| Virginia Tourism Corp. photo |
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| Norfolk, home of the world's largest naval base and its accompanying high-tech industries, also offers scenic views such as this at Waterside. |
by Frances Helms
Ever since the English came to Jamestown nearly four centuries ago, Virginia has been open for business at the cutting edge of technology.
And in the past few years, the state nicknamed the "Old Dominion" has become known in high-tech circles as the "Silicon Dominion," fast outpacing the famous California valley in its fostering of cutting-edge technology and its attraction for those industries.
" 'High-tech' means different things to different people," says Beth Doughty, executive director of the state's Roanoke Valley Economic Development Partnership. "In our attempt to attract high-tech industries, we define it as a company that pays a good wage, employs educated people and is on the cutting edge of product research, development and manufacturing that will spin off and prosper into the 21st century," she explains.
| Virginia is well suited to such endeavors. Research by the Center for Innovative Technology (CIT) in northern Virginia reveals that 94 percent of residents believe science and technology are important to the state's economic health. So it's no surprise to learn that Virginia has one of the largest concentrations of high-technology industry, with 172,000 workers in 5,500 firms. |
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Among the high-tech products made in Virginia are silicon computer chips, rocket motors, night vision devices, robotics, flight simulators, navigation equipment, electronic warfare systems and advanced telecommunications equipment. The range of high-tech services includes research and development laboratories, computer and data processing services and telecommunications services.
In 1995, Virginia captured two of the most furiously recruited high-tech prizes in the nation: a $3 billion Motorola semiconductor plant and a $1.2 billion IBM/Toshiba joint venture. In May 1996, Siemens/ Motorola announced plans to build the $1.5 billion White Oak Semiconductor facility, also in Virginia. These three announcements cemented the state's reputation as the eastern United States' leading technology center.
But high-tech is not new in the Old Dominion.
Bud Denton, president of Virginia's Peninsula Economic Development Council, said, "Virginia is the birthplace of high-tech in this country. If you want to look at it that way, glass-blowing was the first high-tech industry in this area and that was years ago."
Hundreds of years ago, to be exact.
More recently, Virginia was the birthplace of NASA -- established at Langley Research Center in Hampton more than 75 years ago -- and is home to 3,000 information technology, telecommunications and Internet companies; more than 50 percent of all Internet traffic worldwide passes through the state. Seventy-five-plus biotechnology and biomedical companies are here, and, since 1991, pharmaceutical companies have announced $277 million in new capital investments and the creation of more than 800 new jobs in Virginia.
The world's newest particle accelerator is located at the Thomas Jefferson National Accelerator Facility in Newport News; one of the world's largest fiber-optics education programs is housed at Virginia Polytechnic and State University in Blacksburg; and one of only four commercial space launch facilities in the world is at Wallops Island on Virginia's Eastern Shore.
What has brought the cradle of America's history to the brink of leadership in the world's technological future? The answers are many, and center on Virginia's people, the state's geographical location and its innovations in business and government.
Virginia has a labor force that is among the best in the nation. With a population exceeding 6.6 million, the state has a 3.4 million workforce that is younger than the national average. The largest percentage (44.3) of Virginia's population is age 18-44, the early working ages, compared with 41.6 percent across the United States. In the past five years, Virginia's civilian labor force (including agricultural and nonagricultural employment, the unemployed, the self-employed and Virginia residents who commute to jobs in other states) has grown 53 percent faster than the nation's.
Virginia typically has posted one of the lowest unemployment rates in the nation, according to U.S. Department of Labor statistics; the primary reason being the balance in the state's economy, which is dominated by no single industry. The unemployment rate in Virginia in June 1996 was 4.8 percent, lower than the U.S. average of 5.5 percent. The previous year's unemployment rate, in June 1995, was 4.9 percent in Virginia and 5.8 percent in the United States. In June 1996, Virginia had a record 3.14 million jobs -- 36,100 more than the previous year.
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In 1994, the latest year for which figures are available, Virginia had a per capita income of $22,501, the highest of the southeastern states and greater than the national average of $21,699. According to information provided by the Department of Commerce, Virginia's per capita income rose from 94 percent of the national average in 1970 to 104 percent of the national average in 1994. Much of this gain has been credited to the rapid growth of high-technology industries, as well as to the continued strength of the federal government and manufacturing sectors, basic business services, corporate headquarters and regional offices in the state. |
Virginia's workers are committed to education. The state's high schools graduate 62,000 students annually with 80 percent of those continuing their educations. More than 1 million students are enrolled in public schools and the state's dropout rate is 23 percent less than the national average. New educational initiatives are helping to prepare these students for careers; for example, Tech Prep is a statewide program that helps students develop skills for careers that emphasize mathematics, communication, science and technology.
