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INNOVATION CLUSTERS

Planting Innovation in Rural America

Putting Together a Regional Innovation Cluster in Southside Virginia with All the Right Pieces


This is part two of our 3-part case study series examining the lessons learned from building a regional innovation center in Southside Virginia. Part one, which gives additional background to the story, can be read here.

This is the introduction and summary of our report on how a bottom-up, place-based and technology-driven economic strategy is helping to transform the local economy in Southside Virginia. Read the full report, with citations, here (pdf).

How does a rural region, hit hard by declines in the tobacco, furniture, and textile industries of its heyday, transform itself into a hub of innovation and job growth in tech-based industries?

In this second installment of our series on innovation-driven growth strategies in rural America, we will examine the nuts and bolts of how Southside, Virginia transitioned from a declining agricultural economy to a hub of innovation in motorsports engineering, plant biology, polymers processing, and robotics.

Our first article, “Innovation Clusters: Leveraging Universities, Technology, and Education to Drive Rural Economic Growth,” introduced an innovative, technology-based economic development initiative and set forth the broad strokes of the initiative. In this second article, we delve into the details of the four-pronged regional innovation and economic growth strategy that has brought new jobs and industries to an aging agricultural region.

In the full report (pdf), we expand on the theory of economic change that drove investments in this model. We then detail these four main components of the strategy:

  • Developing a new economic base
  • Attracting and developing an innovation economy workforce
  • Making Southside Virginia a “destination location”
  • Strengthening information, talent, and innovation networks

We conclude with a few reflections.

Applying the theory of economic change to Southside Virginia

Economic, workforce, education, and community development strategies are interdependent and co-related. It’s is not only the “technology” in technology-based rural development that matters–It is everything else.

When we left off, we had introduced the background of Southside’s precarious economic situation and the efforts being led by the Future of the Piedmont Foundation to revitalize the region. The combination of the foundation’s network and influence and its interest in having Virginia Tech work with the region in designing and implementing strategies for economic and community modernization led to a transformational partnership.

For Virginia Tech, the Future of the Piedmont Foundation offered access to the Southside region’s senior political leaders, the funding opportunities they influenced, and a strategy around which to reshape its mission and programs for the economic prosperity of Virginia’s regions. For the Foundation and Southside political leadership, Virginia Tech brought a highly regarded brand and credibility along with globally renowned faculty, facilities, and economic development expertise.

The partners developed a comprehensive, multidimensional innovation hub in Danville called the Institute for Advanced Learning and Research as the platform for this unique partnership. The organizing principle of the university-regional partnership was to leverage Virginia Tech’s contribution to the region by creating a place-based, regional innovation and talent hub in Southside, Virginia—some 125 miles from the university’s campus in Blacksburg.

The model was based upon an economic development theory that combined the work of a variety of experts and practitioners, as Franklin and others observed:

The economic success of the United States depends on its collective ability to innovate. Attracting and producing talent in science, technology, engineering, and math (STEM) disciplines increasingly has become a regional prerequisite to growing jobs, companies, and prosperity. Talent and innovation from research and development activity spill over into regions within a commuting distance [emphasis added], spawning new companies and economic growth.

In order to participate in this economy, Americans need increased levels of postsecondary education, including access to career pathways leading to baccalaureate and advanced degrees. Cities, towns, and counties must think and act regionally to position collective efforts in economic sectors of opportunity. In this crucible, rural communities must face the challenge of not only aligning existing competitive assets but also developing new talent and innovation capacity necessary to attain regional competence (to drive down a region’s negative attributes to avoid site selection elimination) and competitiveness (to develop differentiating regional competitive assets) in a rigorous, global economic competition.

The theory assumed that building talent and innovation capacity were the critical steps forward. With Virginia Tech’s participation, the Institute for Advanced Learning and Research would qualify for research and development funding and become a vital center for graduate education in science and engineering fields. Virginia Tech would recruit an internationally competitive faculty for the Institute and design labs capable of attracting federal, state, and industry-sponsored research dollars to Southside. These research and graduate programs would anchor other programs, serving as a magnet to attract and develop entrepreneurial and technical talent.

The Institute would initiate a virtuous circle in which private interests interacted with publicly supported research and graduate education, which in turn connected back to the university’s campus core in Blacksburg. This approach enabled the Institute to leverage Virginia Tech’s credibility in recruiting world-class researchers and generating new ideas to create an initial value proposition for private-sector interest and new job creation.

By linking research and education programs with regional assets, the Institute would create the conditions for a talent and innovation ecosystem that would support new companies and jobs.

The industries that would stem from this work would either relocate from elsewhere to Southside or be incubated locally, taking advantage of the innovative ideas, inventions, and newly minted talent spilling over into the region. The Institute’s research and development programs would also offer fee-based contract R&D, testing, and engineering services that would deliver innovation support to existing local firms, assisting their competitiveness and ability to grow and add jobs.

In essence, the innovation program model suggested creating a mini-version of a research campus in a community 125 miles distant from the campus core in Blacksburg. And while building a research campus in every region would not be feasible, creating one at scale offered a potential win/win opportunity for all of the partners. It aimed to enhance the economic viability of a rural region in an innovation-based, global economy while simultaneously benefiting the university’s discovery, learning, and engagement missions.

The Institute would introduce a new approach for Virginia Tech to engage with distant communities. It would do so by shifting the focus from extending knowledge discovered on campus to distributing its innovation capacity, faculty, and graduate students into the region of need. This latter capability represents the essence of a research university’s economic development potential in the current economy, and it offered a means for Virginia Tech to expand its influence into economic domains beyond agriculture—an area of traditional economic sophistication for the region.

As such, the transformation goal envisioned an atmosphere rich with innovation and ingredients for a newly developed private economy. This would require the creative inputs normally present on campus to be designed as a sustainable set of activities that could create an innovative climate in Southside itself.

If, metaphorically, innovation is viewed as fire built from creative efforts involved in the university’s missions of learning, discovery, and engagement, then traditional university extension and outreach are its radiated heat as knowledge is transferred from fire to field. The Institute for Advanced Learning and Research model would move beyond radiated heat to build a fire in the field, permitting creative combustion, and the private economy it spawns, to occur in the targeted region.

In the full report, we examine how these plans worked in practice.

Timothy V. Franklin is the former (founding) executive director of the Institute for Advanced Learning and Research and the current executive director and secretary of the board for TRE Networks, Inc., a nonprofit focused on advancing the role of universities in transformative regional development. Sam Leiken is a former vice president of the Council on Competitiveness and the principal of Prosperity Projects, a consultancy focused on linking growth and opportunity. Nancy E. Franklin is the former (founding) senior director of the Institute for Advanced Learning and Research and the current director of sustainability outreach and engagement at Penn State University.

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