Resilient Economy
Vision: In 2040, Roanoke’s economy will continue its sustainable growth through the recruitment of diverse industries, revitalization of underperforming commercial spaces, support for small and local businesses, and its continued partnerships with strong regional and national players.
Our economy will be one that builds on a strong collaboration between private businesses, non-profits, local government, and educational partners in order to develop a strong, skilled workforce across all ages, skill levels, and backgrounds that meets current and future employment needs and provides for good paying jobs. These critical stakeholders will value, support, and celebrate each other’s successes.
Introduction
A key measure of prosperity is opportunity; Roanoke’s residents should have opportunities for meaningful careers at all skill levels and for good wages. Roanoke’s economy is driven primarily through private enterprise but the City has a role in creating an environment for growth. While private employers make decisions for location and growth within our region, there are ways the City can positively influence these decision makers. This theme provides a set of priorities, policies, and actions that stakeholders, including the City, can implement to achieve positive economic growth that benefits all citizens.
Background
Roanoke is an ideal place to live, work, play, and do business. As the Southwestern Virginia Region’s economic hub, Roanoke draws many advantages from its economic, cultural, and social gravity. As businesses discover Roanoke’s unique combination of scenic outdoors, low cost of living, outstanding amenities, and a business friendly environment, there are actions that need to be taken in order to ensure a strong economic future.
As technological advancements accelerate, economies around the world compete to keep pace and so must Roanoke. In a rapidly changing world, we can no longer rely on the same models that got us here. In the few years leading up to this planning process, Norfolk and Southern, which employed hundreds of people from across our region, announced that it would move high-paying jobs from our area. Advance Auto Parts, a home grown company that was a major local employer, expanded operations into other markets. Public and private institutions across Virginia are experiencing the effects of the state fiscal issues. In addition, formerly reliable sources of local tax revenue, including the sales tax, appear to be in decline (in the case of the sales tax, due to seismic shifts happening in the retail sector as more sales are conducted online). As our need for proactive economic development grows, the landscape of economic development is shifting. With the ability to conduct business anywhere, through technological advances in remote working and virtual meetings, today’s economic development requires more than traditional development incentives like tax breaks and rebates. Quality of place is at the forefront of both businesses’ and workers’ minds as they decide where to locate.
In recognition of these challenges, this plan recommends policies organized among six key priorities to encourage an economy that supports all members of our community. In addition to traditional approaches like diversification, regional cooperation, and workforce development, this plan calls for work in the areas where economic development and community development goals intersect. This means redirecting support into small scale and local entrepreneurship and guiding new business development into existing commercial and industrial areas. The ideal is a model of economic diversity and innovation, where the benefits of local value-creation are realized locally, where jobs and goods and services are in, or near, our neighborhoods where they can use the infrastructure already in place.
Priority One: Promote Broad Diversity in the Economy
Diversity means resiliency to downturns in the global economy or disruptions in specific industries. Diversification means that if one business fails, the effect on the overall economy within the region is minimized; economic changes can have severe consequences for localities that “put too many eggs into one basket.”
During the 20th century, we saw neighboring localities experience the harsh realities of relying heavily on specific sectors of their economies (textiles, furniture, manufacturing, etc.). Roanoke was heavily reliant on the railroad, and the manufacturing sector employed half of all workers. Fortunately, the decline in manufacturing we experienced was more gradual, enabling some absorption of the impact. Manufacturing was progressively replaced by a strong service industry of professionals including healthcare, law offices, architecture firms, engineers, bankers, and insurance agencies. More recently, Roanoke has become a hub for innovation and technology, most specifically in the field of healthcare research through a partnership between Carillion Clinic and Virginia Tech. It is said that Roanoke has moved from trains to brains as a driver of the economy.
In addition to providing resilience, diversification helps support more varied business sectors. Large office buildings need office supplies, construction companies need lumberyards, and wholesalers, grocery stores need agricultural production and other home goods suppliers, etc. A diversified economy creates a sustainable cycle of economic activity where businesses continually feed off one another and grow as the entire economy grows.
The intent of the policies and actions below is to ensure success in recruiting and promoting business across many industry sectors.
Priority Two: Establish Stronger Economic Ties to Our Regional Partners
Economic development is inherently a regional enterprise. The City of Roanoke is one of many active participants in the Roanoke Regional Partnership and an active member of the Virginia Economic Development Partnership (VEDP). The Roanoke Region of the VEDP is in the midst of the Blue Ridge and Allegheny Mountains and serves as the transportation hub of the area, with an integrated interstate highway, rail, and air transportation network. The Roanoke metropolitan area serves as the medical center for the region and Southwest Virginia. Anchored by Carilion Clinic, one of the largest health care companies in Virginia and the region’s largest employer. The life science sector is one of Roanoke’s strongest clusters, and residents have access to leading-edge medical care.
