the Virginia Income growth rate was higher than that of the US. But after 1990
it is almost the same as the rest of country. Per Capita income is an estimate
of income available for each person in Virginia or US on average. Graph 9 shows
regional and national per capita income. Graph 9 US and Virginia Per Capita
Income 1975-1997 Virginia Per Capita Income is higher than that of the US since
1983. This shows that there is more income on average for each person in
Virginia than in US. As it was maintained before Virginia?s wage and salary
rate is lower than in US, but so does unemployment rate. The lower Unemployment
rate stimulates high per capita income, even with low wage and salary rate.
Graphic description of Virginia regional model is presented in Appendix B
Analysis Virginia is a region of fast growing economic activities and
development. Virginia offers a number of advantages for business. The state is
centrally located on the Eastern Seaboard Effective economic development depends
on elements with which Virginia is richly endowed. Location is one of them. Over
50% of the total U.S. population is within 500 miles of Richmond, Virginia’s
capital. As a measure of its economic stability, Virginia balanced its latest
budget without raising taxes, one of only two states to do so according to
Financial World magazine, and was recognized by that publication as the nation’s
best managed state. Development of the region runs on infrastructure, and in
this category, Virginia boasts nearly 1,100 miles of highways, 3,300 miles of
rail Roads, and Dulles International Airport. The daily confluence of goods and
services across this network paints a portrait of economic development at its
most sophisticated level. Nowhere is this more apparent than at Hampton Roads,
the country’s largest natural deep-water port that in 1991 accounted for 73
million tons of foreign trade — a figure that is still growing. The education
institutions are very developed in Virginia. Virginia has 84 institutions of
higher learning. Twenty-three of these are community colleges on 34 sites
offering training in the business discipline as well as advanced vocational
training. In 1991, more than 2,600 students in Virginia’s colleges and
universities earned degrees in the field of engineering — creating a talent
pool essential to nation’s high-tech future. The overall performance of
Virginia? economic indicators is shown in Table 1 Table 1 Economic Indicator
General state Period when higher than US indicator Output Growth rate Average
1980-1988 Per Capita Output Average 1984-1997 Population Growth Higher than
average 1983-1997 Employment growth rate Average 1982-1988 Unemployment rate Low
– Wage and salary rate Low — Income Growth rate Average 1980-1989 Per Capita
Income Average 1982-1997 As can seen for Table 1 period form 1980-1990 can be
characterized as a period of fast economic growth. In this period economic
indicators of Virginia were higher that in the US. After 1990 there is some
decrease in economic development of the region. This decrease in economic
activates could be explained by some specialization of state of Virginia. One
out of five jobs in Virginia is a civilian government position. Though federal
civilian employment has been in a steady decreasing since 1992, rising state and
local government employment has offset these losses. In 1997 and 1998, civilian
government employment in Virginia will actually experience a net growth of about
1 percent, the report predicted Virginia’s economy depends heavily on its
defense industries. Though period 1980-1990 the defense industry was in
prosperity, a lot of money was invested during presidency of R. Raygan and
period of Cold War. Since 1990 Virginia had experienced few rounds of defense
cuts that influenced the economic situation of the region. But there are some
efficient state conversion program is helping to prepare for coming defense
spending cutbacks. With its concentration on electronics and shipbuilding,
Virginia has been spared the first round of defense. The Virginia plans to
soften the blow of defense. The good example of this is Northern Virginia aria.
It is the most developed part of Virginia. Companies in telecommunications;
Internet applications; systems development, integration and implementation; and
the chemical and biomedical industries have all either relocated or created
offices in Northern Virginia. The area is also home to nonprofit agencies and,
of course, government agencies. Conclusion Economic situation of the region can
differ from national depending on performance of regional economic indicators.
The economic factors that can economic performance of the region that were
presented in this paper are Regional Output, Population, Employment,
Unemployment rate, Wage and Salary rate, and Personal Income. These economic
factors are the main variables of regional economic model that presented in this
paper. Appendix B is the graphic interpretation of the mode. It gives the idea
of relationships that exists in among variables. One of the most impotent
economic indicators of the model is output of the region. It determines the
demand for labor in the region and it is the main source of income for
population. So the high regional output generally implies the high economic
performance of the region. In order to make conclusions about the level of
performance of the region it is useful to compare it with national economic
performance. In this paper Virginia state economic indicator were compared to
US. The Virginia performance could be caricaturized as an average relative to
US. Virginia?s advantage is that Unemployment in this state is lower than in
US. Wage and Salary rates is slightly lower than in US, but Per capita Income
still increases average Per capita Income of US. For some period of time
(1980-1990) Virginia Economy was booming: all economic indicators showed better
performance of the region. This could be explained by increase in government
expenditures on defense industry (the significant of economy of Virginia) in
1980?s. The decrease in economic activity of Virginia began with defense
spending cutbacks in 90?s. But this situation is changing now because of new
arias with developing high technology industries and business sectors like
Northern Virginia.
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16, 1999 11. Richard Meyer: Of swords and plowshares: how Virginia plans to
soften the blow of defense cutbacks on its economy. Financial World, June 8,
1993