Technology Driven Economic Growth

The Commonwealth stands in an enviable position as we close out this decade and plunge headfirst into a future defined by rapid technological progress. Today, the ability to leverage advanced technologies in order to attain competitive productivity advantage is the factor that separates growing from declining economies. The regions that focus their attention on developing these high leverage, knowledge based business environments, will merge as the new hubs for this wage and equally high opportunity economies.

While the popular press has heralded the Silicon Valley, Research Triangle, and the Massachusetts Corridor as the fulcrums for the explosive silicon and software growth of the 1990s, Virginia has an enormous information technology and telecommunications or "InfoComm" industry base that has gone largely unnoticed on the national stage. Many are surprised to learn the Commonwealth has one of the highest concentrations of Internet companies anywhere in the world, including three of the world' largest Internet Service Providers (ISPs): America Online, UUNET, and PSInet. With "Network.VA," the nation's most advanced state-wide, high speed network connecting more than 300 sites and 650,000 miles of fiber optic cable crisscross crossing the state, our communications infrastructure is the envy of the country.

Northern Virginia alone has the second highest regional concentration of high tech workers and companies, trailing only the Silicon Valley. This metropolitan area is the birthplace of the Internet, and serves as the hub for the global satellite communications industry. It is the nation's leader for Internet services and supplies in the world with nearly half of the existing Internet backbone. Little wonder the region and Virginia are becoming known as the "Internet Capital of the World!" Furthermore, announcements of millions of dollars in investments from companies like MCI-WorldCom, Siemens-Motorola, IBM-Toshiba, and Gateway, are further enhancing.

It is important for us to tie the technology sector to its impact on the local economy in order to really appreciate its relevance. We have more than 3,400 technology based companies in the state. Those organizations create jobs and much needed revenues for localities. Technology sector jobs are well paid. The average technology sector worker earned $47,120 in 1997, compared to the average wage in the Virginia economy as a whole, $27,742.

While the technology sector's current performance is impressive, its future hold significant promise. Conservative estimates project that by 2002, Virginia will be home to some 4,000 high tech companies employing some 390,000 employees. Projections show that the average wage for technology sector positions would grow to over $60,000 per year by 2002. The technology sector is currently growing at more than three times the rate of the Commonwealth's overall economy. Moreover, since the technology sector is highly linked to the rest of the economy, additional technology growth is producing jobs in the rest of the economy on almost a one to one basis.

Governor Jim Gilmore has taken the initiative to establish the Commonwealth's technology leadership through his appointment of Don Upson as Virginia's and the country's first cabinet level Secretary of Technology. Further, he established the Governor's Commission on Information Technology and it has already made history by recommending the nation's first comprehensive state level Internet Policy Act. Future commission meetings will concentrate on developing policy recommendations and "best practices" concerned with leveraging Virginia's telecommunications infrastructure to bring tech jobs to pars of the Commonwealth where workers are readily available, creating a coherent information technology (IT) workforce strategy for attracting and "growing our own" high skill wokers, and creating a business environment that is technology friendly where regulatory policy enhances Virginia's attractiveness for technology companies and their employees.

Outside of the InfoComm industry, Virginia has the capacity to be globally competitive in a period of high growth, high tech industries like aerospace, advanced materials, biotechnology, electronics, and high performance manufacturing. The Virginia Commercial Space Flight Authority, in cooperation with Virginia's Center for Innovative Technology and Old Dominion University, has established the state's pedigree at the Virginia Space Flight Center at Wallops Island on the Easter Shore. The Thomas Jefferson National Accelerator Facility in Newport News has created the world's most powerful Free Electron Laser, and with it, the capacity for Virginia to become a national R&D center for the development and commercialization of advanced materials. On the biotechnology front, the Commonwealth has global promise in genetic mapping and engineering, as well as innovative agriculture and plant biotechnologies. Supported by the newly established Virginia Institute for Microelectronic, Virginia's base in high performance manufacturing will be spurred to new growth by the establishment of cutting edge IBM/Toshiba and Siemens/Motorola microdevice and semiconductor manufacturing facilities.

