Continue reading »]]> Brought to you by the Hampton Roads Partnership since 2008, SmartRegion.org, the blog and its accompanying monthly e-Newsletter, is on hiatus.

Stay informed with essentials for your inbox through our recommended bloggers, bookmarked organizations, the region’s communities and traditional news sources (via the website links provided on the left-hand sidebar).

Regional News:

• Hampton Roads Chamber of Commerce
• Virginia Peninsula Chamber of Commerce
• Hampton Roads Economic Development Alliance
• Hampton Roads Planning District Commission’s Review
• Hampton Roads Transportation Planning Organization E-Newsletter 
• Port of Virginia’s blog

And if innovation is on your mind, our favorites:

• Hampton Roads Innovations (the collaboration site)
• Innovate!HamptonRoads (the region’s connection for entrepreneurs, ideas and investment)
• On the Road in Hampton Roads (the entrepreneur’s social media guys)

Questions? Contact@HRP.org.

Need to reach our former editor? She’s on LinkedIn.

Continue reading »]]> On January 5th President Barack Obama released a review of defense priorities to guide spending over the next decade, indicating that the U.S. should use the opportunity presented by the drawdown of the conflicts in Iraq and Afghanistan to invest in a leaner military and in future capabilities.

As with every function of government, budget pressures are leading both the legislative and executive branches to review the level of defense spending, as well as the efficiency of defense spending. There is consensus that the Navy and Air Force will be less significantly impacted than the ground forces of the Army and the Marines which could be decreased by as
much as 15—35% after the end of the current conflicts; this shift would have a much smaller impact on the Hampton Roads economy than a proposed across the board cut.

Economists have noted that a reduction in defense expenditures (both regional and national) will reduce the amount of innovation that has been tied to defense research and development. A recent article in the New York Times highlighted…read the complete report at Link to HRPDC Special Report No.11 Changing Defense Priorities (PDF)

About The HRPDC: The Hampton Roads Planning District Commission, one of 21 Planning District Commissions in the Commonwealth of Virginia, is a regional organization representing Southeastern Virginia’s sixteen local governments. The HRPDC serves as a resource of technical expertise to its member local governments and provides assistance on local and regional issues pertaining to Planning, Water Resources, Communications, Economics & Housing, and Emergency Management.

Continue reading »]]> When:  February 7 to April 10, 2012, 7 p.m.-9 p.m.

Where:  Tidewater Community College, Regional Workforce Development Center, 7000 College Drive, Suffolk, VA

About the Seminar:  Contracting with the federal government, especially in the emerging Homeland Security and Defense industries, has many business opportunities… if you know the tricks of the trade. Only at the Government Contracting Business Management 2012 can you learn from top executives about what it takes to succeed in this growing field.

This is the fastest, smartest way to get the edge you need – perfect for transitioning military service members and civil servants, budding entrepreneurs, defense contractors or anyone planning to build a new career in government contracting.

What You Will Learn:

• Strategic Planning
• Marketing
• Proposal Development Process
• Contract Performance
• Contract Administration and Contract Accounting
• Government Customer Expectations
• How to Subcontract with Prime Contractors
• Profitability and Administration
• Employee Relations
• Small Business Resources

Register here

Continue reading »]]> By Bill Cresenzo for Inside Business, posted January 6, 2012

2012 – 2011 redux? As Hampton Roads begins another year, Inside Business asked the region’s business, government, civic, educational and community leaders to give readers an idea of what they would like to see happen in the year ahead and what they expect to see.

Leaders such as Greg Grootendorst, the chief economist with the Hampton Roads Planning District Commission, who said, “The economic outlook for the coming year is likely to be one characterized by very modest growth.

“Hampton Roads remains entrenched in the process of recovering from the great recession,” he said. “The region has lost in excess of 50,000 jobs since payroll employment peaked in July of 2007; regional employment is now at the same level as it was in 2001.”

Vinod B. Agarwal, an economics professor at Old Dominion University, concurs with Grootendorst. The author of an annual regional economic forecast, Agarwal will present his findings at 10:30 a.m. Jan. 25 at the Norfolk Waterside Marriott at the annual economic forecast event. To register, call (757) 683-5138.

