What's wrong with this picture?
An economic slowdown has taken hold in the Washington area and the outlook is for more of the same for at least another year, if not longer. Job growth continues to decline, housing prices are up and sales are down. Activity in the commercial real estate sector has slowed to a crawl and financial institutions are rationing credit.
In the Baltimore area, a similar pattern is taking on a more worrisome shape as the jobless rate continues to climb, from 4.3 percent in June to 5 percent in July.
The slowdown in the Washington-Baltimore region's economy, coupled with the national economic downturn, has fostered an atmosphere of apprehension and uncertainty among consumers and business executives.
In the face of so much uncertainty and just plain gloom in some instances, the Washington-Baltimore Regional Association (WBRA) -- an alliance of business leaders from the two metropolitan areas -- is promoting the region as a major corporate center, hoping to attract more businesses to the market. A new fact sheet, widely disseminated by the WBRA, shows that the region ranks fourth among the top 10 markets as a home base for Fortune 500 firms. The aim is to fix the region firmly in the minds of corporate executives as a major business center. The hope is that more large corporations will choose to make the Washington-Baltimore area their home.
Under the circumstances, the WBRA's promotional gambit might be likened to selling bikinis in a December ice storm. Even if the economic picture were brighter in the Washington-Baltimore corridor, there's no getting around the fact that the entire country is on the verge of a recession. So the likelihood that corporate executives would consider a major relocation at this time is a long shot at best.
Still, the WBRA's latest attempt to promote business opportunities in the region can't be dismissed entirely as just another exercise in boosterism. It is that, to be sure. But it's also sound economic development strategy. In a sense, it's a calling card. Its practical effect is to get executives to think about opportunities they might pursue in the region once the economy shows signs of improving.
Robert T. Grow, WBRA's deputy director, says the new fact sheet touting the Washington-Baltimore region as a center for emerging markets is designed to show that "Washington isn't just a government town. What we're trying to show is that there is a corporate sector here."
That much is apparent in WBRA's strong reference to regionally based companies such as MCI Communications Corp., Black & Decker Corp. and Martin Marietta Corp. Mobil Corp.'s decision to move to the area from New York this year is just the exclamation point the WBRA needed to make its point that the region is a mature business center.
In all, 21 companies with headquarters in the Washington-Baltimore region are Fortune 500 service firms, according to the WBRA report. Only the metropolitan areas of New York-Northern New Jersey-Long Island, Los Angeles-Anaheim-Riverside and Chicago-Gary-Lake County have more service companies on the Fortune 500 list.
In addition to the 21 Fortune 500 service corporations, eight Fortune 500 industrial firms and 37 companies listed among Inc. magazine's 500 fastest-growing firms make their homes in the region. At the same time, dozens of corporations operate major divisions or offices in the region.
Statistically, the WBRA says, the Washington-Baltimore region offers a comparative advantage over the nation's other top growth markets. With a population of more than 6 million, it is the fourth-largest consolidated market and ranks second in median household income.
Call it boosterism (marketing is more appropriate), but the WBRA's initiative in promoting the region as an important business center beats collective hand-wringing in the face of an economic downturn. Boosterism, after all, played a major role in attracting a good many companies to the region at the height of economic expansion in the 1980s.
Laying the foundation for an aggressive business attraction program at this time seems to be in order. Waiting until the economy begins to rebound to plan economic development strategies could put the region at a decided disadvantage as communities across the country vie for companies to relocate to their areas. Now is the time to establish relationships that could bear fruit later.
In the mid-1970s to early 1980s, following the lead of the Greater Washington Board of Trade, local governments established strong economic development programs with the primary aim of bringing new business to their respective jurisdictions.
The payoff soon showed up in a ripple effect that produced the tremendous growth that occurred during the 1980s. Significantly, the slowdown in the Washington area economy coincided with the decisions of economic development officials to curb business attraction programs and concentrate on helping existing companies grow.
If the transition from economic downturn to prosperity is to be a smooth one, then business and government leaders had better start planning for it. Taking their cue from the WBRA wouldn't be a bad idea at all.