More than 350,000 students are enrolled in Virginia's 85 institutes of higher education, and approximately three of every 10 adult Virginians hold a college degree -- a rate higher than any other state in the Southeast. Additionally, Virginia has the highest concentration of doctoral-level scientists and Ph.D.'s in the South.
Virginia also is attracting more people, which means an even greater available workforce. The state's 1995 population of 6,618,000 was 2.5 percent of the U.S. total, ranking it 12th among the 50 states. From 1990 to 1995, the state's population increased 6.9 percent, compared to 5.6 percent for the nation. This five-year growth rate was the sixth fastest among the states east of the Mississippi River.
Depending on the direction of travel, Virginia has been called both the "gateway to the South" and the "gateway to the North." It is both. And, even more impressive, it is the gateway to consumers across the nation.
The state's central location on the East Coast provides a 24-hour drive time to 60 percent of U.S. markets. Virginia's highway system includes more than 55,000 miles of primary and secondary roads and six major north-south and east-west interstate routes, putting the state within reach of many of the nation's industrial and distribution centers. For example, only 150 miles separate Richmond, the state capital, from Baltimore to the north, 450 miles from Cleveland to the west, and 500 miles from Atlanta to the south.
Eleven commercial airports serve Virginia, including Washington National and Dulles International airports in Northern Virginia and those just across the state line at Bluefield, W. Va., and Bristol, Tenn., to provide convenient access to more than 600 destinations worldwide. A $1.9 billion Capital Development Program is in progress for National and Dulles, which handled more than 750 million pounds of air freight and mail and 27 million-plus passengers in 1995. Virginia's commercial airports are supplemented by 57 general aviation airports licensed for public use; 22 of these can serve corporate jet aircraft and 44 can accommodate multi-engine corporate aircraft.
Two of the nation's largest railroads -- CSX Corporation and the Norfolk Southern Corporation -- are headquartered in Virginia; CSX in Richmond, Norfolk Southern in Norfolk. Rail freight service is provided by three Class I railroads, nine Class III railroads and one switching company with a rail network totaling approximately 3,305 miles. Virginia is a junction point between major north-south and east-west rail lines
Easy access is provided to ships, too. More than 53 million tons of cargo move through Virginia ports each year, with 98 percent moving through the Hampton Roads harbor and shipping center that has marine terminals in Newport News, Norfolk, Portsmouth and Chesapeake. Hampton Roads traditionally is the leading export port in the nation. The cities of Alexandria, on the Potomac, and Hopewell and Richmond, on the James, have river ports. Long-term port expansion plans for general cargo facilities include substantial investments in improvements to be completed over the next few years. The most comprehensive is the $400 million expansion of the Norfolk International Terminal, which will eventually double its size, incorporating an additional 300 acres and adding 4,300 feet of vessel berth space, making it the largest intermodal cargo facility on the East Coast.
Among outstanding attractions to business are the state's AAA bond rating -- Virginia is one of only five states nationwide to receive triple A ratings for general obligation bonds from three rating services: Standard and Poor's, Moody's and Fitch Investors Service -- and its refusal to be innovative by raising taxes. The state has not raised its income tax rates since 1972, and the General Assembly, to keep Virginia's taxes on industry competitive, has enacted one of the most pro-business tax laws in the nation.
For example, the following items are not taxed at state or local levels: inventory, office furniture and fixtures and aircraft of manufacturers; computer application software; intangibles, such as the excess of bills and accounts receivable over bills and accounts payable, money, shares of stock, and bonds and notes and other evidences of debts, demands and claims. The result is a very modest tax bill on industry.
While the state does not offer traditional property tax exemptions and investment tax credits, Virginia does have 50 Enterprise Zones, which allow substantial tax benefits for qualified businesses, and five foreign trade zones. Corporate income tax accounts for only 3.9 percent of the state's revenue; 36 states post a larger percentage. The state also extends $1,000 corporate income tax credit for every job created past the first 100 (the first 50 jobs in economically distressed communities).
Another attractive contributor to the state's favorable business climate is its Right-to-Work Law. Virginia is one of the least unionized of the more industrial states with the percentage of manufacturing employees who belong to unions approximately 40-50 percent less than the U.S. average of 20 percent. Work stoppage is rarely a factor in doing business in Virginia and workers' productivity rates are among the highest in the nation.
| To aid the location, relocation or maintenance of industry, high-tech and otherwise, Virginia offers an Industrial Access Road Program, which assures qualifying new and expanding industrial facilities of quality roads to connect plants to the state highway network. This program funds the construction or improvement of roads to provide adequate access to new or expanding industrial sites. |
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Qualifying projects receive $1 credit in funding for every $10 of eligible capital outlay on the site up to a maximum of $300,000; however, the state will provide an additional $150,000 if the amount is matched on a dollar-for-dollar basis from sources other than the Department of Transportation. In the past two years, the program has allocated nearly $12 million to 49 eligible projects. A program also exists for construction, reconstruction or improvement of railroad tracks and facilities to assist industrial development.
