THE VIRGINIAN-PILOT
Copyright (c) 1997, Landmark Communications, Inc.
DATE: Thursday, January 16, 1997 TAG: 9701160296
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY MYLENE MANGALINDAN, STAFF WRITER
LENGTH: 65 lines
Being on the coast, and being laced with bays and rivers, makes for a great port, tourism industry and lifestyle. But all of that water may be stunting the region's growth as a manufacturing center.
Hampton Roads' coastal location limits its access to markets, raw materials and labor in the east, so the region relies more heavily on western markets, said John Whaley, director of economic services for the Hampton Roads Planning District Commission.
In a study of 70 nonport cities and 26 seaports, Whaley discovered that manufacturing represents 14 percent of the employment base in nonport metropolitan areas. By comparison, manufacturing in Hampton Roads represents only 8 percent of total employment. Manufacturing tends to grow more slowly in port communities, he said.
More importantly, the lack of manufacturing jobs ``negatively impacted wages and incomes in those communities,'' Whaley said of port cities.
``Port cities are under-represented in manufacturing employment,'' he said.
Economic development officials aggressively recruit manufacturers because they usually pay above-average wages. In 1994, the average American manufacturing employee earned $10,991 more than the average worker.
Growing disparity between Hampton Roads' per capita income and the national average prompted Whaley to present his report to the board of the Hampton Roads Planning District Commission. (The region's per capita income was $20,781 in 1993, or 89 percent of the national average.)
``It was occasioned by our asking what the opportunities, strengths are from the area to increase our employment rates and upgrade our employment levels,'' said Joe Frank, mayor of Newport News.
Whaley also highlighted the growing importance of economic development efforts in the region's job growth.
From 1980 to 1989, only 7 percent of new jobs resulted from the region's economic development efforts. By comparison, companies that had moved to the area created 35 percent of all new jobs from 1989 to 1994.
Economic development is playing a larger role in job creation because existing companies are no longer adding jobs at the same pace, Whaley said. The size of manufacturing plants is shrinking. Internal growth at established companies has slowed.
Economic development compensates for the lack of internal corporate growth. About 2,000 jobs per year are created in Hampton Roads through economic development. Hampton, Chesapeake and Newport News have benefited most, Whaley said.
To capitalize on the national movement of manufacturing jobs to low wage areas, Hampton Roads should target industrial machinery and equipment companies, the electronic-equipment industry and the rubber/plastics industry.
The best places to prospect for companies interested in relocating include Los Angeles, New York, Boston, San Francisco, Philadelphia, Washington and Baltimore. Economic development officials should avoid Atlanta, Austin, Texas, Nashville, Tenn., Houston and Portland, Ore., which have proved successful in generating and retaining jobs.
Ann Baldwin, director of research at Forward Hampton Roads, commended Whaley's report for pointing out that economic development involves strategic recruitment of expanding companies.
``We confuse the term economic development with what happens in the community economically,'' she said. ``Economic development implies that it has to be an orchestrated effort, it must have a well-thought-out strategy and be in a professional way.
``The need is more apparent than ever before.''
KEYWORDS: ECONOMIC DEVELOPMENT