Agarwal said he expects the economy to pick up slightly in 2012, but it will continue to be a “jobless recovery.” While the economy might grow some, unemployment rates will remain steady or rise.

But there are other, exciting things on the business horizon. From Hampton Mayor Molly Ward to Jerry Bridges, the executive director of the Virginia Port Authority, to Dana Dickens, president of the Hampton Roads Partnership, inside this issue you’ll find what the region’s leaders believe 2012 will bring, as well as what they hope it will bring.

Recently seen on the Twitterverse:  What’s your wish for Hampton roads in 2012? See what Dana Dickens and other local leaders think. http://insidebiz.com/news/inside-business-story-257

The Year Ahead: E. Dana Dickens III President and CEO, Hampton Roads Partnership

My one wish for 2012 is that the many years of work in regional cooperation and collaboration by the Hampton Roads Partnership translate into true regional consensus, with significant results in growth and in greater diversification of the economy of Hampton Roads.

We can accomplish this if:

• Entrepreneurs have better access to capital, supported via a multimillion dollar fund organized by investors to promote “grow your own” economic development in the region.
• Taxpayers enjoy enhanced government services and lower taxes, supported via implementation of shared public services identified during the pilot program launched in 2011 with Virginia Beach, Norfolk and Chesapeake.
• Local government implements improved efficiencies and savings, supported via more Hampton Roads cities – and counties – joining in shared services projects across the region.
• Startup businesses achieve explosive growth thanks to mentors, supported via coaching provided by the region’s proven business leaders, both retired and active.
• Growth-oriented companies realize their entrepreneurial goals, supported via a cultural shift enabled by Innovate!HamptonRoads and its “Economic Gardening Network,” a suite of high-end, high-speed business growth resources.
• Serious networking and marketing happens for entrepreneurs, supported via successful events like Start Norfolk, active local entrepreneurs, metropolitan-focused academic institutions and the groups championing the region’s technology clusters of aerospace, bioscience, coastal energy, modeling and simulation, robotics and unmanned systems and sensors.
• Education in STEM/STEAM moves forward rapidly, supported via the various regional efforts such as a full-time boarding school, a governor’s school and curricular/extracurricular activities for public schools tied to Virginia’s standards of learning. [STEM stands for science, technology, engineering and math. STEAM stands for science, technology, engineering and applied math.]

Continue reading »]]> The Virginia Inventors Forum meets Wednesday, January 11, 2012, 6:00 – 9:00 p.m. at Thomas Nelson Community College – Historic Triangle Campus (4601 Opportunity Way, Williamsburg, VA – Room 222) for a program featuring Dwight Dart, Design Lab Engineer from the Department of Mechanical and Aerospace Engineering at the University of Virginia on “Prototyping…and after: the importance of building a prototype, refining the prototype, and what comes next once the prototype is built.” To register and for more information, visit VirginiaInventors.org.

CREW (Commercial Real Estate Women) Hampton Roads hosts a Luncheon Program on “Naval Station Norfolk: The State of the Base, Current and Future Growth and Improvement Strategy” featuring Captain Mary Jackson, Commander, Norfolk Naval Air Station, Norfolk, Virginia. Join CREW on Tuesday, January 17, 2012, at Town Center City Club (222 Central Park Avenue #230, Virginia Beach, VA) from 11:30 a.m. to 1:15 p.m. SIGN UP ONLINE at CrewHamptonRoads.org or contact Jamie Richardson at crewhr@verizon.net.

Tidewater Association of Service Contractors (TASC) meets on January 18, 2012, at 11:30 a.m. for a Luncheon at the Norfolk Airport Hilton (1500 North Military Highway Norfolk, Virginia) featuring Stan Scott, Executive Director of the Virginia National Defense Industrial Authority (VNDIA) which advocates for our nation’s military in Virginia. The Virginia National Defense Industrial Authority (VNDIA) was established during in 2005 by the Virginia General Assembly recognizing that “a need exists for the provision of technical assistance and coordination between the Commonwealth, its political subdivisions and the United States military…” Department of Defense (DoD) spending in the Commonwealth now exceeds $57 billion annually ($5,000 for each Virginian) and accounts for 15.6% of the Gross State Product and 18.9% of jobs in Virginia. DoD remains Virginia’s number one direct employer (187,000 jobs) and indirectly supports more than 900,000 Virginia jobs. Register at TASC-TGIC.org/events/registration.php.

