Our region has a vibrant innovation ecosystem that is one of the most important in the United States. Advanced technologies that drive the country’s economy are nurtured here and further developed and deployed by our highly talented workforce and entrepreneurs. People often don’t see the scale and depth of our innovation and entrepreneurship activity because they focus on the wrong metric.

Many people use a region’s level of venture capital funding as a proxy for the level of innovation. This is a good criterion for evaluating a community centered on the venture-backed start-up business model: businesses are started by angel investors who work with founders to advance a technology to the point of commercial application; venture capital is used to fill out the team and provide multiple rounds of growth capital.

When people apply this criterion to our region, they see a comparatively low level of venture capital activity and conclude that our region must not be a driver for innovation. They couldn’t be more wrong.

What powers our region is its proximity to Washington, D.C. As the seat of government and an international city, it draws peoples’ attention and dollars. People come here to change the world or serve the public interest. That positive reality has become obscured by the cynicism that many feel about government. But that doesn’t change the many positive aspects that this proximity creates.

The first such positive feature is the access to federal research and development money and output. Our region gets a very large share of federal R&D funding – tens of billions of dollars each year. In addition to paying for many highly skilled technologists, this funding often creates market-leading businesses. This happens because substantially all that funding is for applied, not basic, research, meaning that our technologists build things that have utility. There are many examples of this, including Medimmune, which commercialized biotechnology technology developed at the National Institutes of Health, AOL which effectively commercialized the world wide web started by the Department of Defense, and Invincea, a venture-backed start-up that commercialized cybersecurity technology funded by Defense Advanced Research Projects Agency.

Tens of billions of dollars in additional funding is spent in our region on technology services, solutions and products. People outside the region look at these purchases as largely being consultants cobbling together technologies and not innovating. First of all, that is not true. Many of the technologies that we now take for granted – GPS and video conferencing as two examples – were developed by local companies under government contract. Yet even when they are applying or supplying more established technologies, these countless companies, large and small, build significant businesses and train talented technologists. And as an ancillary benefit, government purchasing practices have also created a nation-leading community of successful women and minority technology business owners.

Even when the government is not directly involved as a funder or a customer, entrepreneurs often use proximity to it to grow their businesses. Some gain key insights into market regulation and coming regulatory changes to build businesses. For example, Capital One, which revolutionized the credit card industry, MCI, which challenged the status quo on long-distance phone calls and disrupted the telecom industry, AmeriChoice, which brought managed care to Medicaid recipients and the Inova Schar Cancer Institute that is seeking to treat cancer on a genomic level are all companies that apply in concert technology and regulatory insight. Others create businesses that explain or communicate the goings on of a national and international capital, such as emerging media businesses like Vox and Axios, or veteran companies like the Washington Post.

Because our innovation businesses can often grow with government funding or by being proximate to power, they tend to be more mature and established before they need or want venture capital. They also have tangible, usable technology to utilize. This means that when our local businesses do turn to venture funding for growth, they are much better investments. The data shows that our region’s venture capital funding generates better returns for investors than do those of other U.S. regions.

In sum, our region’s model of developing innovation-based businesses is broader and more durable than a system solely centered on venture capital. Moreover, it has created an ecosystem that applies technology and takes a practical approach to technology creation. This process is funded at a level that exceeds the amount of venture capital that is deployed in any region of the United States.

Application of technology supports a broad diversity of industrial clusters in our region — media, energy, advertising/PR, advocacy, cybersecurity, precision medicine and more. Our technologists are driving advances in genomics, machine learning, robotics, virtual reality and advanced software. Viewing our region in its totality, the conclusion is clear: the greater Washington region has an innovation community that is unique and exciting. We have a workforce that knows how to create advanced technologies and apply them, and start-ups that build compelling businesses.

For any business that is looking for technology talent or for new technologies to acquire, this region is incomparable. Once you see its merits, how you could you not want to be part of it?

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Our region rarely speaks with one voice when it comes to economic development. Its many political jurisdictions more often compete with each other than cooperate in their common interest. A current effort to address Metro’s funding challenges — the MetroNow Coalition — shows how our region can unify to solve big economic challenges. If it is successful, it may also eliminate the excuse that our region’s complex jurisdictional environment makes coordination impossible

Locations such as Denver, New York, the Raleigh-Durham area and Nashville all have added jobs and entered new industries through coordinated economic development policies and investments. They have grown faster than our region has. Why isn’t our region pursuing large coordinated economic development efforts like our competitors?

