Hampton Roads needs to work together as a region to grow jobs and attract job creators like Amazon, local economists said Wednesday.
“How do we create jobs? How do we spur innovation?” Old Dominion University economist Robert M. McNab asked more than 600 attendees of the 18th annual State of the Region address at The Main in downtown Norfolk.
ODU’s Center for Economic Analysis and Policy released its annual State of the Region report at the event hosted by Lead Hampton Roads and the Hampton Roads Chamber of Commerce.
Hampton Roads lags behind its peers for entrepreneurial activity, McNab said. The region ranked 33rd of 39 metro areas for startup activity, according to the Kauffman Foundation.
The region also has lagged behind Virginia and the nation in the recovery of jobs lost in the Great Recession, he said. According to the State of the Region report, Hampton Roads is on track to recover the remainder of the lost jobsby the end of 2017 and may be turning the “economic corner.”
“We’re better than we were,” McNab said.
Regional employment is experiencing a peak this year with 821,101 people working in July, according to the presentation. Previous maximum employment was 813,274 in July 2008.
“While we may be struggling to generate jobs, we’re starting to see people return to the labor force,” McNab said.
The sluggishness in job creation also translated into the relative stagnation of the region’s median household income since 2008, according to the report.
Historically, Hampton Roads has had a higher median household income than the nation, but the region is losing ground, McNab said. According to the report, regional median household income was 14.5 percent higher than that of the nation in 2010 but by 2015 was only 7.7 percent higher.
Military compensation also stagnated, declining nearly 7 percent from 2010 to 2015, according to the report. And while ODU economists are forecasting increased defense spending this year, the report shows there’s no certainty that it would increase significantly during the next decade.
Hampton Roads’ economic growth rate is expected to be slightly better this year than last year but still below the region’s historical average, McNab said.
Part of the region’s struggle in growing jobs may be related to growing Virginia college tuition costs and increased student loan debt loads, ODU President Emeritus James V. Koch said.
“People who have debt — they don’t buy houses, they don’t buy cars, they don’t start businesses,” Koch said.
An attendee asked the economists whether Hampton Roads landing an Amazon headquarters would be in the realm of possibility. Seattle-based e-commerce giant Amazon announced in September that it is accepting proposals through Oct. 19 as it's seeking a second North American headquarters.
“The chances of us getting Amazon are very, very small,” ODU economist Vinod Agarwal said, adding that putting forth the effort in trying to attract Amazon is well worth it, though.
If Hampton Roads localities came together to attract Amazon, it could end up bringing other opportunities even if the effort isn’t successful, Agarwal said.
McNab said there is value in figuring out the region’s strengths and weaknesses when working collaboratively to attract higher-paying jobs. Other areas have failed with economic development efforts before succeeding, he said.
The annual State of the Region report has essentially been saying every year that Hampton Roads localities need to better collaborate to diversify the economy instead of relying on defense spending, McNab said.
“We are hoping to stimulate conversation today,” McNab said to attendees at the start of the event.
The speakers will be on the Peninsula to present the report at 11:30 a.m. Friday at the Newport News Marriott at City Center.