From the sixth-floor offices of the Center for Innovative Technology near Dulles International Airport, William B. Hamilton gestured beyond the tinted windows of his futuristic building toward the high-tech businesses lining the Dulles corridor.

"Out there is the capital of the Internet," said Hamilton, the center's regional director. "And this company had a major piece in helping that happen."

Nearly two decades after it was created as a statewide technology extension service, the center is hoping to recapture its glory days even as it copes with deep budget cuts and fends off a proposal to abolish it. Embarking on a more tightly focused -- but still ambitious -- mission, the nonprofit center plans to capitalize on what is expected to be the largest increase in federal funds for research and development since the Cold War: a surge of investment aimed at improving national security.

"We have a huge opportunity," said George C. Newstrom, Virginia's secretary of technology and overseer of the center. The center "is extraordinarily well positioned to be the catalyst" and to help universities and start-up companies attract that funding.

Toward that end, the center is creating a Virginia Institute for Defense and Homeland Security, with participation from the state's 11 major universities.

The ambitious program stands in sharp contrast to the center's malaise two months ago when a commission on government efficiency recommended that it be reconstituted "as part of a statewide initiative to enhance Virginia's research and development infrastructure." The commission, chaired by former governor L. Douglas Wilder, complained that the center had no clear purpose and could not adequately explain what it did.

The General Assembly last year even ordered a study of the center's land -- 7.5 acres straddling the Fairfax-Loudoun county line -- and its odd-shaped building, which looks like a glass pyramid jammed upside down into the ground. The study concluded that the real estate market is too soft to sell the $23 million property, whose value has dropped by more than $4 million since 2001.

Since the Wilder group's recommendation, Newstrom and others say, the center has undertaken a major reorganization that has dealt with the criticism and effectively silenced talk of abolition. For the first time, it adopted measurable goals, said Peter Jobse, executive vice president and chief executive.

Among them is to help create more than 200 technology companies statewide by commercializing the intellectual property generated by university research and matching it with entrepreneurs. Overall, Jobse said, the center plans to boost Virginia's "total competitiveness" this year by nearly $267 million, a figure that encompasses more federal funding to universities and businesses, new capital from private investors and increased sales by technology companies.

"The commission wanted to see a more focused CIT, and I believe they are a more focused CIT," said Bobbie Kilberg, president of the Northern Virginia Technology Council, a trade association.

The center is also considerably smaller, its fiscal 2003 budget having been slashed to $7.8 million from $14 million in 2000, and its staff reduced from 50 to 35.

The CIT needed to be reformed because it was trying to be "all things to all people," Hamilton said.

He spoke after a seminar last week explaining the center's free services to a group of business executives. To access services, a company must have an office in Virginia or an intention to move there. The center helps companies in such areas as obtaining research grants to work on federal technology problems, competing for financing, forming partnerships with universities, and marketing.

Sharon F. O'Shea, president and CEO of a two-person start-up called e-Triage, was looking for help obtaining short-term financing and contacts for marketing. Last year, she said, the center helped improve her business plan. Her company uses "intelligent software" to assist institutions such as hospitals and nursing homes in retaining employees.

"You can't afford to pay someone to look at a business plan when you're putting all your money into product development," O'Shea said. "If there weren't a place like CIT, we couldn't make it."

George C. Newstrom, Virginia's secretary of technology, says the center can be the catalyst to help attract funding for homeland security projects.Bobbie Kilberg, president of the Northern Virginia Technology Council, says she thinks the center has become more focused, as a commission had recommended.The Center for Innovative Technology headquarters.