Join Biotech at the Beach on Friday, January 20, 2012, from 12:30 p.m. to 2:00 pm. Luncheon topic is “Bioelectrics and its use for both medical and environmental applications” with speaker Dr. Richard Heller, Director of the Frank Reidy Research Center for Bioelectrics at Old Dominion University. Location: Virginia Beach Economic Development Authority Conference Room located in the Armada Hoffler Tower at 222 Central Park Ave, Suite 1000, Virginia Beach, VA. Center for Bioelectrics (CBE) at Old Dominion University is a multi-discipline center mainly focused on translational research. Examples of research being performed at CBE will be discussed during the presentation including wound healing, cancer therapy, cardiovascular and decontamination. As always, the luncheon is complimentary, you can register to attend here. Learn more about Biotech in Hampton Roads at Arkios.com/BiotechattheBeach.htm.

Continue reading »]]> Fall 2011

For each newsletter, the Hampton Roads Association for Commercial Real Estate (HRACRE) poses the same four questions to someone in the region who can provide answers and foresight in 50 words or less that’s highly worth considering. For this issue, Craig Quigley, Executive Director of the Hampton Roads Military & Federal Facilities Alliance (HRMFFA) responds:

HRACRE:  What is the greatest Hampton Roads regional achievement?
Craig:  I believe our greatest achievement is the tremendous progress made in thinking, planning and acting as a region, rather than individual municipalities. This enlightened view makes us more aware of strengths and weaknesses region-wide, and to then devise smart strategies for moving forward – together.

HRACRE:  What is today’s biggest challenge for Hampton Roads?
Craig:  Though it may sound odd coming from someone whose charter is to attract, retain and grow Federal facilities to Hampton Roads, I believe our biggest challenge is to diversify our economy so as to lessen our reliance on the Federal sector. But until that goal is achieved, I have no intention of slacking off my mission!

HRACRE:  What would you do to solve this problem?
Craig:  Take an honest appraisal of our regional strengths and weaknesses, play to the strengths and tackle the weaknesses head on. This is already well underway, but nothing this comprehensive happens overnight. I have every confidence we’ll get there, however.

HRACRE:  What will Hampton Roads look like in a decade?
Craig:  We will continue to have a strong Federal presence here, despite whatever Federal budget pressures may occur. The citizens of Hampton Roads love their country and sincerely value the service of the men and women who work directly to support our great Nation. Hampton Roads will be thriving ten years from now!

Others’ Four Questions. Photo credit: Hampton Roads Chamber of Commerce

Continue reading »]]> The failure of the Congressional “super committee” to come up with a plan to reduce the U.S. deficit has triggered $1.2 trillion in across-the-board spending cuts beginning in January of 2013, and ending in FY2021. As prescribed by the Budget Control Act of 2011 (BCA), spending would be decreased by an inflation adjusted $109.3 billion per year, with spending cuts split evenly between non-security spending and security programs (Department of Defense, Homeland Security, Veterans Affairs, and the National Nuclear Security Administration). The BCA would not allow for cost benefit tradeoffs for cuts, nor would it allow for money to be moved between years under the budget caps, preventing programs from back loading spending cuts to allow for a gradual decline.

For questions or comments, please contact Greg Grootendorst,
HRPDC Chief Economist, ggrootendorst@hrpdcva.gov.
Download the complete report in a PDF.

The $1.2 trillion in spending cuts are in addition to the discretionary spending caps designed to reduce the budget deficit by $917 billion over 10 years. There is a great deal of speculation and debate as to the exact implementation of the proposed spending cuts, and whether or not Congressional action might prevent the “automatic reduction” from taking place. Regardless of outcome, intense budget pressure is likely to significantly reduce federal expenditures.

