Smart growth:
Universities and state agencies work together to strenghten Virginia's economy

by Doug Childers
for Virginia Business
August 2007

Universities are often viewed as havens for academia, where faculty are far more immersed in books and ideology than business realities. But universities can be powerful economic engines, playing a key, if often unseen, role in driving local and state economies.

A tech-savvy university can be the deciding factor for high-tech companies looking to expand. When nonprofit research institute SRI International considered where to build a biotech research center, the presence of James Madison University distinguished Rockingham County and Harrisonburg from other sites. The Menlo Park, Calif.-based group's Center for Advanced Drug Research will study and develop new diagnostics, therapeutics and vaccines for infectious disease and biodefense.

Several partners worked together to recruit SRI, including JMU, the Shenandoah Valley Partnership, the Virginia Economic Development Partnership (VEDP) and officials from Rockingham County and Harrisonburg. "From the beginning, this was a team effort," says Robin Sullenberger, chief executive officer of the Shenandoah Valley Partnership. "JMU came early and energetically to the table."

SRI's center in Rockingham should be finished in the second quarter of 2009. Currently, SRI is using offices on JMU's campus, and the university is preparing lab space for SRI.

During the next 10 years, SRI expects the center to create 140 new jobs, which could lead indirectly to an estimated 400 jobs and an infusion of $160 million into the local economy.

The SRI project is JMU's biggest economic development project so far, says John Noftsinger, the university's associate vice president of academic affairs for research and public service. "It really is going to be a regional transformative event. The secret's out about the Shenandoah Valley."

The Center for Advanced Drug Research is just one recent example of economic development success at Virginia's universities. In 2005, Virginia Tech partnered with several groups to persuade Corning Inc. to invest $12 million in its Danville plant. The university also worked with Virginia Secretary of Commerce and Trade Patrick Gottschalk, the VEDP, the city of Danville, the Workforce Services division of the Virginia Department of Business Assistance, Virginia Secretary of Technology Aneesh Chopra and the Institute for Advanced Learning and Research.

"The Danville plant had a large proportion of mature products and also a specialty focus on short-run new product development, and there was a desire to bring on some new products for the Danville plant that would be good for Corning's business," says Tim Franklin, executive director of the Danville-based Institute for Advanced Learning and Research and a Virginia Tech employee.

Franklin says the institute, which Virginia Tech helped create five years ago, was crucial because it demonstrated the role research can play in stimulating economic development in the region. "The [Gov. Timothy M.] Kaine administration then said, ‘We're going to help stabilize and grow this key corporate citizen with this group that's already in place.' "

Corning's commitment will create 50 new jobs and help stabilize employment in the Southside region. Virginia Tech has also formed a research and development partnership with Corning and the Institute for Advanced Learning and Research. Full-time and adjunct faculty from Virginia Tech lead all the institute's research programs.

In Southwest Virginia, the University of Virginia, U.Va. College at Wise and Virginia Coalfield Economic Development Authority are working together to stimulate the local economy.

As a part of the plan, the College at Wise is offering the commonwealth's first software engineering degree, with support from U.Va.'s engineering school. The global defense and technology company Northrop Grumman and IT and business process services provider CGI have plans to create more than 700 jobs in Lebanon in Russell County, and the new degree program will help work-force development there.

In Richmond, recruitment efforts to cement Philip Morris' position in the city are about to pay off. The company is scheduled to open its 450,000-square-foot, $350 million research center in the Virginia BioTechnology Research Park. Virginia Commonwealth University was a founding partner of the park.

Officials from the biotech park and VCU initiated the first meetings with Philip Morris in August 2004 and were soon joined by city and state representatives.

Robert T. Skunda, president and chief executive officer of the biotech park, says VCU's proximity is a major reason companies move to the park. "Without VCU's leadership, the park wouldn't be a reality."

For the last three years, economic development officials at Virginia's universities have been meeting three or four times a year to fine-tune their recruitment efforts. Currently, 14 educational institutions participate. VEDP has been involved with the group since its second meeting. Other state agencies — including the Virginia Department of Business Assistance, the Virginia Department of Housing and Community Development and the Virginia Tourism Corp. — often join them.

"The purpose of the group is to create an economic development system that fully integrates higher education and the state, regional and local economic development organizations," says Ted Settle, director of Virginia Tech's Office of Economic Development.

"It's necessary for the commonwealth to align its message around Virginia's core research strengths, build a systematic relationship between the commonwealth's economic development team and the universities and leverage those core strengths into business-created jobs and investment," says Liz Povar, VEDP's director of business development. "That solid link between business, universities and the economic development team is the foundation for Virginia's long-term economic success — and the success of the United States, for that matter."