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  •   TechCapital logo The Learning Curve

    By Shannon Henry
    TechCapital Editor
    Winter 1997

    It's the topic du jour in Washington area business and technology circles: How can the region maintain its breathless high-tech growth without a recognized world-class higher education system to attract much needed labor and talent

    Some say if the area's higher education system doesn't change dramatically in the next few years, not only will it be nearly impossible to draw technology workers here, but it will be hopeless to keep the current ones. Others, however, claim the situation isn't nearly so bleak.

    Not willing to sit back and wait to see if these forecasts are by Chicken Little or Cassandra, area leaders are taking action on several fronts

    It turns out many efforts are already underway. The grand idea is to create a higher education system here that will be a model for technology-rich areas. Archrival universities are slowly linking up and non-profit groups are trying to connect businesses and schools with the goal of raising technology education standards and ultimately the area's reputation.

    Most high-tech regions - Silicon Valley and Boston in particular - have a world-class university that shaped the area's role as a technology center. Washington, populated as it is with top technology companies and a growing pool of capital, however, does not have a Stanford or MIT.

    A top-flight university's influence spans huge areas that can create an economy: innovative research and development; education that not only trains workers but attracts the best students and faculty; an entrepreneurial spirit that fuels area businesses; and even technology education at the earliest levels - in area K-12 schools Some say it could take decades or even a century for the Washington region to play out this exercise to improve higher education. But others think the next five years are the proverbial window of opportunity.

    "We can attract people. It looks like we've got a chance. But unless the support comes, five years from now it will be worse," says Alan Merten, president of George Mason University in Fairfax, Va. "These jobs will move someplace else if there's not the education here.

    It's clear that the area will never have a Stanford. The newer buzz is that universities here are finally doing something about that realization. Call it doing the best with what they've got. Confidence abounds. "I reject the notion that the absence of a Stanford prohibits us from becoming a national leader in technology," says William Kirwan, president of the University of Maryland at College Park. "We have the elements in place to become a powerhouse ... [although] we have some inherent obstacles to overcome."

    Education Alley


    Robert Templin, president of Virginia's Center for Innovative Technology in Herndon, Va., is spearheading an effort to build an education system in the region that will make current technology growth in the area look turtle-paced. "It's not enough to have one world-class university. We need a system of complementary universities," says Templin. "You end up with something different than Stanford, but it's something very powerful." CIT is linking businesses, universities and federal research laboratories through a series of programs geared toward creating jobs, companies and competition. The organization is forming a seed-stage venture capital fund and already funds entrepreneurship centers at four Virginia universities.

    Templin works out of an ultra-modern, mirrored building leaning on a hill - most people have seen it on their way to Dulles Airport. Some call CIT, which gets $10.5 million a year from the Virginia government, the spy building, and it's even been the backdrop for some B-movies.

    "The strategic question is how can we nurture these universities in the way that has the maximum impact?" asks Templin. He's optimistic. "Universities are recognizing and embracing the role they have in economic development," Templin says.

    "[Templin] is really the most aggressive mover for university change," says April Young, executive director of the Potomac KnowledgeWay Project in Reston, Va. "And the universities are under tremendous pressure to respond."

    William Brody, president of Johns Hopkins University in Baltimore, has even given the area a new name: Education Alley. "We have an incredible density of universities," says Brody, who spent 20 years at Stanford after leaving MIT and says "hogwash" to anyone who thinks the Washington region needs to copy those models. Hopkins has spun off 12 companies from its medical school in the last four years.

    Brody claims that Hopkins, the National Institutes of Health and University of Maryland at Baltimore together create the largest center of biomedical research in the world.

    What Washington's Got


    In fact there are a number of individual programs and projects in the area that together would be stiff competition to any other regional effort. Unusually innovative programs at area universities include the Dingman Center for Entrepreneurship at the University of Maryland, which serves as a broker between venture capitalists and start-up companies; the nonprofit Century Club at George Mason University, made up of area business leaders from companies like Lockheed Martin Corp. and Litton-PRC who want to improve higher education; and the corporate research park at Virginia Tech, which has brought 65 high-tech companies under its wing.

    And the area has something no other region can boast - the federal government. "We're where the information is," says Merten.

    Federal research and resources - think Library of Congress, NIH, NASA - are unparalleled. The co-winner of the 1997 Nobel Prize for Physics happens not to be a university professor but William Phillips, a government scientist at the National Institute of Standards and Technology in Gaithersburg, Md. Phillips shared the honor with colleagues at Stanford and the College de France. And arguably the most important research of the information age - the development of the Internet - was a federal government effort at the Defense Advanced Research Projects Agency in Washington.

    The U.S. government, the largest consumer of information in the world, is in fact the area's prime differentiator from other regions, and in a good way. "We're not trying to be like the West Coast," asserts Templin. "We're trying to develop a new economy based on a new model."

