1. Navigating the Changes in Economic Development – Sighting for the Collaborative Lighthouse Federal Laboratory Consortium Mid-Atlantic Regional Meeting October 23, 2007 Jerry W. Giles Director of Finance - Team Leader, Science and Research Virginia Economic Development Partnership

2. Virginia’s Business Climate # 1 Ranking 2007

3. Virginia Profile 3rd in Federal R&D spending & SBIR awards Total R&D - $7.6 billion (12th rank) Industry R&D - $4 billion (16th rank) University R&D - $914 million (14th rank) Venture Capital Investments (11th rank) Highest concentration of tech workers in U.S. 11,300+ high-tech companies operate in Virginia 29 federal R&D centers in Virginia

4. Market forces have shifted the paradigm. Some in policy making positions "get it" and some don't. Competitive arsenals for new attractions and existing expansions still reflect the older economic paradigm in many cases. Invest to retain and attract. States tax incomes; localities tax assets (real estate, machinery) - conflicting revenue streams and motivations will arise. Workforce, Workforce, Workforce and Operating Costs - The consistent drivers of location decisions. Navigating the Changes in Economic Development

5. Advanced Manufacturing Plastics/Polymers Initiative Fabricated Wood Initiative Food Processing Natural Resources Chemicals Security & Services Distributed Services Initiative Modeling & Simulation Initiative Federal Security Agencies & Providers Information Technology Finance, Insurance, HQ Professional & Business Services Science & Research Energy Initiative Life Sciences/Medical Devices Nanotechnology Emerging/Convergent Technologies Corporate R&D/Federal Labs Transportation Global Logistics Initiative Automotive Aerospace Global Logistics Distribution Initiatives and Verticals

7. Virginia Private Sector R&D Facilities R&D Focus: RegionNumber% Life SciITAerospaceEnergyMaterialsOther Northern Virginia8740% 37%8%5%--10% Richmond5827%69%5%--2%12% Charlottesville2311%87%-- 13% Hampton Roads2311%35%30%22%--4%9% Blacksburg (SWVA)126%50%33%8%-- 8% Valley94%33%11%-- 11%45% Southside31% 33%67%-- Total215113 (53%)46 (21%)13 (6%)6 (3%)13 (6%)24 (11%) Data covers operations that conduct basic and/or applied research, and are both for-profit and non-profit. Data does not include university or federal laboratories or research centers.

8. Support technology, R&D emerging technology sectors that play to Virginia’s strengths and diversify state economy. Invest to retain and attract. Focus on Virginia’s R&D assets and possible collaborative outcomes. Find opportunities to connect complementary research among state universities, federal labs and industry and promote private sector investment. Leverage Virginia’s Center for Innovative Technology (CIT) and their expertise in SBIR/STTR and seed stage technology investment. Collaborative Lighthouse Strategies

9. Federal Labs and VEDP Proactive collaboration opportunities. Facilitation and introduction of corporate/ academic entities with needs/solutions. Enhance marketing strategies for technology companies. Attract quality R&D players.

10. Intellectual capital #1 resource. Interconnected global economy requires new solutions. Innovation enhances competitiveness and is critical to our shared success. Virginia’s growth and retention of high tech jobs and gazelle-like companies is the prize. Embracing the Innovation Economy

11. For More Information Jerry W. Giles Director of Finance - Team Leader, Science & Research Virginia Economic Development Partnership P.O. Box 798 901 East Byrd Street Richmond, VA 23218 Phone: 804-545-5703 Fax: 804-545-5701