Sticky Article Economic issues and regionalism, the focus of the State of the Region Address

Economic issues and regionalism, the focus of the State of the Region Address
State of the Region Address presenters on the Peninsula.

“The overarching role of the Hampton Roads Chamber is to set the conditions for businesses to succeed in Hampton Roads,” said Bryan K. Stephens, President and CEO, Hampton Roads Chamber, during the 2019 State of the Region Address.

On Friday, October 4, 2019, the 20th Annual State of the Region took place on the Peninsula at the Newport News Marriott Hotel at the City Center. The State of the Region is an annual address, presented by LEAD Hampton Roads, a program of the Hampton Roads Chamber, to inform business leaders of the economic outlook and forecast for the year ahead. Salient topics focused on the regional economy, defense spending, tourism, women’s leadership, the economic effects of a hurricane, and marijuana usage in Hampton Roads.

Optima Health, the presenting sponsor of the State of the Region, provided opening comments from Randy Ricker, Director of Government Relations, “Our mission is simple: we improve health every day and we recognize that the health of the economy goes hand in hand with the health of the community.”

Dr. James Koch, Board of Visitors Professor of Economics Emeritus and President Emeritus; and Founding Director of the Dragas Center for Economic Analysis and Policy at Old Dominion University, delivered a brief history of the State of the Region. Dr. Koch spoke highly of the late George Dragas, Jr., who was instrumental in the creation of the State of the Region report.

“Let’s talk about where we’ve been and how we’ll get better,” began Dr. Robert McNab, Professor of Economics; Director of the Dragas Center for Economic Analysis and Policy, Old Dominion University, Strome College of Business. In 2017, following the Great Recession, the economy of Hampton Roads grew by 2% with more than 813,000 individuals employed. Fast forward to 2018 and employment jumped to more than 822,000 individuals employed. According to McNab, the economy is expected to continue growing and July 2019 was record-setting for jobs in Hampton Roads. “The local economy is expected to grow by 2.4% at the end of 2019, the third year of consecutive growth for the region.”

Dr. McNab discussed the three pillars of the Hampton Roads economy: military and defense spending, the Port of Virginia, and tourism. Defense spending and the military are two cohesive portions that fuel the Hampton Roads economy. In 2018, it was estimated that 21 billion dollars were spent on defense and that spending is expected to exceed 22 billion dollars in 2019. “Roughly 40% of economic activity in Hampton Roads is touched in some way by the Department of Defense,” said McNab.

He went on to address the second pillar of the economy: the Port of Virginia. “The shipping industry and the Port of Virginia hit a trough during the Great Recession. However, in 2017, they saw an increase in operating revenue which is good for our economy,” said McNab.

Tourism, the third and final pillar of the economy was evaluated next, concentrated on the impact the Something in the Water festival had on the Peninsula. “Something in the Water was successful from a lodging standpoint,” stated McNab. Although the music festival took place on the Virginia Beach Oceanfront, it spiked tourism and increased hotel revenue by 50% in Newport News and Hampton.

McNab went on to describe Something in the Water as more than just a music festival but said it was “big business” or a “regional event” that injected new dollars into the economy. He compared the festival to Austin, TX’s annual South by Southwest (SXSW) conference, and argued that the success of Something in the Water could result in an annual festival to grow the economy of Hampton Roads. “This is an opportunity for us to collaborate regionally and culturally to organically grow the economy of Hampton Roads,” ended McNab.

The overall sentiment was positive for the economy of Hampton Roads. “Progress is being made. The Hampton Roads economy is in a better position today than it was last year, and a better position today than it was two years ago,” said McNab.

Dr. Barbara Blake, CAO, Dragas Center for Economic Analysis and Policy, Old Dominion University, spoke next as the first woman to present at the State of the Region Address. Blake focused on the gender wage gap and lack of leadership positions for women in Hampton Roads.

“Even though we as women are half of the population, only 18 to 20% of women are in the C-suite,” said Blake. She presented a figure from Blau and Kahn, which found that women earn 92% of male counterpart earnings, and urged the audience to acknowledge the wage and leadership gap in Hampton Roads. “Something has to be done,” Blake said. “Is our leadership truly representing the population of our business?”

Blake encouraged the audience to be intentional in their commitment to diversity and inclusion practices in the workplace for women. “Acknowledging the wage and leadership gap will move us forward to overcome these gaps,” ended Blake.

McNab returned to discuss the economic impact of a hurricane on the Peninsula. Although Hampton Roads has not been struck by a Category 3 hurricane in more than 150 years, the physical and economic damages would be disastrous to the region, leaving cities such as Newport News and Hampton underwater. “The physical damage, along with wind and water damage would result in more than $40 billion lost and 16,000 people displaced,” said McNab.

In closing, McNab went over “420 in the 757,” and addressed possible outcomes for the region if marijuana were legalized in Virginia. “More than 60% of people in Hampton Roads in a recent public opinion survey supported the legalization of marijuana, however, the Code of Virginia is quite clear: possession of marijuana is illegal in almost every circumstance,” said McNab.

While Hampton Roads has the highest rates of marijuana usage recorded among young adults in the Commonwealth, the substance is still illegal in Virginia and warrants law enforcement action. The research found that more than 50% of drug arrests made in Virginia during this decade were for marijuana possession. McNab discussed the possibility of decriminalization, which could reduce the number of arrests but may still have negative effects as a civil charge on people who are caught with the drug.

Comparatively, if marijuana were legalized, it could reduce the number of possession charges but might increase traffic accidents and emergency department visits. McNab also voiced the concern for the military service members and federal employees of Hampton Roads who are regularly drug tested, and how decriminalization or legalization would affect them.

“So that’s the large question that I will leave you with today,” ended McNab. “Our job is to report the data, have fun with the report.” Following the presentation, there was a brief Q&A period. Bryan Stephens asked, “what can we, business leaders of Hampton Roads, do to control our economic growth over time?” Stephens was met with two replies, the first from Blake was, “regional cooperation.” McNab added, “if policy proposals are in place, then collaboration is key. Looking for opportunities to build capacities over time might help.”

The last question was for Blake about what would happen is women did nothing for equality in the workplace. Blake replied, “if nothing changes and we continue doing the same thing, we won’t see equal pay and leadership roles for women until 2059.”

Thank you to the following sponsors: Optima Health (Presenting Sponsor); Bon Secours (Platinum Sponsor); Damuth Trane (Gold Sponsor); BB&T, Old Point National Bank, and The Port of Virginia (Silver Sponsors); Old Dominion University, On Point Communications, and Lori By Design, LLC (Bronze Sponsors).

 

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