Washington may be home to embassies and diplomats from countries the world over, but when it comes to business, the region is failing to realize its potential on the international stage.
That’s the premise of a report released this month by George Mason University’s Center for Regional Analysis, which criticizes the region’s economic reliance on the federal government and suggests ways it can become a bigger player in the global marketplace.
The report urges companies to pursue customers other than the federal government, and local jurisdictions to stop competing against one another and make greater use of Dulles International Airport, among other ideas.
The combined efforts should help combat the perception that the region is shaped largely by the politicians and federal agencies that make up “official Washington” rather than the residents and the companies where many of them work, the report concludes.
“To the world out there, Washington is ‘The West Wing.’ Washington is the ‘House of Cards.’ This corrupt den of thieves and liars and everyone is out to get them. But for the 6 million people who live in this region, very few of us actually occupy that world,” said David Versel, senior research associate at the Center for Regional Analysis.
The report, “Improving the Washington Region’s Global Competitiveness,” reasserts what others have said: The federal government is spending less money and hiring fewer people, a persistent trend that has begun delivering blows to the region’s economy.
That means that the District and its neighbors need to rely more heavily on the private sector and, more specifically, on companies that sell products and services to a global audience. The U.S. economy is not growing at a fast enough rate to provide the kind of economic oomph the region needs, the report said.
The report was commissioned by the 2030 Group, an organization of local business leaders with strong ties to the commercial real estate industry, after a study conducted by the Brookings Institution identified 10 traits common to cities with globalized economies.
“If you’re not looking globally and you’re not realizing your potential in the global marketplace, you’re not in this century,” said Bob Buchanan, the group’s president and head of the development firm Buchanan Partners.
Perhaps the most impassable problem cited in the report is persuading Maryland, Virginia and the District to act in tandem on major infrastructure projects, such as roads and trains, and to market the Washington region as a single place to do business.
The three jurisdictions are known for competing to lure the same companies — at times poaching them from one another — and operating separate foreign trade missions and economic development initiatives that often overlap.
“There’s more animosity than there is collegiality,” Versel said.
“That mentality has faded in a lot of regions. A lot of the case-study regions [in the report] have gotten the message that we need to put on a face for the whole world that we are one region,” he added.
The federal government and its contractors continue to be the region’s largest employers and source of income. From 1983 to 2010, the value of federal contracts performed in the region rose from $7 billion to $83.1 billion, according to the report. In the past four years, that number has declined by $13.5 billion.
With fewer dollars being spent by the federal government, contractors will need to look for other sources of revenue. Reorienting their workforces to provide products and services to foreign governments and commercial enterprises offers one possible solution, Buchanan said.
The Washington region is among the leaders in research and development, particularly at universities and federal labs, but much of that work is never turned into products that can be sold commercially, Buchanan said.
Tapping those resources could allow the region to grow other industries such as technology and the life sciences.
“We’ve got things that other areas don’t have, but we’re not utilizing them well and marketing them well,” Buchanan said.
Among those resources is Dulles Airport. The report argues that the Northern Virginia airport has the capacity for more nonstop international flights than are being offered, resulting in less business travel and cargo shipping in and out of the region than others with major airports.
“There are just a lot more opportunities for a region like this, which already has many connections all over the world,” Versel said.
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