The Dichotomy of the Washington DC Technology Phenomenon

The Washington DC metro area is widely recognized as one of the country’s technology hubs. Unlike the country’s other major tech centers, however, which have been heavily focused on computer technology for several decades (see Annalee Saxenian’s Regional Advantage for a discussion of Silicon Valley and Route 128, for instance), the nation’s capital region went through a significant restructuring during the 1990s as a result of the New Economy and federal government downsizing. 



The tech-based boom of the New Economy has not been shared evenly across the metro area, however. A recent study revealed that, during the seven years of 1993-2000, the region enjoyed a growth of 379,500 jobs – with more than 23 percent of those jobs being in the technology industry. The District of Columbia employment base, though, shrunk by nearly 47,000 jobs during the period. The city lost 79,200 government jobs over the seven years, more than two-thirds of them in the federal sector. 



Such a substantial transformation in so little time presents new challenges for the local non-governmental organizations dedicated to expanding economic opportunities for the area’s lower income residents. DC Agenda, the independent nonprofit organization that commissioned the study, is working to confront these challenges. 



Understanding the scope of the change was a critical first step for DC Agenda. The civic group works in partnership with existing service provider organizations and institutions to overhaul the systems serving low-income residents and strengthen the capacity of local government and community-based organizations. 



The study characterizing D.C.’s tech industry was prepared for DC Agenda by George Mason University researcher Stephen S. Fuller. While presenting the dichotomy of the District versus the metro region, it also reveals some significant differences between the Washington and Silicon Valley areas. For instance, while technology industry directly generates 28 percent of the gross regional product for Silicon Valley, it accounts for 16 percent of the Washington metro economy. 



The Washington area is much more dependent on the services sector of the tech industry, which makes up 86 percent of all tech jobs in the Washington area. By comparison, only 42 percent of Silicon Valley tech jobs are service-based. 



Tech employment accounts for nearly 11 percent of all jobs in the Washington DC metro area and more than 22 percent in Silicon Valley. In striking contrast, tech employment for the District of Columbia only represents 1.5 percent of all private sector jobs. 



The study found that the city’s small technology community was based largely on information technology that grew from entrepreneurial activity dependent on market access to federal and international business opportunities. Access to the large suburban tech industry was also important for partnering and subcontracting opportunities. 



Fuller recommends promotion of the city’s market access, coupled with offering incentives as marketing strategies for the District to pursue to further grow its tech-based industry. 



The complete report can be found on the DC agenda website

http://www.dcagenda.org/pages/m_dc_publications.htm