
DATE: Sunday, November 2, 1997              TAG: 9711010588

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY AKWELI PARKER, STAFF WRITER 

                                            LENGTH:  210 lines

TECH FIRMS TIE STATE'S FUTURE TO THEIR OWN

There's a new set of players in Virginia's politics of business, joining the tobacco lobbyists, rail barons and land developers. And they wear pocket protectors.

Virginia's technology industry is walking tall in Richmond's corridors of power. And now, say technology companies, it's time for them to stand up and be counted in politics.

High tech, for years a bit player on the state political scene, has expanded over the past five years like a teen in a growth spurt.

``They're not the 800-pound gorilla now, but they're coming into adolescence,'' says Robert Hollsworth, director of Virginia Commonwealth University's Center for Public Policy.

``They're players now.''

But these players say their interest transcends business-as-usual, self-centered politicking. The entire Commonwealth has a stake in their success because the industry - in which the typical wage is more than $46,000 - can help ensure Virginia's economic future.

``It's about higher quality of life,'' says Terry Riley, executive director of the Hampton Roads Technology Council.

Increasingly, tech companies' pleas are being heard by the people who count the most - politicians who can change the rules or make new ones.

``I'm a firm believer in the notion that the private sector can have an effect on public policy,'' Virginia secretary of commerce Robert T. Skunda said at a statewide technology summit earlier this year.

Virginia is home to 2,450 technology companies employing more than 290,000 workers.

Together they're a potentially huge political force to be reckoned with, but ``They've only recently become organized, and they've organized in a way that doesn't neatly fit into all the traditional categories,'' says Hollsworth.

The industry, built in large part on the intellectual sweat of entrepreneurs and small companies, ``wasn't looking for favors from government,'' says Hollsworth.

``As the industry matured, however, what you're seeing are government activities that are very important to it,'' Hollsworth says.

New technology has spawned new dilemmas. Finding qualified help is harder and more expensive. Old infrastructure like analog phone lines back up under a flood of modem-borne information they weren't designed to accommodate. And although Virginia leaders like to say the state is ``open for business,'' small business has found opening the the door at times a ponderous task.

For instance, says Riley, complex securities laws and the state's conservative financial institutions make it tough for cutting-edge, high-risk innovators to get capital.

That's where regional ``technology councils'' like HRTC come in. They encourage local, tech-oriented companies to join together and provide feedback on how the area and the state could be more hospitable to their business.

The oldest, and some say most successful, of these technology tribes is the Northern Virginia Technology Council, conceived in 1991. Computer and information systems companies thrived in Northern Virginia during the 1980s, surfing to success on a wave of federal work. When government spending started winding down in the 1990s, those same companies - and more than a few new ones - were able to plug into the information technology boom spurred by the Internet and leaps in computing power.

As Northern Virginia's tech companies faced new challenges and realized that many of them faced similar problems, they organized into a political dynamo that other regional councils today are trying to emulate.

NVTC's membership has swollen to 750, up from about 300 three years ago. Members include heavyweights like Computer Sciences Corp., America Online and AT&T.

Armed with a paid staff and consultants, NVTC brought the workforce shortage problem into stark relief earlier this year, proclaiming that, in Northern Virginia alone, 19,000 high-paying, high-tech jobs go begging. In Hampton Roads about 2,000 tech jobs are vacant.

NVTC is predicting 100,000 new technology jobs in Virginia will create $8 billion in additional wages over the next five years - if the right people can be found to fill the slots.

Virginia's high-tech sector accounted for 63 percent of the state's income growth between 1991 and 1996, according to a recent study by the College of William and Mary. In dollars, that's $8.3 billion that technology jobs contributed to a total of $13.2 billion of growth in all industries.

Politicians are inclined to take notice of those kinds of numbers.

``I think we've affected the (legislative) agenda,'' says Doug Koelemay, NVTC's governmental affairs manager.

``We've focused the attention of nearly all the candidates on the importance of education and training - on the raw resource of our industry, which is skilled, smart people.''

One indicator that state legislators are listening up: In July they authorized the Joint Commission on Technology and Science - a nine-member General Assembly committee that looks at technology issues and how they'll affect Virginians.

Legislators on the committee admit they're relative babes in the woods when it comes to the ever-evolving, jargon-littered world of high-tech - and they actively seek the industry's spin on hot topics like digital signatures, electronic commerce and taxes on Internet shopping.

``Statutory changes may be required in the 1998 session,'' Newport News Del. Alan Diamonstein told a gathering of business leaders in Hampton two weeks ago.

``This is where you can play such an important role,'' added Diamonstein, a member of the JCOTS team along with Virginia Beach state Sen. Ed Schrock.

The tech industry has already rolled up its sleeves. Even before JCOTS was formed, the Northern Virginia crowd was busy lobbying on matters like the Business, Professional and Occupational License tax - a levy on gross receipts that many companies say should be flushed.