The answer most often given is that these regions do not have to deal with the jurisdictional complexities we face here; it’s easier to work within a single state than to coordinate across state lines.

I don’t agree with this argument. Political boundaries are not what  stand in our way; it is the unwillingness of business leaders to stop playing jurisdictions against one another. If you look closely at each successful regional economy around the nation, growth is usually fostered by the business community deciding to work together to improve the local economy and to make investments in the locations with the highest potential for success. Politicians don’t lead these efforts, because they are elected to represent voters who live in a single district. Business people look across geographic and political boundaries without having to worry about satisfying constituents. They are not looking to get elected. They are looking to grow their businesses.

MetroNow, as a collective activity led by business groups to support permanent funding for Metro, could be a model for successful business-led efforts for regional economic development. But will this opportunity be realized? Beth Johnson, founder of RP3 Agency and an expert in branding and public relations, looks at MetroNow and wonders whether business and community leaders will indeed take the time to lead. She is optimistic that they will. But they’ll really need to want to convert words into action, as it will take significant time away from their “day jobs” to drive economic change.

Yolanda Cole, owner of Hickok Cole Architects and chair of the Washington chapter of the Urban Land Institute, believes that the threat to our region from a failing Metro is so profound that addressing the problem will overcome local inertia. Business and community leaders will invest the time and energy, “because our long term economic well-being depends upon world-class transit.”

Clare Flannery, campaign director of MetroNow, says the direct advocacy that many MetroNow coalition members are undertaking in Richmond, Annapolis and D.C. shows a high level of personal commitment by business leaders. Coalition members are talking directly to the region’s elected officials and giving them specific legislative proposals and funding targets. Most importantly, they are speaking with a single voice.

If these efforts are successful, the potential benefits go beyond saving Metro. Bob Buchanan, chair of the 2030 Group, another group leading the coalition, believes that successfully addressing Metro’s funding in this way creates trust, understanding and success that will “lay the groundwork for action in the future.”

Will MetroNow be a template for further success? Or does the fact that Metro is a single, indivisible transportation network that can’t be broken up into jurisdictional parts and continue to operate — make it a unique situation?

I am not sure that we know the answer to that question today. However, one thing is abundantly clear. Whether we chose to act collectively in the future or not, if MetroNow succeeds, our community will no longer be able to point to our unique jurisdictional geography as an excuse for inaction. For that reason alone, MetroNow’s success would be a really big deal.

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Millennials – people born between 1980 and the late 1990s – are now the largest segment of our national workforce. Within a few short years, they will be more than three quarters of all workers. This makes it essential that our region be attractive to them.

Last week, American University’s Kogod School of Business released its newest Millennial Index. The index helps us move our discussion of millennials away from clichés to a conversation based upon objective data. Far from being a generation that is motivated by trendy restaurants and bike trails, the index gives us a picture of millennials as an age group looking for jobs that offer high salaries and career progression while living in communities that provide affordable housing and to some lesser extent other lifestyle amenities.

This picture of millennial aspirations should get our attention, particularly as our region competes to attract Amazon HQ2 and other technology employers. When asked to rank the most important factors they use to evaluate where to live, millennials rank jobs as most important (40 percent), affordability as next important (24 percent), followed by career and education options (18 percent), amenities (10 percent) and people (8 percent). This ranking shows clearly that millennials will be less likely to stay here because of people or amenities, if there are better economic opportunities or cheaper living elsewhere. This is a group that will vote with its feet and move away or never come at all.

Indeed, we are seeing some voting against our region right now. In the aftermath of the Great Recession, our region benefited as its economic stability attracted millennials. But in 2017, our region saw a 0.2 percent drop in millennial residents, despite a 1.5 percent increase nationwide.

What will attach millennials to our region for the long term? The Millennial Index suggests that financial security is a large driver. For millennials who are high earners, this region has become their permanent home. They own homes, have children, and are satisfied with their lives and with life in our region. Simply put, their career ambitions are satisfied, and they can benefit from the positive amenities of our region because they can afford them.

