The New CIT - Overview

Today's business climate is increasingly characterized by its intense competition, a bewildering rate of change, an incessant drive for quality improvements and continuous innovation all within the context of an interdependent and sometimes volatile marketplace. Virginia goods and services must now compete not only with those from other states, but with goods and services from around the world.

Among the fastest growing businesses are those aimed at producing technology-based products and services that require higher levels of knowledge and skill to produce. But these businesses require advanced technology infrastructures, a well-trained work force, and knowledge-based business support systems substantially different from more traditional industry requirements. Virginia can compete in the attraction, creation, and retention of high technology companies and its manufacturing industry if it can fully access, deploy and enhance its considerable technology resources. Guided by this three-year plan for 1995-97, Virginia's Center for Innovative Technology (CIT) will assist Virginia and Virginia companies in being competitive in a global economy by:

• expanding access to all the Commonwealth's science and technology resources including Virginia's colleges and universities, federal laboratories, and private sector resources;

• focusing on technology-based business and manufacturing by organizing regionally and by industry sector;

• serving as a catalyst for technological innovation and using partnerships to broaden its programs and services;

• building upon ten years of experience in enhancing the research and development capability of Virginia; and

• being more accountable, efficient and effective.

Historical Context of CIT

Virginia's Center for Innovative Technology was created by the General Assembly in 1984 as a private, nonprofit corporation to enhance the research and development capability of the state's major research universities in partnership with industry.

Over the past decade CIT has implemented that original legislative intent by bringing Virginia businesses and institutions of higher education into relationships that promote a climate of collaboration and technological innovation:

• CIT has co-funded 836 research and innovative technology projects at Virginia's public universities, involving 786 companies which have attracted over $155 million in private and other funds for Virginia universities;

• CIT has established 13 technology development centers and institutes at Virginia's research universities, increasing R&D capabilities in such leading-edge technologies as fiber-optics, composite materials, advanced computer technology, biotechnology and wireless communications;

• CIT's technology assistance and transfer program, based primarily at Virginia community colleges, has completed over 1,900 industry projects, often with the assistance of college and university faculty; and

• CIT was instrumental in raising Virginia's ranking among the states from 28th to 6th in the number of patents issued to universities and nonprofit institutions from 1987-1993.

Now, ten years after CIT's founding, Virginia faces increased competition from other states and countries in an era characterized by faster technological innovation. Virginia and CIT must enhance the Commonwealth's ability to compete globally. The new CIT recognizes this challenge and embraces it.

CIT's New Mission

Building upon its strength in fostering partnerships between Virginia businesses and higher education, the new CIT will enhance the Commonwealth's competitiveness by providing business with access to the state's technology resources and assisting in the creation and retention of high technology jobs and businesses.

Guided by recently amended legislative mandates, the new CIT will:

• assist in creating or retaining 6,000 jobs and be instrumental in starting, retaining or converting 150 companies by the end of 1997. During this same period, 1,500 companies will be assisted in improving their competitiveness and these companies will report an economic impact of $100 million during the first year after receiving these services;

• increase industry competitiveness by supporting the application of innovative technologies that improve productivity and efficiency;

• mobilize support for high technology industries to commercialize new products and processes, including organizing assistance for small business and supporting select industry sectors and regional high technology efforts;

• promote economic development in Virginia by attracting and retaining high technology jobs and businesses;

• enhance and expand the R&D capabilities of Virginia's colleges and universities, including transferring technological advances to the private sector; and

• capitalize upon the presence of federal labs and the technology resources within the Commonwealth.

Two key strategies will be employed throughout CIT's activities. First, CIT will act as a catalyst. CIT's involvement will help start a project, initiate the involvement of others, demonstrate the feasibility of a concept or idea. Second, CIT will act in partnership with others to accomplish mutual objectives. Most services will be provided by CIT staff acting as facilitators to bring together other partners, whether in colleges and universities, in the federal labs, or in another company, to solve a problem or create a resource.

