Prosperity in tense times

by Robert C. Powell III
Virginia Business
September 2006

Sept. 11, 2001, began a new era in the United States. The nation was plunged into a global war on terrorism that appears to be as dangerous and unending as the Cold War. We were reminded of that in August when authorities thwarted a plan to blow up airplanes leaving Britain for the U.S. The ironic result of these tense times is that Virginia’s economy has been a beneficiary of the nation’s ramp-up in homeland security spending.

In our cover story, Richmond-based writer Garry Kranz looks at the emergence of Virginia’s homeland security industry as we approach the fifth anniversary of 9/11. In fact, the industry has grown more than any other in the commonwealth during the past five years, creating more than 50,000 IT jobs, to cite just one example.

While the growth is boosting profit at some companies, Kranz finds another motivating factor in landing homeland security contracts. Some businesses, such as McLean-based Booz Allen Hamilton, lost employees on 9/11, and they welcome the opportunity to fight back.

Northern Virginia is a major center for homeland security and defense contractors. Another hotspot is Hampton Roads, but the development there that we examine in this issue does not involve government money. APM Terminals Virginia, a subsidiary of the Danish conglomerate A.P. Moller-Maersk Group, is building a $450 million container terminal in Portsmouth, due to open next July. When completed, the terminal will double the state’s annual container cargo capacity.

The new terminal already has identified Hampton Roads as the up-and-coming port of the East Coast. The question remains how increased truck traffic created by expanded port capacity will affect an already congested highway system in Hampton Roads.

Another area of the state, the Roanoke region, is facing a different kind of growth issue. Southwest Virginia is recovering from the loss of many manufacturing jobs in textiles and furniture. Its solution is to grow slowly, building on the success of stable companies that employ a few hundred people rather than thousands. Economic development officials see promise in the growth of the area’s biotechnology industry, which has close ties to Virginia Tech. Roanoke’s strategy is just another example of statewide efforts to find prosperity in tense times.

Lastly, I want to let you know about a change taking place at our Web site. It is becoming part of Gateway Virginia, a portal for news and information from around the state. Typing in www.VirginiaBusiness.com still will take you to our home page, but you will need to update any bookmarks linking directly to other pages, such as the List of Leaders.