Special Report Related story: by Peter Galuszka Julius Caesar may say that all Gaul is divided into three parts. Virginia has four. Indeed, recent economic indicators compiled by Virginia Business show a new picture emerging of the states economy. Unlike the economic "crescent" of the 1980s that stretched down Interstates 95 and 64 from Washington to Norfolk, this one has four distinct parts. And even though Virginia may be doing very well, thank you, compared to the other 49 states, there are strong and significant disparities within the state itself.
Lagging behind are Tidewater and the rest of the state. Hampton Roads counts nearly as much high tech as Richmond in terms of new jobs, but its Old Economy industries, including shipping and shipbuilding, are slowing down and personal income levels are dropping a bit. Limping along are Southside and Southwest and its cities of Lynchburg, Danville and Roanoke. This fourth region has the slowest high tech growth and suffers the biggest transitions as clothing, textile and furniture jobs move offshore. These are the conclusions when Virginia Business, as part of its Growth & Development series, took a look at how the states regions and large cities compare. As we did with the previous section, which looked at how Virginia rates nationally, we break our data down along three areas: current economic indicators (Page 73); dynamic indicators showing where the state is moving (Page 74 and 75) and quality of life (Page 77). As before, most of the research was undertaken by Chmura Economics & Analysis of Richmond. In terms of sheer economic growth, nothing can match the nearly 29,000 tech jobs added in Northern Virginia between 1997 and 1999. Its payroll dwarfs the rest of the state. That shows up demonstrably in per capita income growth rates. The region bordering Washington is becoming richer, indeed. Per capita income there is 36 percent higher than the state average. Only Charlottesville, with its heavy concentration of academics and professionals, and Richmond also beat the state average. Then, too, Northern Virginia costs a lot more. Its median home prices are about $50,000 more than the next largest cities and nothing can match the time spent there in bumper-to-bumper traffic.
Generally, the Central Virginia picture is cheerful, with high tech providing a lot of the smiles. Take Charlottesville, noted for its Jeffersonian charm. From 1997 to 1999, it added 429 high tech jobs. Not a whole lot, to be sure, but considering the small population, thats a significant change as more software firms and e-tailers set up shop on the brick-paved downtown mall area or off of U.S. 29. Richmond, slammed as its venerable banks fled to North Carolina, partly made up for the loss by adding nearly 3,500 jobs in high tech in the period. It is the No. 2 tech center after Northern Virginia in terms of high tech job growth. Hampton Roads, with its heavy dependence on military spending, fared almost as well as Richmond on high tech. But its income levels appear to be stalling as the impacts of Clinton administration defense cuts sink in. That may change with the new president, but it is clear that the economies of Central Virginia and Tidewater are becoming more separate. Falling behind are the Southside and Southwest. Lynchburg and Danville bear the brunt of manufacturing woes, much fueled by the North American Free Trade Agreement which makes it easier for factories to relocate outside the U.S. Major cuts in quotas for tobacco growers arent helping either. The biggest laggard appears to be Roanoke, long the regional retail hub for the Southwest and a faded railroad center. From 1997-99, according to Chmura, it lost 444 high tech jobs, the only major city in Virginia to lose any. Its high tech salaries tracked more closely with Danville and Lynchburg than with the larger cities with which it is usually compared. Yet, its per capita income relative to the state average, 97 percent, beats Tidewater. Christine Chmura, president and senior economist at Chmura Economics, says that could be due to its older work force. "Roanoke is now going through the kind of economic transition that other cities, such as Richmond, went through a few years before," she says. The big question: can Roanoke attract enough high tech and other service industries to make up for its losses? While Roanoke remains largely an Old Economy city, this isnt to say that being so is a negative. Indeed, Virginias economic muscle isnt just digital, and that helps provide the needed mix when high tech tumbles. Old Economy sectors such as manufacturing and mining still put in their reps. Lynchburg and Danville remain the most dominated by this sector, but shipbuilding, auto parts and shipping remain powerhouses in Tide-water and cigarettes and chemicals are the big mules in Richmond. Virginias regional disparities can show up in education, too. Nationally, Virginia ranks sixth highest among the states in the number of residents who have a college degree or higher. Yet, it also ranks poorly in another factor, No. 33 in the percentage of people with a high school diploma or higher. While there are no clear explanations for this, one obvious one is that sophisticated high tech centers, such as Northern Virginia and Char-lottesville, are luring out-of-staters with advanced degrees. If any areas bring Virginia down, it is the rural counties in Southside and Southwest. In Bland County nudging the West Virginia border near Bluefield, only 5 percent of the people have a college education, Ms. Chmura says. All in all, though, despite the newly emerging four Common-wealths of Virginia, the state overall is still strong economically, a point its 2.8 per cent unemployment rate drives home. Not only is high tech an unexpected godsend, the state also has a good balance of other industries. "Virginia," says Ms. Chmura, "either by good planning or good luck, has an excellent mix." Return to Virginia Business - February 2001
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