The greater Washington business community is suffering from the story it is telling about itself, that it is in an old-fashioned government town, dependent on federal contracts, and lacking innovation and fresh ideas.
The reality is very different. Over the past six months, I worked with a multidisciplinary team of data scientists, economists and entrepreneurs to critically and objectively describe the state of technology entrepreneurship here for the 2030 Group, a civic and business organization working to plot a new path forward for the region’s economy.
Our findings suggest much more possibility. Since 2004, this area has created more new businesses than have parts of the United States commonly considered entrepreneurial hotbeds. Over the past 20 years, our region has had the largest number of companies on the Inc. 5000 list of the fastest-growing businesses.
This is a place where entrepreneurs, employees and investors are generously rewarded for growing successful businesses. Over the past 20 years, 6,000 businesses have been sold in the region, including 105 deals with sales prices exceeding $1 billion. Business sales create significant wealth in our region for subsequent investment.
This good news is mitigated by the reality that 75 percent of these business sales occur to buyers from outside our region — meaning we often lose our entrepreneurial talent to other areas. Meanwhile, our own companies are buying businesses at the same rate: 6,000 over the past 20 years. The two business acquisition markets are like ships passing in the night.
Many are concerned that our region does not get enough venture capital, and it’s true: It is the eighth-largest market for such funding. However, it has other impressive sources of investment: $30 billion in federal spending on information technology in 2015, as well as $26 billion in federal research and development spending .
Our region also is a national leader in research and development. Most of the federal research and development funding here goes to local businesses, our 108 federal labs, or federally funded corporations such as MITRE or the Johns Hopkins Applied Physics Lab. Many of the technology innovations that shape our world were invented nearby.
It’s no surprise then that entrepreneurs follow that money to grow great businesses. In the late 1990s, we were leaders in commercializing the Internet and the telecommunications revolution. Now, we are among those who set the standards in cybersecurity and health-care technologies.
So the stories we tell ourselves and the world should change to stories of achievement. We already have the recipe and ingredients for success in the development of entrepreneurial, innovation-based business.
Our region can be better still. With tighter focus, we can attract even more high-quality jobs and boast our identity with innovative industries in which we are experts. Ours is a story worth telling, and it will have the additional benefit of being true.
Jonathan Aberman is a business owner, entrepreneur and founder of Tandem NSI, an Arlington-based organization that connects innovators to government agencies. He is host of “Forward Thinking Radio” on SiriusXM, a business and policy program, and lectures at the University of Maryland’s Robert H. Smith School of Business.