A Five-Part Series

By Keith Waters
Graduate Research Assistant at The Stephen S. Fuller Institute and doctoral student at the Schar School of Policy and Government, GMU

Historically, the economic performance in the Washington region has been shaped by federal spending, including payroll outlays for the federal workforce and procurement outlays for the purchase of goods and services from the private sector. Since 1996, the value of federal procurement outlays has exceeded the value of federal payroll outlays reflecting its rapid growth rate between 1980 and 2010 as annual federal procurement increased from $4.2 billion to $81.5 billion. Following its peak in 2010, federal procurement spending in the Washington region declined to $68.5 billion in 2013 and today remains well below its 2010 level.

The impacts of decreased federal spending on the region’s economy have been measured. Economic growth in the Washington region has only averaged 0.9 percent from 2010 through 2016, the slowest of any of the nation’s largest fifteen metropolitan areas, and annual output growth per worker was negative in four of these six years. As a result of the region’s economic slowdown, local elected and business leaders have recognized the need to diversify the Washington region’s economy away from the federal market. An important step towards understanding this diversification process is to identify and analyze selected sectors in the economy that have successfully reduced their historic dependence on federal procurement.

This series will examine the nature of federal dependence across several sectors of the Washington region’s economy. This series is comprised of five papers.

1-3. The first three papers examine three different sub-sectors at an aggregate level.

Other Management Consulting Services
November 2017
Research and Development in the Social Sciences and Humanities
November 2017
Custom Computer Programming Services
November 2017

4. The fourth paper will analyze firms within one of these sub-sectors to identify those that appear to have successfully diversified their revenue sources away from the federal government.

Successfully Diversifying Firms
To Come

5. The concluding paper of this series will report interviews with contractors who have successfully diversified their revenue base away from the federal market.

A Series of Interviews with Successfully Diversifying Firms
To Come