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CHAPTER TWO: STRATEGIC INDUSTRIES
Our confidence in this plan's success is based on our belief in Washington, DC itself. That confidence is well-founded. Washington, DC has strengths that are unique to the region and the entire country. No other city is the capital of the United States of America, the center of our federal government. No other city can offer the information content, the proximity to federal and global financial institutions, the access to political power, and the attractions that make Washington, DC an international tourist destination. The key to success lies in Washington, DC's ability to build on those unique strengths, by developing its capacity in the private industries in which it has competitive advantages and which are expected to grow in the 21st century. THE IMPORTANCE OF INDUSTRY NETWORKSResearch has shown that cities and regions with the best economic performance today are those that have concentrated specializations in one or more interrelated industry networks. What are industry networks?
Examples of industry networks include the Silicon Valley's network in information technology, New York's network in financial services and Los Angeles' network in entertainment. Industry networks within metropolitan economies around the country are responsible for the nation's economic revival of the past several years and hold the key to 21st century American prosperity in the "New Economy," which is knowledge and information-based, technology and communications-intensive, and globally oriented. Just as America's success in creating and sustaining industry networks helps put it at the top of the world economy, Washington, DC's success in exploiting its regional role will help it rise to the top of the nation's economy. Metropolitan Washington's competitive advantages lie in the functional specialties that are inherent in its role as the national capital. Through research and study, six Industry Networks have been identified for the city:
Together, these six Industry Networks have been the engines of prosperity for Washington, DC's economy during the past two decades. From 1980 through 1996, the six Industry Networks collectively grew by 24 percent, adding 56,400 jobs. During the same time frame, the rest of the city's private businesses together lost 1,000 jobs, a one percent decline, and total government employment dropped by 17 percent, with a net loss of 47,800 public sector jobs. At the end of 1996, these six Industry Networks employed 293,400 people, accounting for 64 percent of all private jobs located in the city, up from a 59 percent share in 1980. The six Industry Networks are the leading edge for the city within the metropolitan economy — 22 percent of the total joins in the region for these six Industry Networks were located in Washington, DC in 1996, compared to just 15 percent of the regional total for the city's other private business sectors. The growth of these Industry Networks has been crucial for the city's economic prosperity and highlights their vital role in helping diversify Washington, DC's economy to compete more effectively in the regional and global marketplace. Back to top of page — Back to table of contents Key Business Sectors In the Industry NetworksBusiness / Professional / Financial / Association Services
Hospitality / Entertainment / Tourism / Specialty Retail
Universities / Educational / Research Institutions
Biomedical Research / Health Services
Media / Publications
Information Technology / Telecommunications
Source: ICE Kaiser Back to top of page — Back to table of contents WHAT ARE THE INDUSTRY NETWORKS AND WHAT IS BEING DONE ABOUT THEM?BUSINESS / PROFESSIONAL / FINANCIAL / ASSOCIATION SERVICESThe largest of the city's six key Industry Networks is Business / Professional / Financial /Association Services, with 127,200 private sector jobs in 1996. It includes lawyers, bankers, accountants, and other specialists, along with professional and membership associations. Washington, DC is currently a major center for many services in this network, with an employment concentration that is 60 percent higher than the US average. This Industry Network grew in total employment by 37 percent from 1980 to 1996. Within metropolitan Washington, 25 percent of all jobs in the network were located inside the city during 1996. Opportunities.for growth: This network is the backbone of Washington, DC's private sector. Attorneys and law firms dominate the office buildings downtown, seeking close proximity to the White House, Congress, federal agencies and courts, as well as their legal and government relations colleagues. A wide range of specialized and highly skilled business and professional services are increasingly in demand, and the presence of the World Bank, International Monetary Fund, Agency for International Development, Export-Import Bank, several hundred foreign embassies, and now the recently opened International Trade Center at the Reagan Building, all point to a wealth of opportunities in global finance and trade. Finally associations are as omnipresent as lawyers. They are essential to the conduct of the nation's business at both ends of Pennsylvania Avenue. The Industry Network group: Led by Sandy Fitz-Hugh, President of NationsBank, Washington, and Whayne Quin, Managing Partner of Wilkes Artis Hedrick 8r Lane, this network is focusing on strengthening the public-private partnership for economic development through institutions such as the new Washington, DC Marketing Center and the National Capital Revitalization Corporation, and they are advocating for the appointment of a Deputy Mayor for Economic Development. In addition, business, professional, financial, and association leaders in this Industry Network are concerned about reducing taxes to promote a better business climate and make Washington, DC's tax rates more competitive with those in suburban Maryland and Virginia. Since large tax cuts may cause problems in terms of balancing the city's budget and in paying for high quality infrastructure and services, a more reasonable approach is to focus on smaller, carefully targeted tax reductions that encourage business growth. Firms and associations that provide business, professional, financial, and association services are increasingly heavy users of information and communications technology. They would benefit substantially from tax incentives that encourage new and increased investment in modern equipment and software. Investing in the most recent technological advances will make these companies and associations more economically competitive, make Washington, DC a more cost-effective location, and help promote technology-based firms to grow jobs within the city.
