702 ED-1 DEFINING THE ECONOMIC FUTURE

702.1 The District's economy is underpinned by a handful of core industries, including government (particularly federal government); educational services; professional, technical, and scientific services; administrative support services; religious, grantmaking, civic, professional, and similar organizations; accommodation and food services; arts, entertainment, and recreation; and health care and social assistance. These eight industries account for more than 85 percent of jobs in Washington, DC and distinguish the District's economy in the regional and national economies. Economic development strategies must explore ways to sustain these industries while leveraging them to attract new businesses and jobs. Diversifying the economic base through focused support of fields with high-growth opportunities can expand job opportunities for residents and can increase the District's resilience against economic downturns.

702.2 The District's economy is diversifying, but it is still dominated by the government sector. More than 30 percent of the jobs are public sector jobs, with the federal government directly accounting for approximately 26 percent of total employment, and local government jobs accounting for approximately five percent in 2016. The federal government generates many of the District's private sector jobs because it spends heavily on contracting and procurement from local businesses.

702.3 In the 1980s, federal procurement spending emerged as a major component of the federal government's budget as an approach to reduce its workforce by outsourcing work to contractors on a competitive basis. Federal procurement spending in the metropolitan region increased steadily between 1980 and 2010, when it peaked at $81.5 billion in 1996 after exceeding spending on the federal payroll. Since 2010, federal procurement in the region has declined by approximately 10 percent. However, most of the regional decline has been to spending in Virginia. As of 2016, procurement spending in the District has remained flat since 2010 at $20.5 billion. Additionally, the federal government's employment in the District grew by only three percent, from 192,800 employees in 2006 to 199,300 employees in 2016. The DC Department of Employment Services' (DOES) industry projections indicate that the federal government is not likely to increase its employment in Washington, DC between 2016 and 2026.

702.4 These trends of flat or declining federal employment and procurement in the District are significant, because historically federal spending and employment have accounted for the overwhelming majority of the region's economic growth. This shift marks a major economic transition following generations of sustained growth propelled by the federal government's operations.

702.5 Figure 7.2 shows the District's top 20 private industries in 2017 ranked by numeric change in jobs between 2004 and 2017. Over this period, employment

has grown dramatically but the same industries still dominated the District’s economy, representing 60 percent of all jobs and 89 percent of private sector jobs in the District.

702.6 Figure 7.2: 20 Largest Private Sector Industries in the District of Columbia: 2004–2017 Ranked by Total Employment Change

NAICS Code	Industry	2004	2017	Numeric Change	Percent Change
722	Food services and drinking places	30,483	52,577	22,094	72.48%
541	Professional, scientific, and technical services	93,841	116,041	22,200	23.66%
813	Religious, grantmaking, civic, professional, and similar organizations	44,078	57,548	13,470	30.56%
611	Educational services	35,798	45,892	10,094	28.20%
621	Ambulatory health care services	10,215	20,479	10,264	100.48%
622	Hospitals	22,466	26,917	4,451	19.81%
561	Administrative and support services	41,415	46,387	4,972	12.01%
624	Social assistance	10,696	13,809	3,113	29.10%
238	Specialty trade contractors	5,963	8,490	2,527	42.38%
531	Real estate	9,301	11,661	2,360	25.37%
445	Food and beverage stores	5,483	7,917	2,434	44.39%
711	Performing arts, spectator sports, and related industries	2,759	4,936	2,177	78.91%
812	Personal and laundry services	5,915	7,965	2,050	34.66%
623	Nursing and residential care facilities	7,372	7,482	110	1.49%
814	Private households	4,315	5,216	901	20.88%
515	Broadcasting, except internet	4,374	5,234	860	19.66%
721	Accommodations	14,795	15,111	316	2.14%
999	Unclassified	6,106	2,151	-3,955	-64.77%
522	Credit intermediation and related	8,529	7,209	-1,320	-15.48%

	activities
511	Publishing industries, except internet	9,180	5,563	-3,617	-39.40%
All other private sector Jobs		54,339	56,188	1,849	3.40%
Total private employment		429,176	524,773	95,597	22.27%

Source: U.S. Bureau of Labor Statistics, Covered Employment and Wages (CEW) series; DC DOES Current Employment Survey (CES) series

NAICS = North American Industry Classification System

Note: Total retail employment (which is comprised of several NAICS industries) is estimated at 20,000

702.7 Washington, DC's largest private sector industry is professional, scientific, and technical services, which accounted for approximately 30 percent of the District's private sector employment in 2017. This category includes lawyers, architects, engineers, and accountants. The second-largest category, religious, grantmaking, civic, professional, and similar organizations, includes the many industry, trade, and interest groups in the District. The food services and drinking places industry had among the greatest numeric and percentage increases in employment between 2004 and 2017. The industry added over 22,094 jobs, jumping from the District's fifth-largest industry by employment in 2004 to the third-largest in 2017. Other key sectors are educational services and ambulatory health care, which added 10,264 and 4,451 jobs, respectively.

