BLACKSBURG -- A study by a Virginia Tech-supported think tank criticizes the university, local governments and the state government for what it sees as a lack of cooperation in leveraging Virginia Tech's research potential to boost the economy of Southwest Virginia.

For the region's economy to prosper, those groups should cooperate more to recruit high-tech jobs, says a Center for Regional Strategies report, "Research and the Regional Economy: The Research University as Driver."

The report was given to The Roanoke Times in March and will be released to the public this week.

The report, which led to the center's severing ties with Tech, cites figures that show Virginia lags behind other states in university research spending. It also references statistics revealing relatively slow economic growth and aging demographic projections in Southwest Virginia, home to the state's largest research university. University research and economic growth are inextricably linked in a cause-and-effect relationship that can be overcome by a greater commitment to economic development through university research, the report says.

The study is more than an indictment, suggesting ways to make that happen.

It offers ideas for off-campus university research facilities, a focus by local government on attracting new technology businesses and more state incentives for industries to collaborate with university research, among other suggestions.

"When you read this report, it becomes very, very clear why Virginia Tech wants to become one of the top 30 research institutions," said Wendy Zomparelli, chairwoman of the center's governing board and president and publisher of The Roanoke Times. "It is so important for the health of the region."

But Tech officials and local economic development leaders cite several examples of cooperation that's already happening.

While some say that the state may have come late to the game of investing in research to spawn economic growth and admit to a lack of local funds to accomplish some of their goals, the suggestions made by the report are not new ideas to them.

"This, to me, truly is like saying, 'Virginia Tech, you really ought to consider offering engineering degrees,' " Tech spokesman Larry Hincker said of the report. "To a certain extent, the authors, I think, don't understand economic development."

Study: Tech 'overlooked'

Center Director Catherine Greenberg worked for a year with center staff to analyze statistics and trends and look at success stories involving economies lifted up by universities around the country.

The New Century Region, largely consisting of the Roanoke and New River valleys, has experienced slow job growth in the past 20 years.

Worse, the study says, is that this growth is mostly in manufacturing, not new technology, despite Tech's presence.

"As a research university, Virginia Tech offers the best hope of revitalizing NCR's stagnant economy," the report reads. "But its potential as a driver in the regional economy is underutilized at best and, at worst, overlooked by local governments, the Commonwealth and Virginia Tech itself."

The report points out Tech's work with Roanoke's Carilion Biomedical Institute and the Institute for Advanced Learning in Danville as examples of successful cooperative efforts.

But it says those examples are few and far between and there is no overarching philosophy highlighting the importance of university cooperation with government and industry.

As evidence, the study points to strategic plans for localities and Virginia Tech. Tech's plan never mentions Roanoke, Montgomery County, the New River Valley, or Blacksburg, the report said. Similarly, the Montgomery County and Roanoke plans have scant mention of the research university that educates more than 25,000 people and employs thousands in their back yard.

'Light bulb goes off'

Regardless of strategic plan language, Virginia Tech's presence in the regional economy is constantly being touted, said Aric Bopp, executive director of the New River Valley Economic Development Alliance.

He said Tech isn't just a selling point when trying to bring businesses to the area, it's an introductory point.

"If you walk up [to a business executive] and say you're in the New River Valley, you get a blank stare," he said. "But if you say it's home to Virginia Tech, the light bulb goes off in their head."

The alliance, which is charged with marketing the New River Valley to companies looking to move or expand, targets 10 industries in particular. Among them are biotechnology and pharmaceuticals; high-tech and research and development; nanotechnology; and plastics, polymers and chemicals.

While Tech has fallen out of the top 50 in the National Science Foundation's overall rankings of spending at national research universities -- ranking 55th in NSF rankings completed this spring -- many of the alliance's target industries are in fields where Virginia Tech is nationally prominent.

Bopp said he keeps up-to-date with what's happening on campus and in Virginia Tech's Corporate Research Center by attending meetings of the Montgomery Regional Economic Development Commission and by keeping in regular contact with CRC President Joe Meredith.

The commission, which Meredith sits on, includes representatives from Montgomery County, Blacksburg and Christiansburg governments and universities and is designed to coordinate economic development efforts.

The CRC was formed in 1985 to help transfer technology from Virginia Tech to private industry by marrying university resources and infrastructure with high-tech companies. There are more than 140 tenants in the park's 20 buildings and about 1,900 employees, although more than one-third of them are university employees.

"The CRC is very plugged into every entity that has an objective of economic development in this region," Meredith said. "I'm just defensive about somebody who says, 'Well, we need to work together better.' Well, we work together pretty darn well already."

Meredith points out the recruitment of UXB International -- a company that manufactures devices to remove mines, explosives and chemical warfare materials -- as an example of the type of business they can attract.

He worked with Bopp and Montgomery County economic development director Bob Isner to get the company to relocate from Northern Virginia.

"It hit all of our major buttons," Meredith said. "It hit research and development, it hit manufacturing. They were a legitimate, big company."

Shiv Joshi is chief technology officer for NexGen Aeronautics, a Southern California firm that will open a branch in the CRC in June.

He said his firm chose Virginia Tech over Cornell and Georgia Tech because of the overwhelming support he received from officials with Tech, the CRC, the state and Montgomery County during his three trips to Blacksburg.

