GNC Annual Meeting, May 24, 2017 – Charles V. McPhillips

 

Over the last several years, this organization and our allied thought leaders have coalesced around some big ideas, which, if implemented, would build upon the momentum Norfolk currently enjoys and make a significant difference in our future.  These big ideas have been vetted in various task forces convened by the GNC and in a couple of cases, these ideas have been further validated by the Hampton Roads Community Foundation’s blue-ribbon Workforce Development Study Group and then established as regional priorities by Reinvent Hampton Roads under the able leadership of Jim Spore.

As you know, most of these initiatives are centered around one essential big idea – that our future depends less on recruiting companies to move here and more on attracting, developing and retaining the talent that will create and fill the highly-skilled, high-tech, high-paying jobs our region sorely needs and currently lacks.

Through this work we have developed enough good ideas – enough good big ideas – that I am now declaring a moratorium on new big ideas until we fully implement the ones we have on our agenda.

I say this not to disparage what we have accomplished thus far.  Winning the battle of ideas marked a necessary milestone in our march toward victory over an economic malaise that recently put our region in last place among the 100 largest metropolitan areas in the country in recovering from the Great Recession.  (I am proud to acknowledge that we have risen to the dizzying height of number 89 in these standings.)  We have fought this battle of ideas because we still have fewer jobs in this region than we did in 2007 and for the past 15 years we have ranked dead last in job growth among metropolitan areas our size; we continue to suffer an out migration of college educated workers; and our region starts-up fewer businesses per capita than these other regions.

These lackluster results require BIG ideas.

 

  1. Innovation District

As we know from reams of data, metropolitan areas boasting vibrant innovation districts are growing faster than we are.  So our first big idea to fully implement must be to bring our innovation district fully alive.  We have had some initial success.  At our request, the City Council made our innovation district official by designating the area along the Elizabeth River stretching from Norfolk State University to Old Dominion University, a “technology zone” under state law, thereby qualifying start-up tech firms located there to receive certain City tax incentives.  Further, our very own Steve Van Leeuwen has donated his time and considerable talents to branding this innovation district as the Norfolk Tech Trail.

But to be brought fully alive, the current incentives need to be augmented and our Tech Trail requires a proper headquarters space where economic developers, their guests and other interested visitors will see early-stage companies clustering to exploit the well-documented benefits of the “knowledge spillover effect” and the power of “network connections” that multiply exponentially when entrepreneurs are densely located in innovation centers such as the American Underground and American Tobacco Campuses in Durham.  Think of it as a highly curated d’Art Center for Entrepreneurs.

Here are the lessons we have learned from successful models in Austin, Boston, Chattanooga, Durham, Nashville and Washington, D.C.:

  • Well-managed innovation centers unleash the power of authentic, cool spaces in a historic downtown to attract clusters of talented entrepreneurs and innovators;
  • They also foster a culture of entrepreneurship in which a community celebrates risk-takers and does not shun failures borne of taking risks;
  • These centers create a culture of inclusion that unlock opportunities for residents in surrounding neighborhoods, many of which are struggling (at the American Underground in Durham, of the 260 companies clustered there, 48% are minority or female led);
  • A mix of start-ups and established companies located side-by-side helps participating businesses to “scale”;
  • Accelerators are crucial for whipping entrepreneurs and their start-up companies into condition to attract angel and other early-stage funders;
  • Skilled mentoring in these innovation centers contribute to the success of the start-up entrepreneurs; and
  • Innovation centers can be structured as public-private partnerships in which the public sector provides the facility and the private sector operates the program and recruits the necessary sponsors, mentors and funders.

 

Proposal

So, based on this evidence, here is our proposal to the City:

We propose that the City of Norfolk provide appropriate downtown space of 20,000 to 40,000 sq. ft. that could be equipped to serve as the region’s innovation headquarters.  It will then be the job of Greater Norfolk Corporation and its partners to recruit sponsors and financial backers of the project; recruit an acceptable operator for the facility; and establish a governance structure to ensure that this facility delivers on its promise.