Of course, individually crafted incentives also may be offered, depending on the industry's potential contribution to the state's economy, as evidenced by the deals offered to Motorola, Siemens, IBM/Toshiba et al. Despite Virginia's low tax rate, prestigious universities and a highly educated populace, the state offers performance-based incentives to secure high-tech semiconductor factories.
Bear in mind, though, that two ancillary positions are expected to be added to the local economy for every single chip job. So, while Virginia came up with $86 million in incentives to entice Motorola's new chip facility to Goochland County, the project is expected to bring in 5,000 jobs and $564 million in new state tax revenue over the next 20 years -- a pretty good return on the investment.
Another crafted deal resulted in part from the governor's personal negotiations and approval of a $100,000 grant from the deal-closing Governor's Opportunity Fund. RGC Mineral Sands Ltd., an Australian-based mining facility, has broken ground for a $39.5 million processing plant near the Town of Stony Creek in Sussex County. About 70 new jobs are expected.
The company, recruited since 1988 by the Appomattox Basin Industrial Development Corp. (ABIDCO), also will be eligible for the Major Business Facility Job Tax Credit and for workforce training. ABIDCO had a good year in 1995, as well, with 10 new facilities committing to a total capital investment of $77.5 million and 866 new jobs.
The modern army of Northern Virginia travels via the Internet, advances on the nation's capital with laptops and bivouacs everywhere from home offices to corporate headquarters. Northern Virginia, with a population of 1.9 million, is the stronghold of high-tech in the commonwealth, accounting for one-half of the state's high-tech industries. Yet many of the high-tech employees work out of state.
| According to information provided by the Department of Commerce, of the 180,000 high-tech employees in Washington, D.C., slightly more than half live in Northern Virginia. Gene Bailey, executive director of Stafford County Economic Development, confirmed, "Sixty percent of our workers commute daily to D.C." |
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With the continuing proliferation of high-tech industries in the area, however, commuting statistics may change. For example, Stafford County recently landed the first Korean investment in Virginia: a $9 million initial outlay by Dongsung America Co. for a 20,000-square-foot plant to manufacture organic photoconductive (OPC) drums for laser printer cartridges. The organization, a subsidiary of Dongsung Chemical Company Ltd., headquartered in Pusan, Korea, will be the only manufacturer of OPC drums in the United States and will sell its Virginia-made product to international markets.
Bailey was among those responsible for luring Dongsung away from possible sites in Maryland and Pennsylvania, and he didn't do it long distance. "To me, economic development has little to do with sitting and watching the Internet all day long. Networking and relationship building are very important parts of attracting any business, especially those that are 15,000 to 20,000 miles away," Bailey explained. To that end, he visited Korea in October 1995, making personal contacts with company officials. The investment commitment became official in July 1996.
Stafford County had sought Dongsung because it fit the county's profile of desired industries, Bailey said. "In the year 2000, 70 percent of the manufacturing jobs that existed in 1985 will be gone. So it's important to attract those industries that fit our needs. Since we drain into the Chesapeake Bay here, our focus is on high technology and those industries that deal with a clean environment. Dongsung did." Bailey expects the company to be operational early in 1997.
And what about those commuters? Bailey thinks they would rather work in Stafford County -- a plus for potential high-tech investors. "We have an incredibly well-trained workforce here. Because of that very competent labor force, most companies are able to locate a plant here and save enough to pay for it in a couple of years. With the savings per employee, you can pay for a $32 million plant in four and a half years."
Stafford County already had other high-tech industries, including Colonial Circuits, which produces circuits for missiles and the space shuttle. But Stafford isn't the only Northern Virginia county or city to boast heavy involvement in high-tech.
In August 1995, Manassas announced that it had landed the first joint U.S. venture between Toshiba Corp. and IBM for a $1.2 billion semiconductor manufacturing facility. The plant will produce 64-megabit Dynamic Random Access Memory chips (DRAMS), which can store the equivalent of more than 6,000 pages of typewritten text. The project, expected to begin operations with 1,200 employees in 1998, has a master plan calling for eventual construction of three semiconductor manufacturing facilities on the site. At site saturation, in approximately 10 years, the project is expected to employ 4,000 people on-site, represent a total capital investment exceeding $4 billion and generate 8,000 additional jobs.
While the commonwealth offered an incentive package totaling $48.2 million in grants and tax credits, with the bulk of the incentives -- $38.4 million -- tied to the performance of the company, the state stands to benefit to the tune of $477.5 million in tax revenue from the deal over a period of 20 years.
Manassas won out over proposed sites in several states, including one already owned by Toshiba in Oregon. IBM's long history in the area was a factor. IBM has had a major presence in Manassas since 1968. When the company's Microelectronics Division was moved out of the area in 1982, the company retained ownership of 125 acres.