HOSPITALITY / ENTERTAINMENT / TOURISM / SPECIALTY RETAILThis is the second largest Industry Network in the city is Hospitality / Entertainment / Tourism / Specialty Retail, with nearly 50,000 private sector jobs in 1996. It includes businesses and employees that serve the many national and international tourists, regional visitors, and city residents drawn to Washington DC's hotels, restaurants, cultural attractions, sports and entertainment activities, and specialty stores. From 1980 to 1996, jobs in this Industry Network increased by 13 percent. Within the region, the city had 17 percent of total jobs in the network in 1996. Opportunities for growth: This Industry Network illustrates the powerful symbiosis in the nation's capital between the federal government and the private sector, a symbiosis that creates opportunities for further growth. The base provided by the federal presence, including the national museums and monuments that draw millions of visitors to the city every year, can be a fertile source of ideas and strategies for expanding private business activity. The Industry Network group: Led by Bill Edwards, Manager of the Washington Hilton, and Barbara Wolfsan, Director of Community Relations for the DC Heritage Tourism Coalition, this Industry Network is working to develop a comprehensive hospitality industry plan for Washington, DC, bringing together hotels, restaurants, the city's tourism entities, and the convention business, with arts and cultural organizations, museums, historic sites, and neighborhood tourism initiatives.
UNIVERSITIES / EDUCATIONAL / RESEARCH INSTITUTIONSThe Universities / Educational / Research Institutions Industry Network includes the staff of Washington's many think-tanks and other policy research institutions as well as the staffs of the city's major universities, each of which has adapted its own teaching and research specialties to take advantage of its location in the nation's capital. In 1996 this network employed 42,000 people in the city, a five percent increase over the number of jobs in 1980. Over 57 percent of the region's jobs in this network were located within the city in 1996, a very high degree of concentration. Opportunities for growth: With world class think-thanks, universities, and other research and educational institutions, the city possesses a unique resource that offers a strategic competitive advantage in today's knowledge-based economy The city should continue to create jobs within this network, which will help attract to Washington, DC the new talent and resources necessary to compete more effectively in the 21st century economy. The Industry Network group: Led by Dr. Charlene Drew Jarvis, President of Southeastern University and Chair of the District of Columbia Council Committee on Economic Development, and Herman Bulls, Managing Partner of LaSalle Partners, this network is working with the Consortium of Universities of the Metropolitan Washington Area and the Initiative for a Competitive Inner City to create a collaborative effort by graduate business schools and other university departments throughout the region. Their mission is providing technical assistance to help promote small business entrepreneurship among minority-owned and community-based firms. Several obstacles currently impede Washington, DC's universities, and particularly their graduate business schools, from fully realizing the opportunities available to strengthen the economic fabric of their surrounding communities. These impediments include the lack of faculty champions, minimal funding, and a scarcity of resources for programs supporting urban economic development. In some cases, university faculty, staff, and students are not aware of the potential value in cultivating relationships with the local business community. The Industry Network's initiative, working together with the Consortium of Universities, is designed to overcome these obstacles and connect scholars and practitioners in ways that are mutually beneficial and will help city residents and business owners prosper.
