Job creation is fueled by existing business expansion
- October 28, 2010
Over the past few years, Virginia’s economic development news has been full of big marquee names: Volkswagen, Altria, Hilton, SAIC, Northrop Grumman and others. The commonwealth has held a winning hand in the high-profile game of attracting corporate headquarters from California, New York and other states.
Natural advantages such as the Port of Virginia, Dulles Airport and proximity to Washington, D.C., are important parts of our success. Legal advantages — like being the northernmost right-to-work state and having reasonable tort laws and a relatively low corporate income tax rate — also make Virginia an attractive place to do business.
When high-profile new business announcements are made, many take credit and rightfully so. Major out-of-state and international relocations involve the governor’s office, the Virginia Economic Development Partnership (VEDP), regional economic development alliances and local-level economic development offices.
Although many of these agencies compete for certain projects, they generally act in the best interest of the commonwealth as a whole.
In comparison with the rough-and-tumble world of politics, economic development remains a relatively genteel game in Virginia. “Friendly,” after all, is indispensible to the meaning of the phrase “business-friendly.”
In addition to friendliness, humility is a cultural value that maintains its currency in the commonwealth. We’ve been a little less than humble in continually reminding ourselves and others of our reputation as the best-managed state, one of the best states in which to do business and the most business-friendly state, among other accolades.
But perhaps Virginia’s existing businesses have been too humble in taking credit for the jobs their expansion and growth have created, especially during difficult economic times. In fact, existing businesses have led the commonwealth in job creation over the past several years.
According to VEDP, job-creation announcements from existing businesses accounted for 78 percent of all new jobs announced during 2009. Preliminary figures for the first nine months of 2010 show that new jobs created by the expansion of existing businesses will account for 62 percent of this year’s announced job growth.
Economic development success requires balancing the attention given to recruiting new businesses with the efforts required to retain and expand existing businesses. When the economy is less than robust, best practices involve dedicating more time to existing business growth.
The top 10 job creation announcements by expanding businesses so far this year have been made by Capital One, KPMG, NeuStar, InMotion Hosting, New Media Strategies, IntelliDyne, O’Sullivan Films, ManTech International, Monogram Food Solutions, Mercury Paper and The Results Cos.
These companies and other existing businesses involved in more than 6,000 smaller projects are doing their part to keep Virginia a leader in economic prosperity. To all of them, we say thank you for doing what you do so well.