We’ve said this before but it bears repeating: The two most interesting places to watch right now are Danville and far Southwest Virginia.
Both communities are taking on a daunting task — to build a new economy after the demise of their traditional industries. Danville is about 20 years ahead of Southwest Virginia, which gives a humbling sense of the scale of the work involved. These are generational enterprises. Still, both communities offer inspirational lessons for others to follow — and both have been in the news lately for important developments.
• Danville. The Southside city hit bottom in 2000 when the textile industry collapsed. That collapse felt abrupt at the time, but had been in the works for decades. Short-sighted politicians blamed foreign trade deals, but the U.S. was never going to be able to hold onto low-wage, low-skilled jobs as developing countries with much cheaper labor reached a certain level of industrialization.
Fast forward two decades — which surely felt long and painful for those involved — and Danville today bills itself as “the comeback city.” There’s enough evidence to suggest this isn’t simply a slogan. In the past year, Gov. Ralph Northam has made five separate announcements about new employers locating in Danville — for a total of 1,473 jobs. We can’t find any other community outside the urban crescent that has had this many job announcements. That’s not a perfect measure, of course. Governors typically make formal announcements when there’s some state role — money from the Governor’s Opportunity Fund, for instance. In the most economically vibrant part of the state, Northern Virginia, governors typically make relatively few announcements because those expansions and locations often happen without any help from Richmond.
Still, the point seems clear: There’s a lot of business activity right now in and around Danville, a city that was given up for dead in 2000.
Nearly half of those jobs came in an announcement last month, which serves to illustrate a lot of different points, including the fact that the economy doesn’t always move in a straight line. In July, IKEA announced it was closing its Pittsylvania County plant and eliminating 300 jobs. That was July 10. That timing proved to be fortuitous. Two days later, a Michigan company that was searching for a place to build delivery vans notified Virginia that it had eliminated sites that it had been looking at in the Old Dominion. Virginia Secretary of Commerce and Trade Brian Ball had a quick response: “We might have another site for you.” The soon-to-be-vacated IKEA plant. Now 703 jobs are headed there — a net gain of 403 for the community.
Stephen Moret, president and CEO of the Virginia Economic Development Partnership, called this “a real Hail Mary pass.” In one sense, that’s certainly true: Corporate courtships usually aren’t consummated that quickly. For that, we can credit a gubernatorial administration that has been quietly attentive to rural Virginia. In another sense, though, this was very typically of what’s been happening in Danville. For that, the credit goes to Danville and Pittsylvania County, which have focused on one of the fundamentals of the modern economy: Developing a high-skilled workforce. Danville’s worker training programs are now so well known that last year, the governor of Arkansas spent a day there with two jets full of officials so he could take those ideas back to his state. Danville’s work is hardly done. Projections show the city is still losing population, although the rate of decline is slower than in previous years. There’s reason to believe the future will eventually be on Danville’s side. We in Virginia may think of Danville as being “in the middle of nowhere” — no interstate highways, for instance – but that’s too narrow a view. It’s actually on the outer orbit of North Carolina’s Research Triangle. As that grows — and becomes more expensive — Danville is in a position to pick up spin-offs looking for lower-cost locations. It’s already attracted some tech companies that way. Geography is on Danville’s side. That brings us to a part of the state where geography is not an ally:
• Southwest Virginia. Throughout Appalachia, there’s been a lot of denial about the future of coal. Sadly, President Trump has exacerbated this, coming to campaign in Southwest Virginia in 2016 and declaring that “We’re going to bring back King Coal. We’re going to bring it back.” No, he’s not. The free market is waging its own “war on coal.” More coal-fired plants closed during Trump’s first two years in office than in Barack Obama’s entire first term. Overall, the U.S. now generates more electricity from renewables than from coal — the former is rising; the latter is declining.
Southwest Virginia is late in answering this challenge but it is responding in ways that we don’t see in other coal-based communities. The otherwise pro-coal Republican legislators who represent the region are now pushing both renewables and a tech-based economy. The four legislators from the state’s southwestern tip — Ben Chafin, Terry Kilgore, Israel O’Quinn and Todd Pillion — have essentially become quasi-executives for the purpose of promoting economic development. Since many tech companies specifically prefer renewable energy — not something previously associated with the coalfields — they’ve set out to remedy that. They’ve created a state authority that they hope (still an aspirational word) can promote energy research in the region, which they fully understand will mean renewable energy. They’ve been behind creating a single group — InvestSWVA — to promote the region. That group, in turn, has singled out the technology community in Northern Virginia with an eye toward attracting data centers and other tech spinoffs.
Last month, Northam brought three Amazon executives to Wise County — a noteworthy bipartisan collaboration. It’s too early to tell what will come of this, but it’s worth pointing out that Southwest Virginia is the first region outside Northern Virginia to make its case for why Amazon’s HQ2 should direct some jobs their way. And, by all accounts, it did so in a polished, business-like way. That’s the kind of creative thinking we haven’t previously seen in rural Virginia.
It make still take decades to build a new economy, but you’ve got to start somewhere. That’s why Danville and far Southwest are the two most interesting places to watch right now — and in the years to come.