Servicing Our Economy: Producer Service Location and Government Procurement 2004–2010 in the Washington DC Metropolitan Area

Abstract

Harrington and Campbell (1997) previously illuminated the pattern of producer services' suburbanization in the Washington, D.C., metropolitan area between 1970 and 1992. Their results showed producer services growing at a faster rate at locations farther from the central city. We revisit the topic utilizing data from 2004 to 2010, assessing not only changes in the distribution of producer services since their work, but also the impact of massive increases in defense spending on producer services' growth throughout the first decade of the twenty-first century. Multivariate linear regression is used to estimate per capita growth of producer services employment using six independent variables. Our results reveal producer services employment during the time period has grown significantly more quickly in the urban D.C. core than the outer suburbs, contrary to Harrington and Campbell's research. Additionally, we find per capita producer services employment is self-limiting over the study period: locations with more producer services employment in 2004 experienced significantly less producer services growth over the period. We find federal procurement has no correlation on producer services overall, with limited effects on some subsectors. Analyzing a select group of producer services subsectors revealed that no sectors followed the overall model exactly, suggesting that targeting producer services for growth must be done carefully. None of our models show employment diversity to be a factor in differentiating economic growth at the intra-metropolitan level.

Employment Contribution of Producer Services—A Case Study of Beijing

“…The results revealed producer services employment grew significantly more quickly in the urban D.C. core than the outer suburbs, contrary to Harrington and Campbell's research. Additionally, they found per capita producer services employment was self-limiting over the study period: Locations with more producer services employment in 2004 experienced significantly less producer services growth over the period [13]. Roland (2001) studied the employment structure of producer services in economically undeveloped areas of American Journal of Industrial and Business Management Canada, and found that the relative labor intensity of producer services in these areas was lower than that in large central cities [14].…”