A Prosperous Future is Ours to Lose
By: Miles Friedman for INSIDENOVA
Some people – yes, even some economists – believe that every cloud has a silver lining. But these days most of us struggle to find that sparkly streak. There is no way to convince those who lost loved ones or those whose businesses failed that something good will come from the COVID-19 pandemic. And yet there are reasons for hope and positivity.
There is Light at the End of the Tunnel
Dr. Terry Clower, renowned economist and professor of public policy at George Mason University’s Center for Regional Analysis, believes that better days are ahead.
“Once we feel that there is some measure of safety, customers will surge back to restaurants,” Clower said. He predicts that businesses that were successful and well-funded before the pandemic will resume prospering once a vaccine is available and consumer confidence is restored.
It helps that our region is gifted with advantages that promote long-term stability. These include a federal government that continues to employ people and spend billions of dollars on goods and services right here, as well as a robust workforce of highly skilled, amply motivated individuals who can sustain the location and growth of key local industries.
What Economic Developers Think
Professional economic developers also are fairly optimistic about our chances for economic success in the region.
Telly Tucker, director of economic development in Arlington County, believes businesses will evolve and adapt to change, rather than wilting beneath it.
“This is an opportunity for economic developers,” Tucker said. “We must be creative in the ways we view business, sites, and the workforce.
He also agrees with Clower on the need for the government to do more to encourage entrepreneurs, and sees failed businesses as a potential breeding ground for the rise of new companies. Tucker also cites the fact that the region is becoming more and more “tech-centric,” noting that it’s “a solid rock upon which to build a strong economy.”
The real challenge may be to see how businesses adapt, and how those adaptations affect profitability and jobs. Most of us know of businesses that have found new ways to generate revenue. Whether that involves outdoor dining with tents and heaters to allow restaurants to operate through the winter, or companies moving more of their sales and marketing to the internet to reach more people, creativity and flexibility are key.
This raises the question of whether there may in fact be a real “silver lining” as companies find their adaptations to be more efficient and more productive than the “old ways” of doing business. While the effects of such re-engineering will vary from firm to firm and industry to industry, an overall move toward higher productivity could have a salubrious effect on the regional economy.
The Mother of Invention
Luke Tilley, chief economist at Wilmington Trust, sees this as the most positive potential change that the pandemic may engender. As the saying goes, “Necessity is the mother of invention.” He believes that the urgency wrought by the pandemic may have stimulated a significant long-term upgrade to business in general.
“We are somewhat optimistic regarding investment in this region, as several factors point to more stability and predictability for the private sector,” Tilley said.
As others have done, Tilley sees the split-party control of the federal government along with the arrival of a vaccine as factors that can minimize the likelihood of government or disease inflicting drastic changes on the economy. Safe investment drives confidence, and confidence for investors and consumers will be a big factor helping to restore and stabilize our regional economy.
There are some strong arguments to be made for optimism, and Clower, Tucker and Tilley seem to agree. A robust, educated, motivated workforce, a surging tech sector, a growing small-business community, pro-business local governments, and a track record of enormous successes can all help propel Northern Virginia’s economy as the virus recedes.
The very facts that local governments have turned far more attention than before toward both existing businesses and new locations and have more fully recognized the importance of smaller businesses as the “beating heart” of local economies help make a powerful argument for an optimistic future.
Needless to say, we will only know for sure how this all plays out as the local and regional economy moves through 2021. Will we warm to the changes in ways of doing business as winter turns to spring? Can we create an environment that encourages our wonderful workforce to remain and grow here in Northern Virginia? Can government at all levels step into a role as a catalyst of positive business health and growth?
There are challenges ahead, no doubt. But with a strong underlying regional economic base that no longer depends solely on federal government spending and an array of sterling institutions of higher learning to build and maintain a superior workforce, winning the battle for a prosperous future is, as the sportscasters might say, “ours to lose.”
About the author
Miles Friedman is an economic development expert with more than 25 years of experience in Northern Virginia, including seven as director of economic development in Fauquier County. He has served as president of the National Association of State Development Agencies and was the director of legislation and policy for the National Council for Urban Economic Development.