Roanoke is also the cultural and recreational hub, boasting the Roanoke Symphony Orchestra and museums like the renowned Taubman Museum of Art, Center in the Square in the midst of the open-air farmers’ market downtown, and the Virginia Museum of Transportation.
Map of Roanoke Region
More than 100,000 undergraduate and graduate students are educated each year from 25 higher education institutions located within an hour’s drive, including Virginia Tech, Roanoke College, and Virginia Western Community College. These education centers are important for the region as it looks to build up its workforce for the skills and technical expertise of tomorrow.
As a true recreation destination, Roanoke’s burgeoning outdoor industry thrives from assets such as the nearby Appalachian Trail, James River, Blue Ridge Parkway – the most visited national park in the U.S. – and Smith Mountain Lake, Virginia’s largest lake.
While the City is the main economic engine driving the region’s economy, regional benefits are derived through regional cooperation among the Valley’s local governments. In order for the Region to build on its economic successes, policies and actions have been recommended below in order to bolster the work that has already been done.
Priority Three: Conversion of Underperforming Commercial and Industrial Areas
As commercial and industrial developments around the City age and become obsolete, the City needs to be proactive in the redevelopment of the properties left behind. Market forces have not served the City well in some areas. As commercial and industrial enterprises fail or relocate, buildings are left unused or underused for years or decades. Disuse and abandonment, even for short periods of time, affect surrounding property values and drive other businesses away, creating entire neighborhoods of blight.
One issue to acknowledge is that Roanoke has a gross excess of commercial and industrial property. The fear of missing out on economic activity led many localities to zone too much land for commercial and industrial uses, and Roanoke was no exception. The oversupply manifests in land values that are so low that owners are not compelled to generate much, if any, income from the use of the property. Moreover, the way we tax real estate means that taxes are so low that carrying costs are negligible. The result is property that is occupied by passive uses like used car lots, junk yards, storage lots, bulk landscaping wholesalers, towing yards, wrecker yards, etc. These uses are often characterized by expanses of pavement or gravel with no runoff management, resulting in intense pressure on public storm water systems. These uses tend to be unsightly, generate little revenue or economic activity, and further devalue adjacent properties. Many even have the potential for environmental damage. Once in this cycle, these areas never seem to improve without intervention.
Neighborhood centers have not emerged despite identifying locations in neighborhood plans and establishing the zoning patterns to encourage them. The excess of commercial land inhibits development in the places we want to see growth.
Passive strategies–waiting and hoping for the market to generate renewal–simply have not worked. Some corridors and industrial centers have not improved appreciably over the past 50 years. This plan calls for a transition to a proactive program of policies that work together to create a more rational, successful, and sustainable business environment for Roanoke. This plan recommends a multi-dimensional approach of acquisition and renewal, restructuring our real estate tax rates, and thoughtful management of where and how we support business development.
Priority Four: Local Business Development
When it comes to local economic benefit, not all business activity is created equal. Locally-owned and managed businesses have more community benefit because of how money cycles through the local economy due to multiplier effects. Nearly all of a local retailer’s economic activity stays local in the form of payroll and profits. With a national retail chain, only the front line and supervisory payroll stays in the community. The upper management payroll and all profits stream out of the community. Furthermore, the purchasing power and predatory business practices of large retail chains has proven to be devastating for local economies and often fatal to small local businesses. Therefore, it is imperative for economic development to focus efforts toward spurring a renaissance of unique local businesses.
Priority Five: Align Economic Development with Workforce Development Systems
Better alignment between economic development and workforce development systems is critical to the future of our local economy. The economic development system is designed to encourage business and job growth, while the workforce development system works to ensure individuals have the education, skills, and training needed to obtain jobs. When the two systems are aligned, job seekers receive training and skill development that employers demand—resulting in higher wages and career advancement—and employers have access to a skilled workforce that enables growth and increased productivity. Beyond benefiting employees and employers, a functional and aligned system has economic benefits to the broader community.
Research indicates that regional economic growth is dependent upon human capital (development and attraction) and innovation. Some observers argue that the focus should be on policies aimed at the attraction and retention of educated workers, while others emphasize increased alignment of economic development and workforce development systems as a way to encourage the skilling up of local populations and the inclusion of populations left out of the traditional economy. The two are not mutually exclusive, nor is the call for greater alignment a new phenomenon. Below are some of the ways that the City can continue progressing toward the alignment of economic development and the local workforce development system.
