From the President: Economic Progress is Not Optional!
The Alliance 5-Year Plan To GROW HighER-Wage Jobs
BY RICK WEDDLE
For some time now, the Hampton Roads economy seems to have lost its way. Once insulated from the economic and business cycle swings that impact most regions, the job loss and outmigration over the past decade left Hampton Roads with a severely damaged economy and a badly bruised community ego. The military presence and federal spending upon which the region depended on for so many decades is no longer the economic engine that it once was. It hasn’t been a sustaining source of jobs and investment for almost a decade.
The metaphor of a turning point is usually applied to designate those points or decisive moments at which a very significant change occurs, e.g. a shift in direction or motion. For Hampton Roads, this is exactly one of those decisive moments.
Do we continue to slog through this sustained period of below-trend growth or to we step up our pace, make some tough choices and follow a different path? The Hampton Roads Economic Development Alliance has answered that question.
During my first six months as the President & CEO of the Alliance, we have surveyed and studied the economic history of both the region and our organization. Our findings and conclusions have been a bit sobering.
Compared to similar regions, we are far behind when it comes to recovering from the 2007-2009 recession. Moreover, that is before we add in the problems created by sequestration and realignment of federal and military spending and investment.
The most pressing issue is not that we experienced job loss and economic setbacks. All of our peer regions took big hits in the recession. Our real problem is that while most peer regions have bounced back and bounced back strong, we continue to struggle to recover from our job losses.
The chart below shows how we’ve performed compared to nine important peer regions. It shows when the regions’ employment peaked, when it hit the bottom or the job loss trough and when they recovered and surpassed their previous employment peak. As the chart shows, the average time for all ten markets to recover the lost jobs was five years.
As you can see, half of these regions lost considerably more jobs and recovered much more quickly than Hampton Roads. On average, the peer regions lost 13% more jobs and returned to peak employment in less than half the time of Hampton Roads.
At current growth rates, it will take eleven years or until December 2018 for us to again have as many people working in Hampton Roads as we did in 2007.
Clearly, we are off our game and way behind the competition.
We must do something different. We must take a different path. It is time for us to again compete aggressively for new private sector jobs and investment just as our peer regions have so successfully done ever since the recession. This won’t be easy or cheap. It will take a sustained commitment and a lot of hard work over the next several years. But we have to do it because economic progress is really not optional.
So, where do we begin?
The Alliance has answered this call to action by framing a 5-Year Higher Wage Job Creation Strategy and Plan. This strategy and plan sets forth the goals and targets that, when attained, will get Hampton Roads back on track and growing again.
The 5-Year Higher Wage Job Creation Strategy and Plan
The 5-year jobs plan was first laid out at this summer’s economic development workshop on August 25, 2016. Based on industry cluster research commissioned by Reinvent Hampton Roads, this plan sets specific job goals in our region’s higher wage industry clusters. It calls for the creation of 19,000 new jobs in the higher wage industry sectors… jobs that will drive the creation of a total of 58,000 new jobs in the region overall.
The Alliance plan also calls for 25% or 4,754 new higher wage jobs to come from new-to-market business recruitment and attraction. The balance of the jobs must come from efforts to accelerate growth and expansion of these important higher wage clusters. As shown in the following chart, the creation of these new jobs will be ramped up over time as the expanded effort gets underway.
These new job goals represent a 40% increase over the historical performance.
So what will it take to make this new plan a reality?
It will require a concerted regional effort with important deliverables in key areas. In simple terms, we have to improve our competitive position and then pull together as never before to market and merchandise our region’s great assets.
Some highlights of this effort include:
Regional Business Identity.
A collaborative effort is needed to develop a strong and competitive business identity.
Workforce and Talent.
We must build on the talent and skills analysis to attract, grow and retain the talent needed by our key industry sectors.
Work is needed to increase the availability of competitive industrial and distribution space.
Marketing and Promotion.
A Hampton Roads “Go-to-Market” campaign and program are needed. We have to increase the pipeline of new investment and job-creating project opportunities.
Business Development and Sales Promotion.
Company outreach will be focused on attraction and recruitment of high profile and high impact corporate targets. We have to elevate the awareness of our region among site locators, consultants and industry advisors. We also have to fully leverage the strengths of our Regional Economic Developers (RED) Team to deliver high-value location options to business and industry clients.
A new economic forum will be launched to ensure that our top business, government and academic leaders are fully aware of the regions’ competitive position among benchmark regions. We also need to significantly enhance our company/industry research platform and business intelligence capabilities.
Investor Engagement Team.
More involvement and engagement of our investors and stakeholders is needed. We’ll be working hard to bring together a cross-section of investors to review, analyze and understand investor benefits, and frame new investment tiers and engagement opportunities.
And there you have it!
This is a quick summary of our roadmap and plan to bring more jobs to Hampton Roads. As noted above, this will be neither easy nor cheap. We’re working hard to pull together the resources needed to get the plan underway and will be reporting our progress to you in future issues of our newsletter.
I wouldn’t recommend this ambitious plan, nor would I have accepted this difficult challenge if I wasn’t convinced it was both realistic and attainable.
By working together, I believe we can do it. We can get the region back on track and we can create the jobs needed to provide good career opportunities to our children and our children’s children. We have choices to make and we need to make them now. As the great American Poet, Robert Frost said in his classic American poem, “The Road Not Taken” ...
Two roads diverged in a wood, and I—
I took the one less traveled by,
And that has made all the difference.
We are at a turning point. We can sit where we are and stay on the old slow growth path, or we can move ahead and take the better path, indeed, the road less traveled. If we do this now, if we take the better path, it will make all the difference… in good jobs, in better payroll opportunities, in greater investment and a stronger tax base.
AND THERE IT IS… EVERYTHING I KNOW…FOR NOW. STAY TUNED!