BIOMEDICAL RESEARCH / HEALTH SERVICESAmong the fastest growing industries in the US economy, the Biomedical Research / Health Services Industry network includes the medical staff of the city's major hospitals as well as the medical researchers drawn here to work on projects funded by the National Institutes of Health, and firms that provide supplies for these activities. Total private employment in 1996 was 40,800 in the city for this Industry Network, 20 percent of the metropolitan total. Biomedical research and health services firms created nearly 13,000 new private sector jobs in Washington, DC since 1980, growing at an impressive rate of 45 percent, far exceeding the city's overall economic performance. Opportunities for growth: Washington, DC serves as a central hub for many key aspects of the broader metropolitan Industry Network, especially hospitals, and research and testing services. This Industry Network has grown rapidly, and will best sustain its growth by diversifying into new business areas such as medical research, biotechnology, and home health care. One key concern for retaining and attracting businesses is creating a more favorable regulatory environment. The Industry Network group: Led by John Green, Senior Vice President of Helix / Medlantic, and Robert Malson, President of the District of Columbia Hospital Association, this Industry Network is working to level the playing field with Maryland and Virginia by streamlining the city's regulatory oversight of health care and hospitals.
MEDIA / PUBLICATIONSWashington, DC has been and continues to be a major center for media and publications industries. In 1996, the Media / Publications Industry Network employed 20,000 people in the private sector, experiencing 9 percent job growth since 1980. More than 28 percent of the total metropolitan jobs in this network are in the city, highlighting Washington, DC's competitive advantage in media production and content. Opportunities for growth: While employment concentration in periodicals, newspapers and television broadcasting is already well developed, newer industries such as motion picture and cable television services are beginning to emerge and grow in Washington, DC. This Industry Network can position itself to broaden its base and take full advantage of the rising demand for "content" and 'new media" products and services, including computer graphics and animation, and web site design for internet users. In order to take full advantage of these opportunities, the quality of life in the city must improve to attract a larger group of creative and talented workers and entrepreneurs. Marketing the city's image becomes critically important for the future vitality of this Industry Network. Also needed is to increase the critical mass of both large and small companies, by developing media-oriented business districts in and near downtown. The Industry Network group: Led by Austin Kiplinger, Chairman of Kiplinger Washington Editors, and Todd Mason, President of Atlantic Video. this Industry Network is developing a three-year local, regional, and international campaign to improve the city's image.
INFORMATION TECHNOLOGY / TELECOMMUNICATIONS
Based in one of the fastest growing areas of the New Economy, the Information Technology / Telecommunications Industry Network includes software designers, privately sponsored computer systems developers, and information engineers in the space satellite communications industry. It is just beginning to grow in the city, with less than 15,000 private sector jobs in 1996 out of a regional total of over 177,000. Metropolitan Washington is becoming one of the country's leading regions for information technology and telecommunications. Enormous potential exists for the city to develop strategic linkages with the metropolitan Industry Network, that generated an astonishing 178 percent job growth from 1980 to 1996. Opportunities for growth: The city can begin to claim a bigger piece of the regional Industry Network by identifying and building upon business strategies that can flourish most effectively in an urban environment. A recent analysis by Potomac KnowledgeWay suggests the city should market itself as a "content developer." As the internet and other elements of information technology and telecommunications business expands, a chief concern will be access to a large quantity and high quality of information to transmit across the globe. The relentless search for good information content leads directly to the nation's capital, providing the city with a major competitive advantage in the regional and global technology marketplace. The Industry Network group: Led by Marie Johns, President of Bell Atlantic-Washington, and Pedro Alfonso, President of Dynamic Concepts, this Industry Network is creating a Washington. DC Technology Council to promote technology-based businesses throughout the city, and especially in targeted "technology districts." The council will concentrate on issues such as research and technological innovation, education and workforce development, economic incentives for technology companies and districts, availability of business financing, providing technical assistance to small firms, and procurement opportunities with private and public sector clients.