"That was key to our decision because we had existing property and infrastructure already set up," said Jim Smith, public relations manager of IBM Microelectronics Division. "And, having been a part of the community for so long, we knew that northern Virginia would provide us with a good workforce. There are many highly skilled people in the area, including some former IBM employees [with] experience in semiconductors."
Major computer and data processing companies also in the area are BDM International, Boeing Computer Services, Computer Sciences Corporation, Electronic Data Systems, GTE Government Systems and PRC Inc. These companies alone employ more than 6,000 people in Northern Virginia.
But the area should not run out of qualified workers. John Scofield, interim director of the Prince William County Department of Economic Development, noted that the county surrounding the city of Manassas recently has formed a partnership, Innovation at Prince William, with Fairfax's George Mason University to center around the Prince William Institute, now under construction by the university. "In October we will be a making an announcement of what 'Innovation at Prince William' means," Scofield said. For those who can't wait, he hinted that it will deal with a new concentration of high technology in the curriculum at George Mason. The institute will be a high-tech research and development park.
The population of Prince William County, approximately 25 miles southwest of Washington, has grown by 70 percent since 1980, making it the second largest county in Virginia. The county's median family income of $52,078 is ranked 19th highest in the nation and the median age of its residents is 29.
The county is focusing on transportation as a priority and several major projects have been completed in the past year with others in progress. Scofield said a recent survey of county residents ranked the county's easy accessibility as top among the benefits of residency. Close behind are the thousands of acres of natural beauty, including 45 parks as well as Manassas National Battlefield, the most heavily visited Civil War site in Virginia.
The town of Leesburg, the Loudoun County seat, also possesses a great deal of scenic, almost rural beauty despite its proximity to Washington. "There are farm fields between us and Dulles Airport," John H. King, assistant town manager, pointed out. "So someone who needs to be close to the hustle and bustle of D.C., but still needs the charm for which Virginia is famous, would be happy here."
Loudoun County is home to both Dulles and Washington National airports, as well as Godfrey Field (named for radio and television star Arthur Godfrey), which Scofield described as "the busiest general aviation airport in the country." The field provides facilities for corporate aircraft.
The county is headquarters for America Online and is home to Orbital Sciences Corp., a space and information systems company; Alcatel Data Networks, a telecommunications company; Telos Corporation, a 28-year-old information technology company; EIT, a mid- to high-technology electronics design and manufacturing company; Automata, a manufacturer of printed wiring boards; Template Software, a template-based software application development company; and ComSat RSI, a manufacturer and marketer of high-tech antenna products. The town is North American headquarters for Rehau, Inc., a European high-tech automotive producer, and Logic Labs, which applies microchip technology to fluorescent light bulbs.
(For those who wonder about the wording of locations, Virginia has 95 counties, 41 independent cities and 191 incorporated towns. In Virginia, incorporated areas are either cities or towns. When an area is incorporated as a city, it ceases to be a part of the county. Cities levy and collect their own taxes, and no county taxes are levied in them. Towns remain part of the county and their residents are responsible to the county as well as the town. Citizens of unincorporated communities pay only county taxes. Therefore, towns are in counties but cities are not.)
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Also in Northern Virginia, albeit at its southern tip, is the Fredericksburg Regional Alliance, led by Myles Stempin, who recently came aboard as economic development director. The alliance serves the city of Fredericksburg as well as Caroline, King George, Spotsylvania and Stafford counties. |
Vitro Corp. is in Dahlgren in King George County on the Potomac River. Al Zeich, Vitro vice president, said, "Any high-technology/R&D company would serve itself well to place the Fredericksburg Region at the top of its site selection list. The area's close proximity to the nation's capital and major transportation linkages, especially international air travel, cannot be matched anywhere." Major regional corporations are involved in advanced engineering and the integration of complex systems: weapons, computing, chemical, biological, biomedical, laser, fiber-optic, composites, energetics and neural networks. These companies support scientific research that currently totals over $1 billion annually.
The highly motivated workforce offers an abundance of scientists, engineers and technicians in all major disciplines and cutting-edge educational resources to keep employees sharp. A high percentage of the workforce, over 40 percent, commutes to Northern Virginia and the District of Columbia and would readily accept positions in the community to end the daily odyssey. Conversely, many residents to the north would make the easier commute south to less congestion, more affordable housing and a lower cost of living. The highly desirable lifestyle found in the region and nearby cultural and recreational resources make it easy to attract and retain key personnel.
