Region's opportunities, perils grow Statistical merger of city-D.C. hailed

October 29, 1992|By Michael Dresser | Michael Dresser,Staff Writer

Members of the Washington-Baltimore Regional Association received a strong dose of economic castor oil yesterday as they gathered to celebrate in advance the region's consolidation into a single metropolitan area.

Economist Charles McMillion,president of the McMillion Business Group, told the gathering in Columbia that the region faces a sharp dichotomy between "incredible opportunity" and "very real structural problems" in the 1990s.

Mr. McMillion said the 1980s were just as "fabulous" as they seemed for the Baltimore-Washington economy, but that the past two years have been every bit as bad as they have appeared.

"Don't look at the unemployment rate, look at the employment rate," Mr. McMillion said. When overall employment is considered, "you seethis has been the longest and deepest recession since the 1930s," he said.

The economist's address to about 200 leaders of Baltimore-Washington businesses and economic development agencies came as the organization met to discuss the effects of an expected federal decision to combine Baltimore and Washington into a consolidated metropolitan statistical area (CMSA).

Wendell L. Willkie II, acting deputy secretary of the Commerce Department, told the W/BRA yesterday that a decision on the matter is expected by the end of the year.

Mr. McMillion cited defense spending cutbacks and the collapse of the region's construction industry as two key factors in the region's economic woes.

The economist challenged business and economic development leaders to face up to the fact that the Baltimore-Washington region's economy is overwhelmingly based on services rather than manufacturing.

"Services are like the Rodney Dangerfield of economics -- they don't get respect," said Mr. McMillion, a former associate director of the Johns Hopkins University Public Policy Institute. "We need to break this idea that services are bad."

The type of service employment that prevails in the Baltimore-Washington area is not the "hamburger-flipper" job that people associate with the term, Mr. McMillion said. Rather, the region is one of the strongest in the world in "producer services" such as law, accounting and engineering, he said.

That, however, is part of the current economic problem, he said. The producer services sector has been hard hit by the recession and by a technological revolution, he said.

While Mr. McMillion's diagnosis of the region's current economic condition was gloomy, he also stressed the tremendous opportunity for those who stay on the cutting edge.

"Customers are movable as never before," he said. Companies that stress value, bringing new concepts to market quickly and tailoring goods and services to individual needs will be able to prosper, he said.

Dennis J. Donovan, a corporate site location specialist, told W/BRA members that the expected consolidation of the two cities into the nation's fourth-largest metropolitan area will be a significant aid to the region's prosperity.

Mr.Donovan, senior managing director of The Wadley-Donovan Group in New Jerseyurged the W/BRA to promote the region as a whole but not to oversell the idea of a single, homogenous region.

"Baltimore and Washington have differences," he said. "These differences are healthy and they provide an array of choice."

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