Politics & Government
A Guru's Take on Northern Virginia's Future
Shrinking federal funding will put Northern Virginia's economy to the test, but it won't be the crash some are predicting, economist Stephen Fuller says.
If Northern Virginia wants to maintain its position as the economic powerhouse of the Washington metro region, local leaders and businesses need to look beyond the federal government and toward the nonprofit and private sectors, according to a recent report by economist Stephen Fuller.
"For Northern Virginia to survive, the ratio of 35 percent of its Gross Regional Product depending on federal funds can't stay," said Fuller, who directs George Mason's Center for Regional Analysis. "Federal spending is shrinking. From 2002 to 2010, spending grew an average of 8 percent. Last year, it grew by 4 percent, and this year it has only grown by 2 percent. Other sectors need to find ways to catch up."
Depending on how much funding is cut, there could be a sizable amount of catching up to do. Since 1980, an estimated $430 billion in federal procurements have poured into the region, funding an active market for highly skilled professionals. From 1980 to 2010, 60 percent of new job openinings were generated in Northern Virginia.
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Despite growing uncertainty of federal dollars, Fuller believes that changing the drivers of the region's economy is possible because a strong foundation has been established by federal funding, business friendly policies, good infrastructure and a highly educated work force, which he argues makes Northern Virginia’s science, technology and business service sectors globally competitive.
Citing positive future economic forecasts, Fuller described what the next 20 years are projected to look like. Between new and replacement job openings, an estimated 580,000 new net jobs will be created, and the area's population is projected to grow by 35 percent. Professional, scientific and technical services are projected to drive employment, accounting for 41 percent of new net jobs created.
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Demand for highly educated workers is another trend predicted. Half of new net jobs created between now and 2030 will require at least a bachelor’s degree. His advice to college students? Consider relevant fields, and sectors that aren’t dependent solely on federal funding.
"Going forward, there's two choices," said Fuller. "Either the whole economy slows with federal spending, and we still grow, but more slowly, or the forces that drive growth shift to the private sector."
