COMMONWEALTH OF VIRGINIA UNMANNED AERIAL …UAS industry includes good access, several flying ranges, excellent roadways, numerous universities, users, and use case populations. But

M A R C H 2 0 1 7

COMMONWEALTH OF VIRGINIA UNMANNED

AERIAL SYSTEMS STRATEGIC ECONOMIC

DEVELOPMENT PLAN

REPORT C IT60T1 REV IS ION 1

Rober t P. Bea ch

V i r g i n i a L . S tou f fe r

Gera ld J . Be l che r

P a t r i c k M . Schu l t z

NOTICE :

THE VIEWS, OPINIONS, AND FINDINGS CON-

TAINED IN THIS REPORT ARE THOSE OF LMI AND

SHOULD NOT BE CONSTRUED AS AN OFFICIAL

AGENCY POSITION, POLICY, OR DECISION,

UNLESS SO DESIGNATED BY OTHER OFFICIAL

DOCUMENTATION.

LMI © 2017. ALL RIGHTS RESERVED.

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Commonwealth of Virginia Unmanned Aerial Systems Strategic Economic Development Plan CIT60T1 REVISION 1/MARCH 2017

Executive Summary

Unmanned aerial systems (UAS) were virtually unknown 10 years ago and now appear poised to change many aspects of our daily lives. UAS could transform medical emergencies, search and rescue operations, personal security, construc-tion and inspection, photography, even daily shopping. In the first 18 months of issuing certificates to operate, the Federal Aviation Administration (FAA) granted 5,000 certifications, established six federal test centers, and approved test ranges with operating privileges. Based on adoption rates in Japan, there is potential for millions of UAS to operate commercially in the United States. The market dy-namics surrounding UAS operations are potentially as revolutionary as the intro-duction of the internet, and new businesses offering UAS services have commensurate potential to earn revenues.

This nascent industry offers a promise of adding jobs, revenue, and opportunity within a state, and to be a part of this new economy. The Commonwealth of Vir-ginia, along with other states, sees an opportunity in encouraging this industry within the state. The Governor issued an Executive Order to establish a Commis-sion to focus on promoting UAS business in the state. The Virginia Unmanned Commission1 revealed that the Commonwealth is already rich in UAS-related as-sets, including an FAA-designated test range, a Beyond-Line-Of-Sight test corri-dor, ongoing research in several military, commercial, and research institutions, and a number of UAS manufacturers and service providers that call Virginia home. The Commission report further identified and enumerated Virginia’s con-siderable existing UAS industries and generally recommended

establishing a dedicated in-bound focal point, which would serve as a point of contact for those seeking to do business or partner with Virginia UAS-related organizations, companies, test sites, and related industries;

updating the list of UAS-related assets;

1 Unmanned Systems Commission Report, Working Draft of July 12, 2016.

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pursuing marketing of UAS capabilities and outreach for partnering campaigns;

targeting financial incentives to small startups; commensurate with the effort that other states are making to encourage the industry in their localities;

avoiding proscriptive regulation; and

enhancing educational offerings.

The Commission report noted that the Commonwealth’s value proposition for the UAS industry includes good access, several flying ranges, excellent roadways, numerous universities, users, and use case populations. But there are obstacles to the growth of the industry in Virginia, chiefly in a lack of marketing, and national inbound recruitment, activities which would require a central organizing effort.

In the final draft of the Commission’s recommendations, the Commission recom-mended founding an Unmanned Systems office for outreach, advocacy, and pro-motion, as well as Centers of Excellence (CoEs) in related fields. Secretary of Technology Karen Jackson began investigating the founding of a UAS CoE as part of a UAS strategic economic development plan, considering the audience and the stakeholders, and how they would use, contribute, change, or enact such a strategic plan.

LMI was tasked to develop a strategic economic development plan to support growth of the Virginia UAS industry. We researched the industry and existing as-sets, and developed a benchmark comparison of other states and other CoEs. We worked with Secretary Jackson to hold four workshops throughout the state, to get to know the audience and stakeholders; their needs, their strategies, the local con-tributions and plans, and to understand how different stakeholders in Virginia would use, contribute to, or enact a strategic CoE development. We compared the plans and abilities of the stakeholders to successful practices at existing COEs. We made a record of the needs of the stakeholders in CoE development, based on discussions. Our listening sessions provided us a wealth of specific needs to in-form the strategies that we used to recommend specific policies and initiatives for the CoE and UAS development. After the workshops, we categorized, grouped, and ranked the needs and recommendations. We discussed and further analyzed the needs of Virginia stakeholders in light of the existing best practices research for establishing CoEs, for economic development within a state, and the Commis-sion reports, the Virginia Business Recruitment Marketing Strategy (2016), the Unmanned Vehicle Web Document (2016), and related Commonwealth research.

Out of this research and stakeholder discussions the LMI team identified four tar-get goals with 20 discrete strategies that the Commonwealth should pursue to pro-vided economic development and growth in the state using the emerging UAS industry as an engine. Each strategy is accompanied by a concrete, implementable

Executive Summary

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recommendation. Most of the recommendations are implementable by a central coordinating body, a Virginia Center of Excellence for UAS, though some are within the purview of the legislature or the state and could only be encouraged by the CoE. We identified which recommendations the CoE can enact and those for which it would lack authority.

At a top level, we recommend the establishment of a virtual CoE, meaning a CoE made up of people not tied to a particular test site, university, city, or brick and mortar place. The CoE must have at a minimum a marketing director responsible for national outreach, inboarding UAS-related clients and opportunities to partner with Virginia UAS businesses, and be a spokesman for the Virginia based UAS assets, firms, training organizations and locations throughout the state. The mar-keting director needs to attend and exhibit at national level UAS conferences to establish external education about Virginia capabilities. In addition, the CoE must also have an inward face to facilitate conversations among the existing and grow-ing UAS firms, organizations, and locations. The inward face consists of program coordination and web interface information. The inward facing capability also needs to conduct outreach and inside-Virginia education, facilitating business connections with traveling workshops and a web presence to complement and ex-tend the connections of the workshops. The CoE will also be responsible for push-ing initiatives within legislative and other bodies within Virginia, such as encouraging local utilities to “buy Virginia” when seeking UAS-related services, promoting a pro-UAS attitude within the Commonwealth, crafting economic in-centives for start-ups, and educating members of the community about the assis-tance available to them and the other members of the local community.

This document is our final report of the need for the CoE, the potential for eco-nomic development surrounding UAS, prioritized recommended goals, strategies, and activities, and our process in reaching those goals, strategies and activities. We also include a brief budget for the establishment of the CoE, and the list of over 700 stakeholder concerns from our listening sessions. Chapter 1 contains an overview of the UAS industry and the related industries that will contribute and grow along with UAS business. Chapter 2 describes our approach in research and analysis, listening, categorizing, prioritizing, and refining our final goals and rec-ommendations, as well as the data sources supporting our report and analysis. Chapter 3 provides a round table comment analysis with background information about the regions of Virginia and the areas we visited. In addition, Chapter 3 pro-vides a list of resources for funding sources for initiatives in this area. Chapter 4 starts with a top level vision and four main goals with the rationale for each, then branches into the detail of the strategies associated with each goal. Chapter 5 ex-tends the strategic plan in greater detail of recommended activities to enact each goal, the priorities for action, and the activities that the CoE can encourage but not directly enact. We discuss the business model for the CoE and recommend staff-ing and work assignments. Three appendices provide detail from the workshops: attendees, comments, and identified resources.

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Contents

Chapter 1 Introduction ............................................................................. 1-1 UAS INDUSTRY ......................................................................................................... 1-1

Technology, Services, and Products ................................................................. 1-2 Related Industries .............................................................................................. 1-3 Demand ............................................................................................................. 1-4 Growth Potential ................................................................................................ 1-6

VIRGINIA GROWTH STRATEGIES ................................................................................. 1-7 STUDY OBJECTIVE ..................................................................................................... 1-8

Chapter 2 Approach ................................................................................. 2-1 DATA SOURCES ........................................................................................................ 2-2

Virginia UAS Roundtables ................................................................................. 2-2 Economic Growth Plans .................................................................................... 2-4 State Practices Related to UAS Industry ........................................................... 2-4 Virginia Economic Development Partnership .................................................... 2-5 U.S. Census Bureau .......................................................................................... 2-5 U.S. Department of Commerce ......................................................................... 2-5 Periodicals ......................................................................................................... 2-6

ANALYTICAL PROCESS ............................................................................................... 2-6

Chapter 3 Findings .................................................................................. 3-1 ROUNDTABLE COMMENT ANALYSIS ............................................................................. 3-1 VIRGINIA DEMOGRAPHICS .......................................................................................... 3-4 VIRGINIA FINANCE SOURCES ...................................................................................... 3-6

CIT GAP Funds ................................................................................................. 3-6 Virginia Research Investment Fund and Committee ......................................... 3-7 Governor’s Agriculture and Forestry Industries Development Fund .................. 3-7 Enterprise Zone Act Credit ................................................................................ 3-7 Port of Virginia Economic and Infrastructure Development Grant Program ....... 3-8 Qualified Equity and Subordinate Debt Investments Credit ............................... 3-8 Telework Expenses Tax Credit .......................................................................... 3-8

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Worker Retraining Tax Credit ............................................................................ 3-8 Agricultural Best Management Practices Credit ................................................ 3-9 Research and Development Tax Credit ............................................................. 3-9 Fertilizer and Pesticide Application Equipment Credit ....................................... 3-9 Credit for Taxes Paid to Another State .............................................................. 3-9 State Small Business Credit Initiative Virginia Capital Access Program .......... 3-10 Small Business Microloan Program ................................................................. 3-10 Environmental Compliance Assistance Fund .................................................. 3-10 Economic Development Access Program ....................................................... 3-10 Rail Industrial Access Fund ............................................................................. 3-11 Transportation Partnership Opportunity Fund ................................................. 3-11 Virginia Enterprise Zone .................................................................................. 3-11 Enterprise Zone Job Creation Grant ................................................................ 3-12 Foreign Trade Zones ....................................................................................... 3-12 Center for Regional Economic Competitiveness ............................................. 3-12 Council for Community and Economic Research ............................................ 3-12 Business Seed Capital .................................................................................... 3-13 Tobacco Region Revitalization Commission ................................................... 3-13 Individual County-Based Incentives ................................................................. 3-13 Virginia Economic Development Partnership .................................................. 3-13 Virginia Business Ready Sites Program .......................................................... 3-14 Commonwealth’s Development Opportunity Fund .......................................... 3-14 Virginia Jobs Investment Program ................................................................... 3-14 Virginia Economic Development Incentive Grant ............................................. 3-14 Major Eligible Employer Grant ......................................................................... 3-15 Major Business Facilities Job Tax Credit ......................................................... 3-15 Technology Zones ........................................................................................... 3-16 Defense Production Zone ................................................................................ 3-16 Commonwealth Research Commercialization Fund ........................................ 3-17 Virginia Coalfield Economic Development Authority ........................................ 3-17 Workforce Investment Act................................................................................ 3-18 Virginia Economic Development Loan Fund .................................................... 3-18

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OTHER STATES’ UAS PRACTICES ............................................................................. 3-18 North Dakota ................................................................................................... 3-19 New York ......................................................................................................... 3-19

Chapter 4 UAS Vision, Goals, and Strategies .......................................... 4-1 VISION ..................................................................................................................... 4-1 GOALS AND STRATEGIES ........................................................................................... 4-1

Goal—Instill an Entrepreneurial Culture Regarding UAS across Virginia .......... 4-3 Goal—Encourage Economic Growth across the Commonwealth of Virginia

via UAS Emergent Business Activity ..................................................... 4-6 Goal—Promote Growth in Virginia’s Economically Disadvantaged Regions

with UAS-Related Industry ...................................................................... 4-7 Goal—Continue and Increase the Commonwealth of Virginia’s Position as

a Leader in the UAS Community ............................................................ 4-9

Chapter 5 Recommendations .................................................................. 5-1 COLLABORATION ....................................................................................................... 5-1

UAS Platforms ................................................................................................... 5-2 Meetings ............................................................................................................ 5-2

MARKETING .............................................................................................................. 5-3 Internal Marketing .............................................................................................. 5-3 External Marketing ............................................................................................. 5-4

START-UP INCENTIVES .............................................................................................. 5-5 COE PRIORITIZED ACTIVITIES ..................................................................................... 5-7 COE BUSINESS MODEL ............................................................................................. 5-8 POTENTIAL COMMONWEALTH REGIONAL UAS OPPORTUNITIES ................................... 5-10

Appendix A Virginia Region County Composition Appendix B Roundtable Attendees Appendix C Roundtable Comment Matrix Appendix D Virginia-Based Financial Sources and Incentives Appendix E COE Staff, Requirements, and Timeline Appendix F Virginia Infrastructure Maps Appendix G Virginia Region Demographics and Colleges

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Figures Figure 2-1. Commonwealth of Virginia Regional Map ............................................. 2-2 Figure 2-2. Roundtable Event Locations ................................................................. 2-3 Figure 2-3. Analytical Structure ............................................................................... 2-7 Figure 5-1. Region 1 Location ............................................................................... 5-11 Figure 5-2. Region 2 Location ............................................................................... 5-12 Figure 5-3. Region 3 Location ............................................................................... 5-13 Figure 5-4. Region 4 Location ............................................................................... 5-14 Figure 5-5. Region 5 Location ............................................................................... 5-15 Figure 5-6. Region 6 Location ............................................................................... 5-16 Figure 5-7. Region 7 Location ............................................................................... 5-17 Figure 5-8. Region 8 Location ............................................................................... 5-18 Figure 5-9. Region 9 Location ............................................................................... 5-19

Tables Table 1-1. UAS Uses .............................................................................................. 1-4 Table 2-1. Attendee Count ...................................................................................... 2-3 Table 3-1. 2016 Virginia UAS Roundtable Comment Analysis ............................... 3-2 Table 3-2. Population and Age by Region .............................................................. 3-4 Table 3-3. Population and Age by Select States ..................................................... 3-5 Table 3-4. Population and Land Area ..................................................................... 3-6 Table 5-1. Region 1 Potential UAS Opportunities ................................................. 5-11 Table 5-2. Region 2 Potential UAS Opportunities ................................................. 5-12 Table 5-3. Region 3 Potential UAS Opportunities ................................................. 5-13 Table 5-4. Region 4 Potential UAS Opportunities ................................................. 5-14 Table 5-5. Region 5 Potential UAS Opportunities ................................................. 5-15 Table 5-6. Region 6 Potential UAS Opportunities ................................................. 5-16 Table 5-7. Region 7 Potential UAS Opportunities ................................................. 5-17 Table 5-8. Region 8 Potential UAS Opportunities ................................................. 5-18 Table 5-9. Region 9 Potential UAS Opportunities ................................................. 5-19

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Chapter 1 Introduction

This report recommends ways the Commonwealth of Virginia can achieve eco-nomic growth through the unmanned aerial systems (UAS) industry,1 a rapidly growing field in the government, commercial, and private environments. The UAS industry offers an opportunity for select private segments, states, and re-gions to grow in terms of economy and job opportunities. The report, comprising the Virginia UAS strategic economic development plan, analyzes the UAS envi-ronment, including views and insight from the Virginia UAS community, activi-ties and strategies undertaken by the Commonwealth’s potential competitors, and best practices and proven strategies for achieving sustainable economic growth.