However, many millennials don’t have high paying jobs. For them, this region is becoming less and less desirable. The high expenses of life in our region cause many of them to live paycheck to paycheck. And for a good portion of them, getting a better education to find a better job may not solve the problem. Or, indeed, getting that education might be the problem.

This is because millennials as a group face a challenge that prior generations have not: the prohibitive cost of obtaining higher education. Gabrielle Bosché, a national expert on millennial behavior, points to student debt as the major challenge for her generation, describing it as creating financial instability that “cripples my generation’s investing power.”

Jennifer Ives, a seasoned executive and workforce development expert, echoes this view. She notes that particularly for millennials who haven’t gotten high-paying jobs, our region is “too expensive (with their loans) so they prefer second and third tier cities with interesting jobs.”

Stephen S. Fuller, founder of research institute at George Mason University’s Schar School of Policy and Government, has for years been urging us to recognize that our region’s job growth lags that of competing regions. Moreover, the jobs we are creating are not high-paying jobs. Combining his insights with the Millennial Index yields a disturbing picture: our largest workforce demographic is motivated more by financial security than by attachment to people and surroundings, at a time when other regions may have cheaper living costs and offer comparable (or better) economic opportunities.

We pride ourselves as a place that has many world-class universities and community colleges and point to our highly educated workforce as a distinguishing reason why employers should locate here, and new businesses will grow. But, if we don’t work to lower the costs of education, or otherwise help students with crushing debt burdens resulting from developing the skills our economy needs, I fear that our region will lose out to places where millennials can better manage their debt burdens as they pursue their careers.

As we talk in our region about offering economic incentives to attract new employers, shouldn’t we also be looking to apply some of those incentives to solve the problem of student debt

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The challenge of knowing whether what you read online is true has gotten national attention. It is proving harder and harder to separate factually based writing from intentional misinformation or click-bait. This problem is about to get exponentially worse.

We should all be concerned about living in what Peter Horan, a long-time veteran of the Internet industry, describes as a “post-truth society” — a society where “whether or not it has a foundation in fact, anything that is repeated often enough is believed to be true.”

The Internet has driven down the cost of producing content and distributing it broadly to effectively zero. It has also made the cost of reviewing written information for probity and integrity higher in comparison. Sadly, insuring that something is true requires more time and expense than making something up.

Until recently, the cost advantage that drives the ubiquity of false written information did not prevail for video images. A recent study by the Belfer Center at Harvard highlighted that since the invention of the photographic camera, “the technology for capturing highly reliable evidence has been significantly cheaper and more available than the technology for producing convincing forgeries.” This allowed people seeing images of a politician taking a bribe, a celebrity staring in a sex tape, or other sensational images, to be relatively comfortable that the depicted event actually occurred.

Last week, a number of technology blogs alerted us to the proliferation of inexpensive video editing software that creates realistic pornographic videos of celebrities. As inexpensive video editing technology is combined with artificial intelligence, creating fake videos have become indistinguishable from reality.

This development will challenge our society. But, it should also create an economic opportunity for our region.

Our largest regional industry, national security, sees the degradation of the fidelity of information as an existential security challenge. Chuck Howell, chief scientist for dependable artificial intelligence at the research contractor MITRE, points to an “arms race over various kinds of deception” attracting the attention of our national security establishment.

Many of our largest private businesses – media, consulting, advertising and other highly skilled knowledge worker businesses – depend upon the reliability of information and a consequent shared reality. More than many others, our region’s economy depends on informational expertise and having insights that are expensive to generate and correspondingly scarce. A world that does not share facts and informational integrity has no way to value informational experts. In that world, many of our businesses will suffer.

Therefore, our region has a very stark choice to make. It can either accept that the erosion of the quality of information is an irreversible technological trend, as many national observers have suggested. Or it can meet the challenge and fight for information quality and objectively demonstrable facts.

When I asked Kurt Roberts, chief innovation officer at RP3 Agency, about the threat posed by technology cheapening information, he told me we should “flip the notion on its head” and focus on using technology to help people know whether something is true or fake. This point was echoed by Adam Zuckerman, founder of the Fosterly community that promotes regional entrepreneurship. For him, technology is neither good nor bad. It just is a tool, and how we use it is an opportunity.

Any entrepreneur will tell you that the biggest businesses are often built by solving society’s biggest problems. We have the technologists and entrepreneurs to come up with new technology applications and the means to ensure that our society is based upon a shared reality and facts. We also have large customers that need that those solutions now more than ever.

