Investing in Knowledge Creation: Building Industry Clusters

The story was buried on page B-4 of the Richmond Times-Dispatch, but don’t underestimate its significance. Gov. Mark R. Warner has proposed investing $27 million to expand the modeling & simulation industry that has sprung up in Suffolk and environs. The money would come from the $550 million research fund, preivously discussed on this blog, that the governor wants to set up.

Modeling & Simulation entails the use of supercomputers to run highly complex scenarios. The technology has been pioneered by the military, which uses it to run war games, but it is spilling over into health care, transportation and other private-sector arenas. Hampton Roads is emerging as a national center of M&S expertise, with the U.S. Joint Forces Command, defense contractors and local universities all getting into the act. Regional planners estimate the industry employs about 4,000 people in Hampton Roads.

Warner would stimulate the growth of this sector in two ways: (1) by providing funds to support more local university R&D, and (2) enabling the extension of Lambda Rail, a super-fast Internet connection that allows supercomputers in different locations to work together. (Secretary of Technology Eugene Huang has told me that he regards Lambda Rail as one of the most important, though unsung, accomplishments of the Warner administration.)

There is one more thing that the state can do: Focus its industrial recruitment activities on the Modeling & Simulation industry. In other words, position Hampton Roads as a leader in the M&S field and make the case that every business who wants a piece of M&S action (that’s “M&S”, not “S&M”) has to maintain a presence there. The Virginia Economic Development Partnership may be doing this already, but if it is, it hasn’t been reported. If it isn’t, it needs to begin right away.

In the highly competitive economic development arena, the VEDP can go after two kinds of companies: (1) those it entices with financial incentives, which benefit primarily the targeted company, or (2) those who are drawn by unique assets possessed by the community, be they a critical mass of employees with special skills; the presence of vendors, suppliers and potential partners with unique capabilities; or the existence of specialized infrastructure like Lambda Rail.

It makes sense, I would argue, to invest scarce state resources in building capabilities, as illustrated by the Modeling & Simulation sector, that will reside in the community even if a particular targeted business, for whatever reason, packs up and leaves.

The Kaine administration will be required to submit an economic development strategic plan within a year of assuming office. Let us hope that the new plan builds on the cluster building initiated by the Warner administration.

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3 responses to “Investing in Knowledge Creation: Building Industry Clusters”

  1. The modeling and simulaton industry has a ways to go when it comes to modeling transportation. Practitioners in this field frequently say the current four step model is inadequate, however great strides are being made. If we are to effectively exploit the link between land use and transportation, this will be a critical investment.

  2. James Atticus Bowden Avatar
    James Atticus Bowden

    I am not sure that Hampton Roads is becoming a center for M&S development as much as it is a center for making the applications work in operationally useful ways for the military.

    I work with military M&S in my dayjob. I know developpers of M&S code who aren’t in Hampton Roads (some in NoVa) or Virginia. Maybe there are other companies out there that have guys writing the basic algorithms in Hampton Roads – and I would be happy to be shown how incomplete my situational awareness is.

    Most folks I know do the glueware to make models and sims work together or work in specific scenarios. Good work that pays well, but not a manufacturing base for future generations – like nanotechnologies, bio-medicine, environmental and robotics industries.

    As long as the U.S. remains the Uber Superpower with Imperial responbilities (even without Imperial ambitions) and keeps the will to survive as such, Rome (DC) will pour money into NoVa and Hampton Roads through the DoD.

    Speaking of modeling – ask if anyone has a holistic macroeconomic model of the Commonwealth. There are a number of National models, but ask around for one that is Virginia – an economy of 7 million persons. I don’t know of any. Check out how the Commonwealth does analysis of tax increases/cuts, etc.

    Any Virginia employees want to name the models and provide links to more information on economic analysis tools used by the Commonwealth?

  3. Nobody has suggested to me that such a model exists. I have been working on a higher ed specific model…which does not exist nationally, let alone in any state.

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