DIVERSIFIED TECHNOLOGY BASE, FEDERAL SPENDING FUEL GROWTH IN LOCAL ECONOMY, SAYS HIRESTRATEGY'S PAUL VILLELLA

Herndon VA, March 13, 2001

A diversified technology base and the growth in federal spending are major reasons why the Washington area boasts the fastest-growing local economy in the United States, according to Paul Villella, President & CEO of HireStrategy (www.HireStrategy.com), an executive recruiting firm based in Reston, Virginia.

Speaking at a "Breakfast with the Experts" seminar hosted by Virginia's Center for Innovative Technology (CIT), Villella said: "Our technology economy is incredibly diversified. We have thousands of information technology, telecommunications, biotechnology, fiber optics, broadband, wireless, Internet and technology services firms. With nearly a half-million technology workers, we're truly at the leading edge of the knowledge economy."

Others who spoke at the CIT event included Matt Newton, partner with Columbia Capital, a venture capital firm in Alexandria, Virginia; and Tim Morgan, a partner with PricewaterhouseCoopers in Vienna, Virginia. The program focused on the state of the Washington-area technology economy.

Villella predicted the Washington area will experience a softer landing than the rest of the country as the economy slows over the next several quarters. "We're close to recession-proof here," Villella said, noting that the Washington area's current unemployment rate is less than half the national rate of 4.2 percent.

"Much has been written about the lay-offs of about 6,000 area technology workers in the last six months," Villella said. "But the creation of new technology jobs will continue to outpace the number of layoffs. Our latest Job Opportunity Index (JOI) shows that Virginia (#5) and Maryland (#9) rank among the best states in the nation to find new jobs."

Villella said most technology workers who have been laid off recently have found new jobs rather quickly. "Even with the slowdown in the economy, we're predicting that Washington area companies will add 75-85,000 new jobs this year."

Villella said the federal government purchased $30 billion worth of technology goods and services from Washington area companies last year. "A large and rapidly-growing portion of the federal procurement dollars in the Washington area is going for technology services such as software development, systems integration, and network design, maintenance and operations. Demand for these services will continue to grow under the Bush Administration," Villella said.

"President Bush plans to spend $2.6 billion more on military research and development during the coming year, and a significant share of this $2.6 billion R&D will go to technology firms in Northern Virginia," Villella said.