Northern Virginia Workforce Development Boardand SkillSource Group

January 21, 2016

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

What Will Drive Growth In the Washington Area Going Forward?

Objectives of the Roadmap

• 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, high-growth 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 SponsorsThe 2030 Group

George Mason UniversityAdventist HealthCare

Northern Virginia Chamber of CommerceMontgomery County Chamber of Commerce

Federal City CouncilMetropolitan Washington Council of Governments

Urban Land Institute-Washington ChapterMITRE

Tech Council of MarylandGreater Washington Board of Trade

Washington Regional Association of GrantmakersWashington Airports Task Force

Roadmap Research Team

Center for Regional Analysis,George Mason University

Inforum,University of Maryland

Metropolitan Policy CenterAmerican University

The Consequences of the Region’s Economic Dependency

on Federal Spending

Year U.S. Maryland DC Virginia WMSA 2010 2.5 2.5 2.8 2.4 3.2 2011 1.6 1.3 1.9 0.6 1.4 2012 2.2 0.4 0.0 0.7 0.2 2013 1.5 0.7 - 0.6 0.4 0.0 Ranking 40th 47th 43rd 2014 2.4 0.8 1.6 0.0 0.3 Ranking 37th 25th 49th Source: U.S. Department of Commerce

State and Metro Growth Rates and Rankings2010-2014

(annual percent change)

2007 2008 2009 2010 2011 2012 2013 2014-4

-2

0

2

4%

Source: IHS Economics, GMU Center for Regional Analysis, Forecast: September 2015

U.S. GDP and Washington Area GRP 2007 – 2014

(Annual % Change)

WashingtonU.S.

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

0

10

20

30

40

50

60

70

80

90

Federal Procurement in theWashington Metro Area, 1980-2015

$ Billions

| < 80-90 = $96.5B > | < 91-00 = $207.9B >| < 01–10 = $563.5B |TOTAL = $1,235.9 Billion

Source: US Census, Consolidated Federal Funds Report and USAspending.gov

79.976.3

69.171.1

2015

Professional & Business ServicesJobs in the Washington MSA

200220052008M

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-20-15-10

-505

1015202530

(000s) Annual Data Annual Month over Year

2009 2010 2011 2012 2013 2014

Jan-15 Total: 702.2Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

Professional & Business Servicesjobs in the Washington MSA

Annual Month Over the Year

-20

-15

-10

-5

0

5

10

15

20

25Prof., Sci. & Tech. Svcs & Mgt. Admin. & Waste Mgt.

2006 2007 2008 2009 2010 2011 2012 2013 2014Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

(000s)

Federal Government Jobsin the Washington MSA

200220052008M

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arJunS

epD

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arJunS

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arJunS

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-20-15-10

-505

1015202530

(000s)

Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis Jan-15 Total: 362.3

Annual Data Annual Month over Year

2009 2010 2011 2012 2013 2014

15 Largest Job MarketsJob Change: 2013 – 2014

Atlanta

SF-Oakland

DallasHouston

Miami

Seattle

Los Angeles

Phoenix

New York

Minneapolis

Detroit

Boston

Chicago

Philadelphia

DC0%

1%

2%

3%

4%(000s)

Washington + 0.6%

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 CenterInternational Governments and Institutions

Connectivity to the WorldConcentration of Government and Business Leaders

High Quality-of-LifeDiverse Population

Breadth of Higher Educational ServicesEducated Work Force

High Level of Labor Force ParticipationAdvanced Occupational Specializations

The Federal Government

Federal Departments

Independent Agencies

U.S. Courts System

Core Mandated Dependent

Congressional Offices

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

Lobbyists• 11,800 registered

lobbyists spent $3.24B in 2014

National Associations

• $3.9B annualbudget of top 5 Associations

Embassies & Consulates

• 183 Chanceries of foreign government

Government Sponsored Enterprises

• FHLBanks support 80% of US lending institutions

• Fannie Mae & Freddie Mac• Sallie Mae

• Financing Corporation• Agriculture & Farm Credit

Banks

Federal Contractors• $1.2 trililon awarded

regionally by place of performance since

1980

Federal Laboratories• Total 103 in the WMA

federally sponsored R&D with local businesses and

Universities

Federally Funded Research & Development

Centers (FFRDCs)• 13 of the 41 in WMA

Perform only Federal R&D

Funding

Funding

Funding

Funding

InfluenceInfluence

Influence

Influ

enceInfluence

The Federal Government

National Associations

Federal Departments

Independent Agencies

U.S. Courts System

Fed. Funded R&D Centers

(FFRDCs)

