RICHMOND — Gov. Ralph Northam will propose legislation to create a new authority to transform the way Virginia invests in higher education research in emerging technologies, as well as the startup companies and entrepreneurs necessary to turn that work to gold for the state’s increasingly high-tech economy.
The Virginia Innovation Partnership Authority would combine the 35-year-old Center for Innovative Technology — based in Richmond instead of Northern Virginia — and the three-year-old Virginia Research Investment Committee, whose leaders strongly endorsed the idea.
“I wish this had been up 30 years ago,” said Doug Juanarena of Roanoke, who has founded multiple startup companies to commercialize technological research and helped to raise venture capital for others. “We’d be so much further along.”
The new authority also would oversee the work of five 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 is based in Northern Virginia but connected to four higher education research nodes across the state.
“What we have right now are multiple initiatives, all with good intent,” Secretary of Commerce and Trade Brian Ball said. “What we’re trying to do is pull all these together in one authority so we can allocate resources in the most efficient possible way.”
With Northam preparing to introduce his proposed two-year budget this week, the authority could become the vessel for state investment of tens of millions of dollars in higher education research necessary to drive new technologies and products, as well as educate students to work in high-skill industries.
“It’s a tremendous leap from where we’ve been,” said Secretary of Finance Aubrey Layne, who serves with Ball on the research investment committee. “The state has lots of one-off investments that have not been coordinated.”
CIT President and CEO Ed Albrigo sees the proposed legislation as a crucial step forward for Virginia. “You’re building a sector of the economy that’s based on innovation,” he said.
“What is critical to all of these state economic development programs, regardless of which organization is driving it, is this is public money,” Albrigo said. “We have to be clear in defining the economic benefits that come out of all of these things.”
The new authority was conceived after the General Assembly failed to adopt a similar initiative at the end of the last session. Deputy Secretary of Commerce and Trade Robby Demeria traveled across the state, convening 11 town halls, surveying hundreds of people with stakes in the outcome, and establishing expert work groups to help draft legislation that addresses the concerns of research institutions, industry partners and public officials with critical roles in Virginia’s economic development.
“We’ve got to start to accept in the business community that technology no longer just supports business — it drives it,” Demeria, former executive director of the Richmond Technology Council, said.
The draft legislation has picked up endorsements from more than two dozen organizations, most critically the board of directors of the Herndon-based CIT and the Northern Virginia Technology Council.
“Importantly, we believe this new authority should maximize and leverage the existing resources, structure and institutional expertise of the Center for Innovative Technology and the Virginia Research Investment Committee, as well as maintain and grow existing initiatives, incentives and tax policies that have already had a successful track record in Virginia,” said Bobbie Kilberg, president and CEO of the council, who will retire at the end of June after 22 years.
“We also believe this new authority has great opportunity to develop and execute a marketing campaign for innovation and entrepreneurship in Virginia, as well as a streamlined process for businesses to engage with Virginia universities on research and intellectual property commercialization and technology transfer partnerships,” Kilberg said in a written statement.
The technology council’s support is considered critical after the failure of similar legislation proposed by House Appropriations Chairman Chris Jones, R-Suffolk, based on the work of Hampton Roads business leader John “Dubby” Wynne and a consultant hired by the research committee.
Wynne, now retired from the committee and the state board of GO Virginia, a sister economic development initiative, endorsed the new innovation proposal as a good substitute for his proposal for supporting commercialization of university research and startup companies to take it to market.
“The essence of it is still there,” he said.
The legislation will be introduced by Sen. Janet Howell, D-Fairfax, who will become chairwoman of the Senate Finance Committee, and Del. Mark Sickles, D-Fairfax, who is expected to be named vice chairman of the House Appropriations Committee as Democrats take control of both chambers of the General Assembly.
Howell had not supported the previous legislation because she said it “needed more buy-in from concerned organizations,” but she said last week, “over the past year, that’s happened.”
“It has tremendous potential,” she said.
The new authority would be governed by a nine-member board of directors, who would be chosen because of their expertise in venture capital, technology, commercialization on intellectual property and entrepreneurial development.
The legislation would create a new division for building entrepreneurial ecosystems, while consolidating existing state initiatives in divisions for research commercialization and investment, directly or indirectly, in new research-driven businesses, including those founded by women, minorities or people in underrepresented parts of Virginia.
State law limits the ability of CIT and any successor organization to invest state general funds indirectly in fund portfolios or investments controlled by others. A recent opinion by Attorney General Mark Herring confirms the authority to invest directly in companies in the seed or early stages of development to achieve state goals, such as economic development and support of research and development.
However, the impending sale of the CIT’s headquarters building next to the Dulles Toll Road and a new Metro station will generate money that the state could use for broader investments in technology companies.
“It would be a great opportunity for Virginia,” Demeria said.