Virginia weighs its dependence on defense spending, Hampton Roads is Pentagon South

from Virginia Business, 1 Sep 08


The 2005 Base Realignment and Closure process (BRAC) is shutting down 33 major installations in 22 states. In Hampton Roads, Fort Monroe is scheduled to close its doors in Sep 2011, a move that will eliminate an estimated 3,300 jobs (military and civilian) while causing the loss of another 1,000 local support jobs.

“The military is probably the single most important driver of the Virginia economy,” says Stephen Fuller, director of George Mason University’s Center for Regional Analysis in Fairfax and a member of the Governor’s Advisory Board of Economists.

Fort Monroe, which has housed fortifications since 1609, sits on the edge of the port of Hampton Roads, Virginia’s oldest and most coveted military asset. Hampton Roads is home to 59% of Virginia’s defense employees, more than a dozen military facilities, and a large number of defense- and homeland security-related companies, earning the moniker Pentagon South. “We are the hub,” says Rep. Thelma Drake (R-2nd District).

Hampton Roads is a major player in building ships and serving as home port for ships. For example, Norfolk Naval Shipyard in Portsmouth has been building ships since 1767, and Newport News Shipbuilding (purchased in 2003 by defense giant Northrop Grumman Corp.) has been in business for more than a century.

“We’ve shrunk from a 600-ship Navy in the 1980s, the Reagan era, to roughly 280,” says David Dickson, executive director of the Virginia National Defense Industrial Authority (VNDIA), a Richmond-based state agency charged with supporting defense and military-related opportunities in the commonwealth. “Today we’re working toward a stated goal of 313 ships.”

Hampton Roads serves as home port for close to 70 ships, including six aircraft carriers. (closest competition, San Diego, serves as home port to two) Each of these floating cities has a crew of 5,000 or more. Greg Grootendorst, deputy executive director for economics for the Hampton Roads Planning District Commission, says that just one aircraft carrier can create an additional 6,000 jobs in the community and contribute $650 million a year to the regional economy.

Hampton Roads will enjoy some trickle down effects from BRAC, too. Langley Air Force Base in Hampton is increasing by 750 and Fort Eustis in Newport News by 300. Overall, by the 2011 BRAC deadline Virginia will have gained more than 5,000 employees and an investment of $4.7 billion, according to VNDIA.

Adds U.S. Senator Jim Webb, “we’ve got the military presence but we have many other strengths. High-tech in Northern Virginia is strong. With the right infrastructure, the importance of Hampton Roads to the entire country is going to grow.”

Virginia without the military is something Fuller can’t foresee. Not with Hampton Roads. “No one can say they have a better port,” says Fuller. “And you just don’t walk away from a channel where you can float an aircraft carrier.”

To read the full article, click HERE.

SBA Study Identifies Hampton Roads as #1 in U.S. for High-Impact Firms

“High-Impact” Firms Create Most Jobs and Growth

Hampton Roads, Virginia-

A study just released by the U.S. Small Business Administration’s Office of Advocacy (SBA) ranks Hampton Roads #1 in the country with the highest percentage of “high-impact” firms when compared to other large metropolitan regions. High-impact firms are defined in the report as rapidly growing firms, accounting for almost all employment and revenue growth in the economy although they represent only between 2% and 3% of all business firms.

“Having a higher percentage of rapidly growing companies than North Carolina’s Research Triangle, Washington DC or Silicon Valley in California is a strong indication of the vibrant technology-based industries growing here” says Rick Lally, CEO of Oceana Sensor and Chairman of the Hampton Roads Technology Council (HRTC).

Released at the International Council for Small Business 2008 World Conference held in late June in Canada, the SBA study High-Impact Firms: Gazelles Revisited defines high-impact firms as those whose sales have at least doubled over a four-year period, analyzing the 1994 to 2006 period. To illustrate: over the 1998-2002 time period, the average size of high-impact firms in the 1-19 employee firm-size class increased by 534%, the 20-499 firm-size class increased by 322% and the 500-or-more class increased by 221%.

The study ranks regions, states, Metropolitan Statistical Areas, and counties by their percentage of high-impact firms, also known as “gazelles”. The study finds that high-impact firms contribute to the majority of overall economic growth and documents also, over the periods studied, that nearly all job losses came from low-impact firms that are also large in size.

“The Hampton Roads economic development organizations have proactively partnered with the private sector to enhance the defense and homeland security industry which resulted in the creation of the Defense and Homeland Security Consortium (DHSC) in 2005”, according to Warren D. Harris, Director of Virginia Beach Economic Development. “The Hampton Roads area has a robust defense and security sector, and it is imperative the private and public sector work in a concerted effort to address the issues that affect these firms and undertake initiatives to expand this sector.”

