As cuts are made at federal agencies, it’s essential that Northern Virginia considers alternative ways to draw business outside the scope of the federal government, Fairfax County leaders said during an Economic Initiatives Committee meeting this week.
As cuts are made at federal agencies, it’s essential that Northern Virginia considers alternative ways to draw business outside the scope of the federal government, Fairfax County leaders said during an Economic Initiatives Committee meeting this week.
Some of the changes are having hyperlocal impacts, as thousands of square feet of office space have been cut in Lorton and Herndon.
Restaurants and other businesses may soon feel the impact of the federal government changes, Board of Supervisors Chairman Jeff McKay said, because fewer residents will have extra money to spend.
In the D.C. region, the federal government has “been customer number one” for a long time, but it may be advantageous to consider ways to change that dependence, according to Julie Coons, president and CEO of the Northern Virginia Chamber of Commerce.
“This is, I believe, the first time we are faced with this level of impact, and I think it’s really our clarion call to change and respond,” Coons told WTOP. “In many ways, this is an existential moment for us, and we have to step forward, respond.”
Changes trickle down, Coons said, because fewer people need to visit the D.C. region to hold meetings, train staff or entertain.
Some federal employees who have lost their jobs have already left the region, or are planning to do so when the school year ends. Government contractors across Northern Virginia are losing contracts, employees are being laid off and the number of open positions from employers has “significantly reduced about half.”
In one case, Coons said, there’s “a cul-de-sac in Arlington where someone lives, and every household has a laid-off federal worker in it.”
To start a change in approach, Coons said it’s helpful to consider industries that have a stronghold in the D.C. region, and then work with elected leaders to figure out potential barriers to their growth. It’s an adjustment that will take time, she said, but it includes partnerships with economic developers, businesses that want to grow and colleges and universities that offer education to the next generation of workers.
Space commercialization could present an opportunity, as could AI, “where we can then take a big leap forward and create a significant number of additional jobs to compensate for this space that the government occupy.”
Biopharma is one area, Coons said, that has a big footprint in Maryland and a smaller one in Virginia.
“Is there something more that Virginia can do to grow it in Northern Virginia?” Coons said.
Many leaders have known that it would be helpful to diversify the local economy further, Coons said, “but when that federal government has been a good customer, and it has been good for our region, helped us when the rest of the country was in recession, kept us from going further — we’ve always weathered through it with growth.”
Even if the region changes its approach, Coons said the federal government would still be a customer, but “it won’t occupy the same portion of our economy.”
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