Virginia is well known as a top state to start and grow a technology business, thanks in part to policies, investments and incentives promoting research, entrepreneurship and job creation as well as science, technology, engineering and math education.
The commonwealth’s angel investor tax credit, research and development tax credit, research commercialization fund, capital gains tax exemption and Center for Innovative Technology GAP Funds program are vital to efforts to diversify our technology economy and grow next- generation technology businesses across the commonwealth. As Virginia’s General Assembly convenes for the 2013 legislative session this month, policymakers must provide predictability and certainty to Virginia’s innovation community by maintaining stable funding levels for these important programs.
The Northern Virginia Technology Council is encouraging policymakers to boost funding for Virginia’s technology-focused angel investor tax credit, which is currently funded at $4 million a year. The number of investor applications for this credit has grown by more than 60 percent from 2010 to 2011 and the amount claimed has grown to $8 million from $3.65 million, which is a positive indicator that the credit is succeeding. Virginia must meet this growing demand and maintain investor confidence in the credit by ensuring current and future investors receive the value of the incentive they are expecting.
Particularly in the face of federal spending cuts, now is also the time for renewed effort on diversifying our state-level economy. Building on our previous successful investments, we must leverage Virginia’s federal, state and private sector assets to position and market the commonwealth as the go-to location for cybersecurity, data centers and cloud-focused businesses, big data and other sectors where Virginia has a competitive advantage and great prospects for growth.
Cybersecurity, in particular, presents a clear opportunity for Virginia companies. Total federal spending on cybersecurity is set to grow by almost 9 percent a year over the next five years, and private sector commercial demand for cybersecurity products and services is strong and expanding.
In order to capitalize on this opportunity, NVTC is proposing that Gov. Bob McDonnell provide $4.6 million to start the nation’s first cybersecurity accelerator at the Center for Innovative Technology to focus on the development of new cybersecurity capabilities, including defensible cloud technologies to support the growing data center presence in Virginia. In addition, we believe that an additional $5 million should be invested to support multi-university and industry research projects focused on developing new cybersecurity solutions while cultivating a pipeline of graduates with advanced degrees in this critical field.
Federal spending cuts and accelerating global competition for jobs and new businesses underscore why smart and targeted economic development investments are more important than ever. Virginia must continue its focus on promoting collaborative research, innovation and entrepreneurship, while also investing in cybersecurity and other growth sectors, in order to ensure our long-term economic vitality and competitiveness. By leveraging our strengths and assets, the commonwealth can not only meet today’s economic challenges but also advance its well-earned reputation as a global technology leader.
Brad Antle, president and chief executive of Salient Federal Solutions, is chairman of the Northern Virginia Technology Council. Bobbie Kilberg is NVTC’s president and chief executive and Josh Levi is NVTC’s vice president of policy.