NVTC is not alone. Groups like HRTC and the Roanoke area's New Century Council will weigh in on topics such as training Information Age workers, building a high-bandwidth communications infrastructure and reworking state rules to make it easier for entrepreneurs to raise capital.

That kind of involvement by other regions sits just fine with NVTC, says Koelemay. For in an age where the product is information and the currency is electrons, it really doesn't matter what part of the state you're in.

``It's important that people don't see technology as some regional, Northern Virginia phenomenon, because in the knowledge economy you can live where you want'' Koelemay says.

Held back so far only by an incomplete agenda and loose organization, techies are planning an ordered assault on political decision-makers next year. Expect their demands to include painstaking attention to detail and timetables - lessons learned in the mid-1980s after the Center for Innovative Technology took a beating for its opaque mission and stealthy handling of its books.

CIT, formed by the General Assembly in 1984, was bedeviled by controversy in its early years as critics groused that it lacked direction and the center's secretive proceedings shrouded it from accountability.

There's a widely held view today that CIT President Robert G. Templin Jr. has turned the ship around by establishing concrete goals for growing jobs and income for the state.

In building a blueprint for Virginia's high-tech future, CIT earlier this year sought the input of hundreds of business people and has come up with a plan to implement the report's suggestions. Unveiled at this spring's technology summit, the blueprint has been well-received by industry.

``It's an agenda for action for the technology community,'' says Debbie Barrigan, a CIT spokeswoman. The blueprint's suggestions are familiar themes in the technology community:

Develop and expand the high-tech workforce

Create a high-bandwidth telecommunications network spanning the Commonwealth; upgrade the ``hard'' infrastructure of roads, bridges and railroads to handle future demands

Nurture the state's entrepreneurial environment by expanding upon the state's four technology-focused entrepreneurship centers and three business incubators.

Improve the business climate for young, capital-hungry ventures.

The Hampton Roads Technology Council is surveying its members on issues like amending the BPOL tax, making computer literacy a high school requirement and waiving state income taxes on employer-paid tuition.

The results will be added to findings of other regional councils and submitted to legislators.

When it comes to political allegiances, the technology industry refuses to be pigeonholed. On one hand, many conservative, traditionally Republican principles, like pro-business policies, resonate strongly.

And yet some liberal ideas, like generous funding of education, also strike a chord.

At Oceana Sensor Technologies in Virginia Beach, smart people are what makes the place run. After all, building highly sensitive, vibration-detecting accelerometers requires a certain brainiac quotient.

Although Virginia colleges have committed to tripling the number of engineering graduates in the next few years, for now technology firms struggle with a shortage of brainpower in the ranks.

``I can go out and interview 10 people and only one will be qualified enough to hire,'' says Wayne Baer, technical director for Oceana Sensor. ``I have to hire people from Duke and MIT.''

But he, and other state firms, would rather be hiring from places like the University of Virginia and Old Dominion University.

``I think anything (politicians) can do in those areas will be helpful,'' Baer says.

Businesses, which often send workers back to school on the company dime, would like assistance in paying for the currently nonstate-funded non-credit courses offered by many private continuing education ventures.

``Both (gubernatorial) candidates are aware of the type of training we do,'' says Mark Dreyfus, president of one such firm, Virginia Beach-based ECPI College of Technology.

Both Donald S.Beyer Jr. and James S. Gilmore III have endorsed a 30 percent tax credit for non-credit employee training.

``Both of the candidates have addressed technology,'' says Hampton Roads Technology Council's Riley. ``They are both true believers. And they should be.''

One might not know it, however, given the back seat that tech issues have taken to the personal property tax in the governor's race.

Despite both candidates beating the technology tom-toms at the May technology summit, neither candidate has taken a Clintonesque, bridge-to-the-21st-Century approach - perhaps because it's too hard for their handlers to package, says VCU's Hollsworth.

``Both candidates have decided that the best populist view was of tax cuts, not the investment that technology wants,'' Hollsworth says.

But technology advocates say the low visibility of high-tech in campaign ads doesn't mean they've been forgotten.

In the gubernatorial campaigns, technology firms have been among the top funding contributors. ILLUSTRATION: Color drawing by JOHN CORBITT, The Virginian-Pilot

Graphic

HOT BUTTONS

Virginia's technology industry is seeking to influence government

on issues including:

Workforce training, development: Wants school curricula

modernized and subsidies for continuous worker training - including

non-credit, non-degree technical courses.

Improvements in regulation: Favors restructuring of securities

and finance laws to encourage loans to higher-risk ventures.

Telecommunications infrastructure: Seeks development of a data

network with enough capacity for transmitting teleconferences, live

audio and other cutting-edge, online applications.