Priority Six: Support Local Community Development
It is vital that the City continue to support community partners that provide programs and outreach to the community, especially to low-income neighborhoods. These programs exist to help support financial literacy, help fund affordable housing, and develop healthy food initiatives. These initiatives help to provide stability to low-income communities, which in turn, allows for greater economic mobility. In principle, if constituents are less occupied by where their next meal may come from, it could allow them the time and resources to open a new business or go back to school for a better paying job.
Introduction
A key measure of prosperity is opportunity; Roanoke’s residents should have opportunities for meaningful careers at all skill levels and for good wages. Roanoke’s economy is driven primarily through private enterprise but the City has a role in creating an environment for growth. While private employers make decisions for location and growth within our region, there are ways the City can positively influence these decision makers. This theme provides a set of priorities, policies, and actions that stakeholders, including the City, can implement to achieve positive economic growth that benefits all citizens.
Background
Roanoke is an ideal place to live, work, play, and do business. As the Southwestern Virginia Region’s economic hub, Roanoke draws many advantages from its economic, cultural, and social gravity. As businesses discover Roanoke’s unique combination of scenic outdoors, low cost of living, outstanding amenities, and a business friendly environment, there are actions that need to be taken in order to ensure a strong economic future.
As technological advancements accelerate, economies around the world compete to keep pace and so must Roanoke. In a rapidly changing world, we can no longer rely on the same models that got us here. In the few years leading up to this planning process, Norfolk and Southern, which employed hundreds of people from across our region, announced that it would move high-paying jobs from our area. Advance Auto Parts, a home grown company that was a major local employer, expanded operations into other markets. Public and private institutions across Virginia are experiencing the effects of the state fiscal issues. In addition, formerly reliable sources of local tax revenue, including the sales tax, appear to be in decline (in the case of the sales tax, due to seismic shifts happening in the retail sector as more sales are conducted online). As our need for proactive economic development grows, the landscape of economic development is shifting. With the ability to conduct business anywhere, through technological advances in remote working and virtual meetings, today’s economic development requires more than traditional development incentives like tax breaks and rebates. Quality of place is at the forefront of both businesses’ and workers’ minds as they decide where to locate.
In recognition of these challenges, this plan recommends policies organized among six key priorities to encourage an economy that supports all members of our community. In addition to traditional approaches like diversification, regional cooperation, and workforce development, this plan calls for work in the areas where economic development and community development goals intersect. This means redirecting support into small scale and local entrepreneurship and guiding new business development into existing commercial and industrial areas. The ideal is a model of economic diversity and innovation, where the benefits of local value-creation are realized locally, where jobs and goods and services are in, or near, our neighborhoods where they can use the infrastructure already in place.
Priority One: Promote Broad Diversity in the Economy
Diversity means resiliency to downturns in the global economy or disruptions in specific industries. Diversification means that if one business fails, the effect on the overall economy within the region is minimized; economic changes can have severe consequences for localities that “put too many eggs into one basket.”
During the 20th century, we saw neighboring localities experience the harsh realities of relying heavily on specific sectors of their economies (textiles, furniture, manufacturing, etc.). Roanoke was heavily reliant on the railroad, and the manufacturing sector employed half of all workers. Fortunately, the decline in manufacturing we experienced was more gradual, enabling some absorption of the impact. Manufacturing was progressively replaced by a strong service industry of professionals including healthcare, law offices, architecture firms, engineers, bankers, and insurance agencies. More recently, Roanoke has become a hub for innovation and technology, most specifically in the field of healthcare research through a partnership between Carillion Clinic and Virginia Tech. It is said that Roanoke has moved from trains to brains as a driver of the economy.
In addition to providing resilience, diversification helps support more varied business sectors. Large office buildings need office supplies, construction companies need lumberyards, and wholesalers, grocery stores need agricultural production and other home goods suppliers, etc. A diversified economy creates a sustainable cycle of economic activity where businesses continually feed off one another and grow as the entire economy grows.
The intent of the policies and actions below is to ensure success in recruiting and promoting business across many industry sectors.
Priority Two: Establish Stronger Economic Ties to Our Regional Partners
Economic development is inherently a regional enterprise. The City of Roanoke is one of many active participants in the Roanoke Regional Partnership and an active member of the Virginia Economic Development Partnership (VEDP). The Roanoke Region of the VEDP is in the midst of the Blue Ridge and Allegheny Mountains and serves as the transportation hub of the area, with an integrated interstate highway, rail, and air transportation network. The Roanoke metropolitan area serves as the medical center for the region and Southwest Virginia. Anchored by Carilion Clinic, one of the largest health care companies in Virginia and the region’s largest employer. The life science sector is one of Roanoke’s strongest clusters, and residents have access to leading-edge medical care.
Roanoke is also the cultural and recreational hub, boasting the Roanoke Symphony Orchestra and museums like the renowned Taubman Museum of Art, Center in the Square in the midst of the open-air farmers’ market downtown, and the Virginia Museum of Transportation.