UAS INDUSTRY UAS—one of the disruptive technologies of our time—will transform our daily lives over the next few decades as profoundly as the smart phone. Smart phones enabled anyone to have information access anywhere at any time, and UAS will give us all access to food, security, and medicine—everywhere. Similarly, smart phones have put a digital camera on every person, and UAS will enable people to video places and things where previously access was difficult to impossible, such as disaster sites, extreme sport events, and unsafe or hazardous environments and terrains. UAS will transform the tedious and labor-intensive chores of monitoring vast farmlands and cities for yield optimization and security into daily automated routines. Applications like “Eye in the Sky” have the potential to dramatically re-duce organized crime and terrorist activity around the world;2 UAS farmland monitoring can increase crop yield by 10 percent.3

The UAS industry consists of the manufacturers that build UAS (now and in the future); pilots who remotely pilot, own, and operate UAS; and persons and organ-izations who buy UAS services. It includes related organizations that repair them and build components such as digital cameras and sensors, as well as program-mers, engineers, and technicians, who provide operating, geolocating, and func-tional software for UAS so they can recognize faces or cars, monitor traffic

1 For simplicity in this report, we use “UAS” for both the singular and plural: unmanned aerial

system and unmanned aerial systems. 2 Radiolab, “Eye in the Sky,” June 18, 2015, www.radiolab.org/story/eye-sky/. 3 Christopher Doering, “Drones could save farmers millions, study finds,” Des Moines Regis-

ter, July 21, 2015. www.desmoinesregister.com/story/money/agriculture/2015/07/21/ drones-farm-savings-agriculture-millions/30486487/.

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speeds, map terrain and vegetation, search, photograph, and scan. Also related are the regulators who create the guidelines and restrictions for UAS operation: height, privacy, ownership, and liability rules. In the United States, UAS are chiefly regulated by the Federal Aviation Administration (FAA), which addresses where, when, and the conditions under which they can fly, as well as who is quali-fied to fly them. The issues of privacy, including the ability to overfly another person’s property, are not well defined and the subject of court cases. The FAA prohibits the videoing of persons from a UAS without the consent of every single person under the UAS, but many people are unaware of this restriction, and argu-ably it is waived in the security, search, and disaster applications the FAA has authorized.

Technology, Services, and Products UAS range in size from surveillance cameras mimicking a housefly, to hand-launched aircraft with 6-foot wingspans, to Reaper or Predator surveillance air-craft with a wingspan half as wide as a B737 commercial passenger jet. The most popular UAS are quadcopters, weighing between a half a pound and 55 pounds, some of which can fly at 80 mph. There are also hybrids with both wings and ro-tors, and blimp-like aircraft with propellers.

Born in the aerospace industry, UAS are designed and being improved by aerody-namic engineers. New applications—such as housefly-shaped UAS and 3D-printed UAS—are on the leading edge of manufacturing capabilities. Electrical engineers and chemical engineers are working on UAS batteries with longer life, faster charge times, and better crash-safety. Some UAS link to smart phones and have electro-optical components in cameras and multispectral sensing devices. Because quadcopter control is complex, each one has a computer board to help control the pitch and rate of spin of the rotors, mandating computer expertise in ongoing UAS developments.

An array of researchers in agricultural, wireless sensing, and materials technolo-gies are working to expand the UAS usability, automate processing and sensing algorithms, and apply UAS to new areas. The data collected by UAS and their flight control are on the frontline of cyber security—protecting the data sensed and keeping control of their flight, preventing them from being hacked or taken over—as is defending no-fly zones from unauthorized UAS flight. Wireless com-munication, coding algorithms, and failsafe codes are all contributing efforts to UAS. As UAS are integrated into the greater U.S. airspace, UAS identification and communications will be required, perhaps using standard Automatic Depend-ent Surveillance Broadcast (ADS-B) for complementary flight among manned and unmanned aircraft. Problems with spoofed ADS-B signals will have to be re-solved as UAS become widespread.

Introduction

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Related Industries One of the primary UAS ap-plications is surveillance, un-der which a wide range of activity falls. Weddings, pa-rades, sporting events, and festivals are videographed from the sky; facilities such as dams, bridges, power lines, and industrial and mu-nicipal complexes are exam-ined and inspected; and fields and crops are sensed and analyzed for soil con-tent, moisture content, and blight and infestation. Road-ways are mapped for driving and navigation applications; wildlife are counted and poachers followed. People are found when lost, and located amid disaster sites. Dangerous or remote sites such as volcanoes, abandoned minelands, and toxic sites are surveyed. UAS pro-vide surveillance on hurricanes, terrorist activities, and war zones. Cameras and sensors from infrared to spectral analyzers are a key related industry for UAS. The drive is to create smaller, higher resolution cameras and encapsulate multiple spectra into a single unit at a low weight so that the UAS can stay aloft longer.

UAS are being used for security and safety surveillance. Police departments have put UAS aloft above crowds and festival events to gain a unique vantage point and capture footage that can be resourced later. While the U.S. military has used UAS surveillance to track and watch terrorist activity for more than a decade, civil police departments now recognize the value of UAS-based visual records with timely access after a crime is reported to enable the capture of suspects be-fore the evidence trail is lost. Private property owners are considering UAS for large parking lot surveillance, augmenting or replacing manned patrols.

The agricultural applications of UAS are fueling cooperative efforts in autonomy and robotics. A UAS with multiple sensors can overfly a field to sense water scar-city, soil content, pest infestation, blight, and disease. The data gathered by the airborne sensors are a bigger payload than can be accommodated by traditional air-to-ground digital radio frequencies (RF), so a sensor processing and output miniaturization industry is working to develop processing firmware on the UAS. Conditioned post-processed output can be used to program ground tractors to ap-ply treatments. As tractors are increasingly autonomous, tractor manufacturers are working with coders to link their equipment to UAS capabilities and provide com-plete solutions in one package.

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The recreational market is also growing. UAS and UAS-related products are in-creasingly found in retail stores, targeting all age ranges and indicating a growing demand for UAS by hobbyists and the recreational population. UAS racing events showcasing competitions among different UAS categories and across numerous landscape types are expanding. In September 2016, the Drone Racing League (DRL) and ESPN agreed to broadcast a full season (10 episodes) of DRL compe-titions.4 This agreement demonstrates the expanding UAS recreational market and its emergence into mainstream society.

More than one industry is approaching the incorporation of UAS as part of an overall service. Partnerships among drone manufacturers, UAS operating and navigation coders, and maintenance and repair workshops are increasing, giving UAS users an end-to-end supply chain for professional UAS use.

Demand In the United States, dozens of applications for UAS are emerging (Table 1-1). The top uses by market size and return on investment are agriculture, building construction, medical, and package delivery.

Table 1-1. UAS Uses

Agricultural scanning for disease, watering Roof condition inspection Agricultural point-spraying for infestation Large ship/aircraft inspection Agricultural spraying of small fields unsuited for airplanes

Pipeline monitoring

Soil/moisture mapping Electric line monitoring Mineralogy mapping Hazard monitoring (flood, landslide,

explosion, radioactivity) Mine land surveying and mapping Disaster relief surveillance, mapping,

situational awareness Water pollution, reflectivity, composition sampling

Swimming/boating distress assistance

Wild or endangered animal census Beach shark monitoring Animal research (migration patterns, nest locations)

Diver monitoring

Sheep herding Remote patient evacuation (Alaska) Search and rescue, missing persons Real estate/housing photography Missing persons vehicle identification (silver alerts)

Sport/extreme sport photography

Police fugitive search Wedding/special event photography Aerial surveillance for reported crime investigation

Personal security attendant

4 Darren Rovell, “Drone Racing League, ESPN reach broadcasting agreement,” September

14, 2016, www.espn.com/moresports/story/_/id/17544727/drone-racing-league-espn-announce-broadcasting-agreement.

Introduction

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Table 1-1. UAS Uses

Border patrol Cargo delivery (in network) Crowd patrol Medical delivery Facility patrol Package delivery Construction surveillance/inspection Food delivery Firefighting hotspot identification Internet point of service

Agriculture is a primary force driving UAS demand around the world. UAS have been in use in crop surveillance in Japan since 1991,5 and a number of UAS-specific agricultural applications are being tested around the United States, in-cluding at Clemson University and University of California–Davis. Targeted ap-plication of pesticides and counter-agents to crop disease can increase yields up to 10 percent, with profound implications for increasing food output from existing cropland for a growing population. UAS are used to herd sheep in Scotland, a use that could expand dramatically if automated. Use of UAS on just 10 percent of land under cultivation in the United States would enable targeted application of water, fertilizers, and pesticides to increase crop production by billions of dollars annually.

Building construction and inspection is a dangerous job, resulting in nearly 900 fatalities annually.6 The data indicate that between 35 and 58 percent of the fatali-ties occurred in tasks a UAS could have performed and reduced or eliminated the risk to life.7 Because the statistical value of a life in the United States is more than $9 million,8 the potential financial return on investment in using UAS to inspect buildings is tremendous, in the billions of dollars annually.

States have experimented with the use of UAS to deliver medical supplies to rural or remote areas; the FAA has granted authorization for medical supply deliveries via UAS in Maryland, Nevada, and Washington. Medical deliveries by UAS were tested in West Virginia and Virginia. UAS are delivering medical supplies in re-mote areas worldwide, with a positive impact on health and longevity at a reduced cost of delivery. Medical deliveries foreshadow one of the most discussed appli-cations of UAS, that of package delivery, including food and consumer goods.

5 Darryl Jenkins and Bijan Vasigh, “The Economic Impact of Unmanned Aircraft Systems In-

tegration in the United States,” March 2013, robohub.org/_uploads/AUVSI_New_Economic_ Report_2013_Full.pdf.

6 Bureau of Labor Statistics, “Occupational Injuries/Illnesses and Fatal Injuries Profiles,” data.bls.gov/gqt/ProfileData.

7 Virginia Stouffer et al., Benefits Assessment of NASA’s Airspace Operations and Safety Pro-gram Technical Challenges, NS660T1 (Tysons, VA: LMI, December 2016).

8 Kathryn Thompson, General Counsel, U.S. Department of Transportation, memorandum, “Guidance on Treatment of the Economic Value of a Statistical Life (VSL) in U.S. Department of Transportation Analyses—2015 Adjustment,” June 17, 2015.

http://data.bls.gov/gqt/ProfileData

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The market for the “last mile” of package delivery of packages under 5 pounds is in the trillions of dollars.9

Growth Potential UAS have the potential to transform multiple aspects of our daily lives. The Association of Unmanned Vehicle Systems International (AUVSI), a trade asso-ciation promoting UAS, has over 8,000 members worldwide. In 2013, AUVSI published a study measuring the po-tential economic bene-fits of UAS.10 This study served to establish the need for the federal government to address the regulations, con-straints, and conditions under which UAS would be allowed to op-erate in the United States. Using Japanese agricultural practices as a baseline, the authors

forecast a similar but slightly smaller number of UAS per acre that would be needed in agricultural use in the United States, using cultivated acres per state. The value of manufacturing these UAS was reported as a direct benefit to U.S. gross domestic product (GDP). Extrapolations to safety surveillance and pipeline monitoring were made on the basis of a Delphi survey, which placed UAS use in those industries at about 10 percent of the agricultural production. Employment per state was forecast as a ratio of the expected drone manufacturing per state. All totals were forecast to grow in accordance with GDP growth. The authors dis-cussed the valuation of indirect and multiplier effects from the employment totals, but with the total benefit of domestically employed UAS having a $95 billion im-pact in the United States in 2015–25, this additional calculation was not needed to prove the case.

