• The development, attraction and retention of the talent required
to support the workforce of the future, spanning entry level,
continuing upskilling, advancement, and extending the work life
of older workers, is a foundational requirement for growing a
knowledge-based economy.
• The area’s public school systems and local business
organizations need to collaborate regionally to increase the
quality of program curricula, invest in teacher development,
and create internships and job-relevant educational
experiences to ensure public school graduates have the
necessary capabilities to pursue careers requiring advanced
education and skills training.
• The Consortium of Universities of the Washington Metropolitan
Area needs to expand its mission and membership, and
establish a region-wide university/business partnership to
provide the talent required for the full career path of the region’s
future workforce.
• The quality of the region’s living environment is critical to its
ability to attract and retain the talent it needs to support growth
of an advanced economy.
• There are two key requirements to achieve and maintain the
region’s QOL that necessitate regional solution: (1) housing
affordability and (2) a transportation system that works.
GRP and Jobs Forecast for
Washington Metropolitan Area:
2015-2020
U.S. GDP and Washington Area GRP
2007 – 2015 – 2020
%
(Annual % Change)
4
U.S.
2
0
Washington
-2
-4
Source: IHS Economics, GMU Center for Regional Analysis, Forecast: January 2016
Economic Outlook (GRP), 2007-2020
Washington Area and Sub-State Areas
%
(Annual % Change)
6
5
4
3
2
1
0
-1
-2
NV
MSA
SM
DC
Source: GMU Center for Regional Analysis, Forecast: January 2016
Principal Sources of Job and GRP
Growth in the Washington Area, 2015-2020
(in thousands)
Growth
Job
Sectors
Change
Prof. & Bus. Ser.
106.0
Construction
36.7
Education/Health
31.3
Hospitality Services
23.9
State and Local
19.1
Sub-Total
217.0
Overall Total
217.8
% of Total
Job Change
48.6
26.9
14.3
11.0
8.8
99.6
100.0
Sources: IHS Global Insight; GMU Center for Regional Analysis
Average Value
Added per Job*
$157,969
$111,992
$72,162
$51,110
$81,736
$119,337
$122,498
*in 2014$s
Job and GRP Gains and Losses for
the Washington Area’s Other Sectors, 2015-2020
(in thousands)
Federal Gov’t
Retail Trade
Other Services
Financial Services
Information Services
Manufacturing
Transportation
Wholesale Trade
Job Losses
Job Gains
Job
Change
- 17.8
2.2
- 0.2
- 2.3
7.0
0.9
7.4
3.6
- 20.3
238.1
Overall Total
217.8
% of Total
Job Change
- 8.2
1.0
- 0.1
- 1.0
3.2
0.4
3.4
1.6
100.0
Sources: IHS Economics, Inc.; GMU Center for Regional Analysis
Average Value
Added per Job*
$185,804
$64,478
$86,150
$620,922
$410,371
$249,934
$203,015
$215,783
$233,742
$131,930
$122,498
*in 2014 $s
Employment Change in the WMSA
by Sub-State Area (000s)
2013 2014 2015* 2016 2017 2018 2019 2020
D.C.
13.0
6.5 12.4 14.1
9.7 10.6
8.9
8.2
Sub. MD
6.1 11.1 21.6 20.2 17.7 14.1 12.0 11.0
No. VA
8.9
1.3 26.5 25.5 23.6 15.9 13.7 12.6
REGION 28.0 18.9 60.5 59.8 51.0 40.6 34.6 31.8
Average Annual Change 1990-2010 = 36,000
Source: BLS, IHS Economics, GMU Center for Regional Analysis (January 2016); *estimated based on 11 month’s performance.
NOTE: The regional totals do not include Jefferson, WV.