GROWING BUSINESSES AND JOBS ACROSS THE PRIVATE SECTORThe strategy for growing businesses and jobs by building on the strength of Washington, DC's six leading Industry Networks has two parts. First, each network is working on high priority actions that are of specific importance to the companies and organizations in their field. Second, other across-the-board initiatives are needed for all the Industry Networks to grow, and for retaining and attracting enterprises of all shapes, sizes, and colors. regardless of the network to which they belong. This section contains seven key actions designed to forward the city's strategy for growing the private sector within the Industry Networks and beyond. The actions in the next two chapters, Strategic Populations and Strategic Areas, also promote business and job growth and are fundamental parts of the overall vision and strategy. The first action is to expand the newly created Washington, DC Marketing Center. This is a major public-private partnership focused on marketing to retain and attract firms. It incorporates the Business Ambassadors program of the District of Columbia Chamber of Commerce and the Early Warning System of the District of Columbia Building Industry Association, and works together with the downtown marketing activities of the Downtown DC and Golden Triangle Business Improvement Districts, the neighborhood marketing activities of the Coalition of Economic Development Organizations, DC Agenda, and the DC Heritage Tourism Coalition, the city's various convention and tourism marketing entities, and the city government's business outreach programs. Industry Network leaders told us that aggressive marketing to keep and recruit companies, as is done by most other cities and counties, is essential for Washington, DC's economy to become more competitive in the regional and global marketplace. It is even more important in this city, because to grow the private sector we first need to change the existing image that many executives already have of Washington, DC's business environment.
In our discussions with business and community leaders, the unfriendly regulatory process was the most frequently cited complaint of entrepreneurs and neighborhood residents alike. This issue has been studied to death by numerous commissions and task forces, and legions of newspaper and television reporters have cut their professional teeth chronicling tragic stories of mismanagement, delay, confusion, and hostility in the city's permits, licenses, and other forms of regulatory approval and enforcement. Now there is new leadership at the Department of Consumer and Regulatory Affairs, and as the agency moves to a new building later this year, it is time to make a new start. The Business Regulatory Reform Commission, the District of Columbia Council, and the Financial Responsibility and Management Assistance Authority determined both the need for sweeping reform and the precise nature of the changes to be made. For Washington, DC's economic strategy to succeed, it is imperative that these reforms are implemented rapidly and completely.
The third action relates to the use of special incentives for business retention and attraction. In the past, the city has not been aggressive about pursuing firms. One executive whose organization is located downtown told us that he had received hundreds of offers from other cities to relocate with offers of incentives to sweeten the deal. In contrast, he has never received a single letter or phone call from our city government asking him to stay. Luckily for us, he is deeply committed to the city. Not everyone is so loyal, and many businesses and jobs have either slipped away or never arrived over the years. Incentives can make a difference, and the ones that the President and Congress provided to Washington, DC in the special Enterprise Zone must be aggressively marketed, from the Employment Tax Credit to Enterprise Zone Bonds to zero capital gains taxes. In addition, particular deals can he made using targeted one-of-a kind incentive packages, such as the recent negotiations with MCI-WorldCom over developing a new office building and brining 1,000 new jobs to the city. Tailor-made incentives should be clearly tied to major economic benefits for Washington, DC and its residents, the most important being substantial job opportunities along with procurement opportunities for local suppliers and contractors.
Assisting small businesses in obtaining procurement contracts to provide goods and services for large corporate and government purchasers is one important strategy for growing the private sector. Dr. Stephen Fuller of George Mason University studied trends in federal procurement for our strategic plan, and his findings were very surprising. He documented that the $22 billion in annual federal procurement has helped fuel the private sector in metropolitan Washington, generating nearly 200,000 jobs in businesses throughout the region, especially northern Virginia. Businesses listing an address in Washington, DC receive about $4 billion of these federal purchasing dollars, but Dr. Fuller, discovered through detailed case study investigation that 88 percent of this money actually pays for work performed in the suburbs. By his calculation, federal procurement only supports 3,000 private jobs in the city, and two-thirds of those are held by people living in Maryland or Virginia. It is vital that real Washington, DC companies that hire real Washington, DC workers be competitive in obtaining a much larger share of these contracts. Technical assistance offered through a public-private collaborative can help make the difference. Technical assistance for small businesses should not simply be limited to federal procurement. Major employers such as the World Bank, Inter-American Development Bank, International Monetary Fund, Fannie Mae, and many other large organizations based in the city and throughout the region can be sources of procurement contracts for small businesses that are creating jobs in the city. The Greater Washington Board of Trade's Community Business Partnership program is a good model to be emulated and expanded. Also, the Universities / Educational / Research Institutions Industry Network project using business schools to support small firms is another key resource for a targeted procurement initiative.
