Maps can tell stories just as words can. Highway maps, once folded in glove compartments and now speaking to us from phones, tell us where to go. Election maps help illustrate all the ways the nation is divided. Now here’s a different sort of map: a map of Virginia’s economic geography.
Spoiler alert: It’s not very pretty.
The occasion is the release of two annual lists: the Fortune 1000 list of the nation’s top corporations by total revenue (which came out in May) and the Inc. 5000 list of the nation’s fastest-growing privately held companies (which came out in August).
None of the results are particularly surprising, but sometimes we get so desensitized to reality it’s worth taking a step back and looking anew at the world around us.
Some 34 Virginia companies made the Fortune 1000 list; 21 of those are also on the more elite Fortune 500 rankings. The highest-rated Virginia company, at No. 56, is the McLean-based Federal Home Loan Mortgage Co., aka Freddie Mac. At No. 96 is Falls Church-based General Dynamics.
Here’s the cartological aspect to this list: Twenty of the 34 Virginia companies on the list are in Northern Virginia, 11 are in the Richmond area and two are in Hampton Roads. Only one is outside the urban crescent – BWX Technologies in Lynchburg barely makes the list at No. 995.
Now let’s move on to the Inc. 5000 list. Those rankings include 258 Virginia companies. The highest-rated is Richmond-based Summit Human Capital, which comes in at No. 20. Here’s how the state’s economic geography shakes out: Of those 258 companies, 185 are in Northern Virginia. Thirty-one are in the Richmond area, 16 in Hampton Roads. In all of Southwest and Southside, only six companies make the list – three in Roanoke, one apiece in Lynchburg, Radford and South Boston.
Those six and their rankings:
976: CloudFit Software, Lynchburg
1,966: Alcova Mortgage, Roanoke
2,025: Acceleration Point, a software company, Roanoke
2,236: Rogers Heating & Cooling, South Boston
3,797: Orsani, which makes air purifiers, Radford
4,909: Southern Trust Home Services, Roanoke
Here’s another way to look at that map: There’s not a single company on the list west of the New River Valley. None in Danville and Martinsville.
Again, maybe none of this is surprising, but it still paints a clear (and sometimes painful) picture of how unevenly distributed Virginia’s economy is. We don’t have Fortune and Inc. lists from the distant past but we also don’t necessarily need them. We know that at one time Danville was home to the largest textile mill in the South, that Bassett Furniture in Henry County was one of the largest furniture makers in the world and that Roanoke was once the headquarters city of the Norfolk & Western Railway.
As recently as 1969, Martinsville had a higher median household income than Charlottesville – $8,118 to $7,758. Today, it’s far lower – $36,116 to $59,598. It’s not just that the economy has changed – the economy is always changing – but that it’s changed in ways that have created bigger gaps between rich and poor. Usually that is discussed in terms of people, but it’s true for communities, too. In 1969, the state’s poorest locality was Lee County, with a median household income of $3,471, and the most affluent was Fairfax County at $14,854 – meaning that the state’s richest county was 4.2 times richer than its poorest. Today the state’s poorest locality is Emporia, with a median household income of $27,063, and the most affluent is Loudoun County at $142,299 – so the rich-to-poor gap that in 1949 was 4.2 is now 5.2. Hamilton Lombard, a demographer with the University of Virginia’s Weldon Cooper Center for Public Service, points out that Virginia has the largest income gap of any state in the country. In fact, 33 counties or cities in Virginia have a larger income gap with our wealthiest county than can be found in any other state.
Those numbers from the Census Bureau are one way to express the disparity; the Fortune 1000 and Inc. 5000 lists are another way to view it. We shouldn’t begrudge places that have done well but, from a policy standpoint, it doesn’t seem healthy to have so much economic growth on one side of the state and so little on the other. So the question becomes: What can we be doing now to build a stronger economy in the parts of Virginia that have been left behind? Don’t expect an easy answer to that. In many ways, much of the coverage and commentary at Cardinal News is dedicated to that question. My purpose today is simply to use a different set of data to illustrate the different economic realities between different parts of Virginia.
There is one other way to measure the economic geography of Virginia – and perhaps its future economic geography. That’s through the awards made by the Virginia Innovation Partnership Corporation’s Commonwealth Commercialization Fund, which gives grants to promising young tech companies.
Of the 54 awards made so far this year, 24 have gone to firms in Northern Virginia; eight to Richmond; five apiece to Hampton Roads, the New River Valley and the Roanoke Valley; three to Charlottesville; and one apiece to companies in Dickenson County, Harrisonburg, Lynchburg and Southampton County.
Of 34 awards in 2021, 12 went to Northern Virginia; 11 to the Charlottesville area; four to Richmond; two apiece in Hampton Roads, the New River Valley and the Roanoke Valley; and one to Lynchburg.
Of 25 awards in 2020, six went to Charlottesville, four to Northern Virginia, five to the New River Valley, four to Hampton Roads, three to Richmond, two to the Roanoke Valley and one to Accomack County.
That means over the past three years, the grand total shapes up so far as: Out of 113 awards, 40 went to Northern Virginia, 20 went to Charlottesville, 15 went to Richmond, 12 to the New River Valley, 11 to Hampton Roads, nine to the Roanoke Valley, two to Lynchburg, and one apiece to Accomack County, Dickenson County, Harrisonburg and Southampton County.
We don’t know how many, if any, of these companies will grow into future Inc. 5000 companies or even Fortune 1000 companies. But we do know that this list has a somewhat different geography. Northern Virginia still dominates, just not as much. Charlottesville has a distinctly bigger presence – so, too, for our purposes do the Roanoke and New River valleys. If anything, the Roanoke and New River valleys are punching above their weight, posting numbers similar to much-bigger Hampton Roads and not that far behind Richmond. Many of these companies in the Roanoke and New River valleys are life sciences companies, which attests to the region’s growing life sciences cluster that we’ve written about before. Still, we see other parts of Southwest and Southside not growing any companies that have merited such funding. This speaks to the need to “spread the digital wealth” that the congressman from Silicon Valley, Rep. Ro Khanna, D-California, had addressed both in his book “Dignity In a Digital Age” and his June appearance in Blacksburg as part of the Cardinal News Speaker Series.
All across this part of the state (and no doubt further beyond), we see groups that have sprung up to encourage entrepreneurship. We see pitch competitions and coworking spaces, incubators and accelerators, from the five-year old RAMP (Regional Accelerator and Mentoring Program) in Roanoke, the region’s biggest metro (see our previous story), to places as small as Clincho in Dickenson County which wants to set up a “Tiny Business Village” where entreprenuers can get their start. Danville has even taken to staging a “Start Up Slam” – modeled after so-called poetry slams – where entrepreneurs pitch their ideas to a paying (and voting) audience, with the winner taking home all the cash. This is the context in which these things are happening. The challenge is to change that big gap in the state’s economic geography that the Fortune 1000 and Inc. 5000 lists so clearly highlight.