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V
irginia
C
apitol
C
onnections
, S
pring
2015
4
Virginia:
The Right Choice for Global Enterprise
By Maurice A. Jones, Secretary of Commerce and Trade
The Commonwealth of Virginia was
founded as a business venture more than
400 years ago by the Virginia Company
of London, a joint-stock company formed
both to bring profits to its shareholders
and establish an English colony in the
New World. Since its founding, the
Commonwealth has remained a journey of
economic opportunity. Virginia’s progress
may be attributed to its many assets,
including: an impressive roster of global
companies; continued growth of businesses
in strategic sectors; a welcoming and supportive business climate; and
a superior workforce. These advantages provide a solid foundation
for growth and make the Commonwealth a great place for enterprise.
International Leader
More than 750 international companies from 44 countries around
the globe call Virginia home, representing more than $8.3 billion in
investment over the past 10 years. While independent third parties
have noted the benefits of conducting business in Virginia, the
corporations who call Virginia home most powerfully demonstrate
the Commonwealth’s business leadership position. Virginia serves as
the headquarters for 35 Fortune 1000 firms and 52 firms with annual
revenues over $1 billion. The resilient success of Virginia businesses
such as Stihl, Northrop Grumman, DuPont, Micron, Canon, Lipton
and MeadWestvaco is the best indicator of what can be accomplished
in the Commonwealth. The prestige and diversity of companies that
join or continue to grow in Virginia—Rolls-Royce,
Amazon.com,
Microsoft, Bechtel, Tranlin, Inc., K2M, Corporate Executive Board
and Continental, to name a few—highlight the Commonwealth’s
ability to consistently attract leading companies across different
sectors.
Growing Businesses in Strategic Sectors
A diverse economy is critical to attracting firms and generating
jobs in the 21st century. Virginia is well positioned to catalyze
growth in key sectors such as advanced manufacturing, information
technology and professional and business services. These sectors are
both growing and providing good paying jobs to our workers.
Advanced Manufacturing
The manufacturing sector remains a vital component of the U.S.
and Virginia economies. While not the dominant employer it was a
generation ago, manufacturing helps drive technology, productivity,
and innovation across many industry sectors. While Virginia has
seen job losses in manufacturing, the sector employs over 230,000
employees and represents over $115 billion in direct annual economic
output. Accounting for direct and indirect jobs in Virginia, 13% of
all jobs in Virginia are related to manufacturing. Wage levels and
overall industry multipliers are higher for the manufacturing sector
than other industry sectors, contributing to overall state income and
economic stability. Key manufacturing operations are found in most
regions of Virginia and provide a viable foundation on which to build.
Information Technology
Virginia has enjoyed national and international acclaim for its
leadership in the broad arena of information technology. Currently,
there are over 300 cyber security companies in Virginia, and more
firms are being established each month. Systems and integration
design and data center operations are some examples of the
formidable information technology footprint here in Virginia.
In fact, there are 10,800 employees working in data centers at an
average salary of $94,000. The Northern Virginia region is clearly
the dominant presence for the industry, but this is being dispersed in
varying degrees to other regions of the state. Today, with broadband
deployment across Virginia’s rural areas, fiber redundancy and low
latency times open up potential for growth of the sector across the
Commonwealth.
Virginia’s information technology strength bodes well for other
sectors in Virginia, as the technologies and capabilities which arise
out of the technology arena inevitably migrate to and find useful
applications in most other industries. Advanced manufacturing
operations in all sectors—medical and life technologies,
bioinformatics, global logistics, research and development, corporate
management and headquarters, and even federal and defense/security
related operations—are all dependent on highly robust and reliable
technologies in sensing, monitoring, processing, managing and
controlling systems as the lifeblood of these industries. Information
technology is the connective tissue and enabling activity that is
common to all and gives rise to a distinct competitive leverage point
for Virginia.
Professional and Business Services
Professional and business services activity in Virginia has been
a leading contributor to Virginia income and job growth. Federal
spending policy has certainly impacted this, particularly as it relates
to the contracting community in Northern Virginia, Hampton Roads
and elsewhere. Still, there is a considerable base of highly skilled
talent in Virginia, requisite infrastructure and a network of highly
formidable companies that are adept at reading and responding to
dynamic market changes. As companies continue to right-size,
engage in strategic alliances, mergers, and develop new strategies for
survival and growth, Virginia must be positioned to assist and add
value.
Notwithstanding recent trends of reduced federal spending,
federal and security operations offer opportunities for Virginia for the
same reasons cited by the private sector. There are opportunities to be
had in agency footprint consolidations and reorganizations that result
from a diminished physical federal footprint. Virginia, especially
Northern Virginia, has ample inventory of office space which can
be a strong consideration in evaluating a Virginia option. Likewise,
the other assets (access, talent, vendors, taxes policy, regulation and
utilities) help promote theVirginia case relative to competitor options.
Pro Business Climate
Virginia boasts competitive, stable operating costs, and a low,
six percent corporate income tax—one of the lowest in the nation—
that hasn’t increased since 1972. The Commonwealth offers a variety
of performance-based business incentives, including tax credits,
exemptions and grants. Virginia views incentives as an investment
in its economic future and as a basis for a rational business decision
for both the Commonwealth and the companies. The Governor’s
Opportunity Fund, soon to be called the Commonwealth Opportunity
Fund, is a vital, proven deal closing incentive that Virginia and
its communities have successfully used for almost two decades.
The Governor’s Agriculture and Forestry Industries Development
Fund provides strategic grants made to businesses that add value
to Virginia-grown agricultural and forestal products. The Virginia
Investment Partnership Grant and the Major Eligible Employer Grant
are discretionary performance incentives designed to encourage
continued capital investment by Virginia companies, resulting in
added capacity, modernization, increased productivity or the creation,
development and utilization of advanced technology. Virginia
also offers extremely competitive sales and use tax exemptions.
The Virginia Jobs Investment Program is an incentive program
offering customized recruiting and training assistance to companies
that are creating new jobs or experiencing technological change.