Informational integrity may be a political issue for all, but for our region it is also a large business opportunity.

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Many in the greater Washington business community woke up this morning to a very uncertain work week. A federal government shutdown, whether it lasts days or weeks, raises serious challenges to our region’s economic prospects.

Virginia Gov. Ralph Northam (D) in a public statement on Friday said the federal shutdown would have a disproportionately negative effect on our region’s economy and would put jobs and economic growth at risk, adding it was “past time for leaders in Washington to get their act together and come to an agreement on long-term funding solutions for the federal government.”

The already extant business uncertainty caused by past short-term funding agreements and sequestration will be exacerbated by this current shutdown. Bobbie Kilberg, chief executive of the Northern Virginia Technology Council, pointed to the many members of her group doing business with the federal government that would lose revenue in the near term and have a difficult time planning for future growth. Since our region’s government contractors receive approximately $1.3 billion in revenue each week from federal government procurement, a shutdown or the unpredictability of short-term spending deals

In addition to the potential harm to businesses, the federal shutdown will leave hundreds of thousands of federal employees with a lot of spare time and no paychecks. Federal rules do not allow non-essential individuals to work for the government without pay, so many federal workers will be furloughed for the duration of a shutdown. Just look at the numbers: The federal government is responsible for 367.900 civilian jobs in the Washington area with a weekly payroll of $777 million, along with another 64,500 military jobs accounting for $122 million in weekly payroll and benefits.

Jeannette Chapman, deputy director and senior research associate at George Mason University’s Stephen S. Fuller Institute, cautioned that the harm from a short shutdown was more reputational than economic. A short shutdown would reinforce the view held by many nationally that the D.C. region is defined by government dysfunction. She believed the actual economic harm from a short-term shutdown would be small, “somewhat similar to a snow storm,” and any lost economic activity would be mostly made up post-shutdown.

However, the longer the shutdown lasts into weeks or longer, she identified much greater economic harm. Chapman pointed to households of government employees that do not have savings to cover expenses during the shutdown, workers that generate income from government contracting jobs who get paid hourly wages only when they work, and family-owned businesses that serve government personnel (such as restaurants and dry cleaners) as all being particularly vulnerable.

She was also concerned that there was no assurance that government workers would receive back pay after their furloughs ended. There is no federal obligation to pay back wages, leaving the issue to be addressed in federal legislation when the government reopens. After each prior federal shutdown, legislation was passed to provide for back pay, but that might not happen in the current political environment. The economic hole created if furloughed government employees are not paid back wages could be significant. Chapman pointed out that even if only 30 percent of furloughed civilian workers didn’t receive back pay this would take $233 million out of our region’s economy for each week of lost pay. This is money that will be lost forever – dragging down our economic growth and creating financial distress for many families.

Our region is disproportionately and adversely affected by a national political dispute in which our region’s economy is collateral damage. This is the downside of our region’s strong interdependence with the federal government, a relationship that over time has created significant wealth and business opportunities.

As we look at the likely harm to our region, we should be justifiably angry at our national politicians for endangering our region’s economy as a result of their failure to govern. However, we should also turn our anger into energy that we focus on the opportunities before us.

Bob Buchanan, president of the local advocacy organization 2030 Group, reminded me that the shutdown is juxtaposed with Amazon identifying our region as having three of the 20 finalists under consideration for the home of its second headquarters project. We shouldn’t lose track of the desirability of our private sector work force and our community.

He is right. I know from my own work that a growing number of businesses are locating in our region and growing in areas such as healthcare, software, education, consumer products and hospitality without any connection to the public sector at all. The reality of our region’s economy is that we have a vibrant and growing private sector business community.

In life, we often learn much about ourselves by how we react to adversity: are we victimized by circumstances or do we meet challenges head on? This can be a moment when we take stock of the many advantages our region has, and we increase our commitment to growing our non government business community.

We can choose to endure the dislocation of a federal shutdown, and hope for a return to business as usual. Or, we can take the opportunity to show the world that Washington, DC is much more than a company town and celebrate our economic diversity.

I think our region is up to this challenge. What do you think?

 

 

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Jonathan Aberman was quoted in this article on CNN/Money “Three Amazon Fnalists are Inside the Beltway. What gives?