For small businesses to start-up and expand, most need more than technical assistance, or even procurement contracts. Many of them need financing, including loans and other forms of credit, plus venture capital and additional types of equity investments. Minority-owned and community-based businesses often need extra assistance in obtaining capital to grow. Fortunately, the federal Community Reinvestment Act serves as an incentive for mainstream lenders to do more urban lending both for businesses and housing. Both the federal and city governments have special programs to increase capital access as do several other key public-private partnerships. The new National Capital Revitalization Corporation and the new CityFirst Bank will both soon begin playing important financial roles. What is needed is a concerted effort to mobilize capital resources and coordinate them more effectively.
To maximize the potential benefits of our strategy for growing prosperity in Washington, DC, we must see ourselves as part of a larger metropolitan economy, help the region grow, and capture a larger share of an expanding economic pie. The Industry Networks are metropolitan in scope; making the city components more competitive requires a regional perspective. Dr. Stephen Fuller has stated that because Washington, DC is the national capital, economic linkages between the city and surrounding suburbs are even stronger than in most metropolitan regions. Based on thorough research, he estimated that for every dollar increase in Washington, DC's production, the suburban areas gain $1.44 in economic growth. Maryland and Virginia businesses and residents benefit very substantially from the city's economic expansion. To a lesser extent, Washington, DC also benefits from suburban regional growth, which creates both business opportunities for city-based firms and job opportunities for local residents. Therefore, promoting metropolitan cooperation for mutual economic benefit through a series of cooperative, "win-win" initiatives is a vital action in our furthering economic strategy.
While the federal government is not as dominant in Washington, DC's economy as it was a generation ago, as the nation's capital, it still has a compelling interest in maintaining and enhancing the health and vitality of the city. The people who participated in preparing our strategic plan clearly recognized the advantages of including the federal government as a full partner, and many federal officials have been actively involved in the process. From the Navy Yard to New York Avenue, and from to Georgia Avenue to the proposed Empowerment Zone, the federal government can play a constructive role helping to grow businesses, jobs, families, and communities in our city. At the same time, we must work harder to ensure that the federal government does not economically harm the city. For example, 82 percent of the entire metropolitan region's federal job losses between July 1993 and July 1998 occurred inside Washington, DC. The city lost 46,000 federal jobs in a five-year period, which dealt a body blow to the local economy and contributed significantly to the city's fiscal difficulties. The National Capital Planning Commission estimates that each federal job generates three jobs in the private sector, and the negative economic impacts of federal job losses are similarly magnified. A study by Reath Communications for this our strategic plan found that Washington, DC s share of total federal employment in the region has declined from 58.3 percent in 1977 to 51.7 percent in 1997. This is far short of the National Capital Planning Commission's official goal that the city should have 60 percent of the region's federal jobs. These devastating losses for the city have taken place despite the existence since 1978 of Presidential Executive Order 12072, which requires federal departments and agencies to show a preference for central city business areas in the location of their offices and other facilities. Despite a federal court decision upholding the legal validity of this Executive Order 12072, the federal government, and particularly the General Services Administration (GSA) which has primary enforcement responsibility, has done little to stem the flow of federal jobs moving from the central business area of Washington. DC to far-flung suburban locations. This exodus has contributed to the air pollution, traffic congestion, and land-use sprawl that increasingly characterize metropolitan Washington. Even the addition of Presidential Executive Order 13006, which gives a preference for federal government location in historic buildings and historic districts, combined with President Clinton's reaffirmation in 1996 of Executive Order 12072, had little positive impact to date.
A classic example of the federal government is disregard its own rules and regulations is documented by Viki Reath in her report. GSA's own entity, the Federal Technology Service (FTS — formerly called the Federal Telecommunications Services), as recently as the fall of 1985 had 1,175 employees working in Washington, DC, and 69 in the Northern Virginia suburbs. Even as late as the fall of 1994, FTS had 870 workers in the city and 205 in the suburbs. Yet by the fall of 1998, the number of FTS workers in the city had dropped to 170, an 86 percent decline in just 13 years. During the same period, FTS jobs in northern Virginia had grown by 460 percent! And this was done by the federal agency that is responsible for making sure that the other federal departments follow Executive Order 12072. Finally, in 1998 as part of the preparation for our strategic plan, local public and private sector leaders protested to GSA, and FTS agreed to move 100 back into the city, along with and a new economic partnership to support the growth of private businesses through the Washington, DC Technology Council. FTS Director Dennis Fischer plans to put a "Center for Excellence in Information Technology" downtown in the new Reagan Building. This example shows the positive role the federal government can play in partnership with the city, and why it so important for Washingtonians to be vigilant about preventing the negative effects of federal actions.