Federal Labs

Federal Contractors

Embassies & Consulates

Government Sponsored Enterprises

(GSEs)

Core Mandated Dependent Spillovers

Lobbyists

Congressional Offices

Locational Assets: Knowledge & Networks • Diverse knowledge production activities• Density of knowledge spillovers• Collaborations across multiple actors• Regional networks of stakeholders

Private R&D

Teaching & Research Hospitals

Universities

Investment Trusts

Insurance Services

National Media Outlets

Non-Government Organizations

Think Tanks & Policy Centers International

Banks

Campaign Operations

Govt. Affairs of Business

Grant Making Organizations

Philanthropic Organizations

Patent System

Federal Credit Banks

Knowledge NetworksFederal connection

Defining the Washington Region’s Advanced Industrial Clusters

The Washington Region’s Advanced Industrial Clusters

AdvocacyServices

The Washington Region’s Advanced Industrial Clusters

AdvocacyServices

Information &Communications Technology Services

The Washington Region’s Advanced Industrial Clusters

AdvocacyServices

Information &Communications Technology Services

Science &Security TechnologyServices

The Washington Region’s Advanced Industrial Clusters

AdvocacyServices

Information &Communications Technology Services

Science &Security TechnologyServices

Bio & HealthTechnologyServices

The Washington Region’s Advanced Industrial Clusters

AdvocacyServices

Information &Communications Technology Services

Science &Security TechnologyServices

Bio & HealthTechnologyServicesBusiness & Financial

Services

The Washington Region’s Advanced Industrial Clusters

AdvocacyServices

Information &Communications Technology Services

Science &Security TechnologyServices

Bio & HealthTechnologyServicesBusiness & Financial

Services

Media & Information

Services

The Washington Region’s Advanced Industrial Clusters

AdvocacyServices

Information &Communications Technology Services

Science &Security TechnologyServices

Bio & HealthTechnology ServicesBusiness & Financial

Services

Media & Information

Services

Business & Leisure Travel

Services

Cluster Jobs %Change1 LQ2 Wage3

Advocacy Services 115,731 19.0 3.5 1.7Info & Comm. Tech 204,489 5.5 2.7 1.4Sci & Security Tech 123,785 18.6 1.8 1.6Bio & Health Tech 55,396 25.1 2.0 1.6Business & Fin. Serv. 190,128 38.9 1.8 1.6Media & Info Services 35,745 - 20.1 1.5 1.7Leisure & Business T. 85,919 - 1.3 1.1 1.3All Clusters 811,193 14.5* 2.0 1.6 Sources: U.S. Bureau of Labor Statistics, JobsEQ, University of MD’s Inforum12003-2014 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: 2014 Employment

Media

& Info

Bio & H

ealth

Tec

h

Bus. &

Leis.

Trav

el

Advoc

acy

Sci. &

Sec

. Tec

h

Bus. &

Fin.

Svc

s

Info &

Com

m. Tec

h0

50,000

100,000

150,000

200,000

Financial

Business Operations

Management

The Washington Region’s Advanced Industrial Clusters

Media

& Info

Bio & H

ealth

Tec

h

Bus. &

Leis.

Trav

el

Advoc

acy

Sci. &

Sec

. Tec

h

Bus. &

Fin.

Svc

s

Info &

Com

m. Tec

h0

50,000

100,000

150,000

200,000Science

Engineering

Computer & Math

Financial

Business Operations

Management

The Washington Region’s Advanced Industrial Clusters

Media

& Info

Bio & H

ealth

Tec

h

Bus. &

Leis.

Trav

el

Advoc

acy

Sci. &

Sec

. Tec

h

Bus. &

Fin.

Svc

s

Info &

Com

m. Tec

h0

50,000

100,000

150,000

200,000MediaLegalHealthcare ProviderScienceEngineeringComputer & MathFinancialBusiness OperationsManagement

The Washington Region’s Advanced Industrial Clusters

Media

& Info

Bio & H

ealth

Tec

h

Bus. &

Leis.

Trav

el

Advoc

acy

Sci. &

Sec

. Tec

h

Bus. &

Fin.