Mentors, funders, publicists and our institutions of higher education will all be there.  However, the heart and soul of the innovation headquarters will be its business accelerators.  The industry verticals may change depending on the responses of corporate funders and entrepreneurs to the proposed accelerators, but based on preliminary interest expressed by potential sponsors and the industry-cluster research recently performed by Reinvent Hampton Roads, our current thinking is that the following accelerators would make the most sense:

  • Sea-Level Resilience
  • Cybersecurity
  • Health Care Data Analytics
  • Life Sciences / Biomedical Technologies
  • Logistics / Maritime Technologies

Enough talk.  So let’s have a ribbon-cutting on this innovation headquarters before this time next year.

 

  1. Place Making

Based on extensive evidence, we know that, in the competition for talent, especially for college-educated millennials in an otherwise graying workforce, building a sense of place and community are absolutely essential.  After public safety, job opportunities and housing options, the places and lifestyle options of a community rank at the top of their selection criteria.  For example, they highly value outdoor recreation, biking and walking options; access to the water; and a diverse urban living environment.  That’s one good reason among many why we must transform the Elizabeth River Trail into a sparkling necklace along our waterfront that every person who lives in, works in, or visits Norfolk will want to try on for size.  To that end, we established the Friends of the Elizabeth River Trail Foundation, recruited an all-star Board of Directors and negotiated an MOU with the City to give that Foundation the primary role in master planning, marketing and fundraising for the Trail.

I am pleased to announce that just yesterday, the VPA Board of Commissioners approved an $82,500 grant for the construction of a kayak launch at Plum Point Park as one of the great attractions we propose to locate along the Trail.  We also thank the Mayor and the City Manager for putting $500,000 for the Trail into the City’s capital improvement plan over the next five years.  So we are already at $585,000 on the way to raising $4 million in the First Phase of making the Elizabeth River Trail the most visually interesting, most historically interesting, most socially interesting and most economically interesting urban river trail in the country.

 

  1. Attracting and Retaining Talent

Let me salute Barry Bishop of GNC and Mary Miller of DNC for their indefatigable work in building the LiveNFK summer internship program into a tremendous asset for our respective members in recruiting talented college students to consider Norfolk and our region for their homes and careers after graduation.  The fourth year of this successful program debuts on June 8, as City Manager Doug Smith holds a power lunch with approximately 100 summer interns from Norfolk employers.  If your company is not participating, you are overlooking a great recruiting tool.

 

  1. Developing Talent

The Elizabeth River Trail and Live NFK will help us in the fight to attract and retain talent.  On the crucial battlefront of developing homegrown talent, GNC gave birth to the big idea of developing a regional center of excellence on the Lake Taylor campus as home to a world-class Governor’s School and a world-class Career and Technical School, both steeped in the STEM disciplines, and focused on cultivating the entrepreneurs, innovators and skilled workforce of generations yet to come of age.  All young people deserve an educational option that will enable them to reach their own best potential.  In some cases, that means an industry-linked and work-linked program of study from which they will graduate work-ready, or perhaps on a fast track to an associate’s degree at TCC.  In other cases, our highest-performing students deserve the same opportunity that their Northern Virginia peers enjoy by attending Thomas Jefferson, a nationally renowned 1800-student Governor’s School, funded in part by Hampton Roads taxpayers, that annually generates 12 times the number of National Merit Semifinalists as all 30 public high schools in South Hampton Roads combined.

