Lynchburg earns national economy ranking

By Bryan Gentry

Published: September 12, 2008

A California-based economic think tank says the Lynchburg region is one of the nation’s top 100 areas for sustaining economic activity.

Growth in local high-tech industries propelled the region there, while slower growth in wages and salaries kept Lynchburg from taking an even higher seat than it did.

The 2008 “Best Performing Cities,” published by the Milken Institute and Greenstreet Real Estate Partners, ranks the nation’s 324 metropolitan statistical areas according to increases in job counts and wages.

In the category of 200 large metropolitan areas — of which Lynchburg is one of the smallest — the region ranked 71, a climb of 39 seats from its ranking of 110 in 2007. It was one of three Virginia cities to crack the top 100.

Joseph Turek, an economics professor at Lynchburg College, said the study reveals “a high-tech economy that was lagging behind the national average, but has now picked up some steam relative to the nation as a whole.”

Bryan David, executive director of Region 2000’s Economic Development Council, said this means businesses are working harder and being effective.

“It’s because the businesses here are doing the right things to remain competitive (and) expand their markets,” he said.

He said the new ranking, along with Forbes.com slating Lynchburg this year in the top 25 places to do business, helps put Lynchburg on the map.

“It gives us exposure that we otherwise wouldn’t be able to gain,” he said.

Two other Virginia metro areas made the top 100: the Arlington/Alexandria/Washington, D.C., area at 41; and Virginia Beach at 89.

The Richmond region barely missed the top 100, coming in at 102 in the nation. Having been ranked at 56 in 2007, Richmond was listed as

one of the report’s “biggest losers.”

Turek said a rise or fall in such a ranking occurs because “rankings are, by their nature, relative. If we’re sitting still at the same place we were, we can still go up or down (in the rankings), depending on what everybody else is doing.”

A higher ranking could simply mean economic woes that have hit other areas are just on Lynchburg’s horizon.

Still, Turek said it pinpointed some bright spots for the local economy.

According to the report by the Milken Institute and Greenstreet Real Estate Partners, the regions that made big gains on the list are ones that did not experience housing bubbles, and therefore are not suffering from severely depressed housing markets now.

The study looks at several categories of short- and long-term job, wage and high-tech company growth.

Soojung Kim, one of the study’s authors, said the data for the “Best Cities” list comes from Moody’s Economy.com and the Bureau of Economic Analysis.

Lynchburg’s strongest ranking was in job growth from March 2007 to March 2008, coming in at 20th in the nation.

During that year, the Lynchburg region’s job count grew by about 2.3 percent, according to the report.

The region was also pulled into the top 100 by ranking:

- 44 for growth of output by high-tech industries from 2006 to 2007;

- 72 for the number of high-tech industries whose concentration in Lynchburg is greater than the U.S. average; and

- 78 for job growth rate for the years 2002 through 2007.

But several factors kept the Lynchburg area from climbing higher:

- The overall concentration of high-tech industries in Lynchburg was half the national average, ranking 146.

- From 2001 to 2006, the region had below-average wage and salary growth, ranked at 137 in the nation.

- The output volume of local high-tech businesses for 2002 through 2007 was below the national average, coming in at 126. However, this was Lynchburg’s most improved ranking over the 2007 study.

The recent jump in high-tech firms’ productivity indicates that the Lynchburg area has attracted more high-tech business in recent years.

Jonathan Whitt, director of Region 2000’s technology council, said most of that growth represents increased business for firms already here.

The Milken Institute defines high-tech industries as information sciences, biomedical, scientific research and development, and high-tech manufacturing fields, Kim said.

As for salary growth below the national average, David said that might reflect the region’s lower cost of living.

Turek agreed, and said that high salary and wage growth is not always desirable, because it can translate into higher production costs, which could drive businesses away.

The Milken report bills itself as a source for businesses and highly skilled workers to look to when making

decisions.

“Because of this growth, we now start coming up on people’s search list for … potential places to do business,” David said.

“To the extent that they use this (rank) for marketing purposes,” Turek said, “they could sell this area, that it’s a good place to live.”

“That could generate more growth.”