    Some top R&D efforts are underway in the area. And universities are more and more sensitive to supporting an entrepreneurial environment where funding and sabbaticals are plentiful. Developing intellectual property that can be used by industry is a main goal, says Stephen Trachtenberg, president of George Washington University in Washington. "Education and training must also be accompanied by research, so that students coming out are at the leading edge - a survival requirement for such companies and industries," he says.

    Most of the region's universities are members of Internet2, an effort with the National Science Foundation and technology companies to create a faster, better Internet that would link communities around the country.

    GW is home to the National Crash Test Analysis Center, a federally funded research project that uses supercomputers to simulate and study automobile crashes.

    Virginia Tech since 1985 has been running a for-profit corporate research park in Blacksburg, Va. "We are an investment for the university," says Joe Meredith, president of the organization.

    The park houses 65 high-tech corporate tenants in nine buildings and plans to add two more buildings a year going forward. Meredith says he's especially proud that the group has attracted companies from nine other states to move their headquarters to Blacksburg. The Scottish genetic engineering company made famous for cloning the sheep Dolly has its U.S. operations in the park.

    Meredith is quick to point out that while the park offers mentorship programs, it's not a traditional incubator where companies are nurtured along until it's time for them to go out into the real world. "We want the companies to stay here forever," says Meredith.

    Virginia Tech, along with telecom companies Bell Atlantic and Sprint, has created a broadband asynchronous transfer mode system called Net.Work.Virginia. The high-speed lines provide voice, data and video services at the same rates to both urban and rural areas of the state. Net.Work is now being studied by other states interested in similar projects.

    While Virginia Tech, like many universities, has been offering distance learning for about 15 years, its approach is different. A classroom is set up with two enormous television screens and each student's desk has a remote control. One can sit in the Falls Church location of the university and interview, or attend a class with, someone in Blacksburg. The technology allows the experience to be interactive and the people on either end can see the whole classroom - including facial expressions - in the other location. "The goal is to allow anyone anywhere to participate in a class," says Jeffrey Bevis, head of video and broadcast services at Virginia Tech.

    This high-tech teaching method is in fact a response to the way students want to be taught. "Universities in general have to start taking their education to the student," says Judy Pearson, director of the Northern Virginia Center at Virginia Tech.

    "I don't know of any state that has that commitment of linking every town across the commonwealth," says Templin about the Net.Work.Virginia project. "These aren't plans - this is happening now."

    A university's attitude toward invention and willingness to fund ideas is vital. Marc Andreessen, founder and executive vice president of Netscape Communications Corp., in Mountain View, Calif., remembers clearly how his college, the University of Illinois, did not support his invention of the World Wide Web browser and creation of Netscape. "U of I considers spin-offs a threat," Andreessen says. "They started attacking us from day one."

    Work Force Is Why


    The immediacy of such a multifaceted education project is what is known in Washington and other technology regions as the work force or recruitment problem. "You can't have a business or university in the area that's untouched by the work force issue," says Judy Pearson, executive director of the Century Club at George Mason (and no relation to Virginia Tech's Judy Pearson).

    Quite simply, there are many more technology jobs than qualified people to fill them. "Look at the want ads on Sunday. There aren't enough people coming out of our universities," says the University of Maryland's Kirwan.

    Ray Pelletier, executive director of the Northern Virginia Technology Council, estimates while there are currently 19,000 job openings in Northern Virginia for engineers and technology workers and a need for 20,000 more a year going forward, the area universities are only graduating 2,300 people qualified for those jobs each year.

    Tech areas across the country are gearing up now for the biggest fight yet. A recent report sponsored by CIT and the Virginia Chamber of Commerce on this region titled "Virginia's Blueprint for Technology-Based Economic Growth" had three strong recommendations:

    In five years, Virginia must have the pipeline in place to triple the number of graduates in engineering, computer science and related technical jobs and provide computer access to all students.

    Over the long term the state must adopt a "K-through-Life" approach to education that would encourage continuing top-quality education.

    Virginia must establish a "virtual university" with education available to anyone, anywhere, anytime.

    On the Maryland side, Johns Hopkins and University of Maryland in August proposed the Maryland Applied Information Technology Initiative, which would commit all Maryland universities and colleges to double the number of information technology graduates by 2003. The proposal also outlines private-sector partnerships, incubator development and applied research activities vital to the area's future.

    Not a Quick Fix


    Robert Kahn, who is considered with Vint Cerf to be one of the two fathers of the Internet, says Stanford didn't have an impact 50 years ago. Kahn now runs the Corporation for Advanced Research Initiatives in Reston, Va., which, interestingly, works on projects with many universities across the country, including MIT, Stanford and the University of Pennsylvania but not with one Washington area university. "It's a matter of where the good ideas are coming from," Kahn says. "You have to create a culture here. That could take centuries. This is a long-term proposition that requires enormous dedication from very talented people."