Our vision for such a center of excellence was affirmed in the lead recommendations made by the Hampton Roads Community Foundation’s Workforce Development Study Group.  Further, the CTE School was specifically endorsed by the Mayor’s Commission on Poverty Reduction as a crucial strategy for equipping our young residents with the skills necessary to lift them out of poverty and to raise their career sights in a technology-driven economy.  Both proposals have been endorsed by legions of business, political, academic and civic leaders throughout Hampton Roads.  Tommy Johnson, thank you for your continued leadership on the CTE battlefield, and Dr. Edna Baehre-Kolovani of TCC, thank you for leaning in with your considerable expertise in our effort to bring the CTE program to fruition.  And we applaud Mayor Kenny Alexander for so strongly supporting this particular educational pathway to a more productive citizenry.

Indeed, the more quality choices we give Norfolk families for educating their children, the better our City will become.

 

  1. Miscellaneous

We continue to work on a host of other initiatives.  I thank Dave Iwans for bird-dogging the expansion of ultra-high speed internet capacity in Norfolk.  We need to revisit the “Hampton Roads” brand for this region, and Norfolk and Virginia Beach should explore a joint venture to market their collective wares in hopes of planting a regional colony of biomedical/life science businesses, taking advantage of state incentives from Go VA and the Virginia Collaborative Economic Development Act.

Next year will be another state budget year, and once again we will need to rally support for ODU, EVMS, NSU and TCC.  We had some success last time around and we offer our support again this cycle.

On transportation, in addition to the Elizabeth River Trail, we will advocate for extending light rail to the major job and traffic generator of Old Dominion University.  And thanks to Miles Leon, we now have an I-87 connection to Raleigh/Durham on our long-range radar.  I look forward to our distinguished guest speaker’s thoughts on the viability of these ideas.

 

  1. Opportunity for All

As my remarks come to a close and my years serving as your President near an end, I take you back to the work of the Mayor’s Poverty Commission, important work in an old port city where 28% of our children dwell in poverty, and 2/3 of our public school children qualify for free or reduced price lunches.  We cannot claim to succeed in our crusade to fix the economy of Norfolk if we do not succeed in reducing a poverty rate that runs almost twice the state average.

A key finding of the Poverty Commission was that concentrating poverty in certain neighborhoods results in more total poverty and more cross-generational poverty than if the poor are given housing options in mixed income communities.  When the poverty rate tips 92% in our public housing projects, children living there become blinded to other ways of life, as they see precious few role models completing their education, getting a job and marrying before they start having their own children, the so-called “success sequence” that, when followed, virtually guarantees that a family will escape or avoid poverty.

The housing projects are an inhumane and disabling way to warehouse the poor.  They breed dependency, educational failure, drugs, crime, poor health, broken families and hopelessness.  The money spent on packing the poor into these ghettoes should be used instead to empower them and to give them personal responsibility in deciding where they live.  President Reagan rhetorically addressed an adversary when he exclaimed in Berlin, “Mr. Gorbachev, tear down this Wall.”  I rhetorically address a good friend and someone I support strongly as our Mayor when I say, “Mayor Alexander, tear down these projects.”

And as for encouraging people of all races and socio-economic backgrounds to pursue the success sequence, I cite a letter to City Council signed by 26 of the 30 very diverse Poverty Commissioners, advocating that a credible body investigate the feasibility of conducting a public education and social marketing campaign championing the success sequence as a proven way out of poverty.  In this case, a study is an action item, as for too long we have avoided asking the tough questions.

But, when only 4.5% of married-couple households are poor, yet 34% of female-headed households and 46% of female-headed households with children under 5 persist in poverty, we can no longer afford the political and moral cowardice that causes us to shrink from coaching young people to make the best choices for delivering themselves from the poverty into which they were born.

I do not know, quite frankly, if you want to follow me onto this battlefield, or minefield, but Amen I say to you, if we cower in fear from addressing these issues “head-on”, then the entrepreneurial and innovative community of widespread opportunity we have envisioned for this old Port city will never come to dock here, and our dreams for a widely-shared prosperity will only drift away.

So, with gratitude to all of those who have fought alongside us in the Battles over ideas, I ask your support and reinforcement in the Battles over execution and implementation yet to be waged.