“Real software and tech innovation isn’t just product innovation, it’s services solutions, and just being skilled at managing technology, and we’re really the leaders in that in the world,” said Jonathan Aberman, a D.C.-area tech investor. “So I think Amazon’s interest in this region shows how informed they are about the nature of technology talent.”

Given its longstanding desire to diversify away from the federal government and businesses that depend on it, the D.C. area could benefit enormously from having a large Amazon campus in any of the three jurisdictions, Aberman said.

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It’s critical that community leaders understand our region’s workforce trends. A recent workforce report from LinkedIn is essential reading.

 With more than 143 million individual members in the United States and 3 million job postings a month, LinkedIn has a large and current data base to use in identifying employment trends.

LinkedIn’s report shows that of the 20 largest metropolitan areas in the United States, Washington, D.C. and its suburbs have the slowest percentage increase in hiring during 2017. Measured against an average hiring increase of 10.8 percent, our region had a hiring increase of only 3.5 percent. That’s worse than the San Francisco Bay area, which had a hiring growth rate of 3.9 percent. Places with diversified local economies and affordable housing performed much better than the national average, with the three fastest growing areas being Houston, Phoenix and Dallas-Fort Worth.

LinkedIn also follows migration of workers and population based upon the profile locations of its members. This effort highlighted the troubling fact that nationally two of the 10 largest losers of workers were nearby: Norfolk was fourth and Baltimore was ninth. The areas with the largest number of lost workers were Providence and Hartford.

Meanwhile, no locality in our region was among the top locations for inward job migration. Places like Austin, Denver and Seattle were top destinations. Our region did rate as one of the most active job markets from the standpoint of inbound and outbound migration taken as a whole, with Washington, D.C. and its suburbs being the sixth most-active region. Austin, San Diego and Orange County, California led the way in migration activity.

LinkedIn also tracks what it describes as emerging jobs–careers where the worker’s skills and role are directly relevant to the growth of technology-driven businesses. Our region attracted workers in many of the emerging job categories, including data mining, business development and relationship management, and sales. It was not alone in looking to attract these workers, however, as our region faced strong competition for these valuable workers from the San Francisco Bay area, New York City, Los Angeles and Dallas.

Unfortunately, according to LinkedIn, we are not winning this competition.

Our region is not attracting workers at the rates of competing regions. In fact, we are losing workers. The top three locations for outbound migration from our region were the San Francisco Bay area, Denver and Seattle. Observers who have suggested that we are losing people who want to be software product entrepreneurs will likely find vindication in this data. Meanwhile, within our region, Washington, D.C. and its suburbs gained workers through inbound migration from Baltimore, Norfolk and Charlottesville. Redistributing workers may create pockets of growth, but does not provide for regional growth overall.

What is clear from the LinkedIn data is that we have jobs going unfilled because we are not attracting, retaining, or training a sufficient number of workers, particularly in emerging job categories. This conclusion is consistent with a recent report produced by the Greater Washington Partnership, as well as past reports prepared by regional experts such as Steven Fuller.

At some point we must acknowledge what data and experts are telling us: without concerted action, our region will have a continued mismatch between our workforce and available jobs. In the long term, employers will either find the workers they need here, or they will relocate their businesses to elsewhere. In the near term, every available high-paying job that is unfilled is an economic opportunity lost.

Unless we ensure that our region is focused on being an enticing place to live, and develop effective processes to develop the skilled workforce we need, we will continue to lag behind competing economies around the nation and the world. And over time we will likely fall further and further behind.

If you aren’t concerned, you aren’t paying attention.

 

 

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The federal government is the primary customer of a substantial portion of our region’s technology businesses. So it bears watching what it does. Industry participants tell me that the coming year looks promising, but even so, there are reasons for concern.

Bobbie Kilberg, president and chief executive of the local trade group, the Northern Virginia Technology Council, and someone with her finger on the pulse of our region’s technology economy, is optimistic that 2018 will be a good year for the government contracting industry. She points to the Trump administration’s attention to IT modernization and innovation, focusing on what she describes as the “plumbing of administration.”