Given the import of Department of Defense (DoD) spending to the Hampton Roads economy, potential cuts in the defense budget are especially significant. Assuming implementation of the sequestration process, the Congressional Budget Office (CBO) estimates reductions ranging from 8.5% to 10% in the caps on new discretionary appropriations for defense programs. The Center for Strategic and Budgetary Assessments (CSBA) estimates an 11% reduction in real defense spending from the peak in FY 2010 to FY 2013, when the cuts will be put in place. This reduces base defense spending back to the FY 2007 levels ($472B a year) until the end of the sequestration process in FY 2021. It should also be noted that War spending in Iraq and Afghanistan, currently $128B, is outside of the sequestration process but will likely draw down over the decade as those conflicts end, leading to a combined decrease in real defense expenditures of 31% (similar to the 34% decline after the end of the cold war).

The direct impact of defense spending accounts for roughly 20% of the regional economy. A reduction of between 7% (CBO low estimate) and 11% (CSBA estimate) would remove approximately $1.6B from the local economy if the government decreased all defense spending equally. An 11% decrease in FY 2010 levels of spending would reduce military spending in FY 2013 to $13.85B in the region, the same level of spending as in FY 2004.

Continue reading »]]> NORFOLK (July 7, 2011) The guided-missile destroyer USS Ross (DDG 71) pulls into Naval Station Norfolk, the largest navy base in the world. (U.S. Navy photo by Mass Communication Specialist 1st Class Christopher B. Stoltz/Released)

Posted by the Daily Press on November 19, 2011

In face of military cutbacks, Hampton Roads must replace lost dollars.

It’s almost impossible to overestimate the military’s important place in our region.

Naval Station Norfolk is the largest naval base in the world. Naval Air Station Oceana, a master jet base, is home to the Navy’s East Coast fighter jet fleet. Langley Air Force Base is the headquarters for Air Combat Command, which oversees national air combat power. Fort Eustis is the Army’s hub for transportation logistics.

There are lots of other military facilities, employing hordes of military and civilian workers.

And let’s not forget the private firms catering to the military. Chief among them is Newport News Shipbuilding, the nation’s only manufacturer of nuclear aircraft carriers and one of two nuclear submarine builders — and the region’s largest private employer, with more than 20,000 workers.

Hampton Roads‘ military connection has been a blessing, helping us to weather the recent economic storms better than most.

A steady stream of military pay checks flows from Washington, D.C., directly or indirectly into the pockets of local residents, to be spent on everything from cars, homes and clothing to gas, restaurants and movies.

According to Old Dominion University, the Pentagon spends more than $20 billion a year in Hampton Roads, accounting for 45.6 percent of the gross regional product. Of the region’s 1 million jobs, roughly 360,000 come either directly or indirectly from the military’s presence, one ODU economist says.

It’s no coincidence that our unemployment rate is two points below the national average.

But there could be painful times ahead. That’s courtesy of efforts to finally cut down our growing levels of national debt — a debt load created by years of irresponsibility on the part of both major political parties.

Given that the military is among the largest components of the federal budget, the Defense Department likely will not be spared the chopping block.

The Pentagon is already scheduled for $450 billion in cuts over the next decade. And if lawmakers can’t come up with another $1.5 trillion in cuts elsewhere in the federal budget, existing law calls for $600 billion to be automatically sliced from Defense.

That could mean base closures, reductions in troop strength, and a sharply reduced American presence around the world. It could mean cuts to medical and retirement benefits to military personnel, as well as the curtailing of procurement programs such as the Joint Strike Fighter, and — particularly ominous for Hampton Roads — cuts to the Navy’s fleet.

When the cuts come, Hampton Roads leaders and politicians should try to avoid the knee-jerk response to try to save every job and program. For the future of the country, the nation’s budget must be cut. And it’s only fair that Hampton Roads — surely one of the nation’s biggest beneficiaries of federal spending — take its share of the hits.

The specter of this playing out, however, points to the urgent need to diversify our regional economy.

Just as Detroit was overly focused on the automobile industry, so is the case with Hampton Roads and the military. We simply should not have nearly half our region’s economy, and more than a third of our jobs, dependent on one economic sector.

When much of the automobile industry skipped town, Detroit suffered immensely. When the military cuts come, the impact on Hampton Roads will likewise be immense.

Too much of our technology industry is tied to the Defense Department rather than the private sector. While regional leaders have long talked about our over-dependence on the military, we must finally get serious about the effort.

