The Truth About D.C.'s Growing Knowledge-Based Economy
Washington, D.C., has always been known as a city of power. But beyond politics and diplomacy, it is now the center of a big, dynamic, successful and diverse economy, one that is quickly becoming an important player on the global stage. As I wrote in last month in The Atlantic, Washington’s economy has "clearly prospered from federal spending; lobbying and government contracts are significant sources of its wealth. But its economy is not entirely or even predominantly parasitic." The D.C. metro area has in fact developed a diversified tech and knowledge economy. The Washington Post’s Jonathan O’Connell picked up on this earlier this month, noting in jest, "It’s not just cupcakes anymore." Urbanist Aaron Renn has put it this way: "We’re witnessing the start of Washington’s emergence as America’s new Second City."
But to what degree has government activity shaped the region's economy in both direct and indirect ways?
To get at this, I asked the labor market data and research firm EMSI to run the most current numbers on the region’s job growth for the period 2009 to 2013. We did this both by industry (referring to sector of employment, such as federal government, the finance and insurance industry, or the health and education sectors) and by occupation (tracking the different jobs individuals perform, regardless of the industry in which they are employed, such as manager, software engineer, or designer). EMSI also undertook a detailed analysis of both the direct and indirect effect of government activity on the region's job picture.
The bottom line: Greater D.C. has evolved into a leading-edge knowledge economy, where private sector knowledge, professional, and creative jobs outnumber direct government jobs. But government remains the central pivot point of the region's knowledge economy, stimulating a wide range of direct and indirect spinoff jobs.
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