Map of Roanoke Region
More than 100,000 undergraduate and graduate students are educated each year from 25 higher education institutions located within an hour’s drive, including Virginia Tech, Roanoke College, and Virginia Western Community College. These education centers are important for the region as it looks to build up its workforce for the skills and technical expertise of tomorrow.
As a true recreation destination, Roanoke’s burgeoning outdoor industry thrives from assets such as the nearby Appalachian Trail, James River, Blue Ridge Parkway – the most visited national park in the U.S. – and Smith Mountain Lake, Virginia’s largest lake.
While the City is the main economic engine driving the region’s economy, regional benefits are derived through regional cooperation among the Valley’s local governments. In order for the Region to build on its economic successes, policies and actions have been recommended below in order to bolster the work that has already been done.
Priority Three: Conversion of Underperforming Commercial and Industrial Areas
As commercial and industrial developments around the City age and become obsolete, the City needs to be proactive in the redevelopment of the properties left behind. Market forces have not served the City well in some areas. As commercial and industrial enterprises fail or relocate, buildings are left unused or underused for years or decades. Disuse and abandonment, even for short periods of time, affect surrounding property values and drive other businesses away, creating entire neighborhoods of blight.
One issue to acknowledge is that Roanoke has a gross excess of commercial and industrial property. The fear of missing out on economic activity led many localities to zone too much land for commercial and industrial uses, and Roanoke was no exception. The oversupply manifests in land values that are so low that owners are not compelled to generate much, if any, income from the use of the property. Moreover, the way we tax real estate means that taxes are so low that carrying costs are negligible. The result is property that is occupied by passive uses like used car lots, junk yards, storage lots, bulk landscaping wholesalers, towing yards, wrecker yards, etc. These uses are often characterized by expanses of pavement or gravel with no runoff management, resulting in intense pressure on public storm water systems. These uses tend to be unsightly, generate little revenue or economic activity, and further devalue adjacent properties. Many even have the potential for environmental damage. Once in this cycle, these areas never seem to improve without intervention.
Neighborhood centers have not emerged despite identifying locations in neighborhood plans and establishing the zoning patterns to encourage them. The excess of commercial land inhibits development in the places we want to see growth.
Passive strategies–waiting and hoping for the market to generate renewal–simply have not worked. Some corridors and industrial centers have not improved appreciably over the past 50 years. This plan calls for a transition to a proactive program of policies that work together to create a more rational, successful, and sustainable business environment for Roanoke. This plan recommends a multi-dimensional approach of acquisition and renewal, restructuring our real estate tax rates, and thoughtful management of where and how we support business development.
Priority Four: Local Business Development
When it comes to local economic benefit, not all business activity is created equal. Locally-owned and managed businesses have more community benefit because of how money cycles through the local economy due to multiplier effects. Nearly all of a local retailer’s economic activity stays local in the form of payroll and profits. With a national retail chain, only the front line and supervisory payroll stays in the community. The upper management payroll and all profits stream out of the community. Furthermore, the purchasing power and predatory business practices of large retail chains has proven to be devastating for local economies and often fatal to small local businesses. Therefore, it is imperative for economic development to focus efforts toward spurring a renaissance of unique local businesses.
Priority Five: Align Economic Development with Workforce Development Systems
Better alignment between economic development and workforce development systems is critical to the future of our local economy. The economic development system is designed to encourage business and job growth, while the workforce development system works to ensure individuals have the education, skills, and training needed to obtain jobs. When the two systems are aligned, job seekers receive training and skill development that employers demand—resulting in higher wages and career advancement—and employers have access to a skilled workforce that enables growth and increased productivity. Beyond benefiting employees and employers, a functional and aligned system has economic benefits to the broader community.
Research indicates that regional economic growth is dependent upon human capital (development and attraction) and innovation. Some observers argue that the focus should be on policies aimed at the attraction and retention of educated workers, while others emphasize increased alignment of economic development and workforce development systems as a way to encourage the skilling up of local populations and the inclusion of populations left out of the traditional economy. The two are not mutually exclusive, nor is the call for greater alignment a new phenomenon. Below are some of the ways that the City can continue progressing toward the alignment of economic development and the local workforce development system.
Priority Six: Support Local Community Development
It is vital that the City continue to support community partners that provide programs and outreach to the community, especially to low-income neighborhoods. These programs exist to help support financial literacy, help fund affordable housing, and develop healthy food initiatives. These initiatives help to provide stability to low-income communities, which in turn, allows for greater economic mobility. In principle, if constituents are less occupied by where their next meal may come from, it could allow them the time and resources to open a new business or go back to school for a better paying job.