Growth & Diversification Plan

Employment and Wages

Between 2016 and 2019, overall employment in Region 4 grew 3%. Information Technology (8.5%) and Logistics (5.2%) had the fastest growth while Bioscience/Life Sciences (2.9%) and Manufacturing (.6%) saw more modest growth. In 2020, overall employment in Region 4 declined by 5.3% and Logistics was the only targeted cluster to see employment growth, up 6.7%. Year over year declines in Region 4s targeted clusters were 4.3% in Bioscience/Life Sciences, 4.2% in Manufacturing, and 3.1% in Information Technology.

Between 2016 and 2019, annual wages increased by 8.6% to $57,966. Logistics saw the largest increase, up 9.8% to $51,339. Average wages in Bioscience/Life Sciences grew to 9.3% $56,140, wages in manufacturing increased 7.4% to $66,603, and wages in Information Technology grew 5.2% to $74,274. In 2021, the COVID pandemic drove wages up. Overall, annual wages in Region 4 increased by 7.8% between 2019-2020. Logistics saw the fastest growth (7.8%) to reach $55,367.

Bioscience and Life Sciences increased 4.8% to $58,997, Manufacturing 3.3% to $68,972, and Information Technology 1.9% to $76,067. As of the first quarter of 2021, wages continued to increase with the average wage reaching $59,061. There were distinct intraregional differences in the employment and wage trends. While overall employment in Region 4 grew 3% from 2016-2019, employment in the southern part of the region declined by 0.3% during the period, including declines in all of Grow Capital Jobs targeted clusters. In addition, the Crater District was recovering more slowly from the pandemic. While by the end of 2020 the entirety of Region 4 had recovered 60% of lost jobs, the southern part of the region had recovered only 50%.

Council/Foundation Members Project Assessments

Council and Foundation members were surveyed to obtain their assessment of the projects that had been funded in GO Virginias 4 priority areas- Workforce, Start-up Ecosystem, Cluster Scale-up and Site Development- and to receive guidance for future project directions. Each project area was assessed along 4 dimensions – Quality, Geographic Coverage, Strategic Focus, and Anticipation of Future Needs. Overall, projects assessments were positive in all categories. Distinctions emerged, however, when only Excellent or Very Good ratings were considered. Cluster Scale-up and Start-up Ecosystem projects rated higher than Workforce and Site Development awards. Council and Foundation members expressed interest in supporting the emergent pharmaceutical manufacturing cluster, linking most projects even more closely to priority clusters, and developing a tighter, strategic focus on workforce projects to increase participation in high paying jobs. Council members also highlighted the importance that GO Virginia projects provide equitable opportunities across the range of its strategic priorities, both across the region and with communities that have been historically excluded.

Trends and Changes

The report examines key changes and changes that have occurred since the 2019 update to the original Growth and Diversification Plan, with special attention to those that have arisen since the onset of the pandemic that have affected the priority areas of workforce, start-up ecosystem, cluster scale-up and site/infrastructure development. The largest changes appear to have occurred with workforce. Business leaders and economic officials consistently described how the terms of engagement between employers and workers have been altered. In several respects, these changes have exacerbated challenges that had been previously highlighted such as finding and retaining skilled talent and have reinforced the necessity of building a better pipeline, making transitioning military programs more effective, creating innovative programs that combine upskilling with paid employment, and finding ways of shaping the trend toward remote work to the regions advantage.

The pandemic resulted in fewer jobs in cluster scale-up priority areas such as advanced manufacturing, information technology and bioscience, but there are clear opportunities for the region to capitalize on the national emphasis on reshoring manufacturing and using technology to increase productivity. In particular, the pre-pandemic commitment of the region to building a pharmaceutical manufacturing cluster brings together the regions strength in bioscience, advanced manufacturing and logistics in a unique manner that holds the potential for national and global leadership. Logistics has been the cluster priority that fared best through the pandemic.

The global supply chain disruption enhanced the natural locational advantages of Region 4, adding jobs and increasing incomes. The logistics cluster should continue to prosper with attractive sites located along I-64, I-95, and I-85, with attention to specialized facilities such as cold storage and by encouraging organizations such as Commonwealth Center for Advanced Logistics Systems (CCALS) to work with its university consortium to meet the identified need for degreed logisticians.

The landscape for site/infrastructure development has also changed since the pandemic. Region 4 is site rich compared to other locales in the Commonwealth and could benefit significantly from the focus on reshoring and the massive changes in the logistics space. In addition, federal and state infrastructure funding should ameliorate the broadband issues that inhibited economic development in the more rural parts of the region. But local governments and economic development officials report that potential clients are less willing to wait 12-18 months for a site to become business ready. Elevating priority sites to business-ready more quickly and increasing the regions capability for addressing utility and transportation infrastructure issues will be crucial to taking full advantage of its site inventory.

Recommendations

The report contains 16 recommendations:

• Workforce/Talent recommendations call for focusing intently on pipeline projects and identifying the locations on the pipeline where Grow Capital Jobs can be most effective in catalyzing high paying jobs. Recommendations also include developing an effective model for recruiting transitioning military and implementing models for upskilling workers while maintaining paid employment.
• Start-up Ecosystem Recommendations call for Activation Capital to apply for a Regional Entrepreneurial Initiative grant that will fill-in the most prominent gaps in the ecosystem, to align projects with the Councils priority clusters and with innovation-based larger firms, and to include lab space needs in the Councils site development considerations.
• Cluster Scale-up recommendations call for prioritizing the emergent pharmaceutical manufacturing cluster, for working more closely with regional and local economic development officials to address gaps that can inhibit relocation or expansion decisions of firms in priority areas, and to explore with Region 5 the potential for creating a global internet hub that could create more tech-based employment in the region.
• Site/Infrastructure recommendations include using projects to enhance the pharmaceutical manufacturing cluster, identifying and funding a few high potential sites that can be elevated to user-ready status expeditiously, capitalizing on supply chain disruption to develop specialized logistics facilities such as cold storage and to enhance activity near the Richmond Marine terminal, and to develop partnerships to address utility/infrastructure issues earlier in the site readiness process.