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BUSINESS SENSITIVE 1 University Research Park Feasibility Study and Business Plan Development Presentation to CSSC Consortium Meeting Battelle Technology.

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Presentation on theme: "BUSINESS SENSITIVE 1 University Research Park Feasibility Study and Business Plan Development Presentation to CSSC Consortium Meeting Battelle Technology."— Presentation transcript:

1 BUSINESS SENSITIVE 1 University Research Park Feasibility Study and Business Plan Development Presentation to CSSC Consortium Meeting Battelle Technology Partnership Practice June 20, 2013

2 2 Project Purpose and Methodology Purpose: Comprehensive assessment and development approach for advancing a University Research Park initiative based on the needs/opportunities at APG and across industry drivers in the region and how they can best connect with universities.

3 3 University Research Parks Are Multi- Dimensional Drivers for Economic Development University Research Parks are place-based initiatives that promote physical, talent, technology and industry development and broader industry partnerships with universities and research drivers

4 4 Todays Agenda Overview of Key Findings and Potential Opportunities for URP Discussion of Potential Demand Drivers/ Opportunities for URP Discussion of Implications for Program Activities, Governance, Operations and Funding Approaches Next Steps

5 5 Key Findings Point to Three Key Opportunities for Advancing the University Research Park Initiative Growing Regional Technology Industry Base Fostering High Value Place Strategy Advancing Workforce Development

6 6 Overview of Key Findings and Potential Opportunities Identified Potential Opportunity: Growing the Technology Industry Base in APG Region Key FactorStrengthsWeaknesses Technology Industry Major gains in tech industry for APG Region Increased presence of C4ISR related defense contractors Tech industry growth stalled in APG Region after 2007 Innovation Many inventors living in APG Region Significant base of SBIR and patent activity associated with APG tenant organizations Few companies in APG Region assigned patents, few winning SBIR awards for APG tenant organizations and few venture-backed

7 7 Significant Rise of APG Tech Industry has Stalled Since 2007 The APG region tech industry employment peaked at 10,446 jobs in 2007 and has declined since to its current level of 8,587 jobs in 2011, a decline of 1,859 jobs or 18% from 2007 Trends in Technology Industry Employment – APG Region, Baltimore MSA and U.S. (Indexed 2001 = 100) Source: Battelle analysis of Bureau of Labor Statistics (BLS), QCEW data; enhanced file from IMPLAN. APG Region tech industry grew from 6,768 jobs in 2001 to 8,587 jobs in 2011, growth of 27%, well outpacing Baltimore region and U.S. nationally 2001-2011 Percentage Increase in Technology Industry for APG Region, Baltimore Region and U.S.

8 8 Wide Divergence in APG Regions Tech Industry Growth Rates Relative to the U.S.; Several Highly Specialized Sectors in the Region APG Region Technology Industries: Employment Size, Relative Growth, & Relative Concentration, 2011 & Trends 2007-11 Note growth rates relative to the US : - Computer Programming slight positive growth rate but lagging strong growth in US; - Wired Telecomm actually a negative 7% but US had larger negative Source: Battelle analysis of Bureau of Labor Statistics (BLS), QCEW data; enhanced file from IMPLAN.

9 9 Overview of Key Findings and Potential Opportunities Identified Potential Opportunity: Addressing Workforce Issues Key FactorStrengthsWeaknesses Talent Strong demand for high skilled workforce across range of skills to support broad missions – C4ISR, Chem/Bio, Business/ Financial High educated/skilled residents in region (42% AA degree or higher) Significant top talent generation of new university graduates just outside of APG Region STEM activities in region growing new pipeline initiatives – Towson- HCC new 2+2 facility; UDel-HCC- Cecil-DTCC Regional Cybersecurity Education Alliance Many of the high educated/skilled residents commute Many of the newer and mid-to- small tech companies finding it hard to fill high skilled jobs and not connected to top talent being generated Hard for universities to aggregate demand and serve needs of APG organizations and contractors