Where better than in the hotbed of high-tech activity in Northern Virginia to found Virginia's Center for Innovative Technology (CIT), which to date has funded more than $10 million in biotechnology and biomedical projects, attracting matching funds of $13 million? The CIT is a front-line technology assistance organization that provides business with access to the intellectual and technological resources of state universities and all the research in Virginia's public institutions. The CIT's Center on Drug Design, Delivery and Clinical Applications and the Center for Bioprocess Development provide research and support services for biotech and pharmaceutical companies. Wayne Sterling, executive director of the Virginia Economic Development Partnership, cites the CIT as one of the major advantages in attracting high-tech interests to the state.
Richmond, once the capital of the Confederate States of America, is rising again. The Greater Richmond area is approximately the same size as the state of Delaware, has a population of approximately 600,000 (expected to reach 1 million by the year 2000) and is home to seven Fortune 500 firms -- Circuit City Stores, CSX Corp., Dominion Resources, James River Corp., Owens & Minor, Reynolds Metals and Universal Corp. An eighth, The Pittston Co., announced plans in March 1996 to relocate its headquarters to Virginia's capital city.
Richmond's Thomas Jefferson-designed Capitol Building is the primary work site of Gov. George Allen, whose trade missions to Europe and Asia have brought 150,000 new jobs to Virginia, surpassing the Republican governor's goal of attracting 125,000 new jobs during his four-year administration. The commonwealth's economic development efforts have their headquarters here, in the offices of the Virginia Economic Development Partnership, led by Sterling. From those offices, dreams are dreamed, negotiations are begun and plans are realized for development across the state.
| Sterling says the public/private partnership has not specifically targeted high-tech industries, although those are its current stars. "We are a market-driven organization. Whatever the market is doing, however it is growing and expanding, that is what we're after. So, if semiconductors are growing and expanding, we'll try to attract those kinds of industries. If cameras are growing and expanding, that's what we'll go after." |
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The city of Richmond, home to the 9th District Federal Reserve, is a major banking and financial center and is full of state and federal agencies. Yet it is a city graced with parks and scenic areas -- Richmond has the distinction of being the world's only city with Class IV rapids regularly drawing whitewater rafters through the middle of downtown and its famed Monument Avenue has been described as the most beautiful street in America. A multimillion-dollar flood wall was completed in 1995 to protect the city and its downtown businesses from the waters of the James River.
Richmond also is the home of the Ethyl Corp., Virginia Commonwealth University, Medical College of Virginia Hospitals and the burgeoning new Virginia Biotechnology Research Park. The biotech park is a $200 million research and development complex that offers research and development companies 1.5 million square feet of leasable space and access to the academic life-sciences resources of the VCU/MCV campus.
Here, too, the Port of Richmond conducts a lively business at its deepwater terminal, where an $8.8 million expansion was just completed, and a multimodal transportation system is being studied to bring high-speed trains to downtown. Also underway is the redevelopment of the downtown riverfront, including eventual restoration of the historic James River and Kanawha canals.
Although the state's economic development office is in Richmond, the greater Richmond area -- the city and the counties of Chesterfield, Henrico and Hanover -- has its own economic development team, headed by Gregory H. Wingfield, president and chief executive officer of the Greater Richmond Partnership Inc. "The Greater Richmond Partnership is kind of in the middle, acting as a liaison (between economic development officials of the metro jurisdictions and industry), representing the private interests," Wingfield explained.
This partnership wants to be part of the site location process. The organization pledges to structure and manage a network of state, regional and local professionals to support a domestic or foreign company's project. Prior to a visit to the Richmond area, the partnership will complete a custom economic and business analysis, a real estate site selection study and any other information a client may request. (Information is available at the partnership's World Wide Web home page: http://www.grpva.com.)
The Greater Richmond Partnership is an example of regionalism, of several jurisdictions agreeing to cooperate for the common good instead of an "every man for himself" attitude. Regional cooperation is important where infrastructure is concerned, where requirements may cross several jurisdictions. Through the partnership, many boundaries are erased by mutual agreement.
Wingfield was part of the team that secured the commitment from Siemens/
Motorola to build White Oak Semiconductor in the Richmond suburbs of Henrico County. The $1.5 billion facility will manufacture DRAM chips and is expected to create as many as 1,500 jobs. Construction is slated to begin by the end of this year and production is anticipated for mid-1998.
Frederick T. Agostino, executive director of the Henrico Industrial Development Authority who headed the Henrico recruitment effort, said, "From an economic development standpoint, one of the most exciting aspects of the project is what it means for our population. This project, along with the Motorola project in Goochland and the IBM/Toshiba project in Manassas, puts us on the world map of high-tech locations. This will allow us to aggressively pursue other similar opportunities in the high-tech arena and bring to the Metro Richmond area some of the best employment opportunities the next century will offer."
Wingfield agreed, adding, "The downside of attracting high-tech industry to Richmond is that we still need to get the word out -- we don't have the hype going for us that the Research Triangle [in North Carolina], for example, does. But that's changing."
