Montgomery County's real economic development problem: it's not part of the military economy

The Post has an editorial that Montgomery County needs to get its act together in order to compete with Fairfax County, which by comparison has more residents, more jobs, schools that are almost as good, and lower taxes. See "Montgomery loses its edge."

This comes out of an almost two year discussion centered around the results of a report that the Montgomery County Council commissioned, Comparative Data on Montgomery County and Fairfax County ("Report shows how Montgomery, Fairfax measure up" from the Post).

Sure Montgomery County has some real assets. The National Institutes of Health and the National Institute for Science and Technology (formerly the National Bureau of Standards) are fundamental building blocks. It's because of NIH (and FDA) that Montgomery County has a number of biotechnology firms and assets--even though the West Coast remains supreme in this business sector.

Montgomery County has a number of technology companies along the I-270 corridor, plus Marriott (which used to be based in DC) and other lodging companies, and a whole lot of other businesses. (Also see The MD-355 / I-270 Technology Corridor Montgomery County, Maryland: Summary of Research, 2006-2007 from the Montgomery County Office of Planning.)

But Fairfax County benefits I think from being more centrally connected to and dependent upon the military-industrial complex, albeit not manufacturing related--even though Montgomery County does have military companies, such as Lockheed Martin (cf. Montgomery County's attempt to legislate against military spending, "Withdrawn Montgomery measure asking Congress to spend less on wars scrutinized" from the Post), although they are by no means dominant within the county. (Montgomery County used to be a center for the satellite business and technology, when Comsat was a going business, both telecommunications and military related, but as that sector became privatized, the assets were required and facilities left the county.)

A comparison between the counties and ascribing dependence on the military to Fairfax County is a little complicated because of the number of software related businesses based in Northern Virginia, but in large part these businesses developed in relationship to the Pentagon and/or the large build up of telecommunications assets in the area that were in large part developed out of the military's telecommunications needs.

In that piece by Andrew Ross that I mentioned yesterday ("Bird on Fire: Lessons from the World's Least Sustainable City" from Places Journal), he cites a work by Ann Markusen that I didn't know about--these days Professor Markusen is more focused on the economic benefits of arts-related uses--The Rise of the Gunbelt: The Military Remapping of Industrial America.

The basic point of the book is that the Sunbelt's (and Boston's) success was driven mostly by military spending. This is the summary of the book:

Since World War II, America's economic landscape has undergone a profound transformation. The effects of this change can be seen in the decline of the traditional industrial heartland and the emergence of new high tech industrial complexes in California, Texas, Boston, and Florida. The Rise of the Gunbelt demonstrates that this economic restructuring is a direct result of the rise of the military industrial complex (MIC) and a wholly new industry based on defense spending and Pentagon contacts. Chronicling the dramatic growth of this vast complex, the authors analyze the roles played by the shift from land and sea warfare to aerial combat in World War II, the Cold War, the birth of aerospace and the consequent radical transformation of the airplane industry, and labor and major defense corporations such as Boeing, Lockheed, and McDonnell Douglas. Exploring the reasons for the shifts in defense spending--including the role of lobbyists and the Department of Defense in awarding contracts--and the effects on regional and national economic development, this comprehensive study reveals the complexities of the MIC.

It's beyond my skill set to do a full analysis of the economies of Fairfax County and Montgomery County, producing what is called an input-output table analysis, but if one were performed (I got a bad grade in my economics class in college, in my course on international trade, but as the professor pointed out, you can do this kind of analysis on any level of an economy), I would bet that the results would show how much Fairfax County is dependent on military spending.

It's actually scary to consider how much of the US economy is dependent on military spending, how the US spends more money on the military than all other nations combined, and that if the Defense budget is slashed, this will have big implications for the economic success and failure of many communities.