This modernization trend dovetails closely with areas where our local businesses have proven technology expertise. John Wood, CEO of Telos, a company that focuses on data security and integrity, said the federal government’s rapid adoption of cloud-based software should play to a regional strength. Michael Isman, managing director of Deloitte Consulting, said there will likely be opportunities in digital reality, blockchain data storage, and automation.

Anita Antenucci, senior managing director at the law firm Houlihan Lokey, a mergers and acquisitions expert, points directly to our local expertise in serving the specific needs of the government customer. Emerging technologies that are driving changes in the private sector are just as necessary to the government, if not more so. When the government has what Antenucci describes as “demanding and urgent” challenges, it is our local businesses that satisfy the need. She points to cybersecurity as a specific example of this phenomenon. Chuck Brooks, a nationally-recognized observer of technology trends, agreed with Antenucci, adding that “the growth in both the number and quality of cybersecurity companies in greater D.C. has been amazing.”

Owners of businesses that deliver technology solutions and products that government needs will have an additional opportunity: the potential to sell their companies to motivated purchasers. Kevin DeSanto, managing director and co-founder of KippsDeSanto and an expert on mergers and acquisitions, sees current stock market and interest rate trends as providing strong incentives for larger companies to be aggressive about purchasing smaller businesses in 2018. Antenucci strongly echoed this sentiment.

Although reasons for optimism abound, there are also reasons to fear that the pace of government purchasing might be slower than the urgency of the need for new technologies would suggest. Paul Leslie, CEO of Dovel, a government contractor with a focus on health care and life sciences, said in 2017, the pace of government purchasing of technology services was slowed by the steep learning curve of new political appointees getting comfortable with their roles. He was hopeful that with their greater comfort “we will see a release of that acquisition bottleneck this year.”

While that issue is important, the biggest challenge to our region’s government contracting industry is political risk. Wood spoke for many of his peers by observing that while the general public might be inured to it, the lack of a predictable annual budget is a “grossly inefficient way to operate” and makes it very difficult for companies that sell to the federal government. Kilberg agreed this was a serious issue, explaining further that “the serial adoption of continuing resolutions to fund our federal government rather than federal budgets has impeded the ability of businesses to plan or expand with confidence.” Continuing resolutions that extend funding for short periods, and don’t provide for funding for new programs, can be as harmful to our local economy as sequestration or budget cuts.

Based on what I learned, the prospects for government contractors in 2018 reflect both the best and worst of our region’s close relationship with the federal government. This year will provide many of our region’s most entrepreneurial businesses with the revenue opportunities to grow their businesses, while leaving our region more open than are competing regions to economic hardship resulting from political dysfunction.

While some will say that the outlook for our government contracting industry should remind us that diversifying our innovation community is an important goal, I also take it as a reminder that it is essential for those of us who care about our region’s future to remain politically engaged.

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New Year’s Day offers an opportunity to reflect on lessons learned from the prior year. So last week I asked members of the business community the biggest lesson last year had taught them.

For many, the biggest lesson involved politics in some way. Some saw this as a positive thing, pointing out that bringing people together to achieve a goal, a behavior characteristic of successful entrepreneurs, had become a part of politics. Fran Craig, chief executive of Unanet, a software product business, pointed out this similarity: “Everyone can contribute so all can win. This was true in getting out the vote and [in] moving a technology business forward.” This sentiment was shared by Shekar Narasimhan, founder of the real estate investment firm Beekman Advisors, adding that taking an entrepreneurial approach to political action means that “business people can engage in the political arena without fear and can make a difference.”

There were limits to this view, though. A number of respondents thought the polarization of our political discourse meant that business people should be careful to separate what they did personally from their business operations. Chris McAuliffe, CEO of Theragen, a medical device startup, raised the concern that if a business itself became politically active in the current political environment, it risked alienating a significant portion of its market. He advises businesses to “remain politically agnostic in favor of delivering value to your customers.”

Another theme that surfaced was the importance of continued progress in regional coordination. Bob Sweeney, managing director of the Global Cities Initiative, and an expert on our region’s economic development activities, pointed to how greater Washington region’s pursuit of Amazon’s second headquarters  highlighted our region’s ability to collaborate. Sweeney worked with representatives of eight different jurisdictions to promote our region to Amazon, and he was pleased with their ability to find commonality in how they described our region’s assets, providing what he described as a “fantastic regional story.”

