Hampton Roads Looks to Diversify Economy following Defense Downturn

first_img Dan Cohen AUTHOR In past decades, a decline in work at shipyards and other military-dependent industries in the Hampton Roads region stemming from a downturn in defense spending has always been followed by a future upswing in the Pentagon’s budget.But for the first time since World War II, leaders in southeastern Virginia are looking for new industries to diversify the region’s economic base as it becomes clear that defense spending no longer will supply 50 percent or more of the local economy.“We haven’t had a concerted effort in the past because, quite frankly, we haven’t needed one,” Bryan Stephens, the head of the Hampton Roads Chamber of Commerce, told the Washington Post.Defense spending in the area has fallen sharply since the 2011 Budget Control Act went into effect, resulting in thousands of blue collar workers losing good-paying jobs. At the same time, Hampton Roads has fallen behind other defense-reliant communities that took steps to cultivate industries that aren’t dependent on the federal budget.“We simply have not been able to diversify the economy,” said Vinod Agarwal, an economist and director of the economic forecasting project at Old Dominion University in Norfolk.Part of the problem is that many of the region’s defense jobs aren’t transferable to other industries, said Christine Chmura, chief executive and chief economist of Chmura Economics & Analytics. Hampton Roads also is contending with a shrinking military presence — there are about 30,000 fewer military personnel in the area than a decade ago.So far, the chamber of commerce and Reinvent Hampton Roads have identified biotechnology and advanced manufacturing as potential growth industries for the region. That effort is ongoing as economic development officials chart the best course ahead.last_img