    William Barr, corporate liaison at Stanford University in Palo Alto, Calif., agrees. He says it took Silicon Valley 60 years to get to the point it's at now. "To compete, the East Coast has a lot of catching up to do," Barr says. "It's all about the university allowing faculty and students to develop a culture where they take their products to market."

    Funding and the Interstate Debate


    There are several fundamental problems with creating a community of interest model to solve the area's education problem. Indeed, creating Education Alley is the region's biggest challenge yet.

    One problem, of course, is funding. "Building a university with a technological base is much more expensive than one with arts or politics," says Merten. "It's a myth that somehow we'll be able to get this without spending a lot of money, that we can do this on the cheap."

    Merten is one of the key players in this transformation as he tries to position George Mason as a leading technology university from his unique vantage point. "I look at this issue from the point of view of a computer scientist, a board member and a university president," says Merten, who has a master's degree in computer science from Stanford.

    For Merten, ground zero is getting more funding for faculty positions. "Unless you're willing to pay for faculty, this is a pipe dream," he says of the region's technology future. Specifically, Merten says, GMU needs $10 million to $15 million more annually than the $70 million to $80 million it now receives.

    Another problem is that businesses and universities have extremely different cultures and senses of timing and therefore a hard time working together. Entrepreneurs who need to get their ideas to market are often frustrated by the slow pace of academia. However, "the answer isn't to make companies out of universities," says CIT's Templin.

    Johns Hopkins president William Brody says he recently met with a large corporation and potential partner whose business doubles every 12 to 15 months. That's a new ball game for Hopkins. "We're not likely to change, so we're finding ways to work with the company on a different time frame," says Brody.

    But it turns out that many companies and universities aren't even trying. "This region has an unusually low incidence of [business-university] partnerships," says the Potomac Knowledge Way's Young.

    Across the country, only four in 10 fast-growth companies draw upon college and university resources, according to a study by Coopers & Lybrand.

    However, the study found that companies using university resources had a 59 percent higher productivity rate than those that didn't. The partnering type reported 21 percent higher projected annual revenues; 32 percent more recent bank loans; and 23 percent more major capital investments planned in the upcoming year. Coopers & Lybrand interviewed 424 CEOs of fast-growing companies ranging from $1 million to $300 million in annual revenues.

    Some universities are taking the lead in setting up relationships with businesses. George Washington University runs a corporate liaison program where some 25 companies send executives to lectures and create joint teaching and research programs. GW also has a Virginia Campus Advisory Board of 35 CEOs who meet quarterly to discuss how GW and the technology community can work together. Two partnerships stemming from those meetings are between GW and Science Applications International Corp. of San Diego to offer a noncredit course and with Leesburg, Va.-based Coherent Communications on a telecommunications research project.

    And perhaps one of the most difficult challenges is the in-fighting among the states that make up the Washington region.

    "We've got Northern Virginia vs. Maryland," says Kirwan. "The Potomac River may as well be the Pacific Ocean. The region needs to come together and realize what assets it has."

    Young, whose group is one of the few that promotes and advises the whole region as opposed to the Northern Virginia Technology Council or the High Technology Council of Maryland, says education improvement won't happen without some serious cooperation. "We need to create a platform for a very high level of collaboration," Young says.

    Competition among universities is intense. Even people who are trained here leave to go to other cities that - in part because of top-notch universities - have a different technology culture than Washington. "They all go to California or Boston. They really do," laments Mona Hoff, president of VentureQuest Resources, Lutherville, Md.

    But as much as people complain about the universities, some recent statistics show the curricula at many of the schools is good and getting better. The annual graduate school rankings in U.S. News & World Report list Johns Hopkins at No. 17 and University of Maryland at College Park at No. 18 in a ranking of the top engineering schools in the country. University of Virginia came in as having the 11th best business school and Maryland was 25th.

    Maryland continued to be the top-rated area school with its No. 12 ranking for computer science and No. 4 in the specialty program of databases. "We have plenty of brain power and expertise in this region to make it," says Kirwan.

    The importance of such rankings cannot be underestimated. "Great students are more affected by reputation than anything else," says Kahn.

    Next fall, Virginia Tech will be the first major public university to require personal computers of every freshman, says Paul Torgerson, president of Virginia Tech. "We'll produce computer-literate students." Torgerson is bullish on the region. "Northern Virginia will surpass Silicon Valley."

    No matter how well this system is put together, it will take time. But, predicts Templin, "We will begin to see this collaboration of business and university finding its way into the fabric of the community."

    If it doesn't happen, the region won't thrive, Templin says. "Our companies cannot be greater than the community they stand on."

    © Copyright 1998 Post-Newsweek Business Information, Inc.

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