10 10 Demand for High Skilled Talent in Region Mounting Beacon Associates 2009 assessment of forecasted demand across APG organizations over time – Note: Beacon study did not examine demand for IT skills Susquehanna WIA Occupational Projections for 2008-2018 -Engineers – 115 average job openings per year -Technicians – 37 average job openings per year -Computer & Math – 101 average job openings per year -Business & Financial – 237 average job openings per year -Note: At least half the demand for each occupational group due to need for replacement workers, not just new jobs Range of Annual Demand: 2010-19Key Degrees Associate Degree: 35-58 per year Bachelors Degree: 127-200 per year Masters Degree: 99-217 per year PhD Degree: 16-18 per year Engineering Logistics Business Administration Supply Chain Management

11 11 Source: National Center for Educational Statistics Significant Talent Pool Among Residents and Near-by Universities Universities within 90 minute commute of APG offer a substantial base of university graduates just outside of the APG Region

12 12 Work in Region Work Outside of Region College Educated40,25734,181 AA Degree9,7506,672 BS Degree18,33719,803 Grad/Prof Degree12,1707,706 Selected High Skilled Occupations 23,327 20,666 Mgt, Bus, Financial15,29814,828 Computer, Eng & Science 8,0295,838 Source: Census America Community Survey Public Use Microdata Sample Note: Includes Cecil, Harford and Kent Counties Highly Educated and Skilled Resident Workforce – But Many Still Commute Outside of Region for Work High Educated and Skilled Resident Workforce –42% of APG Region residents have a postsecondary degree –25% of APG Region residents work in occupations dealing with management, business and financial occupations (17%) or computer, engineering and scientific occupations (8%) Significant numbers of residents commute out of region for work

13 13 Overview of Key Findings and Potential Opportunities Identified Potential Opportunity: Creating a World Class Technology District Key FactorStrengthsWeaknesses Place Established significant Class A Office & Flex Market around APG Planned redevelopment efforts for mixed use, transit-oriented development around MARC stations in region Class A Office and Flex Market is scattered across Routes 40 and 22 – lacks sense of place High vacancy rates found in Class A and Flex Limited mixed use development

14 14 Rise of Defense-related Tech Based Industry Base in APG Region Shaping Commercial Real Estate Market Location of Defense-related Tech Industry Employment by Type of Facility Source: Hoovers Company Data Matched to CoStar Facilities; Calculations by Battelle Defense-Related Tech Industries Mapped –Engineering Services –Commercial Scientific R&D Services –Space Vehicle Propulsion –Computer System Design –Customized Programming Services –Testing Laboratories –Analytical Lab Instrument Mfg

15 15 Post BRAC 2005 – A Class A Office Market Established in APG Region; Relatively Modest Growth in Flex Space Timeline of Cumulative Inventory of Available Space --Total Rentable Building Area (RBA) in the APG Region YearClass A Office Space, RBA Sq. Feet Flex Space, RBA Sq. Feet 2005161,0002,676,199 2006201,0002,706,531 2007301,0002,867,023 2008386,0002,958,523 2009419,4462,982,523 2010731,3343,033,643 20111,134,4533,033,643 20121,425,1533,033,643 Note: Data represent total inventory of existing rentable square feet as of the end of each year. Source: Battelle analysis of CoStar Property database for APG region (Harford and Cecil Counties).

16 16 Location of Office and Flex Space Office Parks By Type of Facility Source: Hoovers Company Data Matched to CoStar Facilities; Calculations by Battelle But Development is Scattered Largely Around APG – Otherwise Would Be a Signature Technology Park APG Region Closer Look In Immediate Area of APG

17 17 Commercial Real Estate Market is Weak in Region If APG Region had a 15% vacancy rate in Class A Office and Flex Space Markets would result in an additional 559,259 net sq ft occupied and an additional 2,796 jobs gained In light of high vacancy levels, the leasing rates remain high for Class A Office and Flex Space around APG Year End 2012 Levels of Vacancy and Leasing Rates for APG Region and Baltimore MSA for Class A Office and Flex Building Markets APG RegionBaltimore MSA Market # Blgs Total Rentable Space 2012 Net Absorption Vacancy Rate Leasing Rates Vacancy Rate Leasing Rates Class A Office 171.43 MSF72,54041%$31.02*15%$24.53 Flex Buildings 1493.03 MSF(-44,118)21%$16.84*11%$11.26 * Leasing Rates reflect selected areas of Harford and Cecil County designated as industrial. Source: Battelle analysis of CoStar Property database for APG region (Harford and Cecil Counties).

