The Washington Region’s Transformation

As this is my last lecture, I thought I should share with you some of what I have learned from my research on the Washington region’s economy over the past five decades. In doing so, I will hopefully set up a framework for better understanding the near- and longer-term futures of this region as these are reported in the coming years and for addressing the region’s many challenges that could undermine its ability to achieve its full development potential.

To help simplify this story, I have divided the economic history of the Washington region into three periods: (1) company town, (2) the first transformation and (3) the second transformation.

This second transformation is still in its infancy. Today, the region’s economy still remains strongly influenced by federal spending.  But, with Amazon’s decision to locate its HQ2 in Arlington, the region’s non-federal assets may have gained traction and may be pointing to a future growth trajectory that will have sufficient scale to compensate for the declining role of federal spending in driving the region’s future economic growth.  

This will not happen automatically.  It will not happen quickly.  And, of course, it might not happen at all. Succeeding in today’s political climate in which (a) residents are resistant to tax increases necessary to pay for the quality and availability of services they want and need to maintain a competitively attractive quality-of-life and in which (b) elected leaders are unwilling to provide long-range vision or to risk alienating the voters by making the decisions needed to advance the region has resulted in the Washington region falling further and further behind its peers’ economic performances.  How will this second transformation end?  The answer to this question is unclear as the region begins this new decade of change.

— Stephen S. Fuller, Ph.D.
University Professor Emeritus, The Schar School of Policy and Government
George Mason University

The Washington Region: The Transformation of Company Town Economy, 1800-2019
February 2020