DHSC volunteers are comprised of officials from the sponsoring city’s economic development departments, educational institutions, workforce development organizations, federal contracting industry professionals and organizations. DHSC has aggressive goals adopted to improve the industry to benefit the entire community and support increased growth of local companies.

For example, each spring since 2005, DHSC has collaborated with Tidewater Community College (TCC) to bring the "Navigating Business with the Federal Government" Seminar Series to South Hampton Roads. The Peninsula Council For Workforce Development (PCFWD) has joined with DHSC to bring the same 9-week series to the Peninsula starting this fall, offering sessions by senior executives from successful local companies to share their experience on what made them, and their companies, achieve their success.

One of the newest initiatives of the consortium, led by Catherine Giordano, CEO of Knowledge Information Solutions and Co-chair of the DHSC, is collaborating to improve education and training opportunities available in Hampton Roads for current and potential employees of the federal contracting industry.

A complete copy of the High-Impact Firms: Gazelles Revisited report and rankings of high-impact firms by region, state, MSA, and county may be found by visiting the Defense and Homeland Security consortium website at http://www.pentagonsouth.org/. For more details, contact DHSC Co-Chair Jack Greenhalgh at 757-345-5508 or Jack@NewEraEnergy.com.

For more information on the report, contact the U.S. Small Business Administration Office of Advocacy, www.sba.gov/advo. The SBA’s Office of Advocacy, the “small business watchdog” of the federal government, examines the role and status of small business in the economy and independently represents the views of small business to federal agencies, Congress, and the President. It is the source for small business statistics presented in user-friendly formats, and it funds research into small business issues.

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The Defense and Homeland Security Consortium (DHSC) is a special interest community within the Hampton Roads Technology Council (HRTC) engaged in collaborative discussion and planning to increase revenue and profitability as well as heighten local, national and international awareness for all defense- and security-related businesses in the Hampton Roads region.

Cities, businesses team up to boost defense industry

Local military and homeland security contractors plan to join with city economic development officials regionwide in an effort to nurture the area's defense industry.

The aim is to position Hampton Roads as "Pentagon South".

Officials said the new group is an outgrowth of a defense industry consortium formed by Virginia Beach three years ago as part of an economic development initiative.

The Beach recruited Chesapeake last year, and industry and government officials in those two cities have now concluded that it makes sense to broaden the effort. Some of the defense companies, for instance, have offices in multiple cities.

With defense spending accounting for roughly one-third of the economy in Hampton Roads, several cities consider such businesses a target market for job creation.

"We always talk about coming together as a region, so this is something else we're trying to do," said Scott Howell, senior business development manager for Chesapeake's Department of Economic Development. "It only makes sense given how much our local economy relies on the defense industry."

One city can't promote itself as "Pentagon South," said Cynthia Spanoulis, strategy and performance coordinator for the Beach's Department of Economic Development.

"We've got to be bigger to call ourselves that," she said. "Everything's regional."

The new group will be known as the Hampton Roads Defense and Homeland Security Consortium. It will operate under the umbrella of the Hampton Roads Technology Council, which counts a variety of defense contractors as members and now works with local economic development agencies.

Rick Lally, chairman of the technology council, said he hopes the regional group will explore such things as mentorship programs, a defense business incubator, and other ways to strengthen the presence of small, innovative companies.

Lally's Oceana Sensor Technologies Inc., which works with the Navy, was among around two dozen companies in the Virginia Beach consortium.

"The benefits of having these businesses here and their impact on the community is a regional thing - that's what it boils down to," Lally said.

The group's first meeting - representatives from any local defense or homeland security business can attend - is a Monday (October 15, 2007) lunch at the Residence Inn at Greenbrier in Chesapeake, starting at 11:30 a.m. Chesapeake's Department of Economic Development is covering the meals and the $150 room-rental fee, Howell said.

So far, economic development officials in Norfolk, Portsmouth, Suffolk, Hampton and Newport News have expressed interest in joining the Beach and Chesapeake in the effort.

By JON W. GLASS, The Virginian-Pilot © October 13, 2007
(757) 446-2318, jon.glass@pilotonline.com

PentagonSouth.org

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My marketing mission as the sub-committee lead for HRTC's Community of Interest, Defense and Homeland Security Consorium (DHSC):

To raise the national and international awareness of the defense and homeland security businesses and market the Hampton Roads region as “Pentagon South”.

To create a networking environment for future business opportunities.

To market the area as a location for expansion of defense and homeland security businesses
located outside of the region.

Visit the website by clicking on the link above and tell me if we're "on target".