18 18 Program Activities Suggested for the Three Potential Opportunities to Advance the University Research Park Initiative Growing Regional Technology Industry Base Fostering High Value Place Strategy Advancing Workforce Development

19 19 Growing the Regional Technology Industry Base: Furthering Pro-Active Outreach Marketing Target SBIR recipients from APG organizations Nearly 400 SBIRs awarded by APG organizations from 2010- 2012. Few to APG companies or even Maryland companies Battelle outreach identified interest to have presence at APG to enhance client relationship and access Key issues for these companies were: –Flexible leasing terms short term stays –Favorable rental cost –Some interest in access to classified space Key advantage of linking SBIR companies to APG prototyping facilities – Meet milspecs and protect IP Increasing Presence of Contractors Working on C4ISR Many defense-related contractors continue to operate both in APG Region and Monmouth County In 2011, the Monmouth Region defense-related tech industry employment stood at 14,870 … this is down from its 2001 level of 17,957 Still, it is still much higher than the 5,795 found in APG Region in 2011. Examples of firms in both regions: Booz Allen Hamilton, CSC, DSCI/D&S Consultants, Engineering Solutions and Products, General Dynamics, Lockheed, Millennium Services, Northrop Grumman, SAIC Growing Chem/Bio Industry Presence With presence of USAMRICD opportunity to attract more Nuclear, Biological and Chemical Industry Group members located in Northern Virginia to APG Region

20 20 Growing the Regional Technology Industry Base: Fostering Technology Commercialization and Start- Up Venture Activities Need more pro-active effort to incentivize commercialization in APG Region Develop a network of advisors resident in APG Region with technology, market and business expertise -- similar to what Innovation Center for the Rockies has done Offer fund for assessment and validation -- similar to Central New York Grants for Growth – unique feature might be to link with rapid prototyping found at APG or existing tech industry capabilities found in region Create Entrepreneurs in Residence similar to Pittsburgh to help in guiding effort Address weak presence of emerging, innovative companies in APG Region, with a few notable exceptions of homegrown, high- growth tech companies Four venture capital backed companies since 2003 in ThomsonOne Venture database Four SBIR funded companies across all federal agencies from 2008-2012 Build upon base of inventors living in APG Region driving patents 1,328 patent applications and awards from 2001- 2012 -- but few assigned to companies in APG – largest holders of patents from inventors living in region are Black & Decker, Army, DuPont, Applied Nanostructured Solutions, Gore, JHU, UMBC 214 patent applications and awards assigned to individuals living in APG Region and 44 assigned to universities

21 21 Advancing Talent & Workforce Development: Clearinghouse for APG Related Education and Training Needs New initiative by APG to create an educational partnership with the APG Region to establish a clearinghouse function for education and training to better match needs/requirements of APG with educational providers –Would address the mushrooming of ad- hoc relationships and lack of coordination in education and training found at APG –Would offer APG organizations a dedicated resource to help them better aggregate needs and identify potential education partners –Offer educational partners easy point of access and better awareness of requirements Still unfolding … but holds great promise beyond its specific function for APG –Potential opportunity to deepen partnerships with universities to offer defined programs to APG –Create a broader initiative to more fully engage contractor community and serve their individual and broader community needs for talent development

