Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, October 2, 1994 TAG: 9410030011
SECTION: HORIZON PAGE: G5 EDITION: METRO
SOURCE: JEFF DEBELL
DATELINE: BLACKSBURG LENGTH: Long
Most of the companies were created to develop and market products arising from scientific research at Tech. Half a dozen do research for outside firms. A few merely rent space for their own work, which is not formally tied to research at Tech.
"We're sort of a marriage broker" between Tech and the businesses, said Joe Meredith, who runs the center and is its president.
More than 650 people work in the park, 80 percent of them full time. Salaries exceed local and state averages, and the collective annual payroll is about $7 million. The companies spend locally for many services and supplies, including an estimated $2 million in furnishings aside from lab supplies.
Virginia Tech officials say the full economic impact of the Corporate Research Center has never been measured.
"Other than knowing it's better to have it than not have it, I wouldn't know how to put a number on it," said Raymond D. Smoot Jr., Tech's treasurer and vice president for finance.
The Corporate Research Center was founded and initially bankrolled by the Virginia Tech Foundation, but it is due to become self-supporting soon. Income is derived principally from the lease of space - some quarter-million square feet - that is under roof in the park, but Meredith doesn't like for the park to be perceived as "a real estate venture."
"It's not real estate," he said. "It's culture, business development, economic development."
The center is intended to enhance support for Tech research and exploit its commercial possibilities, and to provide consulting and employment opportunities for Tech faculty and students and their spouses.
An additional objective is to assist in economic development of the region, Smoot said, "but that's not as altruistic as it sounds. We want Blacksburg and Montgomery County to be an attractive place for students and faculty to come to."
Part of making it attractive, he said, is to foster a "viable business and corporate presence" that not only provides employment and consulting opportunities but has the fortuitous side-benefit of assuming some of Tech's responsibility as the area's economic behemoth.
The Corporate Research Center is one of 133 such facilities in the country, according to the Association of University Related Research Parks. They range in size from a handful of employees to more than 25,000, though most are in the low hundreds.
The Corporate Research Center ranks within the top 25 percent in number of employees, AURRP executive director Chris Boettcher said.
Like many other parks, the center originally hoped to anchor itself with the research and development wing of at least one major corporation, much as North Carolina's successful Research Triangle Park did with IBM.
The hope was that related manufacturing would spin off nearby, thereby benefiting the regional economy, and other companies would be attracted by the twin magnets of the Corporate Research Center (with its high-profile anchor) and Tech itself.
It hasn't turned out that way. Instead, the park has developed a specialty of forming new and small companies, mostly to commercialize research at Tech. And, though R&D was the intent (and remains the bedrock activity of the center), a certain amount of production does take place there.
Production is permissible under the center's charter, but manufacturing isn't. Asked to explain the difference, Meredith said manufacturing is "low-tech stuff. You know it when you see it."
And production?
"Everything else," he said.
Though they might not make the same distinction, and though they'd like for some of the companies in the center to have gone instead into one of the region's commercial industrial parks, local economic development officials say they welcome the center.
"I do see the need for this kind of activity in the region," said Jill Barr, economic development director for Radford. It's not competition, she said, "unless it continues in this manufacturing direction."
"We don't intend to be competitive with them," Meredith said. "We're competitive with high-class office space."
Officials of the park continue to troll for a centerpiece corporation, but so far it has eluded them. The absence of a marquee name may be a disadvantage, but there is an upside:
Without a centerpiece to act as magnet, the Corporate Research Center has ended up creating new jobs instead of merely importing them from somewhere else.
The park is not atypical in having diverged from its original aim, according to University of North Carolina professors Michael I. Luger and Harvey A. Goldstein. In their book on research parks, "Technology in the Garden," they say "about one-half of all announced research parks never achieve viability and one-half of those that do are forced to diversify from research to other types of functions."
Statistically, the parks most likely to succeed (and stimulate other economic activity) are those affiliated with large and prominent research universities such as Virginia Tech, which carries on something like $130 million in sponsored research per year.
Even then, the professors say, the parks are far from a sure thing and can be slow to mature.
North Carolina's Research Triangle Park, considered a model, spent several years going nowhere until IBM decided in 1965 to put a major facility there.
Now, the park is estimated by Goldstein and Luger to be responsible for 52,000 jobs in the Raleigh-Durham-Chapel Hill area. Included are some 18,000 jobs at the park and about 1,240 R&D jobs outside the park, plus all the service and supply jobs generated by the presence of R&D firms and their employees and families.
"Research parks will be most successful in helping to stimulate economic development in regions that already are richly endowed with the resources that attract highly educated scientists and engineers," Luger and Goldstein conclude. "This is not to say that regions with less rich endowments cannot have a high-technology future, but more basic and long-term investments in improving public and higher education, environmental quality, and residential opportunities will be needed first.
"If a decision to create a research park is made, government leaders should be prepared to invest liberally, and all other stakeholders should be prepared to wait a number of years before the investment is returned."
by CNB