1. Northern Virginia Workforce Development Board and SkillSource Group January 21, 2016 The Roadmap for the Washington Region’s Future Economy Stephen S. Fuller, Ph.D. Dwight Schar Faculty Chair and University Professor Senior Advisor and Director of Special Projects Center for Regional Analysis George Mason Unive rsity

2. What Will Drive Growth In the Washington Area Going Forward?

3. Re-position the economy away from Federal markets to national and global markets; Build on the region’s competitive advantages; Focus on export-based, high-value added, high- growth potential businesses; Identify what these types of businesses need—their requirements—to grow in the Washington area; Formulate a call-for-action to address the region’s “requirements” for future growth.

4. Roadmap Research Sponsors The 2030 Group George Mason University Adventist HealthCare Northern Virginia Chamber of Commerce Montgomery County Chamber of Commerce Federal City Council Metropolitan Washington Council of Governments Urban Land Institute-Washington Chapter MITRE Tech Council of Maryland Greater Washington Board of Trade Washington Regional Association of Grantmakers Washington Airports Task Force

5. Roadmap Research Team Center for Regional Analysis, George Mason University Inforum, University of Maryland Metropolitan Policy Center American Univers ity

6. The Consequences of the Region’s Economic Dependency on Federal Spending

7. Year U.S. Maryland DC Virginia WMSA 2010 2.5 2.5 2.8 2.4 3.2 2011 1.6 1.3 1.90.6 1.4 2012 2.2 0.4 0.00.7 0.2 2013 1.5 0.7 - 0.60.4 0.0 Ranking 40 th 47 th 43 rd 2014 2.4 0.8 1.60.0 0.3 Ranking 37 th 25 th 49 th Source: U.S. Department of Commerce State and Metro Growth Rates and Rankings 2010-2014 ( annual percent change)

8. % Source: IHS Economics, GMU Center for Regional Analysis, Forecast: September 2015 U.S. GDP and Washington Area GRP 2007 – 201 4 (Annual % Change) Washington U.S.

9. Federal Procurement in the Washington Metro Area, 1980-2015 $ Billions | | | < 01–10 = $563.5B | TOTAL = $1,235.9 Billion Source: US Census, Consolidated Federal Funds Report and USAspending.gov 79.9 76.3 69.1 71.1 2015

10. Professional & Business Services Jobs in the Washington MSA (000s) Annual Data Annual Month over Year 2009 2010 2011 2012 2013 2014 Jan-15 Total: 702.2 Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

11. Professional & Business Services jobs in the Washington MSA Annual Month Over the Year Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis (000s)

12. Federal Government Jobs in the Washington MSA (000s) Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis Jan-15 Total: 362.3 Annual Data Annual Month over Year 2009 2010 2011 2012 2013 2014

13. 15 Largest Job Markets Job Change: 2013 – 2014 (000s) Washington + 0.6% Source: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis

14. Diversifying the Region’s Economy: What Does This Mean?

15. Washington Region’s Knowledge-Based Economy Built on the creation and dissemination of knowledge: the sources of information, the analysis of information, the transmission of information, policy formulation, advanced education and research, the advancement of ideas and application of new technologies to the solution of global problems. Future growth opportunities will be found in building out the region’s knowledge- and information-based platforms to extend their business-to-business transactions into national and global markets.

16. The Washington Region’s Competitive Advantages

17. Washington Region’s Competitive Advantages Capital City/Federal Government Center International Governments and Institutions Connectivity to the World Concentration of Government and Business Leaders High Quality-of-Life Diverse Population Breadth of Higher Educational Services Educated Work Force High Level of Labor Force Participation Advanced Occupational Specializations

18. The Federal Government Federal Departments Independent Agencies U.S. Courts System Core Mandated Dependent Congressional Offices Locational Assets: Funding & Influence Federal funds spent regionally Financial services of the Government High-tech R&D investment Political & Diplomatic Influence Business – Government relations Cultural Influence & Attraction Lobbyists 11,800 registered lobbyists spent $3.24B in 2014 National Associations $3.9B annual budget of top 5 Associations Embassies & Consulates 183 Chanceries of foreign government Government Sponsored Enterprises FHLBanks support 80% of US lending institutions Fannie Mae & Freddie Mac Sallie Mae Financing Corporation Agriculture & Farm Credit Banks Federal Contractors $1.2 trililon awarded regionally by place of performance since 1980 Federal Laboratories Total 103 in the WMA federally sponsored R&D with local businesses and Universities Federally Funded Research & Development Centers (FFRDCs) 13 of the 41 in WMA Perform only Federal R&D Funding Influence

