Local leaders are lining up to lure Marriott’s  headquarters to their jurisdictions while larger economic concerns lag, researchers warn.
(Photo by Katherine Frey/The Washington Post)

Elected leaders in the Washington area should spend less time poaching jobs from one another and focus on collaborating around international trade and research-based industries, researchers warned this week after releasing new regional economic data.

Local growth slowed in recent years, researchers from the Brookings Institution warned in a report issued Wednesday in conjunction with JP Morgan Chase, and missed opportunities to turn things around are beginning to mount.

If Washington wants to reduce its reliance on federal spending it needs to expand the products and services it can export abroad, where Brookings expects 86 percent of the world’s economic growth to occur over the next five years. Although the Washington region made $27 billion in exports last year, that represented only 6 percent of its GDP — the 95th smallest ratio among the 100 largest U.S. metropolitan areas.

The Washington area is also falling short in commercializing technology and attracting international students, said Amy Liu, Brookings senior fellow. Brookings released economic data on Washington and 28 other large urban areas this week.

“The cities and the firms that are more globally engaged tend to prosper on a much more consistent basis. They are more resistant to the ebbs and flows of the economy,” she said.


Instead, local officials have become increasingly competitive economically. As the economy slowed in recent years, leaders in D.C., Maryland and Virginia began more aggressively poaching and recruiting companies from each other.

For instance Virginia Gov. Terry McAuliffe (D) and D.C. Mayor Muriel Bowser (D) offered competing incentive packages for the Advisory Board Co. In order to prevent the company from moving its headquarters two miles west, to Rosslyn, Bowser offered the company a $60 million incentive package.

That’s on top of $193 million in land and tax breaks D.C. officials agreed to provide D.C. United to keep the soccer team from moving to Virginia or Maryland and $50 million they agreed to spend on a practice venue for the Washington Wizards so it would not be built in Montgomery County.

All of those deals are a prelude to what may be an unprecedented sweepstakes for the headquarters of Marriott International, the Fortune 500 company that has a lease expiring in 2022 and a little more than 2,000 employees in Bethesda. McAuliffe, Bowser and Maryland Gov. Larry Hogan (R) have all pledged to make forays to Marriott, and officials in multiple jurisdictions have begun strategizing.

[Marriott CEO: We will move our headquarters]

Moving a company a few miles doesn’t benefit the regional economy however. Liu warned against high stakes corporate battles as a replacement for growing international trade and growing target industries such as computer systems design, data processing and cybersecurity.

“These political leaders should say, ‘Let’s set aside the conversation around stealing jobs from one another and moving jobs. What we need is a common strategy for helping the existing firms,’” Liu said.

“That’s what a lot of these markets have done — set aside their differences on competition and said let’s make sure that those companies that are already here have the market information, the financial resources and other opportunities to expand abroad,”  she said.

The Washington region remains one of the wealthiest and most highly educated areas of the country, a producer of $400 billion of goods and services and host of 3.2 million jobs in 2014.

But its reputation as a center of political gridlock motivated investment banker Russ Ramsey to chair a bid to host the 2024 Summer Olympics as a way of forging a new public and economic identity focused on sports and universities.

“I do think Washington, uniquely among other capital cities, has an opportunity to take this pro sports footprint and university footprint and use them for other things that don’t take a big investment,” Ramsey said.

Even if they don’t preclude cooperation on larger economic issues, Ramsey said intra-regional competitions for corporations weren’t helping.

“All the Marriott competition does is push the air around in the balloon, and actually it’s taking air out of the balloon,” he said.

Ramsey and Peter Scher, JP Morgan executive vice president and head of corporate responsibility, agreed that resolving the ongoing concerns about Metro ought to be a paramount concern for regional leaders. The Brookings research showed that the area had the longest average commuting time among peer cities.

It’s not just local commuters who benefit. Washington enjoyed a $6.8 billion economic output from international tourism last year, according to Brookings.

“I don’t know how much of that $7 billion is dependent on a well-functioning Metro system,” Scher said. “This isn’t just a matter of convenience or pride. It’s one of the industries that the Washington area wants to grow. The tourism industry is essential.”

Follow Jonathan O’Connell on Twitter: @oconnellpostbiz