As reported on Roanoke.com within the final article of a three part series, Greg Feldmann, Executive Director and CEO of the Valleys Innovation Council shared insight about the area’s technology industry.
Over the past couple of years Virginia has undertaken some important introspective studies that have helped the state identify its significant innovation assets, while also recognizing areas of underperformance. Under the auspices of the Virginia’s State Council of Higher Education (“SCHEV”), TEConomy Partners conducted state and sub-regional assessments that led to a number of insights about Virginia’s performance in the innovation economy and generated several strategic recommendations.
On the positive side, TEConomy’s 2016 assessment of the state found that Virginia is a leader in certain aspects of the innovation economy. Virginia has:
• Nearly 448,000 jobs in advanced industries;
• $2.1 billion in venture capital investment in emerging companies, ranking Virginia 4th among all states relative to the size of the state economy;
• $10.5 billion in R&D funding led by federal labs and federal funding, ranking Virginia 13th nationally based on absolute dollars.
Despite these positive findings, TEConomy’s report also found that “the signs of lagging performance in Virginia’s innovation ecosystem are unmistakable.” As evidence for this statement TEConomy offers the following:
• Between 2010-2016 Virginia’s employment in advanced industries grew at a modest 3% while the nation grew at a 14% clip;
• Venture capital levels of investment have flattened in Virginia and have been consistently below the $2 billion level attained only in 2010 and 2016 ($752 million in 2018) while the U.S. level of venture investment grew by nearly 40% between 2010 and 2016;
• Virginia declined in overall R&D funding by 6.3%, or nearly $500 million, between 2010 and 2015, while the national level grew by over 14% during the same period;
TEConomy’s study concluded that Virginia must take action to reverse this underperformance and realize its full potential in innovation-led development. To do this, TEConomy recommended that the state strengthen its university translational research and development capacity, bridge the disconnect between university research and Virginia-based company innovation, enhance regional innovation support capacities to generate more start-ups and advance high growth industries.
To help achieve these goals, legislation to create a new innovation authority that would transform the way Virginia invests in higher education research in emerging technologies, as well as the startup entrepreneurs and companies necessary to create commercial value. As proposed under the working title of the Virginia Innovation Partnership Authority, the new authority would combine the Center for Innovative Technology, the Virginia Research Investment Committee and five other current state-financed initiatives in specific technologies, including the Commonwealth Center for Advanced Manufacturing in Prince George County and the fledgling Commonwealth Cyber Initiative, which has a research node affiliated with Virginia Tech in Blacksburg, into a single authority that could more effectively allocate resources to innovation-led development in the state. The proposed legislation, which has received widespread support and endorsement, will be considered for adoption in the upcoming legislative session.
Assuming passage of the legislation, Virginia will be better positioned channel much needed resources into building a more intelligently designed network of regional innovation ecosystems designed to leverage the unique assets located in areas of the state surrounding translational research being done at our universities and within federal and private research facilities. Our region has already enjoyed material economic benefits of having companies like BlockOne, Harmonia, Luna Innovations, TechLab, VTLS, VPT and TORC Robotics birthed, at least in part, from research activities at Virginia Tech. And more promising companies are being developed and incubated out of research efforts at Virginia Tech and Fralin Biomedical Research Institute. The new authority intends to work with each region within the state to help enhance regional innovation ecosystems in order to accelerate the growth of more tech-based startups and the growth of existing Virginia companies that can leverage the intellectual property being generated by research and development efforts.
Another positive action being undertaken by the state is the GO Virginia Regional Entrepreneurship Initiative (“REI”). Regional coordinating bodies will be producing strategic investment plans that will identify the best ways in which state funding (and other sources) can be channeled to strengthen regional entrepreneurial support mechanisms and boost existing innovation industry clusters. In our Region 2 of GO Virginia, innovation clusters identified in the Regional Growth and Diversification Plan include:
• emerging technologies such as autonomous systems, blockchain, cybersecurity and IT related sectors, which provide nearly 56,000 jobs and generate $5.2 billion in sales in the region;
• life sciences and healthcare, with nearly 34,000 jobs and $4.8 billion in revenues;
• manufacturing (both basic and advanced, with almost 17,000 jobs and $8.7 billion in sales; and,
• food and beverage processing with more than 5,000 jobs and $2.6 billion in revenues.
Valleys Innovation Council will serve in the coordinating role for Region 2 to produce a strategic investment plan and identify the best implementation partners and the resources necessary to successfully execute.
The intent of this three-part series has been to help all those interested in seeing our region grow and prosper understand why it is so critical that we have a vibrant innovation ecosystem that serve as the nesting ground for translational research and technology-based startups.
Both high wage jobs and value creation are the desirable outcomes of adopting long-term, intentional plans for making our region a hub of technical excellence by leveraging and growing world class research capabilities.
We may not become (or want to become) Silicon Valley, but then again as we consider our economic future, we should consider Robert Browning’s quote, “Ah, but a man’s reach should exceed his grasp, or what’s a heaven for.”
If we reach far enough for long enough, our region can become an example within Virginia and across the country of how a small area can be successful with innovation-led development.