Northam Proposes Reorganization of Tech Programs

The Center for Innovative Technology’s iconic soon-to-be-former headquarters.

by James A. Bacon

I’m so old that I remember when the Center for Innovative Technology, created to catalyze high-tech development in Virginia, was in charge of allocating state funds for university-based R&D. After commanding center stage in Virginia’s conversations about technology development during the 1990s and 2000s, CIT underwent successive downsizings to the point where it is a mere shell of its former self. Responsibility for overseeing state funding for R&D shifted to the State Council of Higher Education for Virginia (SCHEV), where it still resides.

The politics driving CIT’s dismemberment are long since forgotten. Now Governor Ralph Northam proposes to combine CIT with SCHEV’s Virginia Research Investment Committee, the Commonwealth Center for Advanced Manufacturing and the Commonwealth Cyber Initiative under the mantle of the Virginia Innovation Partnership Authority, reports the Richmond Times-Dispatch.

“What we have right now are multiple initiatives, all with good intent,” Secretary of Commerce and Trade Brian Ball said in an interview. “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.”

The idea of merging technology-related initiatives has gained widespread buy-in over the past year, most crucially from the Northern Virginia Technology Council, which represents the interests of Virginia’s largest, most powerful technology cluster.

The RTD describes what the Northam administration has in mind:

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.

The impending sale of the CIT’s iconic headquarters building near Washington Dulles International Airport is expected to generate additional funds the state can use for technology-related investments.

Bacon’s bottom line: Once upon a time, Virginia’s technology community had a powerful voice in state public policy. CIT, founded in 1985, had a significant budget, and a succession of presidents such as Bob Templin were well known in business communities around the state. The Gilmore administration created the nation’s first Secretary of Technology — a position ably filled by Don Upson — to act as a catalyst and advocate for the tech sector. The creation of regional tech councils, supported in part by CIT, sparked a wave of enthusiasm for tech-related entrepreneurial development across Virginia. Building on this foundation, Governor Mark Warner made it one of his signature economic-development initiatives to boost R&D in state universities and dismantle barriers to the local commercialization of patents emerging from Virginia institutions.

Funding for technology initiatives was gutted during the 2007-2008 recession, and never fully recovered. Northam eliminated the post of Secretary of Technology in 2018. The tech sector no longer has the voice in public policy deliberations that it once did.

The contribution of the CIT and the regional tech councils is greatly under-appreciated in the political community. Technology innovation thrives in “innovation ecosystems,” comprised of synergy-driven clusters of tech companies, university research research programs, and higher-ed pipelines delivering employees with advanced tech skills.  These ecosystems require an invisible connective tissue — forums that facilitate communication and interaction among stakeholders. CIT and the Secretary of Technology both were part of that connective tissue. Warner’s secretary Aneesh Chopra, for instance, was a one-man networking phenomenon who delighted in spotting enterprises with similar capabilities and making introductions. I thought of him as a Johnnie Appleseed of Innovation, planting seeds all around the state. (He went on to become President Obama’s chief technology officer.) As the CIT and Secretary of Technology roles diminished, however, the connective tissue shrank, and so did the vitality of the tech community with it.

Hopefully, consolidating Virginia’s tech initiatives under one roof will accomplish more than the proverbial rearranging of deck chairs on the Titanic. Ideally, creating a single entity will give technology issues a higher public-policy profile, reinvigorate the connective tissue of innovation ecosystems, and breathe new life into technology-driven economic development.

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8 responses to “Northam Proposes Reorganization of Tech Programs

  1. though I did not see the money involved, I would ask if this is a situation where we would : ” If we’re going to spend $95 million more, let’s ensure that we spend it to maximum effect. There is no justification — none at all — for spending the money blindly with no means to determine if it makes a difference.”

    So how exactly would we configure what Northam is doing to meet this standard for whatever money he is proposing to spend on it?

    I’m not arguing against doing so but I am asking if we have some kind of consistent standard across the board or do we just treat each one differently so that some – perhaps like this one – have no such performance requirements but Pre-school money spent – should have?

    Fair Question?

    If we advocate for such requirements for one program but not for another, are we making personal value judgements on our own perceived “worth” of a given program?

  2. Conceptually, it seems to be a good move to consolidate these efforts. CIT was struggling. Perhaps its main problem was that, for some reason, it was not able to make it clear to policymakers and budget folks in the administration over the years just what it was and what it did and why that was valuable. The Secretary of Technology’s main function was to oversee VITA. Most of the time, VITA’s director was the face of technology in the state. In at least one administration, it was well known that all the Secretary did was to go to conferences. So, now VITA is under the Secretary of Administration and everything now seems quiet after a somewhat rocky split from Northup Grumman. This proposed consolidation of the administration of grants for tech projects and entrepreneurial efforts should help set priorities and make the best use of the funding available.

    To answer Larry’s question, the entire proposal is probably not available yet. Hopefully, there will be some provision for the new council to evaluate the effectiveness of its work. However, the standards should not be so stringent that they do not allow for some failed projects. Some entrepreneurs will fail; that’s the nature of the beast. And we learn from failure, hopefully. The overall success of the program should be the test.

