Fairfax Shines In Jobs Report
County Challenges D.C.'s Leadership Of Area Economy

By Alec MacGillis
Washington Post Staff Writer
Tuesday, January 30, 2007

Fairfax County has emerged as a jobs powerhouse that far outpaces Montgomery County and now rivals the District as the region's economic core, according to a new federal report that details a profound shift in the Washington area over the past 15 years.

The region's lessening reliance on federal employment and the growth of the Northern Virginia economy are well-established trends, but Bureau of Labor Statistics economists who produced the report said they were stunned at how strong the movement has been.

"Fairfax County has separated itself from the rest of the crowd," said Diane Nilson, a bureau economist. "If you're looking across the board, you'd think that these others are doing fine, and they are. But what jumped out at us is how much Fairfax has separated itself from them."

The report is based on information that is more detailed and accurate than the agency's routine survey-based updates and that has never been used for in-depth analysis of the region.

In 1990, the report states, about 16 percent of the region's workers held federal jobs, the same percentage as worked in "professional and business services," the agency's category for most private-sector professional jobs, including lawyers, engineers and computer programmers.

By 2005, though, the federal share of the region's jobs had fallen to 12 percent, and the share attributable to private-sector professional services had jumped to 22 percent.

The bureau economists had expected the shift because the federal government has been outsourcing more work to private contractors. What struck them was just how much of the region's growth in professional and business service jobs occurred in Fairfax: about 100,000 additional jobs, or nearly half of the region's total increase in that category. By contrast, the District added 31,000 jobs in that category, barely more than it lost in the federal sector; Montgomery added 30,000; and Prince George's and Loudoun counties each added 12,000.

In essence, the report's authors say, employment in the region has developed an unusual dual core, with one base in the District, built around the city's remaining federal jobs, and the other in Fairfax, built around a burgeoning private sector. It is an enviable situation, the authors say, because the two cores mostly complement each other, with much of Fairfax's private-sector growth fueled by outsourced federal work and the county's proximity to the District.

The county's many defense- and homeland security-related companies also benefit from being near the Pentagon and the CIA.

"Your typical metropolitan area probably has one job core, but what we are seeing in Washington is pretty unique in that we have two distinct ones. What's also unique is that they coexist and are thriving on each other," said Gerald Perrins, a bureau economist who wrote the report about job trends with Nilson for the most recent issue of Monthly Labor Review.

Professional and business service jobs account for a much greater share of total employment in the Washington area than in other metropolitan areas, the economists found. They determined that the proportion of such jobs in the area is nearly double the national average and that the area is even well ahead of places one would expect to have high percentages of professional jobs, such as San Francisco, San Jose, Boston and Raleigh, N.C.

The economists found that the percentage of professional jobs in other area jurisdictions -- the District, Alexandria and Arlington and Montgomery counties-- compared favorably with the national average. But, Perrins said, "basically, no other jurisdiction came close" to Fairfax.

Gerald L. Gordon, president of the Fairfax County Economic Development Authority, said he has taken to joking that "we are the downtown and Washington is our suburb."

Although the whole region benefits from proximity to the federal government, he said, Fairfax's success also can be explained by access to Dulles International Airport, good public schools and other services and a vigorous effort to recruit companies through a business-friendly climate.

Even as Fairfax has become a jobs magnet, its development authority continues to seek out companies, helped by a $6.6 million budget that has been questioned by residents who argue that the booming economy is pushing crowded roads and schools to a breaking point.

Fairfax "has been consistently aggressive about attracting businesses . . . and you can't say that about Maryland and about some other counties" in Virginia, Gordon said. He described some of those other places as saying "they're interested in economic development this year, but not next year."

"Businesses want to be in a place where they don't have to worry about the next election," Gordon said.

Royce Hanson, chairman of Montgomery's Planning Board, offered a different theory. He said Fairfax has enjoyed a snowball effect as it has become known as a hub for information technology companies. Montgomery has a similar reputation for biotechnology, he said, but that industry is behind in the growth curve and employs fewer people.

The chief executive of one of Fairfax's corporate newcomers described just such an "agglomeration effect" in explaining his decision to locate in Herndon last year. Tom Patterson said he was sitting on a beach in Malibu, Calif., writing a book when it suddenly came to him that Fairfax was the place to launch Command Information, a company working to develop the next version of the Internet.

Fairfax not only has good schools and proximity to the federal government, he said, but it also has high concentrations of the kinds of businesses his company would be selling to and of the kinds of workers it would need to hire. A year after opening, the company employs 330 people.

"The mood in Northern Virginia was very upbeat. It was a better mood than in other areas that had been historic high-tech centers," Patterson said. "We're building the next generation of the Internet, and we rely on people who are as excited about coming to work as we are."

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