An addendum ought to be added before copies of a recent report on the District's changing economy are made available to the city's business community. The supplement should be an urgent call for the formation of an effective public-private partnership to strengthen the District's economy.
Certainly the author of the report, Stephen S. Fuller, professor of urban and regional planning at George Washington University, recommended a series of actions that should be taken under the broad heading of economic development.. But Fuller's recommendations are addressed primarily to the D.C. government.
There is, however, an important role for the private sector to play in increasing employment and broadening the city's economic base, as Fuller strongly implied during a briefing last week.
Fuller's extensive research not only suggests there are missed opportunities in the District but also that the city's business community needs to be more aggressive.
Fuller maintains that the District's principal economic growth opportunities are to be found in government, business services to government, tourism and international activities.
Growth in those sectors, which he termed "specializations" (sectors in which the proportion of employes is much higher relative to other areas of the country) remained stable or increased substantially between 1970 and 1985, although the District's share of jobs in metropolitan Washington has declined.
Indeed, the so-called specialized areas will continue to be the driving forces in the District's economy, according to Fuller. He concluded in the study for the Greater Washington Research Center that those areas should be strengthened through economic development policies.
If one accepts Fuller's premise that the District should "exploit this specialization in functions that are 'natural' for national/world capital cities," his recommendations pertaining to economic development have to be considered valid. On the other hand, there remains the question of how to halt the decline in other sectors of the city's economy.
The answer depends really on the private sector's interest in expanding in areas not directly related to government, tourism and international activities. For most of the past 15 to 17 years, major segments of the business community with ties to the District have created a void in the city's economy by abandoning it.
In the report, Fuller documents what became apparent quite some time ago: The District's historic role as the major employment center in metropolitan Washington has shrunk significantly.
In a 15-year period, from 1970 to 1985, construction employment in the District fell 29 percent; manufacturing, 17.5 percent; transportation, communications and public utilities, 27 percent; wholesale trade, 53 percent; and retail trade, 12 percent.
With the exception of services and the smaller sector of finance, insurance and real estate, all other nongovernment sectors in the District's economy had significant declines in employment, Fuller noted in the report.
Substantial changes in the District's economy have occurred, Fuller observed, "in response to the District's diminished competitive advantage in the region, to the dispersion of federal government activities and federal purchases from the central city to suburban jurisdictions, to shifting markets, and to increased costs associated central location."
There may be missed opportunities in the District, as Fuller suggested, but it's not that the private sector hasn't been aggressive. Rather, an aggressive private sector helped bring about the District's competitive disadvantage by fueling the growth of Washington's suburban business growth. Washington's main street today is the Beltway, local business leaders are fond of saying.
The District's economy may be becoming more specialized, but that's a luxury that it can't afford as traditional employment sectors shift jobs to the suburbs.
The wholesale trade sector, which employed 20,000 persons in the District in 1970, for example, employed only 9,400 in 1985. The number of wholesale trade jobs in Washington's suburbs nearly tripled between 1970 and 1985, increasing from 23,000 to 65,000.
It is that kind of major shift in jobs that has contributed heavily to growth in Washington's suburbs while the District's relative employment base continues to shrink.
The shrinkage is likely to continue even if D.C. officials follow Fuller's recommendations to strengthen the government, services and tourism sectors.
The services sector remains the second largest in the District, but service jobs in the suburbs increased 164 percent between 1970 and 1985 and the numbers continue to rise.
The decline in the District's economic sectors will stop only when city officials can win commitments from the private sector to stay and help broaden the economic base.