22 22 For tapping resident workforce that commutes: –Identify potential local resident job candidates –Raise awareness and approaches to gaining security clearances –Target education and training to close any gaps on specific software applications or knowledge of federal contracting, etc For STEM pipeline and broader access to large base of university students nearby APG Region better connect through internships, connect firms to student projects, tie-in with univ career services, etc. Advancing Talent & Workforce Development: Talent Connector for Students and Residents –Tap into skilled, experienced resident workforce who commute –Tap into growing STEM pipeline within region (TU 2+2 and UDel Regional Cybersecurity Education Alliance) –Tap large base of undergraduate and graduate students from nearby universities Objective of talent connector would be to ensure that APG Region is recognized as a talent rich community

23 23 Advancing Talent & Workforce Development: Cybersecurity Education & Applied Research Institute Opportunity for Advancing Cybersecurity: –Need at APG for advanced skill development and more hands-on, experiential learning for cybersecurity developers, analysts and operators –Opportunity for advancing collaborations with universities, such as in applied research and development -Includes system of systems engineering design, analysis, testing and experimentation as well as modeling of cyber-agent behaviors Focus on: –Raising competencies of existing 100-200 APG cybersecurity workforce found across CECOM, CERDEC, ARL (SLAD, CISD), ATEC … often formal training as EE and have learned cyberskills along the way –Building pipeline for new workforce with defined programs with nearby universities … opportunity to link with the University of Delaware-led Regional Cybersecurity Education Alliance and other universities –Broader contractor needs Still seeking to address: –How to build upon proposed APG Education Partnership for Clearinghouse to better aggregate demand for specific curriculum, certifications or degree programs. –Is there a value proposition to APG in having more proximity in accessing education and training services or a more applied technology center?

24 24 Advancing Talent & Workforce Development: Chem/Bio University Collaborations Value for Advancing Chem/Bio University Collaborations: –Need at APG for advancing partnerships around systems biology, growing focus on countermeasures and other emerging technology areas –Growing next generation of DoD scientists – creating relationships and engaging top PhD and postdocs in specialized area of chem/bio –Shared research & development opportunities for addressing countermeasures, improved diagnostics and engineering devices (hard wall on actual work with pathogens) Focus on: –Raise collaboration opportunities with military (USUHS) and civilian universities – seek collaborations to generate R&D funding … look to Broad Agency Announcements of DHS or DARPA and then team with universities or industry –Possible reuse of USAMRICD wet lab facility that is being replaced – may need some upgrading – place to house collaborations –Collaboration opportunity on a new high-throughput ADME* facility to test use of novel compounds

25 25 Foster High Value Place Strategy Locations: Promote Mixed Use Redevelopment As Part of APG Region Technology District Best practice in research parks points to continued focus on advancing live, work, play environments o A far-reaching change in the physical development of university research parks that began over last decade – i.e. NC State Centennial Park, UCSF Mission Bay, UCO Fitzsimmons Life Science District o Results of soon-to-be- released 2012 updated AURP benchmarking finds the newer model is continuing to emerge strategically planned, mixed-use campus expansions o Housing – beyond for students o Retail – more than just restaurants Opportunity for APG Region is to move to create Technology District o In sync with Master Plan development o Create identity – add signage o Advance broader range of incentives for mixed use development o Target not only technology businesses, but high skilled administrative, back office operations leveraging residents who commute o Be able to market the Technology District as a live-work-play environment Likely First Mover Opportunities: Planned Mixed Use Transit- Oriented Development o Aberdeen MARC Station o Perryville TOD/ Greenway Plan

26 26 Summing Up Program Activities Across Potential Opportunities for University Research Park Initiative Growing Regional Technology Industry Base Fostering High Value Place Strategy Advancing Workforce Development Initiatives Targeting emerging, innovative companies serving APG Advance Chem/Bio Industry Presence at Edgewood Post Target technology commercialization services to APG Regional Inventors Continue outreach to existing C4ISR contractors to deepen activities ongoing in APG Region Initiatives Support establishment of Education Partnership with APG for Educ & Training Clearinghouse Create talent connector for the APG Region to broader regional university talent and to high skilled residents who commute Advance a Cybersecurity Education and Applied Research Institute Advance Chem/Bio University Collaborations Initiatives Establish APG Technology District promoting mixed use development

