Commonwealth Secretary of Commerce and Trade, Maurice Jones, briefed the Hampton Roads Chamber’s Executive Committee on June 11.
Prior to this position, Jones was Publisher of The Virginian-Pilot and 2012 Chair of the Hampton Roads Chamber. In 2012 and 2013, he served as Deputy Secretary of the U.S. Department of Housing and Urban Development.
Jones provided an informative snapshot of the economy, on the state and local level, and provided an opportunity for the Chamber’s volunteer leadership to dialogue on economic issues important to the region.
With approximately 150 days on the job as Secretary of Commerce and Trade, Jones revealed data he believes “crystallizes where the work is to be done across the state.” Chief among his concerns is the need to diversify our regional economy, weaning our local economy from a dependence on Federal dollars. Jones reminded executive committee members of a sobering fact: 15 of the top 20 employers in the region are tied to the public sector.
Jones said, “The risks we’ve got in an unbalanced economy here are just dramatic.” This trend can be seen in northern Virginia as well. Richmond is the most balanced economy in the Commonwealth with an approximate 50/50 mix of public versus private sector employers.”
He shared a list of the largest employers in the Hampton Roads region.
1) Defense Department
2) Huntington Ingalls
4) Virginia Beach Public School System
6) Riverside Regional Medical Center
7) City of Virginia Beach
8) Chesapeake Public School System
9) Norfolk School System
10) City of Norfolk
11) Newport News Public School System
12) Food Lion
13) Hampton School Public System
14) City of Newport News
15) Farm Fresh
17) City of Chesapeake
18) Tidewater Community College
19) College of William & Mary
20) Navy Exchange
While Hampton Roads has much to be proud of, offering much to its business community, Jones cautioned the status quo is far from ideal.
“We take too much credit for the health of the state, he said. “We don’t have a great strategy. Our strategy has been public investment.”
The Commonwealth’s unemployment rate has improved, but still much to overcome , “The country as a whole will generate more jobs post-recession than we lost during the recession. The economy is slowly healing,” said Jones who cautioned, “Virginia is not at this point. As of April, Virginia is 122,000 jobs below where we were before the recession.”
Jones explained this is because the public sector is our growth engine. The public sector is shedding jobs or remaining stagnant. The dependence on the public sector will be clearer in the next few years. Virginia’s economy is only growing at 1.7% annually, while other states are growing more rapidly. Jones continued to stress that our regional challenge is to grow the private sector.
The state is working to invest in the areas believed will foster private sector growth. Jones shared the five themes to do this. The first theme is infrastructure, which he explained includes roads, air travel and rail. He stressed investing in roads, but said the Commonwealth cannot afford to overlook other areas, “The biggest complaint that I hear from businesses is that ‘I won’t bring my headquarters to Hampton Roads because I can’t get an economical direct flight to New York City.’”
Jones said domestic flight volume is down in all Virginia airports except Dulles International Airport. “We have to do a better job of demonstrating to the airlines that the demand is here,” Jones said. People Express Airlines, offering flights to cities such as New York, launched in Newport News. Jones says the Commonwealth will assist the airline to make it a profitable venture.
The second theme Jones discussed is the right sectors, explaining the state needs to grow IT, healthcare, cyber security, advanced manufacturing, aerospace, life sciences, tourism and others. Jones underscored that the Commonwealth help facilitate a business environment that allows such businesses to grow, as they offer much better wages than other industries in the private sector. Regarding wages, Jones explained that the state is growing low wage jobs at four times the rate of high wage jobs. He repeated his message that, “We need to grow the private sector and high wage jobs.” He also emphasized the need for more international trade.
Jones said talent, is his most important focus. “This is where I hear the most pain for businesses wanting to expand and the most interest from businesses we’re trying to attract,” said Jones. “There is fear from people attempting to launch businesses. Our workforce system has a gap raising its head, especially in trades such as electricians, welders, machinists and computer programmers.”
In response, the Hampton Roads Chamber of Commerce President & CEO, Bryan K. Stephens shared some of the Chamber’s work to address the talent delta to include a desire for a military advisory council focused on “the ability for the businesses in the region to tap into the military talent transitioning into the civilian sector. We anticipate more than 10,000 transitioning military this year alone here in Hampton Roads alone.”
According to Jones, despite concerns for a reliance on Defense spending, the military personnel stationed in Hampton Roads is one of the best resources the region has to offer “This is where I think Hampton Roads is the best in the Commonwealth. Because of the military, Hampton Roads has the most attractive workforce for these jobs in the Commonwealth. We need to brand this. I’m surprised at the number of businesses I talk to that don’t realize this concentration.”
The fourth theme Jones discussed with the group is entrepreneurs, saying the Commonwealth must foster a more entrepreneurial culture. “Our state has more IT workers than almost any other state, largely in northern Virginia.” Jones said many of these workers are leaving Virginia for the Silicon Valley, and the challenge is to instead entice this skilled workforce to stay and launch business here in the Commonwealth.
“We’ve got a much more attractive business climate than California,” said Jones adding that the Commonwealth simply hasn’t marketed that fact. One option is his desire for the state to host a world-class business competition and the winning entry would launch a business in Virginia. The Hampton Roads region trails Richmond and northern Virginia in new firms/start-up companies.
The fifth theme Jones discussed was business climate, expressing that incentives, less regulations and tax breaks are needed in order to attract businesses.
Despite some sobering facts, Jones explained that even with a modest growth, it’s expected that in the next 10 years, there will be 1.4 million job opportunities. Part of this is due to the fact that Virginia has an aging workforce on the cusp of retirement age.