|COG Report Highlights Sobering Economic Trends, New Opportunities as D.C. Region Adapts to Federal Cutbacks
According to a new report by the Metropolitan Washington Council of Governments (COG), cutbacks in federal spending, high housing costs, and a lack of a coordinated brand are among the issues threatening the region’s economic competitiveness. Despite these challenges, the report outlines a path to future prosperity focused on leveraging the region’s assets and advancing new initiatives, such as the development of a global export strategy, joint trade missions for District of Columbia, Maryland, and Virginia officials, and workforce development programs focused on infrastructure.
The 2016 State of the Region: Economic Competitiveness Report measures a wide range of indicators-- from graduation rates to Gross Regional Product (GRP) and poverty levels to parks-- to assess the metropolitan Washington’s current and future economic health and give leaders a fuller picture of how the region can better attract and retain businesses and workers.
“Our region has suffered more than almost any region in the country over the past few years,” said COG Board Chairman and Montgomery County Council Vice President Roger Berliner. “Our reliance on federal spending has made us vulnerable—too vulnerable—and now we need, as a region, to think and act differently.”
In regards to the region’s current economic climate, the report notes that in 2014, the annual job growth rate in the region was 0.5 percent, one of the lowest rates in the country. The report highlights a Center for Regional Analysis figure that federal procurement spending has declined by $11.2 billion since 2010. It also notes growth in inflation has outpaced regional median wages since 2011 according to Bureau of Labor and Statistics numbers.
“With the federal presence sinking, our region needs to pivot to more collaborative efforts to diversify and support the economy,” said COG Executive Director Chuck Bean. “The new reality is this region can’t rely on the federal government and individual economic development actions. Instead, we must build better connections between our region’s key assets and government, business, and academic leaders.”
The report also identifies metropolitan Washington’s universities, colleges, and specialty schools as well as its nationally-recognized university and federal research laboratories as key assets giving the region a powerful economic competitiveness edge. It notes that advanced industries like biology and health technology as well as business and financial services are growing in significance. The report also notes that over the past five years, the region ranks third nationally in venture capital investments at nearly $6 billion—a reflection of the region’s many sectors with high growth potential.
The report encourages leaders to move forward with plans to develop a coordinated regional export promotions strategy as part of the Global Cities Initiative. Later this week, the region will apply to join the initiative, a project of the Brookings Institution and JPMorgan Chase, aimed at helping regions become more competitive in the global marketplace. The report also calls for more coordination among area economic development directors as well as joint international trade missions.
COG members have expressed interest in working with partners to begin re-branding the region to better emphasize metropolitan Washington’s assets and offer an alternative to its “government town” image. COG will also work with local governments and workforce boards to align job training programs with key industry sectors.
The report also calls on area leaders to work through COG to address the infrastructure and quality of life issues that affect competiveness, especially in areas like housing and transportation. The report notes high combined housing and transportation costs in many parts of the region, especially in communities outside of Activity Centers where housing, jobs, and transportation are located nearby.
In addition, the report notes that 39 percent of households in the region are severely cost-burdened—according to an Urban Institute study—meaning housing costs account for more than 50 percent of the household income. COG is working with area philanthropies, nonprofits, and public agencies to address housing affordability issues.
Release Date: Jan 13, 2016
Contact: Steve Kania
Phone: (202) 962-3249