  3. I guess I see VITA as management of existing embedded technologies in use in the State and CIT and allied as outside of that arena and more entrepreneurial incubate and attract technology companies …

    I totally agree there should be a consolidation of these functions – as opposed to shutting them down for not being “effective” or “effective enough”.

    And of course, just as with the universal pre-school issue – the question is how much money should be allocated….. to do it’s job and if you asked that same question of VDOT/MedicAid/Police/Prisons/etc or other agencies.. what would their answer be other than “this is what we spend right now on these things”?

    Do we ask if the thing we are spending money on – should have money spent on it in the first place?

    Again, not arguing that we should put any amount of money on any particular publically-funded function but Govt is not like industry and putting an ROI on it ..is not so easy – though certainly possible to collect metrics… the argument would then shift to whether or not the money spent was “worth it”; how do we figure that out with some functions?

  4. The simple answer to your question is no, we don’t do a good job of determining if the money spent is being done so effectively. This whole subject is a can of worms and is probably worth a blog post all its own.

    The primary reason that evaluation is not done is a lack of manpower to do it. There is JLARC, which does a very good job of evaluating government programs and agencies. But, due to the size of that organization, they are limited in what they can do.

    If you go onto DPB’s website, you will see a tab for “Strategic Planning”. Under that tab, you can access a strategic plan for each agency. Each plan includes performance measures. Frankly, they are worthless. First of all, the measures are developed by the agencies themselves. If you think an agency is going to put forth a measure that it would have trouble meeting, you don’t know much about state agencies. When the strategic plan process first got underway some years ago, some analysts in DPB tried to get agencies to establish meaningful performance measures. However, they usually met pushback from agencies who sometimes would appeal to their Secretaries or even the Governor’s office. After getting little or no support from the Governor’s office, DPB gave up. Now, the strategic plans, including the performance measures, are totally the responsibility of agencies. The rhetoric is that budget decisions are based on performance measures. In my experience, there may have been one or two budget decisions based on performance measures. In truth, there is little monitoring of how well agencies do on their performance measures, primarily because most performance measures have little relationship to the primary missions of the agencies. There are some exceptions, but not many.

    • Dick – I want to thank you for your answer. And I agree with you about performance measures AND that there should be a process external to the agency and I do not really understand why JLARC and the Auditor of Public Accounts do not do this.

      But also – as I was saying:

      1. – a standard that is applied across the board – perhaps somewhat tailored to the expenditure but not a system where we arbitrarily question expenditures for say – pre-school funding but no such accountability applied to VDOT over congestion or traffic accidents (or whatever) or against the DOC for various metrics for their agency, etc.

      2. – When I think of how one would fairly and objectively measure something like pre-school education funding – I see the anti-tax hawks as well as the anti-public education folks basically asserting that it likely won’t work, money down the drain… i.e. “No MO Money”.

      And what I point out if that if you applied a similar standard on that basis to other agencies like VDOT or DOC – it would be just as likely to predict “failure”.

      3. – Not even addressed in this conundrum is what happens if we don’t really know the correct level of funding for something to be effective and if we put a penny-wise/pound-foolish restriction on it – it really will end up squandering money. It would be like your doctor recommending some procedure to save your life and you try to pinch pennies for the LITE version and all it does is burn money.

      But again – thank you for your informative and patient and polite responses.

  5. Can someone provide a benefit analysis of past grants? I am quite skeptical. As an entrepreneur, I wanted no government strings attached to my work.

  6. Giving a rube like Northam control of Virginia’s technology policy is like giving a teenager a machine gun. The best you can hope is that nothing will happen. Unfortunately, in Northam’s case somethings happened – all of them bad. Maybe the state legislature should put me in charge of Virginia’s mining policy. I know nothing about mining so every decision I make will have all the competence of Hunter Biden’s recommendations about natural gas in Ukraine.

    While there are certainly excellent people in our state government, our state government overall is a clown shown kept afloat only by rivers of federal money running into Richmond through Northern Virginia and Tidewater.

    “If you go onto DPB’s website, you will see a tab for “Strategic Planning”. Under that tab, you can access a strategic plan for each agency. Each plan includes performance measures. Frankly, they are worthless.”

    After reading that from Dick … what more needs to be said?

    Maybe the Democrats will make progress – especially if we manage to elect a competent governor in 2021.

    • If Northam did not have Aubrey Layne, I might agree but even without Layne, the GOP in the GA was not exactly worried about things like CIT and much more interested in accusing others of “socialism” and “baby killing”and the like – UNLIKE the GOP of old which would make their case on budget and performance and we did rely on them to guide the ship “conservatively” and competently.

      You have to admit that despite all the gloom and doom about Dems, that Terry McAuliffe did a decent job despite the FUD the GOP was fogging the political sphere with.

      I do not think Northam is GOD’s gift to the Commonwealth but on the other hand – his administration to date , sans the blackface debacle, has show itself to be willing to look at changes as well as not get on the far left train to socialism – despite the GOP’s almost total lack of their alternatives..

      Finally, DJ, I’m amused. These are YOUR GUYS that are now in charge and apparently they have the support of voters in your region – not to mention the fact that almost all of the NoVa jurisdictions have AAA Credit ratings… those elected also – successfully represent a very diverse demographic population… something that the GA could get better at in my view.

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