9 Virginia Stouffer, et al., Initial Benefits Assessment of NASA’s Airspace Operations and

Safety Program Technical Challenges, NS560T1 (Tysons, VA: LMI, December 2015). 10 See Note 5, this chapter.

Introduction

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With this scope and broad applicability, the sentiment among the political, tech-nological, and industry and business communities is that the UAS industry is po-tentially, or already, a high growth area. Numerous documents and reports have been published in recent years describing the UAS industry as a rapidly develop-ing and expanding technological and business field. As one report noted, “over the next 10 years, worldwide production of UAS for all types of applications could rise from $4 billion annually to $14 billion.”11 As the Wall Street Journal found, “Drone technology is developing so quickly—and morphing into commer-cial uses never before contemplated—that aviation regulators are having trouble keeping pace.”12 The AUVSI March 2013 report identified the Commonwealth of Virginia as number eight in the United States in terms of 2015–25 job growth and economic impact from the UAS industry. In the Commonwealth, AUVSI esti-mates 3,500 newly created jobs, a $2.8 billion economic impact, and $26.9 mil-lion increase in tax revenue will be realized in 2015–25.13

VIRGINIA GROWTH STRATEGIES Recognizing the UAS industry’s economic potential for the Commonwealth of Virginia, Governor McAuliffe issued Executive Order (EO) 43, establishing the Unmanned Systems (UMS) Commission. Commission responsibilities set forth by EO 43 were as follows:

1. Identify the state of all unmanned systems industries in Virginia…

2. Identify challenges and needs of the unmanned system industry that may be met with Virginia assets…

3. Provide recommendations that will encourage the development of the unmanned systems industry in Virginia…

4. Develop the value proposition for Virginia that will provide a basis for marketing Virginia to the current unmanned system industry and that will position the Commonwealth for emerging needs and appli-cations within that industry.14

The Commission’s execution of these mandates culminated in a UMS Commis-sion report, which among its other contents, confirmed the UAS industry’s rapid expansion and subsequent economic opportunities available to Virginia. These opportunities are projected to permeate the industry’s supply chain, including re-search and development (R&D), batteries, actuators, motors, manufacturing, and

11 Bill Canis, Unmanned Aircraft Systems (UAS): Commercial Outlook for a New Industry, Congressional Research Service, September 9, 2015, p. 7, fas.org/sgp/crs/misc/R44192.pdf.

12 Andy Pasztor and Robert Wall, “Drone Regulators Struggle to Keep Up with the Rapidly Growing Technology,” Wall Street Journal, July 10, 2016, www.wsj.com/articles/ drone-regulators-struggle-to-keep-up-with-the-rapidly-growing-technology-1468202371.

13 See Note 5, this chapter, pp. 3–4. 14 Commonwealth of Virginia, Office of the Governor, EO 43, “Establishment of the Un-

manned Systems Commission,” June 12, 2015.

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services, as well as supporting industries such as cyber security, data analytics, communications, education and training, venture capital, insurance, and mainte-nance. The UMS Commission report provided commentary to principally increase AUVSI’s economic impact projections by noting,

This study [AUVSI], conducted in 2012 and reported in early 2013, did not foresee the growth of UAS for linear infrastructure inspections and geospatial imaging already being explored within Virginia. Nor did the study consider the huge potential for related needs such as the cyber-secu-rity of these systems.15

The UMS Commission report cited competitive discriminators that position Vir-ginia among states as a national UAS industry leader, including its existing busi-ness policies, geographic topography, high-tech workforce, and infrastructure such as the Mid-Atlantic Aviation Partnership (MAAP), one of six FAA-designated UAS test sites, and two National Aeronautics and Space Administra-tion (NASA) facilities focusing on UAS research, Langley Research Center and Wallops Flight Facility. Although these assets endure, the pace of UAS techno-logical and industrial advancement, as well as other national regions and states’ concerted efforts to establish themselves as UAS industry leaders, mean that Vir-ginia needs to strengthen its current position to maintain and expand its UAS leadership role and optimized related economic growth. Governor McAuliffe’s EO 43 and the UMS Commission report initiated meeting this need, and efforts must continue with substantial, Commonwealth-wide, strategic planning.

STUDY OBJECTIVE This report, comprising Virginia’s UAS strategic economic development plan, is among the next steps taken by the Commonwealth to set forth a coordinated stra-tegic plan to frame Virginia UAS stakeholders’ efforts and assets in achieving UAS-related economic growth. It establishes a comprehensive, Virginia-wide strategy to position the Commonwealth to capitalize on the high growth potential of the UAS industry. A dedicated plan is necessary to best leverage Virginia’s UAS-relevant assets, expertise, and resources to maximize their effectiveness and the subsequent UAS-related economic development in Virginia. The factors influ-encing economic growth in an emerging and high technological field like UAS are numerous, with complexities that transcend the foundational “supply and de-mand” concept. The UAS industry field’s high technology nature leads to a dy-namic, fluid, and innovative environment, with a considerable probability of industry-altering developments originating from small businesses, the academic community, or entrepreneurs, rather than from large, mature businesses. Industry constraints and conditions are yet to definitively develop from a UAS field in its early stages but are likely to include items such as regulations, operating protocols, applications, and supporting technology. In this atmosphere, UAS

15 UMS Commission report, Working Draft, July 12, 2016 (for LMI use in performance of the

contract), July 12, 2016, p. 4.

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stakeholders span a very wide range, from the federal government to individual citizens, and include entities such as state and local governments, businesses, fi-nancial sources, and academia. Virginia is uniquely positioned to effectively en-compass this stakeholder array in its borders, as it contains or possesses competitively strong capabilities and assets associated with each stakeholder type.

This report is a culmination of industry research, Virginia UAS-related capabili-ties assessments, and analysis of economic development practices and strategies. The economic development plan, informed by Virginia UAS stakeholders, articu-lates strategies and tactical activities to optimize the effectiveness of Common-wealth assets in achieving overall UAS-related economic growth throughout Virginia. These strategies and activities are prioritized in a roadmap for the Vir-ginia UAS community to invest its resources. Paramount in this prioritized roadmap is a focus on the plans and requirements of the Virginia UAS Center of Excellence (CoE) envisioned by the UMS Commission as a hub around which the Commonwealth’s UAS community can achieve maximized economic growth.

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Chapter 2 Approach

To prepare the Virginia UAS strategic economic development plan, we leveraged the perspectives and insights of the Commonwealth UAS community and coupled them with research on UAS industry developments, proven economic growth plans, and business and industry growth best practices. Analyzing the amalgama-tion of these data enabled us to establish an informed, cohesive, comprehensive, and feasible plan to account for and meet Virginia’s specific needs, considera-tions, and goals.

This Virginia UAS strategic economic development plan is founded on the UMS Commission’s recommendations to establish a UMS “focal point.” The commis-sion’s interim report characterizes this focal point as “more than a singular entry point for in-bound inquiries about Virginia’s capabilities, it should also actively reach out to firms across the UMS sector and supporting industries to understand and develop solutions for their needs.”1 Virginia’s Office of the Secretary of Technology, along with the Virginia Economic Development Partnership (VEDP) and the MAAP, perform these functions now, but on an ad hoc basis. The man-date from the commission lends itself to a largely un-centralized, virtual construct for Virginia’s UAS CoE. The virtual structure leverages available and proven technology and mitigates Virginia UAS stakeholder geographic dispersion chal-lenges to ensure a coordinated and inclusive Commonwealth UAS community. The Virginia UAS CoE and its virtual construct drove our research and analysis and underlie the subsequent economic growth plan.

The CoE will give stakeholders and interested parties access to a comprehensive collection of information, resources, and potential connections. It will also “level the playing field,” in that all regions of the Commonwealth, regardless of their un-derlying demographics or economy, can be promoted.

The economic development plan engages and capitalizes on UAS-related assets throughout the Commonwealth to strategically establish a comprehensive, Vir-ginia-wide approach. To facilitate this approach, we segmented Virginia into dis-crete regions consistent with the geographic groupings already used by other Commonwealth activities such as the Virginia Initiative for Growth and Oppor-tunity in Each Region (GO Virginia), a business-led initiative created and funded by the General Assembly.2 Its goals include fostering private-sector growth and

1 UMS Commission, Interim Report of Recommendations, January 12, 2016. 2 Michael Martz, “Virginia approves 9 regional economic areas,” Richmond Times-Dispatch,

www.richmond.com/news/virginia/government-politics/general-assembly/ article_4a7d19ca-3165-53c7-8fc7-1ec5fa8896c7.html.

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job creation through state incentives for regional collaboration by business, edu-cation, and government.3 We used these boundaries to concisely capture the unique UAS-related assets throughout the Commonwealth. Figure 2-1 shows the geographic boundaries of the GO Virginia Regional Councils. Appendix A tabu-lates the counties constituting each region.

Figure 2-1. Commonwealth of Virginia Regional Map

Source: Virginia Department of Housing and Community Development, “Regional Boundaries,” GO Virginia, www.dhcd.virginia.gov/index.php/go-virginia.html.

DATA SOURCES The various data sources informing the report and economic plan included first-person records of discussions, official Commonwealth of Virginia documents, other organizations’ publications and websites, media publications, and open source research. We chose these sources and their information and data to render a comprehensive perspective and analysis. We wanted the analysis and subse-quent report and economic plan to be Virginia-unique in the context of the overall economic and competitive environment, UAS industry, and business and industry best practices.

Virginia UAS Roundtables One of the most vital data sources was a series of four geographically dispersed roundtable seminars/discussions, hosted by the Commonwealth of Virginia Office of the Secretary of Technology in August 2016. The daylong events took place at James Madison University (JMU) in Harrisonburg, the Founders Inn in Virginia Beach, the Southwest Virginia Higher Education Center in Abingdon, and the

3 GO Virginia, “About GO Virginia,” www.govirginia.org/about/.

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Institute for Advanced Learning and Research in Danville (Figure 2-2). The loca-tions were chosen in part to facilitate attendance by an inclusive representation of Virginia-wide UAS stakeholders throughout its geography.

Figure 2-2. Roundtable Event Locations

The roundtables sought to gain and share UAS industry and Virginia Commonwealth-specific stakeholder and subject matter expert (SME) knowledge and perspectives regarding the current and future states of the UAS field. The stakeholders came from public and private industry and commerce; academia; federal, state, and local governments; and economic development agencies and included Virginia federal and state-level legislative officials and state executive branch officials. Table 2-1 shows the attendee count for each of the organization types.

Table 2-1. Attendee Count

Organization type Attendees

Academia 17 Local government 4 State government 10 Federal government 10 Industry/economic development agency 46

Every Virginia region was represented in at least one roundtable event. Discus-sion topics included insight into each participant’s region, organization, or interest area as they relate to establishing and growing a Virginia-based UAS industry. Also, discussions entertained ideas and thoughts to leverage and aggregate exist-ing and potential commercial, academic, community, local and state government,

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and Commonwealth resources for UAS-related economic expansion in Virginia. The four separate roundtable events shared a uniform format to facilitate con-sistency in the information gained and the subsequent analysis. (Appendix B lists the roundtable attendees.)

Economic Growth Plans We applied the Silicon Valley model to set the objectives of the Virginia UAS CoE. Silicon Valley is regarded as an innovation and technology industry and growth hub. According to the Silicon Valley Economic Development Alliance, it has come to be known as a “hotbed of innovation” and a place where “the cross-roads of invention and technology continually intersect.”4 The valley comprises cities and counties focused on achieving individual and regional economic devel-opment goals while maximizing scarce resources. To reinforce and sustain this model, structures and systems have been developed to help address business needs, whether through local government policy and streamlined permitting pro-cesses, or linking businesses to local and regional resources that add value to company innovation and growth. Although Silicon Valley’s economic develop-ment plans do not wholly apply to a Virginia UAS economic growth plan, the subject matter and goals have enough in common to allow productive leverage of Silicon Valley success.

State Practices Related to UAS Industry As UAS have grown in popularity, and given their increased availability, states have acknowledged the need to address the new technology in their policies. Ac-cording to the National Conference of State Legislatures (as of August 2016), every state except South Dakota considered legislation addressing UAS issues, while 31 actually enacted such laws.5 Several states have gone beyond reacting to the rise in UAS development and use. Recognizing the economic potential of UAS, some are trying to leverage this technology to their economic benefit by marshalling their talents and resources to claim a role in the future of UAS. Vir-ginia is not alone in the race to establish preeminence in UAS R&D. In this inter-state competitive environment, Virginia needs to understand, emulate, mitigate, or nullify potential competitors’ strategies through its own competitive posture and actions.

4 Silicon Valley Economic Development Alliance (SVEDA), “History,”

www.siliconvalleyonline.org/about-silicon-valley/history/. 5 National Conference of State Legislatures, “Taking Off: State Unmanned Aircraft Systems

Policies,” 2016.

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Virginia Economic Development Partnership In 1995, by the Virginia General Assembly created the VEDP to better serve those seeking a prime business location and increased trade opportunities, thus ex-panding the Commonwealth’s economy.6 VEDP’s stated service offerings of business investment and international trade synergize with the objectives of the Virginia UAS strategic economic development plan. In addition, we used VEDP’s website, www.yesvirginia.org, as a business-focused resource to garner Virginia data sources—such as workforce statistics, business incentives, and industrial and business operating cost figures—to support this report. Yesvirginia.org shares common aims with the Virginia UAS strategic economic development plan, and we consider its context in the Commonwealth’s UAS strategy.

