Success comes from awareness of one’s limitations and opportunities, and the willingness to see how actions influence others. Now is the time for the greater Washington region to challenge itself to look in the mirror and spot its weaknesses and act accordingly.
Yes, the business community must get ready to pivot.
We know all too well the strong connection between our local economy and the federal government. The proximity has been our region’s biggest strength, and yet sometimes its largest burden. The magnitude and diversity of our business community is often obscured by the “business of government” when outsiders view our region. The ability to generate significant wealth by serving the government represents a large portion of our activity, and we have embraced that.
However, for those concerned with the future of our region and its ability to generate high-paying jobs, the complex relationship between our business community and the government has long been a concern. For years, we’ve been identifying and promoting opportunities to divert our economy away from the shadow of government.
Sequestration was a strong reminder that our reliance on the federal government could have adverse effects. As federal spending fell, our region’s high value job employment stagnated. For a time, new employment in greater Washington lagged behind other metropolitan areas, and that’s when a broad cross-section of business leaders and politicians finally stood up and took notice.
The message was clear: greater Washington needed to diversify its economy and lessen its reliance on and interdependence with the federal government.
Business groups took up this message, reports were commissioned, plans were made and everyone agreed that something had to be done to address this pressing issue.
Sadly, as the specter of sequestration passed from the public consciousness, the urgency to make changes also passed. Some argue that our region has diversified. Others believe the lesson to be learned is that even if federal spending shrinks for a time, things eventually return to normal.
Professor Stephen Fuller, one of the leading thinkers on our local economy, last week pointed out that economic diversification hasn’t accelerated. In fact, the data show that the reverse is true. In a sobering report, he describes how the seven industrial clusters most likely to create new high value-added jobs in our community are not growing the way they must. Our reliance on federal government spending continues, and we are falling behind in our need to create high-value employment.
Meanwhile, there are clear indications that the federal government’s spending in the region could be at risk. The Trump administration has signaled plans for a federal hiring freeze. Entire government agencies could be downsized or eliminated. True, indications are that national security spending will increase. However, it is impossible to predict whether the net effect of these trends will create more or less federal spending in our region.
I believe that questions of how to cut our dependency on the federal government will become more pressing. Fuller’s research reminds us that we as a region must be more nimble — ready to adapt and embrace employment not necessarily linked to the federal government.
Greater Washington is about to have its pivotal moment. Will it be ready?
This column was originally posted at WashingtonPost.com.