Technology and traffic draw attention in Northern Virginia

by Bernie Niemeier
for Virginia Business
September 2007

Bigger fines may be slowing drivers on Interstate 95, and that’s a good thing, but other things never change.

I’m prone to distraction. Driving to Northern Virginia, I invariably miss an exit. Before I knew it on a recent trip, I was locked into an HOV lane all the way across the 14th Street Bridge and into downtown D.C.

With a little redirection, I made my appointments in Alexandria and then drove through the rain to Fairfax to join Lead Virginia’s two-day exploration of Northern Virginia. In previous months, our group has visited Williamsburg, Southern Virginia, and the Shenandoah Valley.

On the first day of the meeting, a Thursday evening, we visited Ronald Reagan Washington National Airport, which along with Washington Dulles International, is operated by the Metropolitan Washington Airports Authority. Both airports are undergoing significant capital improvements. Serving a total of 41.5 million passengers in 2006, the airports are the entry points for many visitors to the Northern Virginia market. Moving people to and from the airports is a major piece of the transportation puzzle. Toll roads have been one part of the solution. Extending rail service to Dulles hopefully will be another.

Friday morning started out with a visit to XO Communications in Reston. XO is a leading provider of voice, data and wireless communications solutions for businesses and a good example of the burgeoning technology market that dominates the Northern Virginia landscape. CEO Carl Grivner listed four technological segments driving the region’s growth: the Internet, telecommunications, biotechnology and federal contractors.

Unlike some tech-rich markets in other states, such as San Jose, Calif.; Austin, Texas; and Boston, Northern Virginia did not suffer as much after the dot-com bust. Technology-oriented federal contractors help insulate the region from industry contractions, and post-9/11 there was a big expansion in government procurement for technology services. Federal spending drives the Northern Virginia economy and technology-related business services are the fastest-growing segment.

Mergers and acquisitions, as well as new business startups, are a key feature of the technology scene. The government’s deregulation of AT&T led to the development of many new companies. Talented employees from larger ones, such as MCI and AOL, have gone on to create dozens of startup businesses. These new brands then have split again or have acquired one another in the quest for more profitable niches, greater market share or better economies of scale.

Lead Virginia’s next stop was George Mason University where we focused on the region’s economy and educational needs. Economists predict that by 2030, Northern Virginia will have more jobs than people. In addition to creating even more transportation problems, this situation will continue to raise issues about work-force development and affordable housing in the region.

A big factor driving the region’s economy is federal procurement spending, which totaled $53 billion in the Washington MSA in 2005. That’s more than the statewide totals anywhere else in the U.S. In fact, 68 percent of the total 2004-05 increase in spending went to the Washington MSA.

The Northern Virginia portion of this MSA accounts for one third of Virginia’s population and employment. One billion dollars in federal procurement spending creates about 7,000 new jobs. The unemployment rate in Northern Virginia is around 2 percent, virtually full employment. With transportation gridlock looming and housing prices soaring, it’s no wonder that there will soon be more jobs than people.

State spending is only part of the transportation problem. Even with the “heal thyself” taxation solutions passed by this year’s General Assembly, the road ahead remains clogged.

Land-use planning is the other side of the issue, and this falls quickly to the feet of local officials. Local arguments over road construction and growth have been going on for more than the 20 years it took the legislature to pass the new transportation funding bill. Much like this year’s compromise at the state level, it has been virtually impossible to make the hard decisions on land-use planning at the local level. Even when the roads are funded, no one wants them to disrupt existing property rights.

Smart-growth solutions such as mixed-use developments around metro stops are being implemented, but these take time and money — up to $1 million per acre to displace existing homeowners and businesses.

The bottom line is that while federal government-fueled growth in Northern Virginia drives our statewide economy, it also has resulted in problems for transportation, housing and work-force development. These issues have reached a level where the solutions are longer lived than the careers of the politicians and other people trying to implement them.

As I drove back down I-95 on Saturday, traffic was backed up from Tysons Corner to Fredericksburg. I got up to normal interstate speeds for about 20 miles, then traffic backed up again above Ashland in anticipation of the road’s intersection with I-295.

The trip was a harsh reminder that transportation isn’t just a Northern Virginia or a Hampton Roads problem. The same conditions exist up and down I-95 and on I-81. It is good that Virginia is starting to implement regional solutions, but we’re a long way from being finished with a statewide problem.

Bernie Niemeier, publisher of Virginia Business, is a member of the 2007 Class of Lead Virginia. Lead Virginia is a nonpartisan statewide organization that brings together leaders with the intention of creating “social capital” that will positively impact Virginia’s future.