Bob Buchanan, chair of the 2030 Group, a regional advocacy group, echoed the lesson learned from the Amazon bid. However, the bigger question for him was whether our region’s political leaders truly listen to the business community or just give the appearance of engagement. His concern is that the “business community does not carry much weight” with our political leaders when it comes to addressing the region’s significant transportation and housing challenges.

Some respondents focused more narrowly on their own experiences and shared lessons for other entrepreneurs. Tien Wong, chairman and CEO of Opus 8, a technology investment firm, shared that his most important lesson of the year was to “always see the positive in every situation, even when it seems to be bad,” because doing so allows more creativity in responding to challenges. Ben Foster, a serial software product entrepreneur, pointed out that even as technology allows businesses to be buried in data about customer behavior, there is still no substitute for actually talking with customers if you wanted to understand them. Jamey Harvey, CEO of Courage, a software services business, added that it was essential to “never take the most important partners in your life for granted.”

What I learned from these responses is that the unique tapestry of our region – the proximity to the federal government, an economy that stretches across multiple political jurisdictions and a diverse range of entrepreneurial opportunities – draws to it many interesting and thoughtful people who get up every morning and make great things happen. It’s why I am happy to live here and why believe that our region is one of the leading entrepreneurial communities in the world.

Happy New Year, everyone. Let’s make 2018 a year to remember for good things.

 

 

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Many people see improving our roads and Metro as a shared goal that our region can rally around. I’d like to add another rallying point to this conversation: developing and expanding our region’s digital technology workforce.

Last week, the Greater Washington Partnership released a report that looked very closely at employment in digital tech industries — software development, data management and analysis, software technology engineering and IT management. Digital tech workers are among the highest paid in the country, and expanding digital tech employment drives the growth of leading regional economies.

Additionally, there are a broader range of jobs that aren’t digital tech industries but still require digital literacy. For example, many jobs in health care, law, accounting, advertising and media require comfort with digital technologies.

Taken together, digital tech jobs and digital literacy are highly important. Nearly two-thirds of the new jobs created in the United States since 2010 have required digital skills, and as digital technologies become increasingly integrated into the economy, the percentage can be expected to rise even higher.

Evaluated against these two realities — the need for digital tech workers and a broader workforce that is digitally competent — our region has a challenge.

There is good news. The report reminds us of our long history of leadership in digital tech employment. We should be proud of the role that our workforce has played in building the Internet, aerospace, wireless telecommunications, robotics, cybersecurity and bioinformatics industries, among others. Today 1 in every 16 jobs in our region is in digital tech.

But the GWP report has bad news for us, too. Although our region has one of the largest concentrations of digital tech workers in the country, we do not currently rank among the top 50 U.S. regions for job growth in this important job category. Over the past five years, the number of digital tech workers in our region has grown just 3 percent — only 8,000 net additional jobs — compared to a 12 percent national growth rate.

Moreover, it appears that our region educates digital tech workers who take their educations elsewhere when they look for work. Over the past five years, our region has produced a surplus of tech degree graduates. We had almost 14,000 digital tech degree graduates more than we had regional digital tech jobs filled. Yet at this moment, there are upward of 35,000 unfilled digital tech jobs in our region. It appears our graduates are either leaving for greener pastures, or are graduating with skills insufficient for the jobs that are offered.

Clearly something is not working in our region’s economy. The GWP report raises a number of reasons for this market disconnection. Our region’s employers as a group are not effectively signaling to educational programs the skill requirements for the digital tech jobs they have. National security requirements appear to inhibit the ability of government-reliant employers to employ applicants without bachelor or advanced degrees. Our traffic and housing issues result in quality of life concerns that encourage digital tech workers to migrate to other regions. A regional overreliance on service models for technology innovation encourage people who want to create digital tech product start-ups to go elsewhere.

I have no doubt that these are issues we can address as a region. We could identify mismatches between education and hiring by collecting and analyzing data and sharing insights. Direct involvement of our largest digital tech employers in creating educational syllabi, combined with internship and apprenticeship programs that they sponsor, could broaden opportunities for students to gain practical experience and have the right skills. For those that currently leave our region to pursue entrepreneurial opportunities elsewhere, we must give them reasons to stay by better supporting start-up business formation.

We have the resources to meet the challenge of digital tech workforce development. Let’s form a public/private partnership and get to work.

 

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