U.S. Census Bureau We aggregated Virginia’s county-level census data to the regional level and ana-lyzed them to identify regional and Commonwealth demographic characteristics and trends. We also calculated population density figures at the regional and Commonwealth levels.

U.S. Department of Commerce The U.S. Department of Commerce (www.commerce.gov)—the federal entity with the mission to “create the conditions for economic growth and opportunity7 —is among the government resources that assist in economic development, using incentive programs and other means. The department is a reliable source of eco-nomic data and statistics that states, industry, and individuals can use in preparing economic strategies and plans. The department operates and maintains virtual sites and portals at which interested parties can find information on industries and sectors, commerce regulations, and federal business opportunities. Users can also access portals and apply for grants, including one for science, technology, engi-neering, and mathematics (STEM) R&D.

A major subordinate element of commerce is the U.S. Economic Development Administration (EDA), which focuses exclusively on economic development. It sponsors some of the grants programs and other investments that support develop-ment in economically distressed areas, partners with local organizations and gov-ernments, and supports university involvement in economic development8—efforts that should be useful to the Commonwealth as it implements its develop-ment strategies.

6 Virginia Economic Development Partnership, “Partnership Overview,”

www.yesvirginia.org/AboutUs. 7 Department of Commerce, “Mission Statement,” www.commerce.gov/about. 8 Department of Commerce, “Economic Development Administration (EDA),”

www.commerce.gov/doc/economic-development-administration#4/39.47/-98.74.

http://www.commerce.gov/

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Commerce has significant UAS R&D ongoing. In 2014, the National Oceanic and Atmospheric Administration (NOAA) launched a program called Sensing Haz-ards with Operational Unmanned Technology (SHOUT) to evaluate UAS to ob-serve hurricanes.9 NASA Global Hawk drones were used to monitor 12 named hurricanes, and analysis of the data have led NOAA to conclude that improved forecasts of hurricane track and intensity are possible using this technology. Therefore, NOAA is continuing to invest in UAS development efforts.

Periodicals The aforementioned fluidity and dynamic nature of the UAS industry inherently includes frequent developments and changes, so our study used various periodi-cals and news sources to maintain awareness of the latest news and advances re-garding the field. These publications included the Wall Street Journal, New York Times, and other media and websites, some with a focus on the UAS field. These different news sources gave us the most current UAS-related information in the political, industry, business, technological, regulatory, and other subject matter areas.

ANALYTICAL PROCESS We based our analytical process to develop the Virginia UAS strategic economic development plan on a hierarchal structure driven by an overarching vision re-garding UAS in the Commonwealth (Figure 2-3). We analyzed the vision and used it to frame comprehensive goals. These goals capture the environment and conditions under which the driving vision is realized. We formed strategies to achieve the established goals, noting those most effectively executed by the CoE. We fashioned recommendations describing specific actions to be taken to imple-ment the prescribed strategies.

9 NOAA, “Unmanned Aircraft Systems,” uas.noaa.gov/library/info-sheets/

NOAA_UAS_Program20150808.pdf.

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Figure 2-3. Analytical Structure

Analysis of the various data sources informed each level of the analytical struc-ture (Figure 2-4). We analyzed information from each data source, extracting findings pertinent to the Virginia UAS strategic economic development plan. We used Governor McAuliffe’s EO 43, the UMS Commission report, and roundtable discussions to set the vision and goals because they originated in Virginia and contain Commonwealth-specific perspectives and priorities. We used the roundtable comments and best practices—coupled with research of other state and region UAS-related activities, the UAS industry, and other economic develop-ment and CoE constructs—to inform the economic development plan’s strategies and recommendations. These data sources encapsulate the expertise and experi-ence of the larger UAS and economic development communities in pursuing and achieving high technology and UAS-related economic growth.

Vision

GoalStrategy Recommendation

Strategy Recommendation







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Figure 2-4. Data Source Link to Analysis

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Chapter 3 Findings

ROUNDTABLE COMMENT ANALYSIS The UAS roundtables gave us the opportunity to capture and analyze the thoughts and visions of a cross-section of Virginia UAS stakeholders. Over the course of the four events, we recorded about 750 attendee comments, categorizing them by subject matter and the UAS industry aspect to which they pertained. We found discrete commonalities among the vast majority, which fell into eight categories that describe their general content:

1. Human/intellectual resources. Human capital or institutions with current or potential capabilities or knowledge relevant to the UAS field.

2. Physical infrastructure. Physical features, either built or natural, relevant to the UAS field.

3. Legislative/regulatory. Laws, policies, or regulations relevant to the UAS field.

4. Network/collaboration/culture. Structure, events, and activities facilitating UAS aspects among stakeholders, such as communication, coordination, resource sharing, knowledge transfer, and teaming arrangements.

5. Training/education. Institutions and organizations that provide instruction and preparation in subject matter and skills related to the UAS industry.

6. Finance/tax. Challenges, opportunities, incentives, boundaries, or re-sources related to the financial aspects of UAS stakeholders.

7. Market. The business environment of the UAS field, including potential product/service offerings, competitors, consumers, and applications.

8. Other.

Similarly, we classified each comment’s aspect and relevance to UAS industry economic growth in Virginia in one of six groups:

1. Requirement. An item, condition, or resource necessary to improve the po-tential success of Virginia UAS economic growth (for example, broadband access with online development capacity).

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2. Challenge. Current or projected terms or conditions with a potentially neg-ative affect on Virginia UAS economic growth and on which Virginia UAS stakeholders have varying degrees of influence (for example, retain-ing Virginia-based engineering students after graduation).

3. Constraint. Current or projected conditions affecting Virginia UAS eco-nomic growth and on which Virginia UAS stakeholders have negligible influence (for example, current year state funding limits).

4. Opportunity. Current or potential conditions with a potentially favorable effect on Virginia UAS economic growth and on which Virginia UAS stakeholders have varying degrees of influence or leverage (for example, expanding UAS use to insurance companies for damage assessment).

5. Capability. Current or potential Commonwealth assets or resources with a favorable effect on Virginia UAS economic growth (for example, Vir-ginia’s having the largest robotics team participation in the world).

6. Vision. Strategies, approaches, paradigms, and activities regarding the UAS field (for example, the younger generation’s having the ideas to drive and innovate the industry).

Through this analysis, we identified trends in views and concerns regarding the UAS industry in the Commonwealth. Our findings established broad areas for the Virginia UAS economic plan to address, as well as ideas and concepts to incorpo-rate for implementable recommendations. Table 3-1 summarizes this analysis.

Table 3-1. 2016 Virginia UAS Roundtable Comment Analysis

Requirement Challenge Constraint Opportunity Capability Vision Total

Human/intellectual resources 12 11 0 6 55 17 101 Physical infrastructure 4 4 0 6 43 3 60 Legislative/regulatory 20 26 14 2 7 7 76 Network/collaboration/culture 45 28 3 11 55 48 190 Training/education 4 15 1 3 34 27 84 Finance/tax 23 28 12 9 12 9 93 Market 14 17 4 47 5 32 119 Other 5 3 0 2 0 13 23

Total 127 132 34 86 211 156 746

As shown in Table 3-1, 211 of the 746 comments (about 25 percent) expressed in the four roundtables centered on the capabilities in the Commonwealth regarding the UAS industry. Almost three-quarters of these thoughts articulated Virginia’s advantageous capabilities and discriminators related to its human/intellectual re-sources (55), physical infrastructure capacities and capabilities (43), and the

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stakeholders and assets available to support a col-laborative UAS culture and network (55). The collaborative culture and network was also notably identified in the roundtables as a major re-quirement and component of the stakeholders’ vi-sions of the future state of the UAS industry in Virginia.

In addition to the continuation and growth of the Commonwealth’s UAS collabo-rative culture, legislative/regulatory and financial/tax related items were among those more frequently identified of the 127 requirement statements (20 legisla-tive/regulatory comments, about 16 percent of all requirement comments) and 132 challenge remarks (26 comments, about 20 percent of all challenge comments) to UAS economic growth. Minimal restrictions to the operation and testing of UAS vehicles was noted as a primary factor in the success of the Commonwealth-wide UAS industry. The need for financial assistance (23 comments), specifically for small and entrepreneurial companies, was also voiced. This financial assistance aids in absorbing costs associated with launching and operating small businesses, as well as incentivizes these organizations to remain or locate in Virginia. In roundtable discussions regarding business financing and assistance, access to fi-nancial resources was highlighted as a challenge (28 comments). The challenges were predominantly described as the UAS community’s lack of awareness of po-tential Virginia financial resources and the lack of compatibility of some local and county government financial assistance application criteria with the business met-rics of a high-tech industry such as UAS. For example, one roundtable comment noted that a commonly used financial assistance application metric of projecting the number of workers at a desk in a specific location is not an accurate measure of economic impact for an industry that frequently employs technology to allow remote performance.

Among the four roundtable events, the general consensus was that Virginia pos-sesses a competitive UAS advantage over many other states in areas such as aca-demic community, workforce, natural and built infrastructure, existing industry, and proximity to UAS-focused federal government agencies and departments such as the Department of Defense and NASA. Accompanying this opinion was the frequent revelation that many Commonwealth UAS stakeholders were una-ware of the ready availability of resources, capabilities, and potential teaming op-portunities in Virginia that could support the stakeholders in their respective UAS-related efforts and cultivate a productive and symbiotic relationship.

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VIRGINIA DEMOGRAPHICS Table 3-2 summarizes Virginia-wide and regional population analyses. These analyses revealed a generally growing population base, characterized by a larger percentage of people of typical working age (ages 18 to 64 years old) than the U.S. average, 63.5 percent compared with 62.2 percent.

Table 3-2. Population and Age by Region

Area Estimatea Change, 2010–15

Change (%), 2010–15 Under 18a 18–64a 65+a 18–64 (%)a

United States 321,418,820 12,660,715 4.1 73,604,910 199,922,506 47,891,404 62.2

Virginia 8,382,993 381,948 4.8 1,869,407 5,323,201 1,190,385 63.5

Region 1 390,738 −11,010 −2.7 75,745 236,594 78,399 60.6

Region 2 777,592 15,778 2.1 152,196 489,148 136,248 62.9

Region 3 373,530 −10,477 −2.7 73,962 221,617 77,950 59.3

Region 4 1,236,268 60,133 5.1 272,136 789,084 175,048 63.8

Region 5 1,761,678 46,150 2.7 392,314 1,127,493 241,871 64.0

Region 6 496,997 27,980 6.0 116,486 306,621 73,890 61.7

Region 7 2,447,654 217068 9.7 598,549 1,594,833 254,272 65.2

Region 8 525,115 16,334 3.2 108,672 284,742 131,701 54.2

Region 9 421,195 20,191 5.0 89,813 261,483 69,900 62.1 Source: U.S. Census Bureau. a As of July 1, 2015.

Although the population figures are not uniform across the regions, the respective statistics are consistent with overall demographic, migration, and industry trends. For example, Regions 4 and 7, inclusive of large population centers such as the Richmond and Northern Virginia cities and municipalities, have experienced greater population growth rates than the overall Commonwealth, while Regions 1 and 3 have contracted. This development is in line with the urbanization move-ment throughout the United States, as well as a potential symptom of the growth of the service industry predominant in Regions 4 and 7 and the decline of certain regionally dominant industries, such as tobacco and coal, in Regions 1 and 3.

As shown in Tables 3-2 and 3-3, Virginia’s population of typical working age (18–64) people is approximately 64 percent of the overall Commonwealth 2015 population. Compared with other states—such as New York, North Dakota, Washington, North Carolina, Nevada, and Florida (Table 3-3)—Virginia does not have a distinct advantage in the percentage of working age residents. However, Virginia’s working age population has a considerably greater likelihood of having a bachelor’s degree than most other states. About 36 percent of those 25 years or older have a bachelor’s degree or higher, compared with the national average of 29 percent. VEDP estimates present enrollment of more than 575,000 students in

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colleges and universities across the Commonwealth and an annual generation of over 96,000 associate’s, bachelor’s, master’s, and doctoral graduates.1

Table 3-3. Population and Age by Select States

Estimatea Change, 2010–15

Change (%), 2010–15 18–64a 18–64 (%)a

Bachelor’s+ (%)a,b

United States 321,418,820 12,660,715 4.1 199,922,506 62.2 29.3 Virginia 8,382,993 381,948 4.8 5,323,201 63.5 35.8 New York 19,795,791 417,704 2.2 12,609,919 63.7 33.7 North Dakota 756,927 84,336 12.5 475,350 62.8 27.3 Washington 7,170,351 445,808 6.6 4,524,491 63.1 32.3 North Carolina 10,042,802 507,110 5.3 6,236,580 62.1 27.8 Nevada 2,890,845 190,154 7.0 1,800,996 62.3 22.5 Florida 20,271,272 1,466,649 7.8 12,223,577 60.3 26.8

Source: U.S. Census Bureau. a As of July 1, 2015. b Of those 25 years or older.

Although potentially perceived as a competitive disadvantage, Region 8’s com-paratively low population percentage of working age persons is offset by its inclu-sion of higher education institutions, such as James Madison University, whose undergraduate population comprises over 5,400 out-of-state students. This figure adds the availability of human resources solely from out-of-state origins. These statistics—communicated as a geographically focused source of a highly educated workforce and coupled with the existing academic, government, and commercial assets in Virginia—provide a potential marketable draw to growing UAS industry stakeholders and give the Commonwealth as a fertile location to develop a UAS innovation center.