CIT has been very active in the Opportunity Virginia task force, providing technical advisors in some of the industry groups and serving on the steering committee. CIT is prepared to play a leadership role in the implementation of the recommendations of Opportunity Virginia as they affect the technology community. In addition, CIT will work with the Virginia Technology Council and the Science and Technology Task Force providing leadership in the development of a strategic plan for science and technology in the Commonwealth.

CIT, through its Board of Directors, will report regularly to the Governor and General Assembly on its progress towards milestones established annually. Performance will be measured in terms of economic growth indicators such as jobs and companies assisted.

The New CIT's Customers are Businesses

To meet the objectives set out above, CIT will work with technology-based businesses and manufacturers in Virginia.

Technology-based businesses are defined as those which develop and/or commercialize new technology, provide value-added services or products to existing technology products or services, or have proprietary intellectual property that make them unique in their markets.

CIT will serve technology-based companies in five key industries. The industries chosen reflect several priorities. First, these industries have been identified by the Virginia Chamber of Commerce and the Opportunity Virginia task force as being key to Virginia's future. Second, in each of these industries, Virginia has a significant competitive position in relation to other states, especially in terms of expertise within the business community, the universities and in federal laboratories in the state. Finally, each of these industries has the potential for significant growth as Virginia enters the next century.

The industry sectors are:

• Information Technology and Telecommunications
• Biotechnology and Medical
• Energy and Environmental
• Aerospace and Transportation
• Advanced Manufacturing/Electronics

Through helping to create the Virginia Alliance for Manufacturing Competitiveness, CIT will serve the more traditional manufacturing sector of the Virginia economy by assisting with the acquisition and application of new technologies that make these businesses more productive and globally competitive.

CIT Will Help Its Customers Meet Competitive Challenges

The new CIT will provide a balanced portfolio of services to address the unique challenges that will directly promote the creation and retention of high technology jobs and businesses in Virginia. The CIT services draw upon higher education, federal laboratories and other partners to deliver appropriate solutions to businesses. As such, they complement, but not duplicate, services offered by other state agencies and federal programs.

The challenges that technology-based businesses and manufacturers face are:

• Acquiring or developing new technologies
• Integrating new technologies into products and services
• Bringing new products and services to market
• Applying innovative technologies that improve productivity and efficiency

Virginia Business Challenge #1: Acquiring or Developing New Technologies

CIT will help businesses acquire and develop new technologies to start a business, add new products or turn a business in a different direction, e.g., defense conversion. In highly competitive technology businesses, new products and technologies are the keys to continued growth, and job creation and retention.

• CIT will assist companies developing new technologies in-house, but requiring some additional expertise. CIT will link companies with universities, federal labs or other companies to provide this expertise.

• CIT will license technologies from universities and other technology resources to companies in Virginia.

• CIT will assist companies with locating and obtaining technologies from federal laboratories.

CIT recognizes that the universities are an important source of new technologies, but not the only source in the state. The new CIT will strive to solve business problems by bringing the most appropriate resources to bear. Also, there will be new accountability measures introduced in this area, a stronger emphasis on serving Virginia businesses and on projects with near-term payoffs.

Virginia Business Challenge #2: Making a Technology into a Product

Technology acquisition is only one step in getting a new product to market. Often the later stages of product development are difficult, especially making a new technology into something that can be manufactured cost effectively.

• CIT will assist companies by delivering short-term, focused engineering resources to companies which will result in new products and new jobs.

• CIT will expand its assistance to companies by coupling university resources with businesses to meet short-term requirements such as product engineering, plant reorganization, and technology utilization which have immediate impact upon a company's results.

Since existing programs providing this capability are currently oversubscribed, additional resources will be reallocated to this area and new partnerships initiated in recognition of its importance.

Virginia Business Challenge #3: Bringing the Product to Market

Technology-based entrepreneurs face challenges unique to them - CIT services will meet these singular requirements. Lack of expertise in business and management issues unique to technology-based businesses, especially in start-ups and early stage companies, often leads to difficulties in raising capital and generating sales, ultimately leading to business failures. Some of the unique business issues include intellectual property management, venture capital and other financing mechanisms, marketing, government regulations and industry standards.