Svc

s

Info &

Com

m. Tec

h0

50,000

100,000

150,000

200,000 Other OccupationsEducationCommunity ServiceMediaLegalHealthcare ProviderScienceEngineeringComputer & MathFinancialBusiness OperationsManagement

The Washington Region’s Advanced Industrial Clusters

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 18.8Bio & 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 16.6Leisure & Business T. 87,807 2.2 91,512 6.5All Clusters 872,969 7.6 981,005 20.9All Jobs in WMA 3,092,270 4.0 3,402,570 14.4

The Washington Region’s Advanced Industrial Clusters: Job Growth Forecast

2003-2014 2014-2025

Low 1 High2

Sum of Clusters 14.6% 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

The Washington Region’s Advanced Industrial Clusters: Job Growth Forecasts

(percent change over the period indicated)

Requirements for and Constraints to Future Economic Growth

Requirements for Future Economic Growth: Major Themes

• 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.

Call-to-Action• 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.

Call-to-Action

• 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 forWashington Metropolitan Area:

2015-2020

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

-4

-2

0

2

4%

Source: IHS Economics, GMU Center for Regional Analysis, Forecast: January 2016

U.S. GDP and Washington Area GRP 2007 – 2015 – 2020

(Annual % Change)

Washington

U.S.

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

-2-10123456

%

Source: GMU Center for Regional Analysis, Forecast: January 2016

Economic Outlook (GRP), 2007-2020Washington Area and Sub-State Areas

(Annual % Change)

DCSM

MSANV

Principal Sources of Job and GRP Growth in the Washington Area, 2015-2020

(in thousands)

Growth Job % of Total Average Value Sectors Change Job Change Added per Job*Prof. & Bus. Ser. 106.0 48.6 $157,969Construction 36.7 26.9 $111,992Education/Health 31.3 14.3 $72,162Hospitality Services 23.9 11.0 $51,110State and Local 19.1 8.8 $81,736 Sub-Total 217.0 99.6 $119,337Overall Total 217.8 100.0 $122,498

Sources: IHS Global Insight; GMU Center for Regional Analysis *in 2014$s

Job and GRP Gains and Losses for the Washington Area’s Other Sectors, 2015-2020

(in thousands) Job % of Total Average Value

Change Job Change Added per Job*Federal Gov’t - 17.8 - 8.2 $185,804Retail Trade 2.2 1.0 $64,478Other Services - 0.2 - 0.1 $86,150Financial Services - 2.3 - 1.0 $620,922 Information Services 7.0 3.2 $410,371 Manufacturing 0.9 0.4 $249,934 Transportation 7.4 3.4 $203,015Wholesale Trade 3.6 1.6 $215,783 Job Losses - 20.3 $233,742 Job Gains 238.1 $131,930

Overall Total 217.8 100.0 $122,498 Sources: IHS Economics, Inc.; GMU Center for Regional Analysis *in 2014 $s

Employment Change in the WMSAby 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

Source: GMU Center for Regional Analysis; Forecast January 2016

Non-LocalServingBusiness 12.0%

Local ServingActivities 34.8%

Other Federal 10.7%

Fed Wages & Salaries 10.0%

Procurement19.1%

TotalFederal 39.8%

Oth

er 1

.5% Health/Ed.

4.5% Assn 1.8%

Hosp. 2.1%

Int’l 3.5%

Non-LocalServingBusiness 19.1%

Local ServingActivities 38.3%

Other Federal 7.7 % Fed Wages

& Salaries 6.7%

Procurement12.8%

TotalFederal 27.2%

Oth

er 0

.6%

Health/Ed.

6.2% Assn 1.8%

Hosp. 2.8%

Int’l 4.0%

2010 2020

Fairfax County, Virginia’sWorkforce Outlook: 2015-2020

Net New and Replacement Job Growth in

Fairfax County, VA: 2015 - 2020

Fairfax County, VAChange in Jobs, Summary

2015-2020

Sources: JobsEQ, GMU Center for Regional Analysis, November 2015

Year 

Total Jobs 

Net New(% Change)

Replacement(% Change)

Openings(% Change)

2015Q3 582,476

2015 – 2020 621,85939,383 69,623 109,006

(6.8%) (12.0%) (18.7%)

Fairfax County, VA All Net New Jobs, 2015 – 2020

2-Digit SOC Net New %Total %Change

Computer & Mathematical 7,873 20.0 13.3Business & Financial 4,228 10.7 8.3Healthcare (All) 3,878 9.8 11.0Office & Admin Support 3,772 9.6 3.9Management Occupations 2,870 7.3 7.8Sales & Related Occupations 2,424 6.2 4.3Education, Training, & Library 2,054 5.2 5.8Construction & Extraction 1,942 4.9 11.2Food Prep & Serving 1,510 3.8 3.6Personal Care & Service 1,333 3.4 8.2All Others 7,225 18.3 5.3Totals, All 39,383 100.0 6.8