The previous announcement that Motorola had chosen Goochland County, also in the greater Richmond area and bordering Henrico County, for a $3 billion semiconductor facility might have been a factor in the White Oak decision, Wingfield said. "They felt they were not going to be a big fish in a small pond."
When making the Motorola announcement, Gov. Allen said, "When a company of the stature and reputation of Motorola chooses Virginia, it sends a message to the rest of the business world about the quality of Virginia's business environment."
"Motorola looked at 300 sites around the country and chose us," Wingfield said. The reasons? "Our educated workforce, our geographical proximity, our outstanding quality of life, the choice of lifestyles and VCU's coming on-line with the new School of Engineering."
However, Motorola has postponed for one year construction on its Goochland County facility due to an unexpected slump in the semiconductor market. Work on the administrative building is slated to begin in spring 1997 and on the production plant in late 1997 or early 1998. The company has leased offices in downtown Richmond, and core teams for both the Goochland and Henrico projects will share the administrative space.
Just an hour's drive west from Richmond is Charlottesville, home of the University of Virginia, which is recognized as one of the nation's top 20 doctoral universities and houses centers for immunology, diabetes, DNA, molecular biology and AIDS research. Adjacent is Fontaine Research Park, which will offer 390,000 square feet of space, including research labs, with sites dedicated to the Virginia Neurological Institute, the Neuromuscular Center and the UVA Foundation Research Building.
The area's economic development team, Virginia's Region 2000, covers 2,000 square miles encompassing Altavista, Bedford and Lynchburg and the counties of Amherst, Appomattox, Bedford and Campbell. Yes, there is a city of Bedford and a Bedford County.
Kim Butler, Region 2000 marketing manager, said the biggest hurdle to attracting high-tech industry to the region is easy to overcome. "They think anything west of Richmond is the hinterlands. But once we get a company here to look at us, all the aspects are very positive -- the community is pro-active, we have a wonderful quality of life, and the infrastructure is here."
Among the high-tech products coming out of Region 2000 are circuit boards. telecommunications equipment and power-plant training simulators. Ericsson Inc., a Swedish company, has completed a $50 million expansion adding 500 employees, bringing its workforce to 2,400, in the production of cellular telephone and mobile communication systems in Lynchburg. The Greenwood Partnership, an engineering and architectural firm, is a major presence on the main street of downtown Lynchburg. Grayson Electronics recently completed a $1.5 million expansion in the area and the U.S. Postal Service has increased the workforce at its fiber-optic remote encoding service facility from 400 to 600.
In January 1996, Gov. Allen announced that one of the nation's leading generic pharmaceutical producers, Barr Laboratories Inc., a manufacturer of the breast cancer agent Tamoxifen Citrate, will locate a $14 million manufacturing facility in Bedford County, creating 120 high-skilled, high-paying jobs within the next 30 months.
If people truly consider sites just west of Richmond to be the hinterlands, then Southwest Virginia really has to have something to offer to attract high-tech industry. It does. It has a ready and willing workforce along with 11 industrial parks.
"Our greatest asset is our labor force," Sandra Ratliff, marketing manager for Virginia Southwest Promise, said. "People here are proud. They want to stay in the community and want to do an honest day's work for an honest day's pay."
Industries are discovering the value in that attitude and are moving in to fill the void left by the rapidly declining coal industry that once was this area's lifeblood. They are not moving in fast enough, however. "We have the highest unemployment rate in the state," Ratliff said, "because historically we have had a resource-based economy. People still call (this area) 'the coalfields.'" The area's unemployment rate fluctuates between 7 and 21.5 percent, Ratliffe said.
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Southwest Promise directs development for a seven-county, one-city region (Buchanan, Dickenson, Lee, Russell, Scott, Tazewell and Wise counties and Norton) that has been successful in attracting the telecommunications industry, including Bell Atlantic, AT&T and Issues & Answers Network Inc., the last, a market research firm. |
The most recent investment in the region came from Reynolds Metals Co., which in June 1996 announced plans to construct a $34 million plant in Russell County that will employ 125 to make forged aluminum wheels for Reynolds' automotive customers in the United States, Canada and Europe. This facility will be the first to use a process combining Reynolds' computer-controlled, flow-formed casting technology with forging to produce an even lighter wheel with added styling flexibility. An already anticipated expansion would create an additional 300 jobs. Reynolds studied sites in Ohio and Kentucky before choosing Russell County.
A plus for the area was the commitment of the Virginia Economic Development Partnership's Workforce Services division to develop a plan for the company to provide in-house training for its employees. (Workforce Services offers a program of training and assistance for eligible new and expanding industries across the state. Among companies that have taken advantage of this state-paid assistance in recruiting trainees, implementing training programs and other services are Ford Motor Company, Canon, MCI, Mitsubishi Kasei, Gateway 2000, Panasonic and Motorola.)