CONCLUSIONWhile the city's position as the nation's capital is one of its greatest strengths, the central economic task now is to grow the private sector, with the federal government as a good citizen and full partner in this effort. The main engines of prosperity are the six Industry Networks, and they can serve as the rising tide that will help lift up many other business activities and bring prosperity to all our residents and neighborhoods. Back to top of page — Back to table of contents CHAPTER THREE: STRATEGIC POPULATIONSMost economic plans developed by cities focus exclusively on achieving business goals. This plan is different. The writers of the plan understand that a good economy is not an end in itself; rather, it is the means that allows us, as a city and as a society to create a good quality of life for the greatest number of people. A good economy does not necessarily buy well-planned neighborhoods and vibrant communities. It does not necessarily buy job opportunities and financial well-being. It does not necessarily buy excellent schools and teachers.
What follows is our plan to improve the quality of life for those who live and work in Washington, DC at the same time that we improve our economy. We will do this by establishing a world-class system for local workforce development and by increasing the number of people and families who find the city an attractive place to live. Over the course of our work it became clear that these two elements were critical to the success of Washington, DC. A well-trained workforce is ever more essential as America completes its transition to the information age and as the city seizes the opportunity to play a significant role in a burgeoning metropolitan economy. Washington, DC's prosperity is directly linked to the prosperity of the region, and vice versa. Yet our analysis found that the city is being held back in its efforts to expand because it lacks a sufficient number of adequately trained workers. Also, we need to increase the population of our city A growing population creates dynamism and stability in all aspects of urban file, including economic activity. It also creates conditions and support mechanisms that help people move out of poverty. What follows is a detailed analysis of how these two elements affect the fortunes of the city and shape our action-oriented plan for success. As in the other parts of the report, the key actions explained in this chapter were carefully tailored to meet the city's needs by a hard-working group of citizens. We are convinced that our plan will work to build on the positive momentum that already exists throughout the city. Back to top of page — Back to table of contents WORKFORCE DEVELOPMENTTHE CURRENT SITUATION
In preparation for this report, our working group members met with business leaders throughout the region in order to better understand the barriers between unemployed city residents and jobs. The two issues participants consistently identified as Washington, DC's most pressing challenges were combating the city's negative image and finding a skilled workforce. Workforce preparation must be a city priority and the city must do a better at connecting people to jobs. Despite a booming regional economy, the city still suffers because a significant number of its residents are unemployed or underemployed. Some Washingtonians haven't look for a job for such a long time that for statistical purposes they are not even counted as part of the workforce. The official unemployment rate in September, 1998 for Washington, DC was 8.5 percent, compared to a much lower 3.3 percent for the entire metropolitan Washington area. The higher unemployment rate in the city in 1998 is at least partially due to the much more severe impacts on Washington DC's residents of the sharp decline in federal and local government employment. However, the data also show that there are far more jobs in the city than there are local residents filling them. Some people living in the city, especially some of our youth, currently lack the technical skills, educational background, and good work history sought by most employers, which currently prevents them from getting a decent full-time job. While Washington, DC's leading Industry Networks require many employees with higher skills than more traditional economic sectors, most of the jobs provided by these network businesses still can be performed by high school graduates. Altogether, 63 percent of the jobs — 185,000 jobs — can be performed by persons with no formal training beyond the high school level. The business leaders we talked to told us that their most urgent employment needs can be met by good workers at the entry level, rather than workers who already had high levels of training and employment experience. But they also need people with good basic skills, positive work habits. and a strong desire to leans and perform effectively. This means that while the city needs to invest in its people by training residents for higher-skilled jobs, in the immediate future we can begin by preparing many of our youth and young adults for entry level jobs that are available right now. Today, Washington, DC has more low-skill jobs located in this city than residents who hold them. Many of these modestly paid positions arc currently being filled by workers who commute from Virginia or Maryland. Unfortunately, the city's current workforce development system has not yet been able to turn this trend around. The problem here, as in much of the country, is that the numerous public and private organizations working in this field have not yet formed a comprehensive, well-coordinated system. For example, a study conducted last year by the Technical Assistance and Training Corporation found that job training programs offered by the Department of Employment Services were generally ineffective in addressing the complex needs facing the city's workforce. Many of the existing programs are not tied directly to employers and their hiring and promotion demands and practices, although some recent nonprofit community-based efforts, such as the Foundation for Educational Innovation's DC Link and Learn, and the United Planning Organization's Bridges to Work, are better tailored for producing results by placing people in decent jobs well-suited to the regional market. The urgent necessity for such services will increase in the coming years as mechanisms to stimulate job growth in the city are put in place and as many more