At a recent off site meeting to discuss the need to diversify the economy, area business heard loud and clear that Hampton Roads does not offer a welcoming climate for start-ups — such as those that spin off from work at NASA Langley Research Center, Jefferson Labs and Eastern Virginia Medical School.

Let’s involve business leaders across industries. Let’s discuss how to help small, entrepreneurial companies grow and produce a work force that makes new companies want to move here. The Hampton Roads Partnership, for example, has launched an economic “gardening” initiative to support local entrepreneurs who want to grow their businesses.

This quest means involving the school systems and our universities. We are lagging many metro areas in educational achievement and need a good labor pool to attract new businesses.

Let’s even involve the military, since they, too, have an interest in easing what could be a difficult transition for their civilian workers, and their soldiers, sailors, airmen and Marines.

Continue reading »]]> Retired Rear Adm. Craig Quigley, director of the Hampton Roads Military and Federal Facilities Alliance, outlined specific military operations that might be in jeopardy.

By Bill Bartel for The Virginian-Pilot

A leaner defense budget may be worse for Langley than Oceana, and harder on Navy riverines than SEALs and aircraft carriers, the head of Hampton Roads’ defense lobbying organization said Tuesday.

While no one can say yet how much of the region’s $20 billion annual federal income might be lost from impending defense cuts, retired Rear Adm. Craig Quigley outlined specific military operations that might be in jeopardy and others that might expand as the Pentagon seeks to trim and consolidate. He also warned of long-range changes in national defense, particularly the Navy’s growing focus on the Asian Pacific region rather than the Atlantic, that will affect southeast Virginia in decades to come.

“The federal presence in Hampton Roads will probably be smaller, but we’re not going away,” said Quigley, executive director of the Hampton Roads Military and Federal Facilities Alliance, in a speech to the Economics Club of Hampton Roads.

Congress and the Obama administration are considering about $460 billion in defense cuts over the next decade to help deal with a large budget deficit. In addition, at least $500 billion in other defense cuts could be required under a related congressional agreement if a special House-Senate committee fails to agree on a broader deficit plan by Nov. 23.

Whether the cuts are the larger or smaller figure, Hampton Roads will not be untouched, Quigley said.

For example, the Navy’s riverines, now based at Joint Expeditionary Base Little Creek-Fort Story and at Yorktown, likely will be considerably reduced, he said.

At the same time, special operations units such as the Navy SEALs based in Virginia Beach, are expected to grow or at least maintain their current strength.

“I don’t see it shrinking at all,” he said.

Oceana Naval Air Station is “really looking good,” Quigley said. Top Navy officials have told him they’re impressed with the ongoing efforts by Virginia Beach and the state to buy private property around the base to minimize further encroachment.

Oceana, which provides about 10,000 jobs, will be a strong candidate to become the East Coast home of the Navy’s F-35 Joint Striker Fighters in future years, he said.

But he warned that the Air Force component of Joint Base Langley-Eustis, in Hampton, is having encroachment problems and might be a target should there be another round of base closings. The Air Force also has announced plans for thousands of civilian job cuts nationwide, including the elimination of about 500 jobs, many of them already vacant, at Langley.

NASA Langley Research Center “will feel a lot of budget pressure,” Quigley said, as the federal government determines how it might use the facility.

Quigley predicted that the money shortage will force the Navy to abandon, for now, its desire to move a Norfolk-based aircraft carrier to Mayport, Fla. The relocation, expected to cost $600 million or more, would involve spending money the Navy needs for other projects, he said.

It remains unclear if the Pentagon will slow down its construction of carriers at the Newport News shipyard or change plans for ship overhauls that provide lucrative contracts for maintenance and repair firms, he said.

The Navy wants to increase its total fleet but new ships likely will have much smaller crews than today’s vessels, he said.

The Coast Guard, which has its largest East Coast operation in Hampton Roads, probably won’t be harmed, Quigley said, noting that the service “has a very strong support base in Congress.”

One of the region’s strongest attractions for the military is the close proximity of training areas, he said. “It’s an incredible strength” when defense officials are considering where to place operations.

