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What is Shaping the Future of NOVA's economy?

· Entrepreneurship

The Northern Virginia (NOVA) region is “vibrant, growing, and remarkably diverse. Today, 50% of all children in Northern Virginia live in immigrant families, and the positive impact of these families on our region’s economy is significant. There is a powerful case for extending ladders of opportunity, building bridges between newcomers and long term residents, and growing a culture of inclusivity that will continue to shape a prosperous future for us all.”

Economic inclusion and Immigrants

Economic inclusion is essential for sustained economic growth. It is the single-most important factor for achieving maximum employment and price stability. However, since 1975 economic growth has not translated into shared prosperity.

Across the board, those born after 1980 have a greater chance of earning 50% of what their parents earned. This is especially salient among those in the bottom 20% of the population, which has found it increasingly harder to improve their economic situation. This does not bode well for the economy of the region. A decrease in GDP impacts everyone.

Welcoming immigrants to the region is a smart economic strategy. They are the critical factor for bridging the growing gap between opportunity and growth. See the Community Foundation for Northern Virginia’s report "One Region. Welcoming New Americans to Northern Virginia" and the New American Economy’s impact map.

  • Immigrants fill workforce shortages, especially in STEM-related fields, construction, healthcare, and the hospitality business.
  • Immigrants pay billions of dollars into Social Security and Medicare.
  • Immigrants create 1 in 5 new businesses, create employment and generate $1.3 billion in the region.
  • Immigrants contributed $57.7 billion to our local economy, generating 25% of regional GDP and 12% of the state of Virginia’s GDP.

Local solutions needed

Local solutions and innovation are needed to build the 3 pillars for inclusive growth, as defined by Ashley Putnam, Director of the Economic Mobility Project at the Federal Bank of Philadelphia:

Physical infrastructure, especially transportation and broadband internet. Too many people are being left out. Poverty has to be redefined to ALICE:

  1. Asset-Limited, Income-Constrained, Employed, or families, neighbors, and colleagues (men and women) who work hard, earn above the federal poverty level, but not enough to afford a basic household budget.
  2. Human capital through workforce development focused on upskilling, opportunity occupations (those that do not require a 4-year college degree and pay above a living wage) and with an accent on women, people of color and immigrants, all of whom are still being left out and behind.
  3. Job creation through small business development and improved health so they can be sustainable and scale.

Public-private partnerships and anchor institutions (hospitals, universities, city governments, large government institutions) are crucial to enable concurrent bottom-up and top-down initiatives and flow of capital. So is a willingness to refocus the concept and practice of investment for growth.

It’s also important to differentiate between mainstream investors, who do not generally have a practical interest in micro and very small business start-ups or established enterprises, and impact investors, who have a specific interest in ensuring their investments deliver both financial and social Returns on Investment.

Moving forward

There are four key elements to move forward constructively to achieve more inclusive economic mobility:

  1. Collaboration among the different economic agents. Silos must be broken down and trust built. (private sector, government, non-government, banking and investment).
  2. Entrepreneurship development with social impact and more inclusive business investments.
  3. Systems change: giving equal weight to product and process.
  4. Creating strategic immigrant welcoming plans.

Economic inclusion is not just a problem that happens to "those people over there". It's an all-of-us challenge. Economic development and growth means translating talent into innovation. So ask yourself: What can I do to advance innovative solutions?

Astrid Ruiz Thierry, Principal, Upboost LLC

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