Table 3-4 depicts the population density and land area of Virginia and the individ-ual regions, showing those with larger population centers from which to draw re-sources and those with less population density (Regions 1, 2, 3, 8, and 9). The roundtables noted thin population density as an attribute conducive to UAS test-ing and operations and desirable in many UAS industry fields. The availability of less densely populated land is among the primary requirements for conducting UAS testing and operations to adequately control, contain, and minimize any det-riments of flights. As articulated in the roundtables, some of Virginia’s less popu-lated regions are already capitalizing on this characteristic by hosting UAS racing events and coupling their population density traits with available built infrastruc-ture, such as abandoned mines, to develop intriguing and challenging race courses.

1 VEDP, “Skilled and Talented Workforce,” www.yesvirginia.org/AssetRich/Workforce.

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Table 3-4. Population and Land Area

Area Population per

square mile, 2015a Land area

(square miles), 2010

Virginia 212.3 39,490.09 Region 1 65.4 5,977.26 Region 2 132.0 5,892.87 Region 3 55.7 6,701.45 Region 4 309.0 4,000.44 Region 5 471.6 3,735.74 Region 6 145.6 3,413.72 Region 7 1,876.2 1,304.58 Region 8 103.9 5,051.63 Region 9 102.9 4,094.73

Source: U.S. Census Bureau. a As of July 1, 2015.

VIRGINIA FINANCE SOURCES In virtually any instance of economic or industry growth, the need for capital to finance the expansion is among the primary requirements. In an emerging, high tech industry, such as a UAS, projected to be largely driven by small businesses and entrepreneurs, this condition often goes beyond the basic function of funding infrastructure and staff. The availability of financial resources is a predominant factor in a business locating in one geographic area rather than another. Financial resources can be delivered in various forms, including tax incentives, start-up cap-ital (seed money), free or low-fee provision of infrastructure or services (office space, for example), or private investment, that is, venture capital. An obstruction faced by many entrepreneurs is the awareness or access to such financial tools.

Although roundtable discussions supported this statement regarding lack of awareness, the Commonwealth is not without potential financial resources. The subsections that follow describe sources available in Virginia to assist in meeting businesses’ needs for capital funding. (Appendix D lists the sources, source or-ganization, and source organization type—state government, local government, or private entity—and gives an overview of the constraints and conditions for access.)

CIT GAP Funds Center for Innovative Technology (CIT) GAP Funds is a family of seed- and early-stage investment funds placing near-equity and equity investments in Virginia-based technology, life science, and cleantech companies. CIT GAP Funds invests in companies with a high potential for achieving rapid growth and generating significant economic return for entrepreneurs, co-investors and the

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Commonwealth of Virginia. Within CIT’s family of funds is the GAP Tech Fund that makes seed-stage equity investments in Virginia-based technology companies.2

Virginia Research Investment Fund and Committee Established by Virginia General Assembly, the Virginia Research Investment Committee (VRIC) administers grants and loans from the Virginia Research In-vestment Fund (VRIF) to promote research, development, and commercialization in the Commonwealth within the science and technology fields.3

Governor’s Agriculture and Forestry Industries Development Fund

The Agriculture and Forestry Industries Development Fund (AFID) awards grants, at the discretion of the Governor, to a political subdivision that will result in a new or expanded processing/value-added facility for Virginia grown agricul-tural or forestry products, and with the expectation that the grant will be critical to the success of the project.4

Enterprise Zone Act Credit The Enterprise Zone Act Credit is a general tax credit for businesses qualified prior to July 1, 1995 against the tax due on taxable income within the established zone, as well as a credit for a percentage of unemployment tax due on zone em-ployees. Businesses qualified between July 1, 1995 and June 30, 2005 may take a credit against the tax due on the zone’s taxable income and may be eligible for the real property improvement tax credit or the investment tax credit.5, 6

2 CIT GAP Tech Fund,” http://www.cit.org/service-lines/gap-tech-fund/. 3 VRIC and VRIF, “Summary as Passed,” https://lis.virginia.gov/cgi-bin/

legp604.exe?ses=161&typ=bil&val=hb1343. 4 Virginia Department of Agriculture and Consumer Services, “AFID Facility Grants,”

http://www.vdacs.virginia.gov/agriculture-afid-facility-grants.shtml. 5 Virginia Department of Taxation, “Enterprise Zone Act Credit,”

http://www.tax.virginia.gov/content/tax-credits. 6 Effective July 1, 2005, the Enterprise Zone Act credit has been replaced with a grant pro-

gram administered by the Department of Housing and Community Development (DHCD). Certain businesses that signed agreements with DHCD prior to the expiration of the Enterprise Zone Act credit provisions may continue to claim the business tax credit and the real property improvement credit.

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Port of Virginia Economic and Infrastructure Development Grant Program

The Port of Virginia Economic and Infrastructure Development Grant Program (POV Grant), subject to Commonwealth appropriations, provides grants to quali-fied companies to incentivize them to locate new maritime-related employment centers or expand existing centers in specified localities in order to encourage and facilitate the growth of the Port of Virginia.7

Qualified Equity and Subordinate Debt Investments Credit The Qualified Equity and Subordinate Debt Investments Credit is available to in-dividual and fiduciary taxpayers making a qualified investment in the form of eq-uity or subordinated debt” in a pre-qualified small business venture. Qualified business means a business which (i) has annual gross revenues of no more than $3 million in its most recent fiscal year, (ii) has its principal office or facility in the Commonwealth, (iii) is engaged in business primarily in or does substantially all of its production in the Commonwealth, (iv) has not obtained during its existence more than $3 million in aggregate gross cash proceeds from the issuance of its eq-uity or debt investments (not including commercial loans from chartered banking or savings and loan institutions), and (v) is primarily engaged, or is primarily or-ganized to engage, in the fields of advanced computing, advanced materials, ad-vanced manufacturing, agricultural technologies, biotechnology, electronic device technology, energy, environmental technology, information technology, medical device technology, nanotechnology, or any similar technology-related field deter-mined by regulation by the Department of Taxation to fall under the purview of this section.8

Telework Expenses Tax Credit The Telework Expenses Tax Credit is for employers for eligible expenses in-curred for allowing employees to telework pursuant to a signed telework agree-ment for taxable years beginning on or after January 1, 2012, but before January 1, 2017.9

Worker Retraining Tax Credit The Worker Retraining Tax Credit allows an employer to claim a tax credit for the training costs of providing eligible worker retraining to qualified employees for taxable years beginning on or after January 1, 1999. The credit may be applied

7 The Port of Virginia, “ED + Infrastructure Grant Program,” http://www.portofvirginia.com/ stewardship/economic-development/ed-infrastructure-grant-program/.

8 Virginia Department of Taxation, “Qualified Equity and Subordinated Debt Investments Credit,” http://www.tax.virginia.gov/content/tax-credits.

9 Virginia Department of Taxation, “Worker Retraining Tax Credit,” http://www.tax.virginia.gov/content/tax-credits.

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against individual income tax, estate and trust tax, corporate income tax, bank franchise tax, and taxes imposed on insurance companies and utility companies. Eligible worker retraining includes noncredit courses that are approved by the Virginia Economic Development Partnership.10

Agricultural Best Management Practices Credit The Agricultural Best Management Practices Credit is available to individuals and corporations that are engaged in agricultural production for market and have a soil conservation plan in place to provide significant improvement to water quality in Virginia’s streams, rivers, and bays. To be eligible for the credit, your plan must be certified in advance by your local Soil and Water Conservation District.11

Research and Development Tax Credit Research and Development Tax Credit is a Commonwealth income tax credit for individuals and businesses for qualified research and development expenses for taxable years beginning on or after January 1, 2011, but before January 1, 2022.12

Fertilizer and Pesticide Application Equipment Credit The Fertilizer and Pesticide Application Equipment Credit is for individuals and corporations who purchased equipment to provide more precise pesticide applica-tion. Eligible entities must be engaged in agricultural production for market and have a nutrient management plan approved by their local Soil and Water Conser-vation District.13

Credit for Taxes Paid to Another State The Credit for Taxes Paid to Another State is for individuals reporting income to Virginia and paying income tax to another state. The Commonwealth will credit those individuals for the tax amount paid to other states.14

10 Virginia Department of Taxation, “Worker Retraining Tax Credit,”

http://www.tax.virginia.gov/content/tax-credits. 11 Virginia Department of Taxation, “Agriculture Best Management Practices Credit,”

http://www.tax.virginia.gov/content/tax-credits. 12 Virginia Department of Taxation, “Research and Development Tax Credit,”

http://www.tax.virginia.gov/content/tax-credits. 13 Virginia Department of Taxation, “Fertilizer and Pesticide Application Equipment Credit,”

http://www.tax.virginia.gov/content/tax-credits. 14 Virginia Department of Taxation, “Credit for Tax Paid to Another State,”

http://www.tax.virginia.gov/content/tax-credits.

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State Small Business Credit Initiative Virginia Capital Access Program

The Virginia Small Business Financing Authority’s (VSBFA) Virginia Capital Access Program (VCAP) provides access to capital for Virginia businesses by helping banks in Virginia to make loans to businesses that may have difficulty ob-taining a conventional loan without a credit enhancement. To apply for financing through VCAP, a business makes application to a bank participating in the Vir-ginia Capital Access Program. Eligible borrowers include: 501c3s and any for-profit corporation, partnership, Limited Liability Corporation, limited liability partnership, joint venture, sole proprietorship, cooperative or other entity which is authorized to conduct business in the Commonwealth of Virginia and meets the VSBFA’s definition of “small business.” Borrowers cannot have more than 250 employees in Virginia or 500 employees overall.15

Small Business Microloan Program The Virginia Small Business Financing Authority’s Small Business Microloan Program is designed to assist Virginia’s existing small businesses across the Com-monwealth. Short-term loans are provided to help established businesses create new jobs and retain existing “at risk” jobs in Virginia.16

Environmental Compliance Assistance Fund The Virginia Small Business Environmental Compliance Assistance Fund (ECAF) provides Virginia businesses with financing for 1) equipment to comply with the federal Clean Air Act, 2) equipment to implement voluntary pollution prevention measures, or 3) equipment or structures to implement voluntary agri-cultural best management practices (BMPs). Eligible borrowing businesses em-ploy 100 people or less and is a small business concern as defined in the federal Small Business Act.17

Economic Development Access Program Economic Development Access Program is a Virginia Department of Transportation-administered (VDOT), state-funded incentive designed to assist Virginia localities in attracting sustainable businesses that create jobs and generate tax revenues within the locality. The program makes funds available to

15 Virginia Bankers Association, “SSBCI Capital Access Program-Virginia Capital Access Fact Sheet,” http://www.vabankers.org/ssbci-capital-access-program.

16 Virginia Bankers Association, “SWAM Business Loan Fund-Small Business Microloan Fact Sheet,” http://www.vabankers.org/Default.aspx?PageID=13498500&A=SearchResult& SearchID=3800615&ObjectID=13498500&ObjectType=1.

17 Virginia Bankers Association, “Environmental Compliance Assistance Fund-Environmen-tal Compliance Assistance Fund Fact Sheet,” http://www.vabankers.org/Default.aspx? PageID=13501881&A=SearchResult&SearchID=3800648&ObjectID=13501881&ObjectType=1.

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localities for road improvements needed to provide adequate access for new or substantially expanding qualifying establishments. Qualifying establishments include manufacturing, processing, research and development facilities, distribution centers, regional service centers, corporate headquarters, government installations or similar facilities, or other qualifying establishments that also meet basic employer criteria.18

Rail Industrial Access Fund The Rail Industrial Access Program, administered by the Virginia Department of Rail and Public Transportation, promotes truck diversion by providing grant assis-tance to connect new or expanding businesses to the freight railroad network. The program supports localities, businesses, or industries seeking access to a common carrier railroad.19

Transportation Partnership Opportunity Fund The Transportation Partnership Opportunity Fund (TPOF) is to be used by the Governor of Virginia to provide funds to address the transportation aspects of economic development opportunities, including, but not limited to, the creation of jobs and to promote private investment for economic development projects that may result in the availability of the facilities in a timelier and/or less costly fash-ion. Financial assistance from TPOF may be awarded to any agency or political subdivision of the Commonwealth of Virginia.20

Virginia Enterprise Zone The Virginia Enterprise Zone (VEZ) program is a partnership between state and local governments that encourages job creation and private investment. VEZ ac-complishes this by designating Enterprise Zones throughout the state and provid-ing two grant-based incentives, the Job Creation Grant and the Real Property Investment Grant, to qualified investors and job creators within those zones, while the locality provides local incentives.21

18 Virginia Department of Transportation-Local Assistance Division, Economic Development

Access Program Guide, 2014. 19 Virginia Department of Rail and Public Transportation, “Rail Industrial Access Fund,”

http://www.drpt.virginia.gov/grantees/rail-grants/. 20 The Commonwealth of Virginia, The Transportation Partnership Opportunity Fund-Guide-

lines and Criteria, January 2016. 21 Virginia Department of Housing and Community Development, “Virginia Enterprise Zone

(VEZ),” http://www.dhcd.virginia.gov/index.php/community-partnerships-dhcd/downtown- revitalization/enterprise-zone.html.