Sources: JobsEQ, GMU Center for Regional Analysis, November 2015

Fairfax County, VA All SOC Top 10 Net New Jobs, 2015 – 2020

Top 10 5-Digit SOC Net New %Total %Change

Software Developers, Apps 1,888 4.8 15.2Computer Systems Analysts 1,441 3.7 16.4Software Developers, System 1,063 2.7 15.5Computer User Specialists 1,018 2.6 13.9Management Analysts 897 2.3 11.4Customer Service Reps 894 2.3 7.0General & Operation Manager 891 2.3 8.4Secretaries & Admin Assistant 798 2.0 7.4Market Research Analysts 795 2.0 19.2Accountants & Auditors 719 1.8 6.9All Others 28,979 73.6 5.9Totals, All 39,383 100.0 6.8

Sources: JobsEQ, GMU Center for Regional Analysis, November 2015

Fairfax County, VA All SOC Top 10 Net New Jobs,

Average Annual Wage 2015–2020Top 10 5-Digit SOC Net New Avg. Wage ($s)

Software Developers, Apps 1,888 110,100Computer Systems Analysts 1,441 103,700Software Developers, System 1,063 112,400Computer User Specialists 1,018 61,700Management Analysts 897 103,800Customer Service Reps 894 40,300General & Operation Manager 891 148,500Secretaries & Admin Assistant 798 43,600Market Research Analysts 795 77,300Accountants & Auditors 719 89,900All Others 28,979 59,680Totals, All 39,383 64,600

Sources: JobsEQ, GMU Center for Regional Analysis, November 2015

Fairfax County, VA: Net New Jobs by Educational Requirements,

2015 Annual Estimates

* Totals show underestimates due to suppressed data and may not add up

Education Net New % Total

Less than High School 1,142 14.0High School Diploma 2,110 25.9Postsecondary non-Degree 376 4.6Some college, no Degree 283 3.5Associate's Degree 444 5.5Bachelor’s Degree 3,444 42.3Master’s Degree 147 1.8Doctoral or Professional 198 2.4*Totals 8,144 100.0

Sources: JobsEQ, GMU Center for Regional Analysis, November 2015

Fairfax County, VA Replacement Jobs Summary

2015 - 2020

Year Total Jobs Replacement Jobs

(% Total Jobs)

% Change

2015Q3 582,476

2015 – 2020 621,85969,623

12.0%11.2%

Sources: JobsEQ, GMU Center for Regional Analysis, November 2015

Fairfax County, VA All Replacement Jobs, 2014 – 2019

2-Digit SOC Replacement % Total % Change

Office & Admin Support 10,903 15.7 11.3Sales & Related 8,830 12.7 15.6Food Prep & Serving 7,797 11.2 18.3Business & Financial 5,350 7.7 10.5Computer & Mathematical 4,834 6.9 8.2Management Occupations 4,344 6.2 11.7Educ., Training & Library 3,721 5.3 10.5Healthcare (All) 3,461 5.0 9.9Transport & Material Moving 2,597 3.7 12.2Building & Grounds Maint. 2,585 3.7 11.6All Others 15,203 21.8 12.1Totals, All 69,623 100.0 12.0

Sources: JobsEQ, GMU Center for Regional Analysis, November 2015

Fairfax County, VA All Replacement Jobs, 2014 – 2019

2-Digit SOC Replacement Avg. Wages ($s)

Office & Admin Support 10,903 43,500Sales & Related 8,830 49,400Food Prep & Serving 7,797 25,600Business & Financial 5,350 89,200Computer & Mathematical 4,834 99,900Management Occupations 4,344 141,100Educ., Training & Library 3,721 61,600Healthcare (All) 3,461 70,346Transport & Material Moving 2,597 36,400Building & Grounds Maint. 2,585 28,900All Others 15,203 60,604Totals, All 69,623 64,600

Sources: JobsEQ, GMU Center for Regional Analysis, November 2015

Fairfax County, VA: Replacement Jobs by Educational Requirements,

2015 Annual Estimates

* Totals show underestimates due to suppressed data and may not add up

Education Replacements % Total

Less than High School 4,019 28.0High School Diploma 4,800 33.4Postsecondary non-Degree 530 3.7Some college, no Degree 278 1.9Associate's Degree 506 3.5Bachelor’s Degree 3,744 26.1Master’s Degree 187 1.3Doctoral or Professional 291 2.0*Totals 14,355 100.0

Sources: JobsEQ, GMU Center for Regional Analysis, November 2015

Thank You & Questions

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