Hatching ideas Hatching ideas
BYLINE: JON W. GLASS
BY jon w. Glass
THE VIRGINIAN-PILOT\
With $75,000 from the General Assembly, technology leaders in Hampton Roads hope to broaden interest in a business-incubator system that they say could bolster the region's high-tech ambitions.
It's just a small fraction of the $400,000 sought by the Hampton Roads Technology Council during the winter legislative session.
Even so, officials said, the support is encouraging and will help lay groundwork to improve the nearly 10-year-old incubator system, which has helped homegrown technology start-ups generate hundreds of jobs and millions in sales and tax revenue.
The state money likely will be used to market two existing technology incubators, study ways to make the system self-sufficient and jump-start discussions for at least two more incubators, said Tim Early, the Technology Council's president and chief executive.
It also may be used for an ad campaign to win public support and financial backing from local governments. Now, local officials put more emphasis on recruiting businesses from outside the area - and on big-dollar deals - than on growing their own, Early said.
Only Hampton and James City County, which host the council's two existing technology incubators, provide money to operate them. Hampton puts in about $185,000 a year, while James City County, which owns the building where that incubator is housed, spends around $60,000. That money helps the council offer fledgling companies discounted rent and other benefits, such as free Internet access, in hopes of growing them into sustaining operations.
"We're doing it with a regional focus in mind, but we're not doing it with regional support," Early said. "The Hampton Roads area still has a ways to go to create an entrepreneurial atmosphere and attitude. If you could take Silicon Valley and shove it right next to Hampton Roads, you could stand back and see the difference."
Talks are ongoing with Suffolk economic development officials and the military's Joint Forces Command about opening an incubator in a burgeoning high-tech corridor in northern Suffolk.
Council leaders also have approached Old Dominion University about creating a Norfolk technology incubator. Officials are looking at the campus' new Innovation Research Park @ ODU, where university researchers hope to spin off marketable high-tech products with industry partners.
The council's incubator system has a good story to tell, Early said.
In 2005, the system's 34 technology start-ups - 20 graduate businesses and 14 incubator clients - employed more than 300 workers, generated around $110 million in sales revenue and paid nearly $13 million in local, state and federal taxes, according to a Technology Council survey.
So far, no companies have graduated from the year-old James City County incubator, housed in about 2,000 square feet of county office space. The incubator is working with four clients.
"We're cautiously optimistic it will pay dividends for us," said Keith Taylor, director of the county's Office of Economic Development. "A lot of the more traditional things have been going offshore, and there's a lot of global competition. Most everybody in the economic development business has tried to look for other opportunities, what niches or clusters they can pursue."
In Hampton, where the incubator has access to 30,000 square feet of leased space in a privately owned office building, businesses that graduated have set up shop across the region, including in Virginia Beach, Norfolk, Suffolk and the Peninsula.
But getting local governments to contribute money for a regionwide incubator system poses challenges, said Bob Sharak, director of special projects for the Hampton Roads Partnership, a nonprofit group focused on regional economic competitiveness.
"It's a tough sell if one of your neighbors is going to be getting benefits and they're not putting money in," Sharak said. "It's called the free-rider program. If they all contributed money to a common pool and weren't micromanagers as to where they sited facilities, you could take a broader look at the companies and nurture them and not worry so much about keeping them in your particular locality."
Randy Gilliland, Hampton's vice mayor, said the Technology Council "is on the right path." Gilliland said he envisions creating a system of incubators throughout the region that specialize in different technology clusters.
"You need to think regionally and, for that matter, nationally and globally," he said.
Even so, Rick Lally, the Technology Council's chairman, said efforts to expand the incubators to date have focused on individual cities because of difficulty selling politicians on a regional approach.
"We can't hold our breath waiting for that to happen," he said.
In Suffolk, officials hope to capitalize on the computer modeling and simulation sector that has put down roots in northern Suffolk to support the needs of the military's Joint Forces Command.
Tom O'Grady, director of the city's Department of Economic Development, said Suffolk has held "very preliminary discussions" with the Technology Council about creating an incubator for modeling and simulation businesses.
The aim, O'Grady said, is to move beyond defense, assisting start-ups interested in tapping emerging markets for modeling and simulation in such areas as health care, transportation and land-use planning.
"It's probably not something we'd want to do on our own because we don't have the expertise," O'Grady said. "Not everybody is a Lockheed Martin or a General Dynamics. There are lots of new business ideas being germinated every day, and we want to be able to help."
Tom Osha, economic development officer for ODU, said university officials are weighing the possibility of putting incubator space in the new research park's second building, expected to open in late fall 2008.
"As our high-technology sector evolves in Hampton Roads, having the services and support that allows entrepreneurs to have a better shot at business success are important," Osha said. "What we're having conversations around is how can we put in a thing that's going to be most useful and most relevant for all involved."
State. Sen. Kenneth Stolle, R-Virginia Beach, who helped secure the $75,000, said legislators, while receptive, did not provide more because of other pressing needs, including transportation.
It will be up to the Technology Council, he said, to decide "where they get the biggest bang for the buck" - whether it's expanding the capacity of the existing incubators or adding new ones.
"We've got to put some money into economic development, and technology is the future of Virginia - I really believe that," Stolle said. "The Northern Virginia Technology Council and the Greater Richmond Tech Council have taken off, and Hampton Roads is just coming into their own now. It wasn't a tough sell for those guys to convince me."
n\Reach Jon W. Glass at (757) 446-2318 or jon.glass@pilotonline.com
state support
The General Assembly gave the Hampton Roads Technology Council $75,000, which will likely be used to market two technology incubators, discuss adding more and study ways to make the system self-sufficient.