Just east of coal country lies one of the jewels of Virginia's high-tech attractiveness: Virginia Polytechnic Institute & State University. "One important factor in our ability to attract the kinds of companies we do is Virginia Tech, just 35 miles away," said Doughty of the Roanoke Valley Partnership. "Tech is a real drawing card, and a real advantage for us."
Virginia Tech is one of the National Science Foundation's top research universities. Its average invention disclosure/
research spending ratio is second only to the Massachusetts Institute of Technology. It also is home to the Virginia Productivity Center, a valuable resource for public, non-profit and commercial organizations in the measurement, evaluation, control and improvement of productivity. Just two miles away is the Virginia Tech Corporate Research Center with more than 220,000 square feet of office and research laboratory space and services including training, Internet access and consulting support.
The Roanoke Valley Partnership represents seven localities in an area that has long been a center for high-tech activity. "It goes back years to ITT, which has two facilities here -- one makes night vision goggles; the other, chips. That's about as high-tech as you can get," Doughty said.
In the 1980s, the Roanoke Valley attracted Vitramon, which produces monolithic ceramic capacitor chips used in electronic circuitry. It also boasts Optical Cable Corp. "That's a real success story," Doughty said. "It's a home-grown company that just went public a few months ago." But it's just one of a concentration of fiber-optic companies in the area. (The state has a total of more than a half-million miles of fiber-optic lines.)
It takes a lot of power to run these operations but, thanks to American Electric Power, with its Central Virginia Region located in Roanoke, that is no problem.
Sprint, the local communications company for much of Southwest Virginia, has aggressively deployed the latest technology in the industry to serve this region. And Sprint has led two projects that are paying dividends for local schools and the community of Abingdon.
The "electronic village" project has evolved from a three-month trial to an ongoing permanent fiber backbone in Abingdon. The second project involves the Southwest Virginia Education and Training Network, which links area high schools and community colleges with a digital, full-motion video and audio system for distance learning, video conferencing and training purposes.
It was to this Southeastern region of Virginia that John Smith and Christopher Newport and the English colonists who accompanied and followed them brought first basic and then more technical handwork. Denton, of the Peninsula Economic Development Council, is serious when he says, "This is the birthplace of high-tech in America."
The Peninsula development team represents the cities of Hampton, Newport News, Poquoson and Williamsburg and the counties of Gloucester, James City and York. It was instrumental in attracting Gateway 2000, the leading producer of personal computer systems in the United States (in 1994, it sold more than 1 million systems worldwide), to Hampton.
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Until August 1996, all Gateway 2000 PCs had been assembled at the Fortune 500 company's headquarters in South Dakota. That month, however, the first units rolled off the manufacturing line in the new $18 million plant in Hampton. Plans call for the creation of 1,000 new jobs at the facility by 1999. |
Gateway 2000 had studied sites in several states, including North and South Carolina, before choosing Virginia. The deciding factors cited were the quality labor pool, a recognized educational system with a strong history of job training programs, various incentives -- including a grant from the Governor's Opportunity Fund to assist with site preparation, Workforce Services and the job tax credit -- and a positive logistical location on the East Coast.
In nearby James City County, plans are advancing for a $25 million manufacturing facility where Solarex, the largest U.S.-owned manufacturer and marketer of photovoltaic (PV) modules and systems, will produce solar panels. The plant will produce amorphous silicon thin film PV modules that are expected to revolutionize the PV industry by making solar energy a cost-effective, alternate energy source.
Solarex cited the Photovoltaic Grant Program, enacted into Virginia law in 1993, as one of the reasons the Maryland-headquartered company chose to locate in James City. The grant program is designed to encourage the production of solar PV energy modules and the grants are designed so that a company must meet significant commitments in creating jobs and manufacturing its products in Virginia and selling an agreed amount of products before receiving any funds from the state.
Denton noted that Virginia's being the northernmost right-to-work state always presents an advantage, but he quickly added that the Peninsula's superb quality of life, its geographic location, its workforce, the presence of NASA Langley Research Center and the Port of Hampton Roads are equally, if not more, advantageous. "We try to have the infrastructure in place," he added, "and existing buildings need to be available -- 70 to 75 percent are looking for an inventory of existing buildings. So far, we have had enough offerings."
The Port of Hampton Roads, served by more than 75 steamship lines across the world, three major railroads and nearly 150 motor freight carriers, is foremost among the attractions mentioned by Hans Gant, director of Forward Hampton Roads. FHR markets the Hampton Roads region, focusing on the cities of Norfolk, Virginia Beach, Chesapeake, Portsmouth and Suffolk. Gant speaks proudly of the year-round activities in the port that is never frozen over, but he speaks no less proudly of the highly skilled people who live in the area. "Outside Silicon Valley in California, we have one of the largest concentrations of scientists and engineers in the country."
