Report Anticipates DC Private Sector Job Growth

The Washington, D.C., region could add up to 170,000 new jobs over the next decade through expanded industries in the private sector, according to a report released April 13 by Inforum, a policy analysis organization at the University of Maryland.

The report, written by Inforum Executive Director Douglas Meade and titled “The Roadmap for the Washington Region’s Economic Future,” also highlights key challenges and opportunities for the District to advance economically and compete globally.

The growth in jobs is anticipated to cluster in seven key industries, including information and communications technology, science and security technology, biological and health technology, business and financial services, media and business, advocacy and leisure travel.

According to the study, these expanding industries — which in 2014 provided nearly 800,000 of the region’s 3 million jobs — will comprise 981,005 of the region’s 3.4 million jobs by 2025. The clusters are expected to expand at a 20 percent rate during this period, double the national average growth in the same industries.

The report states that too much of the D.C. area’s economy depends on the federal government and stresses the importance of diversification of employment among different sectors for continued economic growth.

Inforum economist Jeffrey Lemieux noted that for years, much of the regional economy has been dictated by the budget of the federal government. If private sector clusters grow as Inforum predicts, this trend will be mitigated.

“When the federal government spends a lot of money, the D.C. area will prosper and grow,” Lemieux said. “One of the points of this report is to highlight the private sector areas we focus on in order to prevent federal cutbacks from spilling over into a general region-wide slowdown.”

Inforum economist Troy Wittek said that while the federal government’s role in determining the region’s overall economic growth may be diminished, it will remain an important source of employment.

“The goal of the project is to identify ways the region can pivot away from a general overreliance on the federal government,” Wittek said. “We’re not talking about completely turning our back on this business source. It’s always going to be very important.”

To measure the area’s anticipated job growth, Inforum created a variable called a location quotient. The location quotient is a number calculated by taking the percentage of local jobs in an industry and dividing that by the percentage of the industry’s national jobs. While not every one of the seven industries had a substantially higher location quotient than those in larger regions, each cluster stood out for its appeal to potential residents.

“In some of the cases, the clusters we highlighted aren’t necessarily growing faster locally than nationally,” Lemieux said. “But we singled it out for a lot of reasons, including not only their location quotient, but a lot of potential activity here that would attract people in those industries to this area.”

The report also highlights five areas for improvement in the District region: transportation, housing, workforce, rebranding and collaboration. To advance transportation, the study suggests the District consider forming a regional transportation authority in addition to the Washington Metropolitan Area Transit Authority, which contains representatives from D.C., Virginia, Maryland and the federal government.

As presented in the report, the main challenges faced in the housing sector are primarily centered on affordability, whereas the problems in the workforce include a lack of strong collaboration between academic and business communities.

In terms of rebranding, the study recommends that the region develop a brand that portrays the area as a global center of business. The report also proposes opportunities for interregional collaboration, including a non-compete alliance between local economic development efforts.

Lemieux noted that many of the jobs in the seven clusters appeal to highly educated individuals, meaning much of the growth will not include the creation of lower level service jobs.

“Some of the sectors are not necessarily high wage, but most of them are,” Lemieux said. “For example, the business travel sector has pretty ordinary wage levels, but most of the others are pretty high wage tech oriented sectors that we’re focusing on.”

Wittek said the D.C. area is unique for the number of people it attracts, and identifies the region’s many institutions as giving D.C. an advantage over other areas of the country.

“We have at least 14 pretty big universities with close to quarter of a million students, and the quality of life in the region attracts a lot of people,” Wittek said. “It’s a power center. People gravitate to this area.”

Lemieux said that the aim of the report and Inforum’s work is to highlight the role these diverse industries can play in D.C.’s continued economic growth. Lemieux expressed confidence that by focusing on these clusters, the regional economy can remain healthy going forward.

“The theme of the report is to try to make these job clusters work together in a way that it becomes an attracting force,” Lemieux said. “Make things more than the sum of their parts, so you can attract talent.”

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