"We never got anything close to that from the other two places," he said.

While defensive about some of the criticisms, Meredith agrees with some of the report's conclusions. Other states do offer more advantageous climates for research parks, he said. The CRC was started with money from the federal government and the Tech Foundation. It has never received state money, and Virginia doesn't fund companies to license technologies like Maryland and North Carolina do.

Meredith also laments funding cuts for the Virginia Center for Innovative Technology and would like to see more money available from the state for startup companies. The CRC addressed some of those needs when the park's first business incubator, VT KnowledgeWorks, opened last year.

But more can be done, Meredith said. "If this were in North Carolina, I believe that we would have access to greater and more tools to help provide funding, technical assistance and business assistance to the companies in the park," he said.

'Magic formula' unknown

Indeed, Virginia pales in comparison to neighboring states when it comes to research spending, despite recent emphasis put on the subject by state politicians.

Using the most recent figures available, the report said Virginia ranks 42nd for the amount of university research dollars brought into the state versus gross state product. Maryland ranks first and North Carolina is 10th.

In addition to North Carolina's Research Triangle, the report mentions the recent economic success of Boston and the Silicon Valley as examples of universities lifting the economy of a region.

But Bill Shobe, director of business and economic research at the University of Virginia's Weldon Cooper Center, said it's unrealistic to expect Tech to produce anywhere near the investment created by universities in major urban areas with higher profiles, more infrastructure and services to attract talent.

"You can't expect Virginia Tech to lift all the boats all across the Southside," he said. "That's a pretty heavy load to saddle them with."

Research Triangle Park was formed in 1959 and the fruits of that project were not realized until after decades of major state investment.

Danville economic development director Ron Bunch, who lauds the effects of Tech in Danville, calls Research Triangle "the overnight success that started in the '50s."

A study released by the center last year shows the New Century Region lagging behind in comparison to small cities such as Athens, Ga., and Lexington, Ky., that are home to major universities.

But Shobe added that the market for bringing in high-tech industry is so competitive now that it would be wrong to look at what states did years ago and expect the same effect today. States are "hep" to this idea, he said.

"Georgia was out of the blocks early and very aggressive in this field," he said. "The truth is, no one really knows the magic formula for turning a university into a Silicon Valley."

That uncertainty makes it hard to persuade politicians to pour tens of millions of dollars into university research, he said.

Manufacturing still focus

Whereas incentives to bring in manufacturing plants won't be paid if the industry doesn't come, governments are saddled with the cost of research investment regardless of the outcome, Shobe said. And it's not just incentives that are on a manufacturing model. So are area marketing efforts.

Bopp said a majority of alliance efforts continue to be manufacturing-related, in large part because much of the work force continues to have those skills.

"People laid off at Ethan Allen may not have the skills to work at an R and D facility, but they could work at James Hardie," he said.

Like Bopp, Phil Sparks, executive director of the Roanoke Valley Economic Development Partnership, said a significant part of his efforts is geared toward manufacturing. Most research and development comes out of manufacturing and not everyone can research or be a scientist, he said, despite figures cited by the study indicating underemployment is a bigger problem than unemployment in the region.

But, like Meredith, Sparks agrees with parts of the report. He gives his own organization a C on its ability to really take advantage of the university.

"I think there's more that we could be doing, but one of the problems we suffer here and one of the problems Aric [Bopp] suffers from, is we have pretty close budgets -- a fraction of what our counterparts in Richmond and Hampton Roads have," he said.

Recent efforts could help

While local funding levels are relatively low, then-Gov. Mark Warner made plans to increase state funds in December. That's when he announced $255 million in his proposed budget would go to research at Virginia's universities. He referenced Virginia's status behind its neighbors to the north and south in university research when making the announcement.

This isn't the first time Richmond has recognized the importance of higher education research.

Then-Gov. Jim Gilmore introduced the Commonwealth Technology Research Fund at the turn of the century. Warner announced a goal of increasing Virginia's annual research and development higher education expenditures to $1 billion by 2010.

In 2003, Tech President Charles Steger led a committee to make recommendations to the state to expand research capabilities at universities following a study on Virginia's poor standing in the field by the State Council of Higher Education for Virginia.

Craig Herndon, a research policy analyst with SCHEV, said the importance of university research to the state's economy is well-known now and has been for several years. Without the current movement to increase research, the state would be even further behind, he said.

"It's difficult to say when Virginia went wrong," he said. "It's difficult to say when the bad seeds were sown."

While the level of state investment in university research is still up for debate in the General Assembly, Gov. Tim Kaine is a firm believer in university research as an investment with potential for great returns.

"I think there's a realization that we really can leverage more of the economic development power of higher education," he said. "We've seen what they can do. We just have to put more state resources into it."

Kaine acknowledged that Virginia has been reluctant to put up money to draw in research dollars in the past and other states have policies that make it easier to attract investment. But he said those problems can be addressed.

University system collaboration found in states such as North Carolina doesn't exist in the more decentralized Virginia system, which is another problem. Institutions that give grants like collaboration, he said.

But several different, highly regarded institutions have grown in that structure, Kaine said. That's something he hopes the state can take advantage of.

"The thing that makes me optimistic is that we have a spectacular higher education system," he said. "If we get this right we've got these other options."