Layoffs impacting government and contracting jobs are hitting the D.C. region’s job market hard, with concerns the Northern Virginia unemployment rate will skyrocket.

The sweeping layoffs impacting federal government and contracting jobs is hitting the D.C. region’s job market particularly hard, with concerns that the unemployment rate in Northern Virginia will reach levels not seen since the pandemic.

A new report released Monday by the Northern Virginia Chamber, in collaboration with the global professional services company Accenture, aims to offer a way to reverse the jobs trend and reignite growth going forward.

The road map states four goals, with lots of recommendations it believes will help in meeting those goals. First and foremost, the report calls for a reinvention of the region’s economy, which it said has been overly reliant on the federal government.

While it doesn’t mean the region should ignore the federal infrastructure already in place, the report states there should be more focus on luring artificial intelligence and quantum computing, as well as other tech companies. It also recommends expanding the region’s energy capacity.

“It’s a real call to action to think differently about our future, more specifically around reinventing our economy to the economy of the future, some of which is very much here today,” said Julie Coons, president and CEO of the Northern Virginia Chamber.

“Things like AI, quantum computing, biotechnology, life sciences, robotics and really — how do we expand those? Really double down on those industries? And how do we bring our workforce along with us?”

The report estimates that in the years ahead, AI will be a $3.8 trillion industry worldwide. And it argues that claiming just 2% of that industry would be worth tens of billions of dollars, or more.

“Our region is leading the country with knowledge workers,” said David Metnick, managing director at Accenture, which helped conduct the report. “This notion of AI being all about machines and less about humans — I think this region is about human plus machine.”

The second goal listed in the report focuses on making it more affordable to live in the D.C. area, especially for younger workers that would help drive the economy of the future.

The chamber is calling for changes to zoning laws that would allow denser, multifamily units in the region, fewer regulations that would then speed up the building process, and even suggests making it easier to build modular and microhousing.

Those proposals that would be sure to raise questions among environmentalists and others who are living in the region.

“If we all think it’s a problem, we have to come together and find a solution, and the solution is … supply,” Coons said. “We simply don’t have enough.”

Making child care more accessible and affordable is also part of the affordability target discussed in the report.

“We knew that affordability, which is principally housing access, as well as cost of child care, were an impediment to our growth,” Coons said. “Now more than ever, we have got to find solutions there.”

The chamber also said the region needs to streamline permitting and modernize the tax structure — something Coons described as antiquated — by moving away from taxing gross receipts and instead focusing on profits. The current model penalizes growing and low-margin businesses, while discouraging local expansion of businesses, Coons said.

Lastly, the report suggests a rebranding for the region, arguing that not nearly enough is spent to market Northern Virginia to companies around the country, compared to other locations such as Austin, Texas, which Virginia competes with for business.

Some of the proposals could be turned into policy within a year’s time. Other recommendations could take a lot longer, and require more debate. Coons said, overall, this road map is a 3-5 year plan for the region.

“We’ve got to take the reins and say, ‘How are we going to, as regional leaders, local and state and communities, really expand these economies of the future here, as opposed to maybe someplace else? That’s a whole set of decisions and conversations we’ll have,” Coons said.

“But let’s grow the AI industry here. Let’s grow the robotics industry here. Let’s expand the life sciences that we do have — that’s the intentionality of what we’re talking about.”

Get breaking news and daily headlines delivered to your email inbox by signing up here.

© 2025 WTOP. All Rights Reserved. This website is not intended for users located within the European Economic Area.