employment opportunities are credited by the Industry Networks. Back to top of page — Back to table of contents THE STRATEGIC SOLUTIONThe goal of this strategy is to create a worldclass workforce development system for Washington, DC. Based on our analysis summarized above, we know that the city must do a better job of preparing its workforce for the 21st century economy. We must link people seeking work with real jobs and employers throughout the metropolitan region, and connect employers — especially those that are growing jobs in Washington, DC — with qualified workers who fulfill their business and organizational needs. To do this effectively, we must provide more opportunities for genuine, career-oriented education and employment training at the high school level and beyond, in college and at job training and placement centers. The recommendations that follow accomplish just that. The first action is focused on turning the soon-to-be-established Workforce Investment Board into a genuine clearinghouse and public private partnership coordinating a more effective workforce development system that brings together employers, such as the Industry Networks, with educators, community-based service providers, public agencies, and most importantly, people who need and want a good job.
The next action, strongly recommended by many employers, is strengthen the role of the University of the District of Columbia in granting Associate Degrees for one or two-year career-oriented programs directly tied to employment opportunities in metropolitan Washington.
This action takes a similar approach for the public schools and public charter schools. They need to expand their links to employers by designing effective teaching methods training students for careers in the work world, in hospitality, information technology, automotive engineering, culinary arts, telecommunications, performing arts, media, health care, law, finance, international trade, association management, marketing, geographic information systems, aerospace, and many other promising fields.
The last action recognizes that there are many job opportunities in the city that should be available for local residents, but that we should lift our sights beyond our borders and assist city residents in gaining access to suburban jobs at the same time that we actively encourage suburban residents currently working in Washington, DC to buy a home and live in our city.
ATTRACTING AND RETAINING RESIDENTSTHE CURRENT SITUATIONAs noted throughout this report, Washington, DC is a city with tremendous resources, hut it has recently been hampered by a negative image. The impact of that image can be measured in dollars and cents, in the numbers of business and job opportunities lost, and in the decline of the city's population over the past few decades. Companies and organizations have been less inclined to locate or remain in the city and people have been less likely to move here or stay here. The two things go hand in hand. To reverse one cycle, we must reverse both. Successfully retaining and attracting businesses and jobs is interwoven with the need to retain and attract residents. Business leaders from the Industry Networks told us that the city's past image made it difficult for them to attract talented young executives and managers to work here and that this was a significant constraint on their prospects for expansion within the city.Some people simply have not wanted to live in a place with the tarnished reputation of Washington, DC. Our job is to change their perception for the better. Between 1950 and 1990, while the population of the metropolitan region grew by nearly two-and-a-half times, the population of Washington, DC consistently declined. Although a loss of population has been typical for most central cities in the northeastern United States, the impacts on Washington, DC have been particularly harsh. Due to the unusual nature of Washington, DC's economy — a city surrounded by two separate states but with no reciprocal tax-sharing permitted for the city — a Washington, DC resident with a local job is worth much more to the city than a job held by a non-resident. A recent study by McKinley and Company showed that employing 100 Washington, DC residents in jobs located within the city produces 84 percent more in income and sales tax revenue compared to 100 jobs in the city held by suburbanites, who pay no city income or wage taxes, and spend far less on city sales taxes because they and their families do most of their shopping near their homes and schools. Consequently only one-third of the nearly 700,000 jobs located within Washington, DC are held by city residents. Clearly it is beneficial for the city to attract new residents, starting with the almost 470,000 people who work here every day but do not live here. Our challenge is to find out how this can be accomplished. We analyzed the past and present exodus from the city to better understand why people leave, why others stay, and how we can effectively use this information to encourage both stability and growth. Back to top of page — Back to table of contents WHY THEY LEAVE — AND WHY THEY COME BACKPerhaps most surprising was the shift in the city's population by race and ethnicity. During the 1980s the biggest population losses occurred among African-Americans, with an average decline of over 1,000 households per year. The city's demographic profile was becoming smaller but more diverse, as the number of Hispanic households grew substantially and various other ethnic groups increased slightly. Losses continued in the early 1990s at a rate nearly five times higher than the previous decade. While African-American households still accounted for the highest rate of people leaving the city — averaging 2,400 annual household departures — the number of white residents also declined by nearly 1,000 households a year, while Hispanic and Asian households continued to increase. Data are not available on population changes in Washington, DC since 1996, but the high loss rates in the early 1990s indicate that the task of attracting and retaining residents should be a top high priority. Our analysis also made clear that the city must try to retain and attract a w de variety of households, not simply middle- and upper income families, in order to achieve the greatest overall economic success. Diversity makes good economic sense, because it generates a broader range of business activities and a more well-rounded workforce.
