VRIC VIRGINIA RESEARCH INVESTMENT COMMITTEE MEETING APRIL 9, 2018 MINUTES Mr. Blake (chair) called the meeting to order at 1:30 p.m. in the SCHEV Main Conference Room, 9 th Floor, James Monroe Building, Richmond, Virginia. Committee members present: Peter Blake, Jim Dyke, Heywood Fralin, Doug Juanarena, April Kees, Aubrey Layne, Esther Lee, Jason Powell, Robert Vaughn, John O. Dubby Wynne Committee members absent: None SCHEV Council members present: Henry Light, Tom Slater WELCOME AND INTRODUCTION OF NEW VRIC MEMBERS AND ATTENDING MEMBERS OF THE IMPLEMENTATION ADVISORY COMMITTEE (IAT) Mr. Blake welcomed members to the committee s first meeting since the inauguration of Governor Northam and the adjournment of the 2018 Virginia General Assembly. He noted the attendance of State Council of Higher Education members Tom Slater and Henry Light and acknowledged Deputy Secretary of Education Fran Bradford. Mr. Blake introduced Secretary of Commerce and Trade, Esther Lee, as one of the committee s two new ex officio members. Secretary Lee spoke briefly about her interest in the work of the committee. Mr. Blake then introduced the second new ex officio member, Secretary of Finance Aubrey Layne. Secretary Layne relayed a message from Governor Northam regarding his appreciation of the work of the committee. Mr. Blake reminded that, at the committee s January 2018 meeting, members had authorized him to assemble an advisory body to assist through August with development of an implementation plan for the recommendations of the asset-assessment study. He reported that he had asked Mr. Wynne to chair this Implementation Advisory Team (IAT) and to lead the selection of its members. Mr. Wynne had convened the IAT twice, including that morning. Short biographies of the 14 Team members were distributed. Mr. Blake recognized those IAT members in attendance. UPDATE ON PROGRESS AND NEXT STEPS OF THE IMPLEMENTATION ADVISORY TEAM (IAT) AND TECONOMY PARTNERS: ADDITIONAL SERVICES Mr. Blake reported that a considerable amount of activity had transpired since January. He asked Mr. Wynne to introduce the topic. Mr. Wynne stated his desire to not just play catch up to other states, but to achieve transformational change for Virginia. He noted that IAT members were experienced in a diverse range of relevant topics. His said his intention is for the IAT to bring an implementation plan to VRIC in August. Mr. Wynne then introduced Mitch Horowitz, Principal and Managing Partner of TEConomy Partners, which is being contracted to assist the IAT and to conduct additional analyses. 1
Mr. Horowitz led members through a presentation on the projected work of the IAT and the additional analyses to be conducted by his firm. Mr. Horowitz stated that the key deliverable from TEConomy would be an investment prospectus to guide future investments from the Virginia Research Investment Fund and potentially other relevant sources. VRIC members asked clarifying questions, and Mr. Horowitz responded. Mr. Powell asked about the described goal of incentivizing collaboration and alignment with complementary efforts, such as GO Virginia. He asked whether those incentives would involve funding from VRIC and GO Virginia or whether the private sector would play a role in providing incentives. Mr. Horowitz said that incentives could take many forms, including the spurring of collaborative research and development between industry and universities through better use of the currently available tax incentives. Secretary Lee suggested that the IAT consider opportunities of all kinds, including attracting investors from across the country. She stated that large private foundations, such as the Rockefeller Foundation, have an interest in supporting these types of efforts and, while their focus on opportunity zones might not match our plans, other private foundations could have programs that support what we plan to do. Mr. Horowitz asked his associate, Deborah Cummings, to comment on the various models for entrepreneurs in residence (EIRs). Ms. Cummings noted some confusion about the term EIR, but assured that no confusion exists about the importance of coaching, mentoring and guidance across the entire process of commercialization. She stated that, around the country, these roles are filled by people who are termed EIRs, even though they support entrepreneurs in different ways at different stages of commercialization. Mr. Blake asked whether some of these same support services are available at Virginia universities and in the regions. Ms. Cummings responded that, while support services are available in Virginia, most of these services are targeted toward entrepreneurs at the later stages of commercialization. Mr. Horowitz then described TEConomy s final deliverable, an integrated investment prospectus. Mr. Blake asked Mr. Horowitz to pause and asked members for comments. Mr. Powell asked for clarification regarding EIRs. In what organization would they reside and who would determine their required qualifications? Mr. Horowitz replied that those were the correct questions. Before the answers could be determined, IAT members would have to define the results they wanted to achieve, then determine whether EIRs were part of the right package of activities to accomplish the specific results. Mr. Blake asked Mr. Horowitz to further explain each bullet point of the goals and contents of the investment prospectus, which Mr. Horowitz did. 2
Secretary Layne asked what the output(s) would be of the activities recommended by the IAT: Is it jobs? He stated that VRIC will need something to measure progress against and that understanding the ultimate goal, from the beginning, is important. He stated that the measures chosen by VRIC could inform future discussions about the sustainability of Virginia s tax base and reliance on the income tax. Ms. Cummings assured members that intermediary measures indicating that jobs are forthcoming would be developed because it would not be feasible to measure or even to attempt to measure -- only jobs, especially at the beginning of any new initiative. Mr. Juanarena requested that the IAT consider intellectual capital and other forms of capital beyond financial and intellectual property that universities contribute to the economy. He suggested that smart/talented/skilled people, such as graduate students, are a type of capital and, when they leave an institution, they take their intellectual capital out into the innovation ecosystem. That type of capital should also be included in measurements of the strength of the ecosystem. He stated that value should be captured somehow and credited to the institutions