Hampton Roads, with a population of approximately 1.5 million, is one of the largest metro areas in the United States and is the fourth largest in the Southeast. This section of Tidewater Virginia is the home of the largest naval base in the world and counts nine universities and tech schools, with 75,000-80,000 students enrolled, among its advantages. The military presence offers another enticement to high-tech industries looking for a skilled workforce. "There is a large number of military service people -- 15,000 to 20,000 -- who exit the military every year and we get first crack at them," Gant said. "They are highly trained in the technical areas, motivated, drug-free and have a strong work ethic."
The attractions Gant cited were deciding factors in 1995 for 13 companies to commit to $47.2 million in investments and the creation of 2,189 jobs. Among the high-tech industries locating in Hampton Roads were Panasonic Technics Quasar with a $4.5 million investment in Chesapeake; Oceana Sensor Technologies, $1.7 million, Virginia Beach; FAG Bearing Corp., $3.5 million, Suffolk; and Trans World Airlines, $4.2 million, Norfolk. Among existing high-tech companies that expanded in the area in 1995 were Mitsubishi Chemical America Inc., $17 million in Chesapeake, and NGK-Locke Polymer, $3.125 million in Virginia Beach.
Virginia Malinsky, planning manager for the Virginia Beach Department of Economic Development, noted that 13 new companies moved into the city in 1995 and another 18 companies expanded -- including Raytheon, under a five-year, $300 million contract to produce the SMART-T (Secure Mobile Anti-Jam Reliable Tactical Terminal), an extremely high-frequency satellite terminal, for the U.S. Army Communications-Electronics Command -- or were retained, creating 2,568 new jobs and a capital investment exceeding $112 million. She added that 1996 also is turning into a banner year for Virginia's largest city, with the opening of a Unisys high-tech computer laboratory.
Malinsky pointed out that the Virginia Beach Commerce Corridor, paralleling major transportation arteries, has seven major concentration areas containing more than 25 million square feet of total enclosed space, including 5.5 million square feet of office space. With the Virginia Beach Development Authority municipally-owned and operated business parks and scores of privately developed business facilities, the choices among sites and buildings are substantial.
Virginia Beach also introduced a new marketing campaign in the spring, touting its selection in 1995 by The Children's Environmental Index as one of the nation's top 10 "best places to raise children;" its low crime rate (for the eighth consecutive year) as noted by Money magazine; its choice by Entrepreneur magazine and USA Today as one of America's hottest spots to do business in the 1990s; and a "bonus for business" listing in Fortune for its "excellent quality of life and a labor force expanding faster than job growth."
| While FAG Bearing is Suffolk's newest corporate citizen, the city is involved in more high-tech plans. William Harrell, assistant city manager for development and acting economic development director, said, "The city is working with Old Dominion University to establish the Virginia Modeling and Simulator Center which will open this fall. This will be a partnership with the Department of Defense to do a technology transfer. We'll be working with the U.S. Atlantic Command to transfer that sophisticated technology to the private sector. We feel this will have a significant impact on Suffolk's and the entire Hampton Roads area's reputation as a high-tech center." |
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In Chesapeake came the June 1996 announcement by Oji-Yuka Synthetic Paper Co. Ltd., headquartered in Tokyo, of plans to build a $100 million plant. The U.S. operation, titled the YUPO Corp., will annually produce 10,000 tons of the synthetic paper product called YUPO. YUPO has a surface similar to natural paper with greater strength, lightness and water-resistance. After the ample supply of quality labor and the overall quality of life, factors influencing the site choice were the adjacent location of Mitsubishi Chemical, a $200,000 state grant for site and infrastructure improvements and Workforce Services.
Franklin-Southhampton Economic Development worked with papermaker Union Camp to help locate a new sheet converting facility in Southhampton County, just a few miles down the road from its Franklin paper mill. Officials helped negotiate utility services needed for the facility. The company plans to build a 68,000 sq. ft. facility that will take rolls of paper from the Franklin mill and convert them into 25,000 tons per year of high value printing and copying papers.
The Tidewater area retains its famed scenic beauty, but Isle of Wight County is among those jurisdictions to have even more. It has corporate giants Union Camp Corp. and Smithfield Foods; Union Camp recently expended $180 million for a recycling facility and Smithfield invested $10 million to expand its production facility -- employing about 6,000. It also has Monette Information Systems, a much smaller computer software development company with headquarters on a site overlooking the Pagan River. The dedicated workforce, the quality of life in the area and the proximity to Hampton Roads are advantages named most often by companies that choose to locate in Isle of Wight.
Cited repeatedly by officials for firms across the nation and around the world, "quality of life, geographical location, dedicated and educated workforce, scenic beauty, financial incentives" are the primary drawing cards for high-tech, or any industry, to locate in Virginia.
-- Frances Helms is a freelance
writer based in Richmond.