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Enterprise Zone Job Creation Grant Administered by the Virginia Department of Housing and Community Develop-ment (DHCD), the JCG is for companies creating at least four net new qualifying jobs with health benefits and paying at least twice the federal minimum wage rate.22

Foreign Trade Zones Virginia offers six foreign trade zones (FTZ) designed to encourage businesses to participate in international trade by effectively eliminating or reducing customs duties. Also, numerous subzones are provided and additional ones can be desig-nated to enhance the trade capabilities of specific companies. FTZs allow busi-nesses to defer paying U.S. Customs duties on imported goods held within the zones until the goods enter the United States for domestic consumption. No duties are paid if goods are re-exported. Companies also receive the benefit of not hav-ing to pay duties on broken or scrapped product. Businesses are allowed to store goods within foreign trade zones for an unlimited period of time. They are also al-lowed to manufacture products within zones and pay duties at the duty rate of ei-ther the foreign parts used or on the finished product, whichever is most advantageous to the company.23

Center for Regional Economic Competitiveness The Center for Regional Economic Competitiveness (CREC) is an independent organization whose primary goal is to help regions compete. It works on a fee-for-service basis, supporting federal, state, local, and philanthropic clients.24

Council for Community and Economic Research The Council for Community and Economic Research (C2ER) is a membership or-ganization that promotes excellence in community and economic research by working to improve data availability, enhance data quality, and foster learning about regional economic analytic methods.25

22 YesVirginia.org, “Virginia’s Business Case-Virginia Enterprise Zone Program: Enterprise

Zone Job Creation Grants,” http://www.virginiaallies.org/assets/files/incentives/ Enterprise_Zone.pdf.

23 YesVirginia.org, “Virginia Guide to Business Incentives-Regional & Local Assistance, For-eign Trade Zones” http://www.yesvirginia.org/Content/pdf/guides/Virginia%20Guide%20to% 20Business%20Incentives%202016-2017.pdf.

24 CREC, “About CREC,” creconline.org/about-crec/. 25 C2ER, “About C2ER,” www.c2er.org/about/.

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Business Seed Capital The Business Seed Capital, Incorporated Program targets assistance to small en-terprises. This program offers courses to business owners who want to learn how to start and manage a small business. It also offers individual technical assistance to small business owners. The program supports small businesses in Roanoke city, Roanoke County, Vinton, Salem, Botetourt County, Craig County, Coving-ton, Clifton Forge, and Bath County.26

Tobacco Region Revitalization Commission “The Tobacco Region Revitalization Commission’s mission is the promotion of economic growth and development in tobacco-dependent communities, using pro-ceeds of the national tobacco settlement.”27 The Tobacco Region Revitalization Commission is run by the State of Virginia. It only serves Amelia, Appomattox, Bedford, Brunswick, Buckingham, Campbell, Charlotte, Cumberland, Danville, Dinwiddie, Emporia, Franklin, Greensville, Halifax, Henry, Lunenburg, Martins-ville, Mecklenburg, Nottoway, Patrick, Pittsylvania, Prince Edward, Sussex, Bland, Bristol, Buchanan, Carroll, Dickenson, Floyd, Galax, Lee, Norton, Russel, Scott, Smyth, Tazewell, Washington, Wise, and Wythe Counties and Cities.28

Individual County-Based Incentives Each county has its own economic development authority or groups, which focus on bringing business to individual counties. Each county has county-specific fi-nancial assistance, county-level incentives, and access to state-level incentives, depending on its location.

Virginia Economic Development Partnership The VEDP’s goal is to enhance the quality of life and raise the standard of living for all Virginians, in collaboration with Virginia communities, through aggressive business recruitment, expansion assistance, and trade development, thereby ex-panding the tax base and creating higher-income employment opportunities.29

26 Total Action for Progress, “What Is the Total Action for Progress Business Seed Capital,

Incorporated Program?” www.tapintohope.org/BusinessSeedCapital.aspx#. 27 Tobacco Region Revitalization Commission, www.tic.virginia.gov/. 28 VEDP, Major Business Facility Job Tax Credit, www.virginiaallies.org/assets/files/

incentives/MBFJTCOverview.pdf. 29 VEDP, Virginia Ally Information Exchange, www.virginiaallies.org/.

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Virginia Business Ready Sites Program The Virginia Business Ready Sites Program promotes and supports the develop-ment of industrial and commercial sites. This program only applies to industrial sites with a minimum of 100 contiguous developable acres.30

Commonwealth’s Development Opportunity Fund The Commonwealth Development Opportunity Fund (COF), formerly known as the Governor’s Opportunity Fund, is a state finance source created to support the generation of new jobs in the Commonwealth. Any program or business applying for COF assistance must meet COF eligibility requirements. All grant requests must be made by the community in which support is being requested.

Projects must also meet all COF eligibility requirements to receive sup-port:

• Projects must meet investment, job creation, and wage minimums to be eligible.

• Projects must match local financial participation and is required on a dollar-for-dollar basis (cash or in-kind).

• Public announcement of the project must be coordinated by the Virginia Economic Development Partnership and the Governor’s office (neither the company nor the locality may publicly confirm the proposed project).

• Grants are made at the discretion of the Governor.”31

Virginia Jobs Investment Program “The Virginia Jobs Investment Program (VJIP) provides services and funding to companies creating new jobs or experiencing technological change.”32 VJIP is only for projects that assist in the creation of basic employment. Businesses or functions must directly or indirectly derive more than 50 percent of their revenues from out of state sources, as determined by VJIP.33

Virginia Economic Development Incentive Grant The Virginia Economic Development Incentive Grant (VEDIG) encourages com-panies to spend their money and create new jobs in Virginia. This can be done by

30 See Note 29, this chapter. 31 VEDP, Commonwealth’s Opportunity Fund, www.virginiaallies.org/assets/files/

incentives/COFOverview.pdf. 32 VEDP, “Virginia Jobs Investment Program,” Incentives, www.virginiaallies.org/

incentives.html. 33 See Note 32, this chapter.

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building a headquarters or creating significant operations in the Commonwealth. The company must meet VEDIG eligibility requirements.

A company locating in a Metropolitan Statistical Area (MSA) with a pop-ulation of 300,000 or more in the most recently preceding decennial Cen-sus must:

• Create at least 400 new full-time jobs with average salaries at least 1.5 times than the prevailing average wage or create at least 300 new full-time jobs with average salaries at least twice than the pre-vailing wage.

• Must make a capital investment of at least $5 million or $6,500 per job, whichever is greater.

A company locating elsewhere in Virginia must: • Create 200 new full-time jobs with average salaries at least 1.5

times the prevailing average wage. • Make a capital investment of at least $6,500 per job.34

Any company looking to participate in this grant cannot be participating in any other Virginia performance grant program. The VEDIG is a performance grant determined by the secretary of commerce and trade, making this grant a state-level grant. The grant must be approved by the governor and have all public an-nouncements of the project coordinated with VEDP and the Governor’s Office.

Major Eligible Employer Grant The Major Eligible Employer (MEE) grant is a financial incentive based on com-pany performance. The grant is awarded to encourage significant capital develop-ment and creation of new jobs for manufacturers based in Virginia and other basic employers. “The program is targeted at major employers that make a minimum capital investment of $100 million and create at least 1,000 new jobs (a minimum of 400 jobs, if average pay is at least twice the area’s prevailing average wage).”35 The company and award amount are determined by the secretary of commerce and trade with the governor’s approval.

Major Business Facilities Job Tax Credit The Major Business Facilities Job Tax Credit is a finance incentive for companies that meet certain qualifications as detailed by VEDP. The credit incentivizes com-panies planning to locate or expand their business to Virginia. Companies looking to locate or expand into Virginia are eligible to receive a $1,000 income tax credit for “each new fulltime job created over a threshold number of jobs, beginning in

34 VEDP, Virginia Economic Development Incentive Grant, www.virginiaallies.org/

assets/files/incentives/VEDIGOverview.pdf. 35 VEDP, Major Eligible Employer Grant, www.virginiaallies.org/assets/files/

incentives/MEEOverview.pdf.

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the first taxable year following the taxable year in which the major business facil-ity commenced or expanded its operations.”36

In order to receive this tax credit, companies must meet these qualifiers:

• Companies locating in Enterprise Zones or economically dis-tressed areas are required to meet a 25-job threshold; all other lo-cations have a 50-job threshold. The threshold number of jobs must be created within a 12-month period.

• The $1,000 credit is available for all qualifying jobs in excess of the threshold and is taken in equal installments over 2 years ($500/year). Unused credits may be carried over 10 years.

• The actual value of the tax credits depends on a number of com-pany-specific factors such as: the number of qualifying new jobs, the net effect of job creation and elimination by the company throughout their Virginia facilities, the hiring schedule, the com-pany’s tax year, and the credit year established by the company.

• Non-qualifying jobs include seasonal or temporary jobs, positions in building and grounds maintenance, security, positions ancillary to the principal activities of the facility, and/or a job created when a position is shifted from an existing location within the Common-wealth to the new major business facility.

• Credits are available for taxable years before January 1, 2020. • For jobs on the payroll for less than the full calendar year, the

credit will be prorated.37

Technology Zones Counties and cities within the Commonwealth of Virginia are able to establish a technology zone within their localities. A technology zone allows counties and cities to create financial incentives for business operating within an established technology zone and performing technology work. For a business to qualify for incentives, it must locate or expand into an existing technology zone and run a business that falls under the requirements of that locality. Each locality adminis-ters its own technology zone.38

Defense Production Zone Each county and city in the Commonwealth can establish a defense production zone, similar to a technology zone, to attract business to its respective locality. To

36 See Note 28, this chapter. 37 See Note 28, this chapter. 38 VEDP, Establishment of Technology Zones, September 2015, p. 1,

www.virginiaallies.org/assets/files/incentives/techzonewriteup.pdf.

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qualify for incentives within a defense production zone, companies looking to lo-cate or expand into a defense production zone must perform work related to the nation’s defense.39 Each locality designs and administers its own program.40

Commonwealth Research Commercialization Fund The Commonwealth Research Commercialization Fund assists institutions in finding public and private research funding. The fund targets institutions of higher education to increase economic development geared toward technology in Vir-ginia.41 This particular fund also focuses on research that has a high potential to be commercialized.42 “The awards are made to Virginia’s public institutions of higher education or their associated intellectual property foundations.”43 The Vir-ginia General Assembly distributes the funds to institutions, which “have to be matched on at least a dollar-for-dollar basis by private, institutional, federal or other monetary sources.”44

Virginia Coalfield Economic Development Authority The Virginia Coalfield Economic Development Authority (VCEDA) is an eco-nomic development group, made up of several counties in southwest Virginia, supported by funds from local mineral severance taxes paid by the coal and natu-ral gas industries.45 VCEDA provides financial incentives to bring jobs and strengthen the local economy.46 “VCEDA’s primary financing program is a re-volving loan fund designed to provide low-interest loans for fixed asset needs (e.g., land purchase, building construction, and equipment).”47 The assets must be located in Tazewell, Russell, Scott, Lee, Wise, Dickenson, Buchanan, or Norton Counties or City.48

39 VEDP, “Business Incentives,” Virginia: Best State for Business, www.yesvirginia.org/

ProBusiness/BusinessIncentives. 40 VEDP, Establishment of Defense Production Zones, February 2015, p. 1,

www.virginiaallies.org/assets/files/incentives/defenseproductionzoneswriteup.pdf. 41 VEDP, Commonwealth Research Commercialization Fund, www.virginiaallies.org/

assets/files/incentives/CRCFOverview.pdf. 42 See Note 41, this chapter. 43 See Note 41, this chapter. 44 See Note 41, this chapter. 45 VCEDA, VCEDA Financing Programs, www.vaceda.org/vceda-funding#. 46 See Note 45, this chapter. 47 See Note 45, this chapter. 48 VCEDA, Where is Virginia’s e-Region? www.vaceda.org/location.

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Workforce Investment Act The Workforce Investment Act is a source of federal funding to increase employ-ment, training, productivity, and competitiveness.49 The Virginia Community College System administers the Workforce Investment Act at the state level for the Commonwealth of Virginia. At the local level, local elected officials oversee the Workforce Investment Act.50

Virginia Economic Development Loan Fund The Virginia Economic Development Loan Fund offers permanent working capital, owner occupied commercial real estate, and equipment loans to fill the ‘gap’ unmet by equity, conventional financing, and other sources (GOF, Historic Tax Credits, etc.) Project eligibility is determined by guidelines set by the federal Economic Development Administration (EDA) and the Vir-ginia Small Business Financing Authority (VSBFA).51

OTHER STATES’ UAS PRACTICES State and federal assess-ments all point to robust economic impacts from the development and adoption of UAS for public, private, and recreational use. Nearly all U.S. states have mobi-lized their efforts to realize a share of this economic windfall. For example, sev-eral states are leveraging initiatives by universities and nonprofit organizations in a relationship similar to

the one between Virginia Tech and Qualcomm, Inc. Pennsylvania’s Drexel Uni-versity—a member of the ASSURE consortium—and Ben Franklin Technology Partners of Southeast Pennsylvania are establishing a $10 million seed to fund technology and innovation start-ups. Wisconsin’s Marquette University and the Wisconsin Economic Development Corporation established a similar seed fund.52 Also, like Virginia, other states want to claim leadership status in the national and

49 VEDP, Virginia Advantages: 2013–2014 Guide to Business Incentives, p. 13, www.yesvirginia.org/Content/pdf/Virginia%20Guide%20to%20Business%20Incentives%202013-2014.pdf.