• CIT will develop and deliver, in conjunction with the Small Business Development Centers (SBDC) and others, courseware, seminars and resource materials on the basics of technology entrepreneurship.

• CIT professional staff will continue to consult on a one-on-one basis with Virginia businesses in their areas of expertise which are unavailable elsewhere.

• CIT will fund additional entrepreneurship assistance centers in partnership with regional organizations to make critical incubator and "incubator without walls" resources more broadly available to technology-based entrepreneurial businesses.

• CIT will make a $500,000 investment in a seed-stage venture capital firm. This firm will use CIT's funds to attract other investors and ultimately to fund technology-based start-up companies in Virginia.

The new CIT will enhance its entrepreneurial support activities. This reflects CIT's recognition that our previous investments in technology development and licensing cannot come to fruition without adequate partnerships to ensure business success. Much of the entrepreneurial support activity proposed will assist companies which have spun out of the universities based on technology co-funded by CIT and licensed by CIT on behalf of the universities.

Virginia Business Challenge #4: Applying New Technology for Productivity Gains

The Virginia Alliance for Manufacturing Competitiveness (VAMC) will insert new technologies into small and medium-sized manufacturers to make them more competitive. The VAMC is being spun out of the CIT. CIT will act as an incubator for the VAMC, providing administrative support, seed funding and personnel to nurture this organization into a self-directed entity by 1997.

CIT Will Be Organized Regionally

While CIT's one-on-one relationships with customers will continue, a major component of the new CIT will be an emphasis on regional delivery of services. CIT will reposition its regional offices throughout the state to provide businesses with one place to come to access CIT services. Key resources will also be deployed regionally.

The regional office concept will also allow CIT to become better integrated with other regional service providers such as the SBDCs and the new manufacturing and advanced technology centers. This arrangement will allow CIT to work more closely with local chambers of commerce, regional technology councils and economic development entities, and to focus on local issues.

CIT Will Be More Efficient and Effective

The activities and goals set out in this document will be accomplished within the organization's current appropriation by a small staff of highly trained individuals with experience in technical specialties and business. The organization will be streamlined and flattened to bring more personnel into direct contact with CIT's customers. CIT will use partnerships to leverage this core expertise throughout the Commonwealth. In addition, the staffing qualifications and compensation levels will be reviewed by an independent private organization. During the 1996-98 biennium, appropriations will need to be brought up to CIT's current expenditure level which is presently supplemented from reserve funds.

CIT will be accountable; each program area will have a specific plan with milestones and budget responsibility as well as expectations based on results, not effort. Accountability will also be passed along to our partners who receive grants or contracts and they will be expected to report on results achieved versus commitments made. Outside, private sector expert assistance in performance measurement will be obtained to produce professional and demonstrable results based on client input. Additional data will be collected such as customer satisfaction, capital raised, revenues increased, margins improved and other measures of increased competitiveness that translate into a healthier Virginia business sector.

CIT will avail itself of current information technology to make its help available online to greatly increase its ability to reach Virginia businesses. The appropriate use of information technology will improve the staff's ability to serve the business community in an efficient and effective manner, as well as facilitate the collection and measurement of results.

In addition, CIT will form a Technical Advisory Committee made up of individuals with knowledge, skills or expertise in the specific needs of industry and technology. As part of the fabric of Virginia's business support infrastructure, CIT will work closely with other organizations which reflect the thinking of the business community including Opportunity Virginia, the Virginia Technology Council, the Science and Technology Task Force, and various state-wide business organizations such as the Virginia Chamber of Commerce and the Virginia Manufacturers Association. These groups will ensure that CIT is closely linked with the business community and responding to its needs.

Summary

The new CIT will build upon the infrastructure established in the first ten years. CIT will harvest the results of those investments while bringing enhanced programs and services to Virginia which will meet today's business challenges. The new CIT mission provides an opportunity for Virginia's leadership to showcase the Commonwealth's progress as the economy evolves to one more dependent upon technology and technology-based businesses.

Contact

Contact Wolfgang Tolle, Managing Director, Technology Industry Development, at (703) 689-3037, or e-mail to wolfgang@pcmail.cit.org.