When considering offshore oil and gas drilling or wind-powered turbines, local officials have to make certain they don’t jeopardize those training areas, Quigley said.

Federal officials have said they probably won’t know more specific dollar figures for budget cuts within the individual services until early 2012.

Quigley expects that Hampton Roads might begin to feel the impact in the spring as the military prepares for the 2013 budget year, which begins Oct. 1.

Several states are already organizing themselves to try to preserve their military assets during the upcoming budget debate, he said.

Virginia, with its unusually large defense industry, won’t get much sympathy from other parts of the country.

“Nobody feels sorry for Virginia. We’re perceived to have more than our fair share,” he said. “There are any number of communities who would love to pick our pockets.”

Continue reading »]]> In 1997, the United Kingdom initiated a program to develop a nuclear attack submarine. But some five to six years into the program, it became clear that neither the prime contractor nor any other British firm had the necessary design and production skills to build the new submarine. Without a domestic ability to produce submarines, the United Kingdom was forced to look abroad in order to complete their project.

Fortunately, the British were able to look to United States and employ one of our shipyards to provide the missing skills and expertise. With American help, the Astute class was completed in February 2010. However, by then the cost for the first three Astute-class submarines had reportedly grown by 90%, and the first of the class was some four years late.

If the U.S. military one day found itself in the same position as the British did with the Astute program, it would have few places to turn for help since no allies currently maintain the breadth and depth of capabilities resident in the U.S. defense industry.

Defense manufacturing is worth protecting. Let’s take a look at this snapshot of defense manufacturing in America:

The Workforce-
Take for example one American shipbuilding company that currently employs 39,000 people:

• More than 7,500 engineers.
• More than 1,000 employees with advanced degrees.
• More than 19 different crafts and trades.
• Over 700 master shipbuilders (over 40 years experience).

The defense industry employs some of America’s best and brightest:

• Skilled technicians and designers that have produced our fleet of nuclear powered submarines and aircraft carriers- a fleet with over 145 million miles safely steamed on nuclear power.
• Skilled engineers that have designed the most advanced and capable aircraft in the world.

As production jobs and capability decline, the ability to recover these critical skills becomes very expensive or even impossible as highly skilled personnel are forced to pursue other careers.

The Production Lines-
Historically the United States has been able to convert commercial manufacturing to produce defense products during a time of crisis:

• During, WWII manufacturers of consumer products like toys and arcade games were able to rapidly shift production to military munitions in support of the war effort.
• Today, U.S. has lower manufacturing capacity and weapons are more specialized than they were 50-plus years ago.
• We need a strategy to maintain the skills and infrastructure of these production lines.

Shuttering existing lines will diminish or eliminate our capabilities should we need them in a time of crisis.

The Suppliers-
The industrial base is much broader than the top tier, Fortune 500 defense contractors.  The small business suppliers are a vital component that is often overlooked.  Look at just two examples: 

• Since 2004, 1,600 vendors in 42 states have filled orders totaling over $3 billion to build our nation’s aircraft carriers.
• The Joint Strike Fighter supply chain spans 1,300 companies in 47 states and supports nearly 127,000 direct and indirect U.S. jobs.

According to Pentagon analysis, the defense industrial base provides 3.8 million private sector jobs.  Trillion dollar cuts to nation defense will result in:

Job Losses. Hundreds of thousands of jobs lost within the defense industry.  Much of the engineering and technical experience lost will be impossible to recover or rebuild in the future.

Shipyard Closures. Shuttering of U.S. shipyards, which are the largest manufacturers in Mississippi, Louisiana, Virginia, and Maine.

Atrophy of innovation. Looming defense cuts will invariably eliminate entire sectors of the industrial base and lead to less competition.  With far fewer manufactures, remaining companies will lack incentive to come up with new, better, or cheaper solutions for our warfighters.

Inability to rapidly reconstitute critical skills in response to emergent threats. The ability of the United States soldier, sailor, airman, or Marine to maintain a technological advantage on the battlefield would be in jeopardy.

Few have contemplated a future where the United States, when confronted with a crisis on the scale of Pearl Harbor or 9/11, must predicate its response with “Can we?” rather than “Will we?” Such a way of life is worth protecting.

Yours in Service,

Randy Forbes