50 See Note 49, this chapter. 51 See Note 49, this chapter. 52 SSTI blog, “Universities Build Diverse Partnerships to Fund Startups,” December 3, 2015,

ssti.org/blog/universities-build-diverse-partnerships-fund-startups.

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international UAS community. The six states designated by the FAA to operate UAS test sites are certainly prime candidates to compete for leadership roles. Most notable among them are New York and North Dakota.

North Dakota North Dakota has been particularly aggressive in its efforts to establish itself as a leader in UAS development and has made the burgeoning industry an integral part of its economic development agenda. These activities have been largely spear-headed by the Northern Plains Unmanned Aircraft Systems Test Site (NPUASTS), a collaborative organization that includes state government, univer-sities, and industry entities. Among these members are the North Dakota Depart-ment of Commerce, University of North Dakota, North Dakota State University, Office of the Adjutant General, CoE-ASSURE, Northrop Grumman, and other, smaller UAS or technology-focused companies.

North Dakota has realized some success as NPUASTS became the first FAA-approved UAS test site in the nation. Private businesses, anchored by Northrup Grumman, are also investing in brick-and-mortar space in the Grand Sky UAS Business Park on Grand Forks Air Force Base, where UAS technology develop-ment is concentrating.53 The state government is actively involved in business and safety permissions and restrictions and in access to resources such as grants. Both NPUASTS and the North Dakota Chamber of Commerce provide matching funds for qualified research, development, and commercialization endeavors.

New York New York is another state aggressively investing in and courting UAS develop-ment. State leaders call its central region “strategically positioned” to lead the United States in creating the ideal environment for full commercial use of UAS. The state is establishing an R&D center for unmanned aerial and ground systems, with an emphasis on the commercial use of such vehicles.

In December of 2015, Governor Cuomo announced the Central New York region won $500 million in economic development resources through the Upstate Revi-talization Initiative and the Regional Economic Development Counsel competi-tion. Under the proposal, approximately $250 million will be allocated to support development of the UAS industry in the region.”54

The NUAIR Alliance, a New York based not-for-profit, is a coalition of more than 100 private and public entities and academic institutions working together to operate and oversee UAS test ranges in New York, Massachusetts, and Michigan.

53 Jonathan Vanian, “Here’s Why North Dakota Wants to Be Drone Central,” July 27, 2016, Fortune, fortune.com/2016/07/27/north-dakota-drones/.

54 Aaron D. Frishmann, Bousquet Holstein, PLLC, “Unmanned Aerial Vehicles (Drones): New York State’s New Major Capital Investment,” May 11, 2016, bhlawpllc.com/publication/ unmanned-aerial-vehicles-drones-new-york-states-new-major-capital-investment/.

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Headquartered at Griffiss International Airport, in Rome, NY, NUAIR manages one of the seven [sic] FAA-designated UAS test sites.55

New York’s efforts have received national-level attention. The White House Of-fice of Science and Technology Policy (OSTP) recently hosted a workshop on Drones and the Future of Aviation to “advance and celebrate the potential of un-manned aircraft systems.”56 Through the workshop, the OSTP announced several actions aimed at promoting the safe adoption of UAS in the United States. Among them was the announcement of a $5 million down payment by the state of New York to support the growth of the UAS industry in the state. Notably, Central New York and the Mohawk Valley hosted an international convention (November 8–10, 2016) to attract the world’s top drone researchers from business, govern-ment, and academia.57

Others states garnering attention are as follows:

Nevada. Also received FAA designation as a UAS test site, has invested state funds in its Governor’s Office of Economic Development, helping secure the test site designation and funds to harness industry-university partnerships to commercialize UAS technology.58

Mississippi. Selected by the FAA to host its Center of Excellence–the Alli-ance for System Safety of UAS through Research Excellence (ASSURE). The CoE-ASSURE is a consortium of 22 research universities, led by Mis-sissippi State University, and more than 100 industry and government partners.59

Kansas. Its political and corporate leaders see the state as a pioneer in the UAS market, stressing technology and STEM jobs and use for precision

55 NUAIR Alliance, “About the NUAIR Alliance,” www.nuairalliance.org/

about-the-nuair-alliance/. 56 Ted Wackler, Evan Cooke, and Terah Lyons, “Harnessing the Potential of Unmanned Air-

craft Systems Technology,” White House Blog, August 2, 2016, www.whitehouse.gov/blog/ 2016/08/02/harnessing-potential-unmanned-aircraft-systems-technology.

57 Sarah Moses, “Upstate NY wants to be leader in emerging drone industry; CNY to host convention,” syracuse.com, June 9, 2016, www.syracuse.com/business-news/index.ssf/2016/06/ upstate_ny_wants_to_be_leader_in_emerging_drone_industry_cny_to_host_convention.html.

58 State Science and Technology Institute (SSTI) blog, “States Seek Slice of Growing Un-manned Aircraft Industry,” October 1, 2015, ssti.org/blog/states-seek-slice-growing-unmanned-aircraft-industry.

59 FAA, “Center of Excellence (COE) and FAA Test Sites,” www.faa.gov/uas/ programs_partnerships/coe_test_sites/.

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agriculture.60 The state recently created an UAS program and named a re-tired Air Force officer as its first Director of Unmanned Aircraft Systems.61

60 News release: “Agricultural flight demonstration highlights benefits, economic impact of

unmanned aircraft,” Salina Airport Authority, July 3, 2013, www.salinaairport.com/ media/21169/20130703_agricultural_flight_demonstration_highlights_benefits_economic_ impact_of_unmanned_aircraft.htm.

61 Matt Leonard, “Virginia invests in drone research and education, cites jobs potential,” GCN Magazine, July 26, 2016, gcn.com/articles/2016/07/26/virginia-drone-education.aspx.

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Chapter 4 UAS Vision, Goals, and Strategies

This chapter systematically addresses the top three tiers of the analytic structure (Figure 4-1), establishing the framework on which the recommendations for Vir-ginia UAS strategic economic development (Chapter 5) are based. Founded on the research and analysis of data and insights captured through the study, the strategic plan, vision, goals, and strategies correspond to the Commonwealth’s unique characteristics.

Figure 4-1. Structure Tiers

VISION The vision of Virginia’s UAS community is to facilitate UAS-driven economic opportunities in Virginia. This vision was articulated unanimously among EO 43, the UMS Commission, and the roundtable attendees.

GOALS AND STRATEGIES We set particular goals to comply with and enable Virginia’s UAS vision, which include definitive targets on which to base strategies. We formed strategies that align with the specific goal they are established to achieve. As is often the case, similar strategies that facilitate meeting different goals overlap somewhat. From a

Vision

GoalStrategy

Strategy

GoalStrategy

Strategy

GoalStrategy

Strategy

GoalStrategy

Strategy

4-2

Virginia-wide perspective, the CoE can best execute certain strategies, marked with an asterisk (*) below. Other strategies fall more effectively in the sphere of influence and responsibility of other VA UAS industry stakeholders.

Regardless of each strategy’s primary initiator, close coordination and leveraging of existing Commonwealth resources and organizations should be done. GO Vir-ginia is a prime example of an opportunity for maximizing the efficiency and ef-fectiveness of Virginia’s UAS goals and strategies. As stated previously, GO Virginia is a business-led initiative with goals of fostering private-sector growth and job creation through state incentives for regional collaboration by business, education, and government.1 From this description, as well as GO Virginia’s en-dorsement by state, regional, and local organizations including chambers of com-merce; higher education institutions; and the 8,100 individuals who have joined the coalition, the shared ambitions of GO Virginia and its endorsers with the Vir-ginia UAS community are revealed. The membership and resources of GO Vir-ginia should be coordinated and included in the Virginia UAS communities activities to achieve their common goals and visions.

Referenced earlier as a potential funding source available to the Virginia UAS community, CIT is another existing Commonwealth asset which can be used. Center for Innovative Technology (CIT) is a nonprofit corporation that accelerates the next generation of technology and technology companies. CIT creates new technology companies through capital formation, market development and reve-nue generation services. To facilitate national innovation leadership and acceler-ate the rate of technology adoption, CIT creates partnerships between innovative technology startup companies and advanced technology consumers.2

1 See Note 3, Chapter 2. 2 Commonwealth of Virginia, “Agencies”, https://www.virginia.gov/agencies/center-for-

innovative-technology/.

UAS Vision, Goals, and Strategies

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Goal—Instill an Entrepreneurial Culture Regarding UAS across Virginia

UAS is an emer-gent, untraditional field: it will open doors for new businesses and new business models. Those with the vision to explore this new field in the Com-monwealth should be encouraged to do so and not face discrimination when building a business around the new concept. Discouragement can come from business and bank loan refusals for UAS companies just because the product or service offering has not been tried. Discouragement can also come from local residents and com-munities unfamiliar with the potential business revenue from new UAS busi-nesses. As community leaders in central and southern Virginia work to revive opportunity in those areas, it should not be perceived as unconventional or ridicu-lous for an entrepreneur to want to start a UAS business in those regions, but many residents will need to be made aware of the potential growth and the en-couragements being offered for these businesses. The Commonwealth needs to in-ternally address an affirmative campaign—advertising Virginia’s readiness to induct new, cutting-edge businesses—to make Virginia citizens aware of the new opportunities.

Strategy—Encourage University Business Innovation and Partnering*

Academia is among the best natural incubators of entrepreneurial spirit. Virginia’s boundaries encompass elite universities and an FAA UAS test site at Virginia Tech. The Commonwealth should take advantage of this competitive edge. As noted in the roundtable events, Virginia’s academic community has opportunities to partner with the UAS industry. They can be facilitated by increased collabora-tion and incentives for faculty and students to pursue opportunities in the UAS field, such as R&D and testing. In addition to operational partnerships, the estab-lishment of human resource pipelines between Virginia universities and its UAS industry will not only fortify the relationships between academia and business to meet short and long-term personnel needs, but also foster a growing student popu-lation focused on the UAS field and cultivate the further growth of the entrepre-neurial culture and community.

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Complementing the encouragement of universities and colleges to offer UAS-specific curricula, the Commonwealth should direct attention and investment to tangential UAS-related disciplines, such as cyber security, optics and sensors, ad-vanced materials, additive manufacturing, and computer science topics, including control logic, software integration, and autonomous systems. The Commonwealth should also encourage cooperation among institutions—including reciprocally recognizing credits in specialty fields. Supporting the state’s academia also en-sures the continuous availability of a highly qualified technical workforce.

Strategy—Plant 1,000 Acorns (Advocate for Small Businesses)*

Small business accounts for 66 percent of annual new jobs,3 so it is a good me-dium for growing UAS development in a variety of applications. A key part of the state’s economic development plan should be measures aimed at encouraging small business development and growth. The state can encourage small business ventures that grow from academic or government-funded R&D. It can assist in the formation and growth of small businesses by gathering and providing market in-telligence to help with their business decisions. Of course, the reality is a signifi-cant number of small businesses will fail, so encouraging large numbers of small businesses will increase those that survive the start-up challenges and thrive. The large numbers also provide more opportunity to collaborate and support (feed off) one another. Finally, as other high technological start-ups have shown, some will be acquired by larger businesses, including those within the Commonwealth.

Strategy—Enact Financial Incentives for Start-Ups and Entrepreneurs

In addition to keeping the regulatory environment favorable for start-ups, Virginia needs to provide access to financial incentives (economic development grants, tax breaks and R&D tax credits, small business loans, etc.). These should include spe-cial incentives for UAS-relevant technologies and businesses, but some should also be across the board to encourage risk taking that may open doors for yet un-recognized UAS opportunities. The state should seek to create an environment that attracts venture capital, as well as consider incentives for larger businesses to partner with entrepreneurs. Further, the Commonwealth government should con-tinue to ensure VEDP programs, like the Governor’s Opportunity Fund, remain fully funded.4

Strategy—Change Viewpoints Regarding the UAS Field and Entrepreneurship in Rural/Small-City Virginia*

The Commonwealth should incentivize and support movement of UAS entrepre-neurs to rural areas (or their native growth) by emphasizing “local” advantages—ample space, low-priced infrastructure and workforce, etc. This motivation could

3 U.S. Small Business Administration (SBA), “Small Business Trends,” Starting & Manag-ing, www.sba.gov/managing-business/running-business/energy-efficiency/ sustainable-business-practices/small-business-trends.

4 See Note 1, Chapter 2.


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include emphasis on opportunities for rural areas—such as forward-looking em-ployment and development—that demonstrate how UAS integration will help them:

Jobs—particularly in agribusiness, transportation, incident response, min-ing and logging, etc.

Dollars spent at local businesses, bringing needed infrastructure improve-ments, such as housing, medical/health services, communications (broad-band, etc.), cultural/recreational areas and services, and public safety.

Strategy—Ease City and County Regulatory and Administrative Barriers for Small Business to Provide Services

The state’s strategy should include ways to help small business navigate the inevi-table hurdles to viability. Among these aids are informing current and prospective businesses about laws and regulations that concern UAS development, testing, and employment; advising on and assisting in obtaining the rights, licenses, and waivers needed to do business (operating, testing, and conducting commerce); and linking them with local and state legislatures to keep them informed of emerging legislation that affects the UAS industry.

Strategy—Assist Small Businesses and Entrepreneurs with Locating Business Administration Services*

Small businesses, especially those in high technology fields, often focus their re-sources on their respective organization’s operations (R&D, manufacturing, and service delivery, for example), leaving little internal capacity for business admin-istrative functions such as human resources or accounting. An increasing number of resources are available to render these functions contractually, many of them small business themselves. Establishing a community network platform facilitat-ing the connection of UAS small businesses and entrepreneurs with business ad-ministration service providers will ease the UAS community’s burden of executing those administration functions or identifying an entity to perform them.

