Revving up “Pentagon South”

It looks like Hampton Roads is moving towards an “Economy 4.0” paradigm: mobilizing resources to build its defense-industry cluster rather than opportunistically chasing any old business-relocation opportunity that comes down the pike. The Hampton Roads Technology Council and the Defense & Homeland Security Consortium have launched an initiative to promote the region as “Pentagon South.”

Outside of Northern Virginia (and possibly Southern California), Hampton Roads is home to the largest defense-industry cluster in the United States. Hampton Roads is the largest center for military shipbuilding and repair in the country (which makes it the largest in the world). Outside the shipbuilding sector, however, most private-sector defense businesses once consisted mainly of field offices serving local military clients. But the size and scope of defense-related business have grown steadily over the years to encompass “systems integration, analysis, innovation, solutions and services across multiple disciplines.”

Illustrative of the “new” defense sector in Hampton Roads is the up-and-coming modeling & simulation cluster in Suffolk, the ultimate in sophisticated information technology.

The Pentagon South initiative combines a number of components: (a) provide necessary training and workforce development, (b) create networking opportunities for businesses in the sector, and (c) to brand the region nationally and internationally. (Read the list of goals here.)

This initiative makes sense. Not only does Hampton Roads have a strong military presence and defense-industry cluster to build upon, it enjoys a significantly lower cost of doing business and lower cost of living than competing defense-heavy regions. Equally important, Pentagon South organizers are attentive to the “soft infrastructure” needed to support a growing industry. The preliminary indications are very positive.

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  1. Anonymous Avatar

    Can you explain the “4.0” moniker? I thought that “2.0” meant somehow going from networks of PCs to the Internet. You seem to be saying you are jumping two steps ahead. That so?


  2. Anonymous Avatar


    Search Bacons Rebellion. Jim Bacon has authored perhaps 10 columns on his Economy 4.0 theme.

    V. 2.0 has a lot of meanings.

    Forinstance check out the conference now going on in San Franciso re Web 2.0. (of which this Blog is part).

    BBC has the story.

  3. Jim Bacon Avatar
    Jim Bacon

    Peter, here are my definitions of the different economic development paradigms:

    Here is how I dissect the evolution of economic-development paradigms in Virginia over the past 40 years.

    Economy 1.0: Buffalo Hunting. The industrial- recruitment model of the 1960s, ’70s and ’80s achieved economic growth by recruiting outside manufacturing: bagging the trophy quarry. Municipalities and regions focused on (1) marketing to corporations, and (2) building industrial infrastructure, primarily Interstate highways, rail lines, industrial parks, water, sewer and electrical power. As long as there was abundant unskilled and semi-skilled labor, there was little need to worry about human capital.

    Economy 2.0: Safari Hunting. In the 1980s, some economic developers began updating their industrial- recruitment model for the service economy. They didn’t chase just smokestacks anymore — they went after back-office operations, call centers, distribution facilities, even corporate headquarters. Like safari hunters, they hunted anything that moved.

    Corporate requirements became more sophisticated. Broadband Internet access joined the list of “must have” infrastructure. Service companies typically had specific skills requirements, so economic developers became more attuned to the nuances of labor markets, collaborating with high schools and community colleges to ensure that workers could acquire those skills.

    Economy 3.0: Tending the Garden. The shift from the “hunting” model to the “grow your own” model took root in the 1990s. According to this line of thinking, fast-growing, entrepreneurial companies — gazelles, as MIT economist David Burch calls them – are the greatest job creators in the U.S. economy. Drawing upon the success of Silicon Valley and the Boston area, NUR leaders began thinking about “soft” infrastructure such as research universities, incubators and networking groups, to encourage entrepreneurial start-ups, and gave more attention to the small-business tax and regulatory climate.

    Economy 4.0: The Creative Class and Sustainability. Economy 4.0, the economic development model that advanced New Urban Regions are now moving towards, contains all the elements of the previous models — and more. Savvy NURs still recruit corporate investment, build and maintain hard infrastructure, tend to the soft infrastructure and nourish a business climate where entrepreneurs can thrive. But Economy 4.0 adds a new component: the systematic building up of human capital.

    Now that you bring it to my attention, this Hampton Roads initiative is illustrative only of an Economy 3.0 paradigm. The region has yet to advance to the 4.0 paradigm.

    I’ve got to brush up on my own terminology!

  4. Anonymous Avatar

    We’re reaching the point of Germany’s Mittelstand from the 19th century?


  5. Anonymous Avatar

    This sounds like a lot of corporate welfare speak, if you ask me.

  6. Larry Gross Avatar
    Larry Gross

    close… I think it was Eisenhower who called it the Military Industrial Complex…

  7. James Atticus Bowden Avatar
    James Atticus Bowden

    Actually, it is a variation of the Chamber of Commerce boosterism.

  8. Groveton Avatar

    God speed to Tidewater in building out an expanded technology-based economy.

    Please call any of us in NoVA if you want to know what not to do with land use and transportation. Maybe time for some bumper stickers:

    Don’t NOVA Tidewater

    And, once that great sucking sound from “Richmond” gets a bit more audible – give us a jingle. Let’s talk about the GA and Judge Dillon.

  9. Anonymous Avatar

    The Defense and Homleand Security Consortuim (DHSC) was my idea. “Pentagon South” was suggested by the CEO of KIS computers and adopted by the founding members of the DHSC.

    -Reid Greenmun

  10. Larry Gross Avatar
    Larry Gross

    Is the motto: “We gladly consume Fed tax dollars”


  11. Jim Bacon Avatar
    Jim Bacon

    Reid, the Consortium was your idea? Good job. You guys are heading in the right direction.

  12. Anonymous Avatar

    Thanks – I do other stuff besides being one of those pesky “anti-taxers”, LOL!


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