19. The Federal Government National Associations Federal Departments Independent Agencies U.S. Courts System Fed. Funded R&D Centers (FFRDCs) Federal Labs Federal Contractors Embassies & Consulates Government Sponsored Enterprises (GSEs) Core MandatedDependent Spillovers Lobbyists Congressional Offices Locational Assets: Knowledge & Networks Diverse knowledge production activities Density of knowledge spillovers Collaborations across multiple actors Regional networks of stakeholders Private R&D Teaching & Research Hospitals Universities Investment Trusts Insurance Services National Media Outlets Non-Government Organizations Think Tanks & Policy Centers International Banks Campaign Operations Govt. Affairs of Business Grant Making Organizations Philanthropic Organizations Patent System Federal Credit Banks Knowledge Networks Federal connection

20. Defining the Washington Region’s Advanced Industrial Clusters

21. The Washington Region’s Advanced Industrial Clusters Advocacy Services

22. The Washington Region’s Advanced Industrial Clusters Advocacy Services Information & Communications Technology Services

23. The Washington Region’s Advanced Industrial Clusters Advocacy Services Information & Communications Technology Services Science & Security Technology Services

24. The Washington Region’s Advanced Industrial Clusters Advocacy Services Information & Communications Technology Services Science & Security Technology Services Bio & Health Technology Services

25. The Washington Region’s Advanced Industrial Clusters Advocacy Services Information & Communications Technology Services Science & Security Technology Services Bio & Health Technology Services Business & Financial Services

26. The Washington Region’s Advanced Industrial Clusters Advocacy Services Information & Communications Technology Services Science & Security Technology Services Bio & Health Technology Services Business & Financial Services Media & Information Services

27. The Washington Region’s Advanced Industrial Clusters Advocacy Services Information & Communications Technology Services Science & Security Technology Services Bio & Health Technology Services Business & Financial Services Media & Information Services Business & Leisure Travel Services

28. Cluster Jobs %Change 1 LQ 2 Wage 3 Advocacy Services115,731 19.0 3.51.7 Info & Comm. Tech204,489 5.5 2.71.4 Sci & Security Tech123,785 18.6 1.81.6 Bio & Health Tech 55,396 25.1 2.01.6 Business & Fin. Serv.190,128 38.9 1.81.6 Media & Info Services 35,745 - 20.1 1.51.7 Leisure & Business T. 85,919 - 1.3 1.11.3 All Clusters811,193 14.5 * 2.01.6 Sources: U.S. Bureau of Labor Statistics, JobsEQ, University of MD’s Inforum 1 2003-2014 Percent Change; 2percentage of local employment in a cluster divided by its respective percentage nationally; 3 WMSA/US wage ratio; * total job change for WMSA, 9.3%; The Washington Region’s Advanced Industrial Clusters: 2014 Employment

29. The Washington Region’s Advanced Industrial Clusters

33. Cluster 2014-2025 Job Forecast Low % High % Advocacy Services122,303 5.7138,868 20.0 Info & Comm. Tech213,621 4.5 224,872 10.0 Sci & Security Tech135,707 9.6 147,104 18.8 Bio & Health Tech 58,388 5.4 67,929 22.6 Business & Fin. Serv.218,851 15.1269,053 41.5 Media & Info Services 36,292 1.5 41,667 16.6 Leisure & Business T. 87,807 2.2 91,512 6.5 All Clusters872,969 7.6 981,005 20.9 All Jobs in WMA 3,092,270 4.0 3,402,570 14.4 The Washington Region’s Advanced Industrial Clusters: Job Growth Forecast

34. 2003-2014 2014-2025 Low 1 High 2 Sum of Clusters 14.6% 7.6% 20.9% Total Metro Job Growth9.3% 4.0% 14.4% US. Job Growth5.1% 9.5% 9.5% 1 continuation of 2011-2014 trends. 2 reflecting historic growth patterns plus reversals based on national forecasts for declining clusters. Source: Inforum, University of Maryland, December 2015 The Washington Region’s Advanced Industrial Clusters: Job Growth Forecasts (percent change over the period indicated)

35. Requirements for and Constraints to Future Economic Growth

36. Talent development, attraction and retention; The region’s quality-of-life; Transportation flexibility and adaptability; Access to capital; Regional branding and national and global marketing; Entrepreneurial culture; Competition among local jurisdictions; and, Public costs and disincentives.

37. Business Requirements for Growth Talent Development, Attraction and Retention Provide the region’s current and future workers with educational and training resources required to succeed in a competitive knowledge-based economy. Strong public school systems and educational institutions that foster continued skills and professional development are needed to advance the region as a desirable place to live with excellent career pathways at all levels and stages of employment.

