Economic Competitiveness Demands Collaboration: Metropolitan Washington’s State of the Region

by Mariia Zimmerman


Throughout 2015, MZ Strategies worked with several regions to address complex challenges they face that go beyond the scope of any one jurisdiction or sector. In the San Francisco Bay Area, we supported a diverse coalition of area foundations and non-profits trying to put out the flames of a housing affordability crisis. In metropolitan Minneapolis – Saint Paul we brought together public and private sector leaders working to re-envision the future of former industrial sites as vibrant 21st Century eco-districts. And in our Nation’s Capital area, we engaged with regional leaders through the Metropolitan Washington Council of Governments (COG) and its Region Forward Coalition to lift up the challenges threatening the region’s economic competitiveness including cutbacks in federal spending, high housing costs, and a lack of a coordinated brand.

COG's 2016 State of the Region Report, authored by MZ Strategies, examines a number of factors that influence regional competitiveness. The picture is a sobering one that calls on regional leaders to more strongly collaborate to leverage the region's considerable assets.

COG's 2016 State of the Region Report, authored by MZ Strategies, examines a number of factors that influence regional competitiveness. The picture is a sobering one that calls on regional leaders to more strongly collaborate to leverage the region's considerable assets.

The 2016 State of the Region: Economic Competitiveness Report measures a wide range of indicators-- from graduation rates to Gross Regional Product (GRP) and poverty levels to parks-- to assess the metropolitan Washington’s current and future economic health and give leaders a fuller picture of how the region can better attract and retain businesses and workers. Even beyond the Great Recession, Federal Sequestration is having serious impacts on growth, prosperity and exacerbating regional disparities.

The 2016 State of the Region report, written by Mariia Zimmerman of MZ Strategies, notes that in 2014, the annual job growth rate in the region was 0.5 percent, one of the lowest rates in the country. Federal procurement spending has declined by $11.2 billion since 2010, while inflation is outpacing regional median wages.

These are daunting challenges, but the region also has a number of incredible assets on which to build including one of the world’s most educated workforces, a strong cluster of internationally-recognized research institutions and universities, and a high quality of life.  At the same time, prosperity and advancement opportunities are not realized equally by all residents.  Some do not have the education or English-language skills to advance beyond low-wage employment or face limited opportunities to upgrade their skills particularly in such a highly-educated region.  Residents growing up in neighborhoods of concentrated poverty face additional hurdles affecting their ability to work regularly or succeed in school. 

An Equitable Growth Profile prepared earlier this year for Fairfax County found that while only 1 percent of the County’s white, US-born population between the ages of 16-24 did not have a high school degree or were in pursuit of one, for Latino immigrants in this age group the rate was 26 percent. Among US born Latinos and African Americans, the rate was 6 percent for each group.

Regional leaders recognize tackling these complex challenges -- each of which is far greater than any single jurisdiction or institution can tackle -- requires collaboration not only between elected officials and policy makers, but also with business leaders, academic institutions and regional non-profits. In the coming year these groups will work together to develop a coordinated regional export promotions strategy, hopefully as part of the Global Cities Initiative (a joint project of the Brookings Institution and JPMorgan Chase). Area economic development directors are meeting to better coordinate their promotion efforts. COG will also work with local governments and workforce boards to align job training programs with key industry sectors.

In today’s world, to be globally economically competitive requires thinking about more than just attracting jobs or relying on traditional economic development policies such as tax breaks or subsidies. Quality of life issues affect competiveness, especially in areas like housing and transportation. In each of the three regions mentioned where MZ Strategies is working, high combined housing and transportation costs threaten future competitiveness. These costs are particularly felt by working families. In metro Washington, 39 percent of households in the region are severely cost-burdened—according to a 2014 Urban Institute study—meaning housing costs account for more than 50 percent of the household income. Changing this dynamic requires area philanthropies, nonprofits, and public agencies working together to address housing affordability issues.

Members of the Bay Area's GCC come together to strategize on ways to increase impact to address regional housing, climate and economic challenges (Photo: M. Zimmerman, 2015)

Members of the Bay Area's GCC come together to strategize on ways to increase impact to address regional housing, climate and economic challenges (Photo: M. Zimmerman, 2015)

Just as each region’s challenges, assets, geography and culture are different, there is no one model of collaboration. In some places, philanthropy has stepped forward to engage and fund cross-sector tables such as the Great Communities Collaborative in the Bay Area or the Central Corridor Funders Collaborative in the Twin Cities. In other metro areas, regional planning agencies are helping to fill this role such as that described in metro Washington but also in other regions such as Seattle-Tacoma, Kansas City and Atlanta.  (See report by MZ Strategies and the National Association of Regional Councils describing some of these efforts). The business community must be a key player in this work, and we see countless examples of them stepping up to play an active role in advocating for policies and investments in education, infrastructure and workforce development.

America enjoys the world’s strongest economy, and our long-term national growth and prosperity depend on strong regional economies. These in turn, rely on tackling the societal challenges that can slow growth and result in disparities across income and racial groups. As noted by Angela Glover Blackwell as Policy Link, “For the country to grow and prosper, we must erase lingering racial and class divides and ensure everyone can apply their talents and creativity to building the next economy. Equity, inclusion, and fairness are no longer only moral imperatives—they are also economic ones. Equity is the superior growth model.”

While this may seem daunting, we are seeing in regions across the country that public, private,  academic and non-profit partners are coming together to think creatively, holistically and practically about how to address them to make their metropolitan economies, communities and people thrive in the 21st Century.