702.7a Text Box: The Sharing Economy

The sharing economy, which includes businesses that provide shared-use goods and services such as mobility, housing, workspace, and equipment, is expanding and driving innovation in business practices across numerous industries. Its most visible impact has been on transportation through services, such as car sharing, on-demand ride hailing, and bike sharing. It also includes business cooperatives, community farms, and membership workspaces.

702.7b The sharing economy has the potential to reshape the District's built environment and infrastructure by shifting where work occurs and how people move. However, many of the people who deliver the goods and services in the sharing economy are employed as independent contractors, and there are significant concerns related to worker compensation, benefits, retirement planning, and career stability.

702.8 In 2006, forecasts by DOES and research organizations including the Center for Comprehensive Plan

Regional Analysis at George Mason University anticipated the District would add approximately 7,000 new jobs per year on average between 2005 and 2015 These forecasts accurately projected the total amount of jobs that were created across this period.

702.9 The DC Office of Planning (OP) anticipates job growth to maintain a long-term average of approximately 9,000 per year through 2035. OP’s long-term growth rates balance cycles of rapid growth against periods of economic contraction. DOES expects nearly all sectors of the economy to grow during the next decade, but certain retail segments closely connected to neighborhood commercial corridors—such as clothing, furniture, and electronics—are forecast to contract. These contractions are associated with the rise of online retailing.

SOURCE: District of Columbia Comprehensive Plan Act of 1984, effective April 10, 1984 (D.C. Law 5-76; 31 DCR 1049 (March 9, 1984)); as amended by District of Columbia Comprehensive Plan Act of 1984 Land Use Element Amendment Act of 1984, effective March 16, 1985 (D.C. Law 5-187; 32 DCR 873 (February 15, 1985)); as amended by District of Columbia Comprehensive Plan Amendments Act of 1989, effective May 23, 1990 (D.C. Law 8-129; 37 DCR 55 (January 5, 1990)); as amended by District of Columbia Comprehensive Plan Amendments Act of 1989 NCPC-Recommended Amendments, and Closing of Public Alleys in Square 669, S.O. 88-452, Act of 1990, effective May 23, 1990 (D.C. Law 8-132; 37 DCR 2213 (April 6, 1990)); as amended by District Government Land Use Temporary Amendment Act of 1994, effective October 1, 1994 (D.C. Law 10-190; 41 DCR 5360 (August 12, 1994)); as amended by Comprehensive Plan Amendments Act of 1994, effective October 6, 1994 (D.C. Law 10-193; 41 DCR 5536 (August 19, 1994)); as amended by District of Columbia Comprehensive Plan Act of 1984 Land Use Amendment Act of 1994, effective March 21, 1995 (D.C. Law 10-235; 42 DCR 30 (January 6, 1995)); as amended by Technical Amendments Act of 1996 effective April 18, 1996 (D.C. Law 11-110; 43 DCR 530 (February 9, 1996)); as amended by Second Technical Amendments Act of 1996 effective April 9, 1997 (D.C. Law 11-255; 44 DCR 1271 (March 7, 1997)); as amended by Comprehensive Plan Amendment Act of 1998, effective April 27, 1999 (D.C. Law 12-275; 46 DCR 1441 (February 19, 1999)); as amended by Technical Amendments Act of 1999, effective April 12, 2000 (D.C. Law 13-91; 47 DCR 520 (January 28, 2000)); as amended by Comprehensive Plan Amendment Act of 2006, effective March 8, 2007 (D.C. Law 16-300; 54 DCR 924 (February 2, 2007)); as amended by Technical Amendments Act of 2008, effective March 25, 2009 (D.C. Law 17-353; 56 DCR 1117 (February 6, 2009)); as amended by Comprehensive Plan Amendment Act of 2010, effective April 8, 2011 (D.C. Law 18-361; 58 DCR 908 (February 4, 2011)); as amended by Comprehensive Plan Amendment Act of 2021, effective August 21, 2021 (D.C. Law 24-20; 68 DCR 006918 (July 16, 2021)).