Investing in the Workforce

The opportunities associated with technology based economic growth are difficult to dispute. However, the state must take a proactive role if Virginia is to realize its potential.

Our success to date is built on our available workforce and education system. The public and private sectors must work together to hone our lifetime educational focus. The reality is that the requirement for education does not end with graduation. Today, education is a kindergarten through retirement age process, and our educational institutions must adapt to support this new reality. Within the traditional kindergarten through higher education system, local and regional school officials within a region must focus on delivering graduates with relevant technical skills. Further, the region must focus on attracting individuals from other areas with relevant skills to fulfill our requirements today.

In several regions, including Northern Virginia and Greater Richmond, the projected growth of technology jobs is outstripping the state's capacity to provide skilled wokers. In Northern Virginia alone, there are now over 20,000 job vacancies among high tech companies, potentially resulting in the loss of more than $940 million in wages annually. Furthermore, the demand for high tech workers continues to escalate. In the next five years the demand for information technology workers alone is expected to double.

Companies are turning to other solutions, sometime offshore, to meet their requirements. A series of mostly Asian nations like India, Malaysia, Philippines, and China are responding with technically trained workers and a technology infrastructure to support the growth of the new information age economy. We must significantly increase our capacity to "grow our own" high wage technology jobs to other areas.

This will require an enormous effort and significant investment in workforce readiness. We must retrain and continuously upgrade the skills of our existing workers and identify under employed, career changers and those currently outside the workforce. Additionally, we must work to develop a better match between workplace requirements and the skills of high school, two, and four year college graduates, as well as people receiving advanced degrees. This technology mindset must begin from kindergarten to develop optimal technology literacy among most, if not all, of Virginia's workers.

Infrastructure

As we focus on people and education, here in Virginia we cannot afford to ignore the requirement for excellence in underlying technical infrastructure, or the necessity for an "entrepreneurial environment." If the technology community is to flourish, communication and transportation will be key. People and firms need equitable access to the latest technologies, capital, and skills, as well as an ability to continuously upgrade all three in order to grow.

While the products, assets, and capital of the so called, "knowledge economy" may not be tangible in the traditional sense, the infrastructure requirements are both "hard" and "soft." The "hard" infrastructure, like roads, bridges, ports, and schools, etc., must keep pace with the technology community's burgeoning requirements. Virginia's existing road and rail network is extensive and efficient, contributing to our claim to provide access to 50 percent of the United States in 24 hours or less. That said, we need to expand this traditional infrastructure to include data transmission. Reaching beyond the tangible, we must consider our "soft" infrastructure, including the supply of highly educated workers, as well as the caliber and focus of its colleges and universities, and ready access for the citizenry.

The telecommunications network is developing rapidly for government and educational institutions, but in some parts of the Commonwealth businesses and communities still have difficulty obtaining affordable access to wider bandwidths. Virginia will need to accelerate the deployment of low cost, high speed telecommunications and develop a strategy to help business learn how to integrate electronic commerce into the heart of their operations if we are to gain competitive advantage from the state's Internet leadership. Over the long term, Virginia also will need to establish a world class distributed learning environment for higher educations and research, specifically supporting technology and related industry sectors.

The Governor's Commission on Information Technology

Fortunately for the Commonwealth, Governor Gilmore and Secretary Upson have taken the on issue of the state's technology workforce and infrastructure as key initiatives of the Commission on Information Technology. The commission is considering what type of statewide computing and communications investment strategy will leverage public investment to create more opportunities and incentives for the location and growth of IT businesses throughout the Commonwealth. The commission will address the IT worker shortage and develop a plan to address Virginia's need for a highly trained IT workforce to support business growth and integrate more students and citizens into the technology industry in a conference this fall. By next December when the commission concludes its work, policies should be in place to guarantee that this exciting new medium will continue to grow and prosper here in the Commonwealth and ensure that Virginia will be in a dominant position as the Internet capital of the world.