38. The development, attraction and retention of the talent required to support the workforce of the future, spanning entry level, continuing upskilling, advancement, and extending the work life of older workers, is a foundational requirement for growing a knowledge-based economy. The area’s public school systems and local business organizations need to collaborate regionally to increase the quality of program curricula, invest in teacher development, and create internships and job-relevant educational experiences to ensure public school graduates have the necessary capabilities to pursue careers requiring advanced education and skills training.

39. The Consortium of Universities of the Washington Metropolitan Area needs to expand its mission and membership, and establish a region-wide university/business partnership to provide the talent required for the full career path of the region’s future workforce. The quality of the region’s living environment is critical to its ability to attract and retain the talent it needs to support growth of an advanced economy. There are two key requirements to achieve and maintain the region’s QOL that necessitate regional solution: (1) housing affordability and (2) a transportation system that works.

40. GRP and Jobs Forecast for Washington Metropolitan Area: 2015-2020

41. % Source: IHS Economics, GMU Center for Regional Analysis, Forecast: January 2016 U.S. GDP and Washington Area GRP 2007 – 2015 – 2020 (Annual % Change) Washington U.S.

42. % Source: GMU Center for Regional Analysis, Forecast: January 2016 Economic Outlook (GRP), 2007-2020 Washington Area and Sub-State Areas (Annual % Change) DC SM MSA NV

43. Principal Sources of Job and GRP Growth in the Washington Area, 2015-2020 (in thousands) Growth Job % of TotalAverage Value Sectors Change Job Change Added per Job* Prof. & Bus. Ser. 106.0 48.6 $157,969 Construction 36.7 26.9 $111,992 Education/Health 31.3 14.3 $72,162 Hospitality Services 23.9 11.0 $51,110 State and Local 19.1 8.8 $81,736 Sub-Total 217.0 99.6 $119,337 Overall Total 217.8 100.0 $122,498 Sources: IHS Global Insight; GMU Center for Regional Analysis *in 2014$s

44. Job and GRP Gains and Losses for the Washington Area’s Other Sectors, 2015-2020 (in thousands) Job % of Total Average Value Change Job Change Added per Job* Federal Gov’t - 17.8 - 8.2 $185,804 Retail Trade 2.2 1.0 $64,478 Other Services - 0.2 - 0.1 $86,150 Financial Services - 2.3 - 1.0 $620,922 Information Services 7.0 3.2 $410,371 Manufacturing 0.9 0.4 $249,934 Transportation 7.4 3.4 $203,015 Wholesale Trade 3.6 1.6 $215,783 Job Losses - 20.3 $233,742 Job Gains 238.1 $131,930 Overall Total 217.8 100.0 $122,498 Sources: IHS Economics, Inc.; GMU Center for Regional Analysis *in 2014 $s

45. Employment Change in the WMSA by Sub-State Area (000s ) 20132014 2015* 20162017201820192020 D.C.13.06.512.414.19.710.68.98.2 Sub. MD 6.111.121.620.217.714.112.011.0 No. VA 8.91.326.525.523.615.913.712.6 REGION28.018.960.559.851.040.634.631.8 Average Annual Change 1990-2010 = 36,000 Source: BLS, IHS Economics, GMU Center for Regional Analysis (January 2016); *estimated based on 11 month’s performance. NOTE: The regional totals do not include Jefferson, WV.

46. Structure of the Greater Washington Economy Source: GMU Center for Regional Analysis; Forecast January 2016 Non-Local Serving Business 12.0% Local Serving Activities 34.8% Other Federal 10.7% Fed Wages & Salaries 10.0% Procurement 19.1% Total Federal 39.8% Other 1.5% Health/Ed. 4.5% Assn 1.8% Hosp. 2.1% Int’l 3.5% Non-Local Serving Business 19.1% Local Serving Activities 38.3% Other Federal 7.7 % Fed Wages & Salaries 6.7% Procurement 12.8% Total Federal 27.2% Other 0.6% Health/Ed. 6.2% Assn 1.8% Hosp. 2.8% Int’l 4.0% 20102020

47. Fairfax County, Virginia’s Workforce Outlook: 2015-2020

48. Net New and Replacement Job Growth in Fairfax County, VA: 2015 - 2020

49. Fairfax County, VA Change in Jobs, Summary 2015-2020 Sources: JobsEQ, GMU Center for Regional Analysis, November 2015 Year Total Jobs Net New (% Change) Replacement (% Change) Openings (% Change) 2015Q3582,476 2015 – 2020621,859 39,38369,623109,006 (6.8%)(12.0%)(18.7%)

