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SW Virginia Study Identifies Challenges to Growth for Small Metros

March 28, 2005

While some regional assessments attempt to benchmark economic indicators of smaller regions to those of notable accomplishment such as Silicon Valley or Research Triangle Park, a new study from the Center for Regional Strategies at Virginia Tech compares regions with similar economic and demographic characteristics, a potentially more useful model for other metro areas.

Researchers at Virginia Tech's Center for Regional Strategies identified six regions similar to the New Century Region (NCR), which encompasses 12 counties and the cities of Roanoke, Covington, Radford and Salem, and tracked various economic indicators from 1990 to 2000. Benchmark regions for comparison included Colorado Springs and Ft. Collins, Colo.; Athens, Ga.; Asheville, N.C.; Knoxville, Tenn.; and Lexington, Ky. Eleven fundamental categories of regional life with which to compare to NCR were identified as employment, income, housing, education, health, environment, public safety, arts and culture, infrastructure, and social capital.

According to the study, four of the most troubling gaps found in NCR are interrelated. The region's mean earnings were the lowest of the benchmark areas, and it had the fewest knowledge-based jobs, the highest rate of those lacking a high school diploma, and the lowest rate of those with a bachelor's degree or higher. Researchers concluded that having more of its population earn a college degree would lead to a more skilled workforce, in turn attracting higher-paying jobs, which would raise the mean earnings.

Per capita income for NCR in 1990 was $12,384 and grew only to $19,272 over the 10-year period, while the average national per capital income in 2000 was $21,587. The report compares this figure to Ft. Collins, which had a similar per capita income in 1990 of $12,883. However, per capita income for this region grew to $21,709 by 2000. In measuring employment, the study found that total employment growth for NCR was the lowest among the benchmark regions, but the region's unemployment rate also was the lowest. Average income and earnings, however, were less than those of the benchmark regions.

With the differences between NCR and the benchmark regions identified, the next steps are to research the causes, according to the report. Based on findings from the study, researchers recommended six issues be included in future research:

  • Future industry mix and industrial policy;
  • Educational attainment;
  • Retention of college graduates in the region;
  • University as a driver for regional development;
  • Regional art and humanities opportunities; and,
  • Care for elderly residents.

[Editor's Note: While the studies of the New Century region are ongoing and policy recommendations have yet to be implemented, SSTI cautions other areas to consider that efforts to increase the number of college graduates - without a strong support system to encourage locally based entrepreneurship and innovation - could result in a brain drain as new grads seek higher-wage opportunities in other metro areas. Virginia Tech and the Greater Roanoke area have a number of recognized tech-based economic development initiatives that should serve integral components for strengthening the NCR regional innovation system.]

The study, Benchmark Analysis for the New Century Region: Lessons from Benchmark Regions, is available at: http://www.regionalstrategies.org