that educated those graduate students. BREAK Mr. Blake announced a break at 3:15 p.m. The meeting resumed at 3:30 p.m. DISCUSSION OF PROCESS, DELIVERABLES, COORDINATION WITH OTHERS Mr. Blake asked members whether additional discussion of the TEConomy presentation was needed. Hearing none, he suggested that agenda items for the April 10 meeting be covered in the remaining time and that the April 10 meeting be canceled. Members agreed via informal consent. WRAP-UP AND PREVIEW FOR APRIL 10 This item was no longer relevant in light of the cancelation of the April 10 meeting. PUBLIC COMMENT Mr. Blake reported that no requests for public comment had been received prior to the meeting, in accordance with the process published in the public meeting notice. Mr. Blake called for spontaneous public comment from attendees. Paul Rocheleau, Executive Director of Strategic Development for the Virginia Commonwealth University School of Engineering, asked to be recognized. Mr. Blake invited him to speak. Dr. Rocheleau stated that he had written a successful regional grant proposal to GO Virginia. He believes that both VRIC and GO Virginia have good processes. He said that the VCU School of Engineering has relationships with 400 to 500 companies. All companies in all sectors need talent. Dr. Rocheleau encouraged the committee to have a discussion on the speed of execution for new programs because it is important to move fast enough to keep up with the fast pace of change in technology. He believes that if current Virginia companies can t find talent, then Virginia will not be able to attract new companies. He suggested that the Commonwealth Center for Advanced Manufacturing could be a model because of its good framework and partnerships for pulling talent out of universities and into the workforce. 3
ACTION ON MEETING MINUTES Upon a motion by Mr. Wynne, seconded by Mr. Dyke, the minutes from the January 8, 2018, meeting were approved unanimously. ANNOUNCEMENTS Mr. Blake made several announcements. He provided the dates of all 2018 VRIC meetings and announced that the December meeting would be moved to December 18 to align with the meeting date of the GO Virginia board. He noted that the morning of December 18 could represent a potential conflict with several members schedules, as it could be the date of Governor Northam s budget introduction. Mr. Blake stated that he had invited INOVA Health and the University of Virginia to attend the June 12 meeting and provide an update on the progress of the Global Genomics and Bioinformatics Research Institute, for which VRIC had approved bond funding in 2017. He then asked members to send to him ideas for agenda items for the remaining 2018 meetings. Mr. Blake also provided an update on the SCHEV Council s priority initiatives in support of The Virginia Plan for Higher Education. Since 2015, one initiative had been to elevate academic research through various efforts, including a grant program. With the launch of VRIC and the VRIF, Council considers this initiative achieved. Therefore, at the Council s March 2018 meeting, it revised its initiative related to research and economic development. Mr. Blake read the new language into the record: Promote economic development and employment outcomes by pursuing policies that enhance academic research, degree and workforce credential programs and commercialization of new products and discoveries. Mr. Blake reminded that the introduced budget included funds for a new staff position at SCHEV to support development of the Research and Technology Strategic Roadmap. He stated that SCHEV has advertised for and received applications, but that SCHEV will not interview candidates until the budget process is complete. Mr. Blake announced the hiring on a part-time basis of Christie Funk, who will continue part-time as Regional Economic Development Project Manager at NASA Langley Research Center, to support the work of the Implementation Advisory Team. Her contract will run April 16 through September 28. Mr. Blake provided an update on the VRIF Round 1 competition. He stated that Memoranda of Understanding have been signed with the three grantees, and the total amount committed was: General fund: $2,512,643 Bond funds: $36,000 The balance of funds remaining is: General fund: $9,088,059 (after both contracts with TEConomy Partners) Bond funds: $28,964,000 4
PERSPECTIVE OF UNIVERSITY SENIOR RESEARCH OFFICERS Mr. Blake commented that the Implementation Advisory Team includes three university Vice Presidents for Research. He asked Melur Ramasubramanian from the University of Virginia to provide their perspective. Dr. Ramasubramanian stated that the senior research officers (SROs) from eight universities had met on March 23 at UVA. The main purpose was for the SROs to get to know each other personally. One agenda item was to collect ideas from the university perspective for a potential Round 2 VRIF competition. He stated that the institutions of higher education are trying to contribute three things to the VRIC mission: Attract advanced industry Strengthen existing industry Grow advanced industry support Dr. Ramasubramanian reported that the SROs discussed the four growth opportunity areas highlighted in the TEConomy study and looked at two sets of ideas. The first idea is a pipeline activity in the form of rapid funding. He described a grant competition similar to Michigan s M-Cubed program. Dr. Ramasubramanian stated that the second idea involved the recommendations from the TEConomy study and ways to support them further. He suggested that the envisioned translational research centers be virtual and jointly administered, rather than physical. OPTIONS FOR NEAR-TERM ACTION ON POTENTIAL COMPETITIONS FOR FUNDING Mr. Blake asked Lynn Seuffert, SCHEV Associate for Research Investment, to briefly highlight the salient points of four potential options developed by staff for near-term funding/grant competitions, which she did. Mr. Wynne stated that the IAT would uncover details that will inform decisions relating to funding options. He stated that it might be possible to sequester funds to match large-scale center grant applications to other grant-making entities, but VRIC would have to first identify the morefocused domains of research. Ms. Kees requested that staff poll universities to determine whether any large-scale center grant competitions are scheduled in the foreseeable future and which of their current centers might be candidates to apply. ADJOURNMENT Mr. Blake adjourned the meeting at 4:30 p.m. Peter Blake Chair, Virginia Research Investment Committee Lynn Seuffert Associate for Research Investment 5