Structure of the
Greater Washington Economy
2010
2020
Other Federal
Non-Local
Serving
Business
12.0%
Local Serving
Activities
34.8%
Other Federal
7.7 % Fed Wages
10.7%
Fed Wages
& Salaries
10.0%
Total
Federal
39.8%
Procurement
19.1%
Source: GMU Center for Regional Analysis; Forecast January 2016
Non-Local
Serving
Business
19.1%
Local Serving
Activities
38.3%
& Salaries
6.7%
Total
Federal
27.2%
Procurement
12.8%
Fairfax County, Virginia’s
Workforce Outlook: 2015-2020
Net New and Replacement
Job Growth in
Fairfax County, VA:
2015 - 2020
Fairfax County, VA
Change in Jobs, Summary
2015-2020
Year
Total Jobs
2015Q3
582,476
2015 – 2020 621,859
Net New
(% Change)
Replacement
(% Change)
Openings
(% Change)
39,383
69,623
109,006
(6.8%)
(12.0%)
(18.7%)
Sources: JobsEQ, GMU Center for Regional Analysis, November 2015
Fairfax County, VA
All Net New Jobs, 2015 – 2020
2-Digit SOC
Computer & Mathematical
Business & Financial
Healthcare (All)
Office & Admin Support
Management Occupations
Sales & Related Occupations
Education, Training, & Library
Construction & Extraction
Food Prep & Serving
Personal Care & Service
All Others
Totals, All
Net New
7,873
4,228
3,878
3,772
2,870
2,424
2,054
1,942
1,510
1,333
7,225
39,383
Sources: JobsEQ, GMU Center for Regional Analysis, November 2015
%Total %Change
20.0
10.7
9.8
9.6
7.3
6.2
5.2
4.9
3.8
3.4
18.3
100.0
13.3
8.3
11.0
3.9
7.8
4.3
5.8
11.2
3.6
8.2
5.3
6.8
Fairfax County, VA
All SOC Top 10 Net New Jobs, 2015 – 2020
Top 10 5-Digit SOC
Software Developers, Apps
Computer Systems Analysts
Software Developers, System
Computer User Specialists
Management Analysts
Customer Service Reps
General & Operation Manager
Secretaries & Admin Assistant
Market Research Analysts
Accountants & Auditors
All Others
Totals, All
Net New %Total %Change
1,888
1,441
1,063
1,018
897
894
891
798
795
719
28,979
39,383
Sources: JobsEQ, GMU Center for Regional Analysis, November 2015
4.8
3.7
2.7
2.6
2.3
2.3
2.3
2.0
2.0
1.8
73.6
100.0
15.2
16.4
15.5
13.9
11.4
7.0
8.4
7.4
19.2
6.9
5.9
6.8
Fairfax County, VA
All SOC Top 10 Net New Jobs,
Average Annual Wage 2015–2020
Top 10 5-Digit SOC
Software Developers, Apps
Computer Systems Analysts
Software Developers, System
Computer User Specialists
Management Analysts
Customer Service Reps
General & Operation Manager
Secretaries & Admin Assistant
Market Research Analysts
Accountants & Auditors
All Others
Totals, All
Net New
Avg. Wage ($s)
1,888
1,441
1,063
1,018
897
894
891
798
795
719
28,979
39,383
110,100
103,700
112,400
61,700
103,800
40,300
148,500
43,600
77,300
89,900
59,680
64,600
Sources: JobsEQ, GMU Center for Regional Analysis, November 2015
Fairfax County, VA: Net New
Jobs by Educational Requirements,
2015 Annual Estimates
Education
Less than High School
High School Diploma
Postsecondary non-Degree
Some college, no Degree
Associate's Degree
Bachelor’s Degree
Master’s Degree
Doctoral or Professional
*Totals
* Totals show underestimates due to suppressed data and may not add up
Sources: JobsEQ, GMU Center for Regional Analysis, November 2015
Net New
% Total
1,142
2,110
376
283
444
3,444
147
198
8,144
14.0
25.9
4.6
3.5
5.5
42.3
1.8
2.4
100.0
Fairfax County, VA
Replacement Jobs Summary
2015 - 2020
Year
Total Jobs
2015Q3
582,476
2015 – 2020
Replacement
Jobs
(% Total Jobs)
% Change
69,623
12.0%
621,859
11.2%
Sources: JobsEQ, GMU Center for Regional Analysis, November 2015
Fairfax County, VA
All Replacement Jobs, 2014 – 2019
2-Digit SOC
Office & Admin Support
Sales & Related
Food Prep & Serving
Business & Financial
Computer & Mathematical
Management Occupations
Educ., Training & Library
Healthcare (All)
Transport & Material Moving
Building & Grounds Maint.
All Others
Totals, All
Replacement % Total % Change
10,903
8,830
7,797
5,350
4,834
4,344
3,721
3,461
2,597
2,585
15,203
69,623
Sources: JobsEQ, GMU Center for Regional Analysis, November 2015
15.7
12.7
11.2
7.7
6.9
6.2
5.3
5.0
3.7
3.7
21.8
100.0
11.3
15.6
18.3
10.5
8.2
11.7
10.5
9.9
12.2
11.6
12.1
12.0
Fairfax County, VA
All Replacement Jobs, 2014 – 2019
2-Digit SOC
Replacement
Avg. Wages ($s)
10,903
8,830
7,797
5,350
4,834
4,344
3,721
3,461
2,597
2,585
15,203
69,623
43,500
49,400
25,600
89,200
99,900
141,100
61,600
70,346
36,400
28,900
60,604
64,600
Office & Admin Support
Sales & Related
Food Prep & Serving
Business & Financial
Computer & Mathematical
Management Occupations
Educ., Training & Library
Healthcare (All)
Transport & Material Moving
Building & Grounds Maint.
All Others
Totals, All
Sources: JobsEQ, GMU Center for Regional Analysis, November 2015
Fairfax County, VA: Replacement
Jobs by Educational Requirements,
2015 Annual Estimates
Education
Replacements
% Total
4,019
4,800
530
278
506
28.0
33.4
3.7
1.9
3.5
3,744
187
291
14,355
26.1
1.3
2.0
100.0
Less than High School
High School Diploma
Postsecondary non-Degree
Some college, no Degree
Associate's Degree
Bachelor’s Degree
Master’s Degree
Doctoral or Professional
*Totals
* Totals show underestimates due to suppressed data and may not add up
Sources: JobsEQ, GMU Center for Regional Analysis, November 2015
Thank You & Questions
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