Economic dynamism: Northern Virginia ascendant, while DC and Suburban Maryland lag

Northern Virginia is the MidAtlantic's Gunbelt.  The Washington Post has an article, "Northern Virginia’s economic growth risks leaving Maryland suburbs behind," about this.

 I have written similar pieces over the years. Basically, NoVA benefits because of its place in the military ecosystem and as importantly, the fact that IT which grew out of the military ecosystem is now the most dynamic and growing business sector there is.

-- "Revisiting stories: military spending, the Gunbelt, and Montgomery County vs. Fairfax County," 2019
-- "Montgomery County's real economic development problem: it's not part of the military economy," 2011
-- "Montgomery County's real jobs problem is that it is an adjunct, not a full-fledged, member of the military-industrial complex," 2012

Health sciences and government regulatory functions don't have the same level of economic multiplier effect.  Yes, the health sciences in Montgomery County -- National Institutes of Health primarily -- have seeded a biotechnology sector, but it doesn't function at the same scale as Cambridge, San Diego, and San Francisco, nor does it have the same driving force as tech.

Partly this is because at least when you're producing software or platforms, it's relatively cheap to produce comparatively speaking. Manufacturing a drug, let alone shepherding it through the regulatory approval process, after having proved that it works, is much harder and takes so much more time.

But another element is work that adds value versus work that doesn't. FDA is mostly a regulatory agency. So it just doesn't have a whole lot of spin off economic development. Same with HHS or Nuclear Regulatory Agency being based in Montgomery County. NOAA maybe could, but it's an administrative headquarters not a research division.

Prince George's County has an Agriculture Experiment Station, but because the area is so disconnected from substantive agriculture--although it is an important element of the regional economy--it doesn't have the same kind of impact compared to similar research efforts elsewhere.

When you don't make stuff, it's hard to generate high economic returns.  Then, military equipment -- big military installations in Maryland: Fort Detrick (bioweapons); Fort Meade/NSA (signals intelligence); Aberdeen Proving Ground (testing equipment) -- don't seem to have the same spillover benefits in terms of industrial development compared to spending on information technology.

Process knowledge comes from building things.  charlie sent a link to an interesting end of the year piece by Dan Wang, an economic research analyst covering Asia, and he made some interesting points about technology development, the development of China's technological prowess, etc. A key point he made was that a lot of the money going into things like Facebook don't really add long term value. From the article:

To me, it’s entirely plausible that Facebook and Tencent might be net-negative for technological developments. The apps they develop offer fun, productivity-dragging distractions; and the companies pull smart kids from R&D-intensive fields like materials science or semiconductor manufacturing, into ad optimization and game development.

The internet companies in San Francisco and Beijing are highly skilled at business model innovation and leveraging network effects, not necessarily R&D and the creation of new IP.

Invention versus innovation.  It reminded me of a recent Harvard Business Review article, "How to Ensure Your Health Care Innovation Doesn't Flop," which made an interesting distinction between innovations and inventions, making the point that unless an idea--an invention--is implemented, does it really make your organization innovative? From the article:

1. Inventions are not innovations. Many organizations define innovation as novel technologies, processes, and business models. They may regard artificial intelligence, just-in-time supply chain, or bitcoin as innovations. These things, at least in their early phases, are more accurately called “inventions” rather than innovations. Inventions are important, but they only rise to the level of innovations when they are broadly adopted to transform behavior and functioning of users or organizations or even society as a whole. In other words, innovations are inventions that have successfully scaled. ...

2. Innovation does not automatically require radical change. Innovations can come in any size from incremental to radical. Innovating might mean adopting a new approach to an existing service — for example, starting to offer robotic surgery, a material improvement on minimally invasive techniques. Or it might mean offering a new service — for example, post-acute care, a potentially radical change that affects multiple parts of an organization and might even redefine it in some fundamental ways. ...

A thousand small tweaks can transform a mediocre performance into a great one. ...

4. Sometimes we don’t need to innovate, we just need to improve. Just as we must avoid confusing invention with innovation, we must avoid confusing innovation with improvement. While all innovations should be improvements, innovation is a technique rather than a goal in itself. Sometimes tried-and-true improvement tools like process redesign are better for our immediate purpose.

Opportunities for DC.  In terms of DC (and places like it) I've written about how purposeful harvesting of universities, especially engineering colleges, can be a way forward for local economic development:

-- "Naturally occurring innovation districts | Technology districts and the tech sector," 2014
-- "Better leveraging higher education institutions in cities and counties: Greensboro; Spokane; Mesa; Phoenix; Montgomery County, Maryland; Washington, DC," 2016

And the series of articles about how the rebuilding of a hospital in Southeast Washington could be used to spark significant revitalization and economic development in that area, leveraging the basically unused St. Elizabeths campus.

-- "Ordinary versus Extraordinary Planning around the rebuilding of the United Medical Center in Southeast Washington DC | Part One: Rearticulating the system of health and wellness care East of the River," 2018
-- "Part Two: Creating a graduate health and biotechnology research initiative on the St. Elizabeths campus," 2018
-- "Part three: the potential for donations around an expanded program," 2018
-- "Update on DC's plans to build a new United Medical Center," 2018

That series is based on a failed proposal I wrote concerning do that at Walter Reed. Fortunately, on its own initiative Children's Hospital is doing something similar ("Here's a look at Children's National's plans for Walter Reed," Washington Business Journal).

At the city scale, Mayor Bloomberg's creation of a world class technology higher education initiative involving Cornell and Technion is a rare example of aiming big.

Learning from Europe: Knowledge locations in cities.  In 2013, I wrote about Helsinki, "Helsinki as an example of creative industries driving urban revitalization programs," for the Europe in Baltimore project conducted by the Washington Chapter of the European Union National Institutes of Culture.

Design is a key element of Helsinki's identity and economy.  And while writing the article, I learned a lot which has influenced my thinking ever since, about cultural planning, cultural production, systematic planning of new districts, specifically Arabianranta, where the Aalto University is now located, assigning cultural planners to districts, libraries, and more.

An article on Arabianranta,

"Developing creative quarters in cities: policy lessons from 'Art and design city' Arabianranta, Helsinki," Van Tuijl, Carvalho, and Van Haaren, Urban Research & Practice 6(2):211-218 · June 2013

introduced me to a new line of thinking about "creative quarters," which we might call Arts Districts 2.0.

The research was part of a larger project which resulted in the book Creating Knowledge Locations in Cities: Innovation and Integration Challenges.  (This is a pdf of the book.)

Note that Brookings Institution has a similar program, Innovation Districts, but I like the writings from Europe better.