27 27 Organizing for Success Guiding Principles Form should follow function Steering versus rowing Seek leverage and broader public-private partnerships Best practices can inform how to design Potential Opportunities Implementation Approaches Governance Operations Funding Approaches

28 28 Battelle Ideas for Implementation to Grow the Regional Technology Industry Base Program Activities GovernanceOperationsFunding Approaches Best Practice Examples Targeted outreach marketing to companies doing business with APG – i.e. SBIR cos, C4ISR cos, NBC Industry Group Economic Development Advisory Board Primary economic development function Existing economic development funding Dayton Development Corporation Chamber of Commerce of Huntsville/Madison County Commercialization services to APG Regional Inventors URP Board to oversee & advise on activities, funding Economic development function for staffing to do outreach, generate network, solicit proposals, create mentoring Need an ongoing source of public funding – might be able to structure some returns Seek support from angel investors/serial entrepreneurs Oklahomas Innovation to Enterprise (I2E) – OKC and Tulsa primarily CNY Grants for Growth Innovation Center for the Rockies (previously just Boulder County)

29 29 Battelle Ideas for Implementation to Address Talent and Workforce Development Program Activities GovernanceOperationsFunding Approaches Best Practice Examples Educational Partnership Clearinghouse APG Organizations University Center at HEAT / NMHEAB University Center at HEAT State, Local, APG, Educational Institutions (?) Suburban MD Technology Council Talent Connector for Students and Residents University Center at HEAT / NMHEAB Economic development function given need for close working relationship with companies Possibly tap university relationships of STEM Pipeline and Clearinghouse County, Contractors (direct to students and universities) Oklahoma Project Boomerang Iowa Life Changings smart career move Cybersecurity Institute URP Board in conjunction with APG Organizations Identify university lead with guidance of APG Possibly house as part of CERDEC technical support lead Aggregating APG requirements Air Force Institute of Technology Chem/Bio University Collaborations URP Board in conjunction with APG Organizations Identify a university lead with guidance of APG Aggregating APG requirements

30 30 Battelle Ideas for Implementation to Create High Value Place-based Development Program Activities GovernanceOperationsFunding Approaches Best Practice Examples Technology District involving mixed use development Economic Development Advisory Board Collaboration of County and City – create an overlay district? Economic development function Use of tax mechanisms – Tax Increment Finance, PILOT like in Prince Georges County Private developer investment Consider Business Improvement Districts – Chapter 461 -- HB 1182 Laws of 2010 Growth of mixed use approaches for redevelopment

31 31 Broad Implications for Implementation Breadth of opportunities and related program activities encompass large part of overall economic development –Key elements include: physical development, business development, innovation/commercialization and education & workforce development Implication #1 University Research Park Initiative will require broad support as a top economic development priority of APG Region to succeed –For Harford County, this suggests it is governed overall by the Economic Development Advisory Board Implication #2 Collaboration across county, city, state government with APG will be critical –Beyond collaborations between Harford and Cecil, even within Counties will need collaboration on master planning –Engage state authorized boards (NMHEAB) along with broader state support for initiatives to promote technology industry growth around APG

32 32 Thank You and Discussion Growing Regional Technology Industry Base Fostering High Value Place Strategy Advancing Workforce Development Initiatives Targeting emerging, innovative companies serving APG Advance Chem/Bio Industry Presence at Edgewood Post Target technology commercialization services to APG Regional Inventors Continue outreach to existing C4ISR contractors to deepen activities ongoing in APG Region Initiatives Support establishment of Education Partnership with APG for Educ & Training Clearinghouse Create talent connector for the APG Region to broader regional university talent and to high skilled residents who commute Advance a Cybersecurity Education and Applied Research Institute Advance Chem/Bio University Collaborations Initiatives Establish APG Region Technology District promoting mixed use development


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