50. Fairfax County, VA All Net New Jobs, 2015 – 2020 2-Digit SOCNet New%Total%Change Computer & Mathematical 7,87320.013.3 Business & Financial 4,22810.78.3 Healthcare (All) 3,8789.811.0 Office & Admin Support 3,7729.63.9 Management Occupations 2,8707.37.8 Sales & Related Occupations 2,4246.24.3 Education, Training, & Library 2,0545.25.8 Construction & Extraction 1,9424.911.2 Food Prep & Serving 1,5103.83.6 Personal Care & Service 1,3333.48.2 All Others7,225 18.35.3 Totals, All39,383 100.06.8 Sources: JobsEQ, GMU Center for Regional Analysis, November 2015

51. Fairfax County, VA All SOC Top 10 Net New Jobs, 2015 – 2020 Top 10 5-Digit SOCNet New%Total%Change Software Developers, Apps1,8884.815.2 Computer Systems Analysts1,4413.716.4 Software Developers, System1,0632.715.5 Computer User Specialists1,0182.613.9 Management Analysts8972.311.4 Customer Service Reps8942.37.0 General & Operation Manager8912.38.4 Secretaries & Admin Assistant7982.07.4 Market Research Analysts7952.019.2 Accountants & Auditors7191.86.9 All Others28,979 73.65.9 Totals, All39,383 100.06.8 Sources: JobsEQ, GMU Center for Regional Analysis, November 2015

52. Fairfax County, VA All SOC Top 10 Net New Jobs, Average Annual Wage 2015–2020 Top 10 5-Digit SOCNet NewAvg. Wage ($s) Software Developers, Apps1,888110,100 Computer Systems Analysts1,441103,700 Software Developers, System1,063112,400 Computer User Specialists1,01861,700 Management Analysts897103,800 Customer Service Reps89440,300 General & Operation Manager891148,500 Secretaries & Admin Assistant79843,600 Market Research Analysts79577,300 Accountants & Auditors71989,900 All Others28,979 59,680 Totals, All39,383 64,600 Sources: JobsEQ, GMU Center for Regional Analysis, November 2015

53. Fairfax County, VA: Net New Jobs by Educational Requirements, 2015 Annual Estimates * Totals show underestimates due to suppressed data and may not add up EducationNet New % Total Less than High School1,14214.0 High School Diploma2,11025.9 Postsecondary non-Degree3764.6 Some college, no Degree2833.5 Associate's Degree4445.5 Bachelor’s Degree3,44442.3 Master’s Degree1471.8 Doctoral or Professional1982.4 *Totals8,144100.0 Sources: JobsEQ, GMU Center for Regional Analysis, November 2015

54. Fairfax County, VA Replacement Jobs Summary 2015 - 2020 YearTotal JobsReplacement Jobs (% Total Jobs) % Change 2015Q3582,476 2015 – 2020621,859 69,623 12.0% 11.2% Sources: JobsEQ, GMU Center for Regional Analysis, November 2015

55. Fairfax County, VA All Replacement Jobs, 2014 – 2019 2-Digit SOCReplacement% Total% Change Office & Admin Support10,90315.711.3 Sales & Related8,83012.715.6 Food Prep & Serving7,79711.218.3 Business & Financial5,3507.710.5 Computer & Mathematical4,8346.98.2 Management Occupations4,3446.211.7 Educ., Training & Library3,7215.310.5 Healthcare (All)3,4615.09.9 Transport & Material Moving2,5973.712.2 Building & Grounds Maint.2,5853.711.6 All Others15,20321.812.1 Totals, All69,623100.012.0 Sources: JobsEQ, GMU Center for Regional Analysis, November 2015

56. Fairfax County, VA All Replacement Jobs, 2014 – 2019 2-Digit SOCReplacementAvg. Wages ($s) Office & Admin Support10,90343,500 Sales & Related8,83049,400 Food Prep & Serving7,79725,600 Business & Financial5,35089,200 Computer & Mathematical4,83499,900 Management Occupations4,344141,100 Educ., Training & Library3,72161,600 Healthcare (All)3,46170,346 Transport & Material Moving2,59736,400 Building & Grounds Maint.2,58528,900 All Others15,20360,604 Totals, All69,62364,600 Sources: JobsEQ, GMU Center for Regional Analysis, November 2015

57. Fairfax County, VA: Replacement Jobs by Educational Requirements, 2015 Annual Estimates * Totals show underestimates due to suppressed data and may not add up EducationReplacements % Total Less than High School4,01928.0 High School Diploma4,80033.4 Postsecondary non-Degree5303.7 Some college, no Degree2781.9 Associate's Degree5063.5 Bachelor’s Degree3,74426.1 Master’s Degree1871.3 Doctoral or Professional2912.0 *Totals14,355100.0 Sources: JobsEQ, GMU Center for Regional Analysis, November 2015

58. Thank You & Questions 2030roadmap.com cra.gmu.edu