George Grier of the Greater Washington Research Center did a study for our strategic plan, he conducted surveys on migration asking households who moved into the city to explain the main reasons for their move. His report produced some useful insights. For white, Hispanic, and Asian households, the most common motivation for moving into the city was to be near their job, especially if it was a new job. That tells us it is worthwhile to encourage local employers to offer incentives for their workers to move into the city. The other main reason these people moved here was their desire to take better advantage of the general conveniences and attractions of city living. This underscores the importance of improving the quality of life in Washington, DC, especially the cleanliness and safety of streets and public spaces, efficiency of transportation and services, and availability of good housing and cultural amenities. For African-American households, proximity to family and friends was the reason most frequently given for their move into the city. This tells us that working closely with community institutions — churches, schools, universities, hospitals, banks — to promote homeownership and neighborhood reinvestment, will help keep African-American families in Washington, DC and bring them back from the suburbs, and attract them from other places. Back to top of page — Back to table of contents THE STRATEGIC SOLUTIONThe city can attract and retain households who represent a broad cross-section of income levels. racial and ethnic backgrounds, and other household characteristics. In order to truly prosper and live up to its potential as a world class city, Washington, DC must become a better place to live for all its current and future residents. That means raising the performance of public schools, improving local government services by having the workers treat residents as their respected customers, strengthening the economy and the workforce development system, and making communities more secure, attractive, and livable. Increasing homeownership is a central element of our strategy for success. Homeownership stabilizes and strengthens neighborhoods, boosts economic investment, and enables families to take better control of their lives and improve their financial well-being. When homeownership goes up, other remarkable things start happening to communities: Crime goes down. Streets are cleaner. Quality of life improves. Businesses thrive. Neighborhoods come alive. The strategy is clear: retain and attract residents by increasing homeownership making neighborhoods more attractive to current and potential residents of all income levels and diverse backgrounds, ensuring public safety for families and communities, improving access to cultural and recreational amenities, and getting businesses, community institutions, and faith-based organizations actively involved in expanding the human potential of the city. The first action focuses on using major employers,churches, schools, and other community institutions to promote homeownership.
The next action emphasizes creating a more exciting, 24-hour downtown that draws people in day and night, with far more people living, shopping, and having fun there.
This action puts the spotlight on neighborhood arts, culture, and heritage tourism, bringing more prominently into public view what is now the best-kept secret of Washington, DC: the beauty and history of our many diverse communities.
Another key action supports neighborhood reinvestment by eliminating blighted eyesores and pockets of crime spots that detract from quality of life, replacing them with new development that enhances the community environment.
The last action will make communities safer by providing a powerful tool for law enforcement officials to stamp out drug dealing, prostitution, and other harmful pursuits. Once the police start impounding cars driven by people engaged in illegal activities, visitors from the suburbs will stop using our neighborhoods as "drive-throughs" for obtaining illicit substances.
CONCLUSIONWashington, DC's greatest resource is its people. By focusing on workforce development and on attracting and retaining residents, our plan demonstrates that investing in people — is the best strategy for growing our economy |
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