Commerce Secretary Speaks in Manassas
By Jennifer Buske
Washington Post Staff Writer
Sunday, October 26, 2008
With a skilled labor force and a welcoming business environment, Virginia will weather the economic storm better than other states, state Secretary of Commerce and Trade Patrick O. Gottschalk told local business leaders Thursday.
"We have an award-winning business climate, but we can't rest on our laurels," he said. "We've had significant [business] wins, but we must continue vigilance in challenging times."
Gottschalk spoke to about 130 Manassas entrepreneurs at the seventh annual Mayor's Small Business Awards Ceremony. Gottschalk discussed the importance of small businesses and where Virginia stands when it comes to economic growth.
"Ninety-eight percent of businesses in Virginia are small businesses," he said at the event. "You are the heart of the economy in Virginia. We can have all the big companies in the world, but it's the small businesses that create jobs and keep us going." Small businesses consist of companies with fewer than 250 employees or those that make less than $10 million in annual revenue, Gottschalk said in an interview.
Since Gov. Timothy M. Kaine (D) took office in 2006, Virginia has received $7.4 billion in economic development investment and more than 54,000 new jobs, Gottschalk said.
For the third year in a row, Virginia was ranked by Forbes.com as the best state for business, Gottschalk said. The ranking is based on numerous categories, including unemployment rate, labor force and regulatory climate.
"We have the least number of regulations on business, and we're ranked Number 1 in the country," Gottschalk said of the regulatory climate category. "We send messages to businesses that say, 'We want you here.' "
In an interview, Gottschalk said Virginia regulates enough to keep people safe and pollution down but does not go so far as to discourage businesses from coming to the state. Virginia's transportation is competitive, he said, and it has a "superior" incentives program for economic development.
Virginia also did well in the labor force and quality-of-life categories, Gottschalk said at the gathering.
"We have good schools, we have mountains, we have beaches, 130 wineries; I could go on forever," he said. "This is a great state for quality of life."
The implementation of the Governor's Career and Technical Academies and the fact that 65 percent of Virginia public school graduates attended college last year helped the labor ranking, he said.
Having a skilled labor force also helps keep the unemployment level low. Although it has crept up to 4.2 percent, it is still below the national average of 6 percent, according to the Virginia Employment Commission.
Virginia did not fare as well in the categories of growth prospects and the cost to do business, Gottschalk said, adding that the latter is because Northern Virginia businesses must pay higher salaries.
The economic growth rate in Virginia has dropped to 1.9 percent, which is below the 2 percent national average. Gottschalk, however, said he has formed a committee to address the issue and hopes it will turn around when the national economy improves.
Although business and job growth might slow for a while during these uncertain times, Gottschalk said, Virginia has attracted numerous big companies in the past three years.
Some of the companies to settle in the state include Rolls-Royce, Coors, Canon and Volkswagen.
"We were able to get VW from Detroit to Herndon, and that is not an easy task," he said, adding that Volkswagen brought 400 jobs and invested $100 million. "VW wanted a place that was welcoming to German companies, and they found that here."
Gottschalk said the roughly eight "big announcement projects" in the commonwealth since 2005 have generated almost 4,000 jobs, almost $2 billion in capital investment and $115 million in incentives, which include workforce investment services, road access and job investment funds.
Gottschalk said some of the industries he plans to try to attract include security, pharmaceuticals, research and development, and transportation.
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