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Goal—Encourage Economic Growth across the Commonwealth of Virginia via UAS Emergent Business Activity

Just as UAS have multiple applications, those applications need different environ-ments in which to conduct business. Destination wedding UAS videographers need flight access to the Commonwealth’s tourist sites. Integrated agritechnology applications will tend to be applied in its rural areas. Delivery services, such as medical delivery, will be most needed where population density is low. UAS ca-pabilities, such as railroad track scanning algorithms, will need to be tested on abandoned or little-used tracks in rural areas, while regions with established fed-eral government ties—Region 7 (Northern Virginia) and Region 5 (Hampton Roads)—will have increased demand, in addition to likely containing more abun-

dant venture capital sources. However, as noted, UAS operations outside Regions 5 and 7 will entail comparatively lower labor costs.

In-state partnerships need a starting point to flour-ish—a point at which the UAS-interested businesses across related fields come together and talk about

common needs. A community college instructor may be uncertain about the skill sets needed from graduates, while an entrepreneur in the same community may wonder where to find the skilled labor for a new UAS business. A hardware man-ufacturer needs to know that operating system software is available in the Com-monwealth. Virginia needs repeated forums where members of the UAS ecosystem can interact.

Strategy—Attract UAS Technologies and Businesses to the Commonwealth*

The Commonwealth’s UAS strategy must include a robust marketing and out-reach campaign to articulate Virginia’s “value proposition” inside and outside the Commonwealth. It should stress the myriad regional strengths and competitive advantages, including good economic trends, geography, transportation, and cli-mate (temperate, not prone to natural hazards); significant academia involvement; government and commercial resources and customer bases; an educated work-force; a favorable regulatory environment; and the active engagement of leading businesses, industry associations, and supporting academic institutions with UAS-relevant curricula and research opportunities.


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Virginia should increase its exposure in industry and trade magazines. The ap-proach should leverage the Commonwealth’s containment of and proximity to the MAAP, NASA/FAA, Virginia Tech UAS test site, and federal defense agencies. One approach is to host summits or conventions, similar to that held in New York in November 2016, to directly engage leading proponents and stakeholders in the UAS community as well as fledgling UAS companies searching for locations in which to establish.

Strategy—Encourage “Buy Virginia” (Facilitate an Enduring Commonwealth UAS Ecosystem)*

The Commonwealth should adopt a strategy that focuses appropriate state entities and resources on supporting the growth and vitality of Virginia’s UAS business environment. It should encourage collaboration among all state and local public resources and the emerging UAS industry:

Encourage Commonwealth agencies and local governments to acquire Virginia-based UAS services. Encourage the public to support and invest in Virginia UAS-related goods and services. Advocate Virginia UAS—reach out and market Virginia-based UAS businesses beyond the Com-monwealth’s borders.

Encourage Virginia UAS businesses to partner within the Commonwealth. Launch initiatives that reward partnering and collaboration between Virginia UAS-related businesses and local, county, state, and federal stakeholders.

Goal—Promote Growth in Virginia’s Economically Disadvantaged Regions with UAS-Related Industry

Prosperity follows increased local business activity. One of the basic precepts of a unified political state is the encouragement of trade within its borders: for in-stance, interstate commerce was part of the U.S. Constitution, and the interstate trade among the large U.S. population and resources are one of the reasons for this country’s rapid growth in the 20th century. Similarly, the Commonwealth has areas that now enjoy prosperity that have demand for employment and can invest capital in areas of lower costs and less prosperity. Virginia will grow in prosperity and economic robustness (resilience against economic recessions) when business opportunities are spread across the Commonwealth instead of concentrated in a few wealthy areas.

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The Commonwealth can promote job growth based on the emergent UAS indus-try in economically disadvantaged regions. Areas previously employed in mining, particularly coal mining, tobacco, or textile farming are suffering the effects of a decline in these industries. New jobs in the old industries are not being created. Population centers that grew up around the locus of jobs in these industries have more labor supply than labor demand. This sort of decline causes younger people to move to other regions and forces established families in the region to face loss

of jobs and lower household income, re-ducing the demand for contributing services, such as cars, grocer-ies, and household goods. These areas are looking for a new in-dustry to create new jobs.

The UAS industry is in a growth phase, in which experimenta-

tion will yield discoveries of new applications from the convergence of UAS and other technologies. For R&D, an area with low wages, inexpensive land, and low density enables limited R&D funding to go farther and cover more labor. The UAS industry requires less densely populated land for testing; less-populated air-ports and launch points; and technicians, inventors, and innovators who enjoy hands-on experimentation. The areas needing economic influx can meet the de-mands of a UAS industry needing space to innovate.

Strategy—Play to the UAS Strengths of Every Region*

The Commonwealth is home to a variety of market players: sources of govern-ment UAS demand in Region 7 (Northern Virginia) and Region 5 (Hampton Roads); tourist videography demand in Region 6 (Northern Neck); innovation hubs in Blacksburg and Danville, Regions 2 and 3, respectively; and skilled tech-nicians, wide-open test grounds, and an accepting populace in Regions 1 and 8. The Commonwealth has all the elements of a marketplace, but the geographically disparate elements need to be introduced and encouraged to work together.

Strategy—Provide Inclusive Policies for Greenfield Development (in Non-Urban Areas)

Funding awarded or contingent on businesses hiring is a common criteria for eco-nomic development investment. The UAS industry also requires testing areas, but development of an airfield might not score well on traditional economic develop-ment criteria fashioned to help inner cities. Creation of test ranges will bring UAS testing teams to the airfield and people to the town to spend money. The potential


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of establishing a facility in a less-dense region should not be excluded from eco-nomic development funding criteria because of a focus on urban job creation.

Strategy—Emulate Successful Incubator Strategies Used in Other Locations

Local incubators serving a defined town or county have transformative effects on the entrepreneurs and businesses with which they interact; the incubator not only provides mentoring and funding, but also business connections, and can help with government-business relations and easing bureaucratic challenges. Incentive funds such as the Tobacco Fund are also useful in jump-starting entrepreneurial efforts in areas of economic underdevelopment.

Goal—Continue and Increase the Commonwealth of Virginia’s Position as a Leader in the UAS Community

At the time of pub-lication of the AUVSI’s 2013 re-port, Virginia was anticipated to be among the nation’s leaders regarding job creation and additional revenue resulting from the UAS field. This projection was largely based on activity in Vir-ginia’s airspace and infrastructure at the time of the study. Since that time, the in-crease in growth potential of the UAS industry, the widespread attention it has received, and other state and regions’ aggressive pursuits in the field call for the Commonwealth to make deliberate, concerted plans and steps to preserve its standing and, preferably, expand its UAS footprint in the larger UAS community.

Among the starting points to secure and strengthen its industry position, Virginia should leverage its current competitive advantages. As the Commission report, roundtable events, and other research have revealed, the Commonwealth discrimi-nates itself from many other states and regions with an academic community that focuses on and practices in the UAS field:

The University of Virginia Work in Progress program “helps students see the entrepreneurial potential of their projects and keeps them accountable to their long-term goals by providing peer-driven support and connecting

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them to the resources they need to continue their work outside the classroom.”5

Virginia Tech’s Virginia Center for Autonomous Systems is a “research center which facilitates interdisciplinary research in autonomous systems technology,”6 and its Unmanned Systems Lab is an environment for air and ground vehicle research and testing, staffed with faculty and students providing support and expertise in algorithm development, hardware de-sign and fabrication, and test flights.7

MAAP is “an FAA-selected UAS test site formed in 2013 as a collabora-tion between Virginia, Maryland, and New Jersey. MAAP is led by Vir-ginia Tech with a focus on progressively overcoming obstacles to move the unmanned aircraft systems industry forward.”8

Liberty University has a nation-leading bachelor’s degree program for the professional UAS operator.

4-VA, an interuniversity consortium of Virginia-based institutions, is “lev-erag[ing] the strengths of each partner university in order to accomplish much more than any individual university could achieve alone.”9

Multiple community colleges and high schools across the Commonwealth have and are developing curriculums and programs, such as internships and industry co-operatives (co-op) that directly apply to various areas in the UAS field.

Danville’s Institute for Advanced Learning is “a regional catalyst for eco-nomic transformation.”10

These examples illustrate that Virginia has formidable academic resources to ad-dress the emerging UAS industry, including industry and academic collaboration efforts, but it needs to address areas to comprehensively maximize these engage-ments. The four UAS roundtable events repeatedly revealed the attendees’ lack of awareness of the availability of in-state human, intellectual, industrial, and finan-cial resources. In addition, research and roundtable discussions revealed that aca-demic faculty in other U.S. areas are not only more actively involved in private

5 Katie McNally, “New Program Provides Critical Connection Point for Student Entrepre-neurs,” UVAToday, news.virginia.edu/content/new-program-provides-critical-connection-point-student-entrepreneurs.

6 Virginia Center for Autonomous Systems, www.unmanned.vt.edu/news.html. 7 Virginia Tech, “Director’s Message,” Unmanned Systems Lab, www.me.vt.edu/

unmanned/index.html 8 Virginia Tech, “MAAP Overview,” Mid-Atlantic Aviation Partnership,

maap.ictas.vt.edu/About/about-us.html. 9 4-VA, “Mission,” 4-va.org/about/2016. 10 Institute for Advanced Learning and Research, “Economic Development,” www.ialr.org/

index.php/economic-development.


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industry and entrepreneurial endeavors, but they are encouraged to do so by their respective institutions. In a nationwide competitive environment, the Common-wealth needs an aggressive posture to maintain and foster future UAS industry and economic growth. This can be accomplished through a combination of activi-ties undertaken by Virginia’s UAS stakeholders.

Strategy—Adjust the Intellectual Property Policies at Universities to Encourage Faculty Engagement with Entrepreneur/Industry Communities

One roundtable noted that Virginia’s college faculty is, generally, not motivated to engage the entrepreneur and industrial communities due to its perception that personal ownership of any intellectual property will be transferred to the respec-tive academic institution. This perception largely negates the financial or opera-tional incentives faculty may have to pursue opportunities in these environments. Conversely, Massachusetts Institute of Technology (MIT) has reportedly installed a policy in which its faculty members maintain personal rights to the intellectual property developed through their entrepreneurial endeavors. MIT’s approach in-centivizes its faculty to actively engage and interact with the high technology en-trepreneur and industrial communities. Although MIT does not maximize its own immediate benefits from intellectual property ownership, the innovative and busi-ness-applicable culture fostered in its community has enabled the university to reap the tangible and intangible rewards of being known as a world leader in cut-ting-edge technological R&D.

Adjustments to Commonwealth university policies to emulate this philosophy will strengthen the interaction of Virginia’s academic resources with the UAS entre-preneurial community. This will not only capitalize on the immediate intellectual resources in the Commonwealth, but will also cultivate a UAS-centric innovative culture and enhance Virginia’s reputation across the industry as the area where the greatest innovations are available to support UAS entrepreneurs and development.

Strategy—Strengthen the Human Resources Pipeline between Academia and Industry*

As noted, the roundtables found that Virginia UAS stakeholders do not tap Com-monwealth UAS resources because they are largely unaware of their existence. Notable among these capabilities is human resources. Numerous roundtable at-tendees from the industrial community noted the need for qualified, capable peo-ple to support their UAS initiatives. For example, one attendee stated that his firm cannot get enough engineers, while another expressed difficulty in engaging with academic institutions for recruitment purposes. In the same events, academic par-ticipants noted the gains could be realized—in curriculum, student interest, knowledge, work experience, and employment—if universities regularly inter-acted with the UAS industry. These comments, along with others by industrial and academic roundtable attendees, highlight the need and mutual benefits of a structured, focused link between academic and industrial organizations.

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Virginia needs an established, dedicated construct, such as a website, as a plat-form to communicate opportunities throughout the Commonwealth. These include internships, co-ops, employment openings, and research needs, along with the people seeking these opportunities. This dependable, sustaining, “one-stop” venue would help meet the needs at the supply and demand ends of the Virginia-based UAS human resource supply chain. Because of its Commonwealth-wide reach, perspective, and goals, the UAS CoE is the optimum stakeholder to undertake the coordination and management of such a platform.

Strategy—Coordinate the Financial Resources Available in Virginia*

Entrepreneurial start-up companies and small businesses drive a substantial por-tion of high technology industries’ growth, a trend that applies to the UAS field. Research and known business activities show the need for financial resources and incentives for these entrepreneurs to succeed and be drawn to a specific location. These resources and incentives take a variety of forms, including tax breaks, seed money, and venture capital. Many start-up companies are not staffed with the ex-pertise or personnel capacity to deeply investigate and navigate the nuances of identifying and acquiring such financial assistance and will potentially migrate to locations widely known for these resources. For example, at the roundtable event in Danville, a Danville-based start-up firm recounted its intention of locating in Silicon Valley until it became aware of the benefits of staying home, including fi-nancial assistance.

Virginia has a variety of financial resources available to organizations to help them locate or stay based in the Commonwealth (Appendix D). Virginia can es-tablish an easily accessible construct—similar to the human resources facilitation platform—to spread the news of financial assistance resources and facilitate their interaction with potential UAS firms. Like the human resources pipeline, interac-tion of UAS financial resource stakeholders can be facilitated through a UAS CoE–coordinated and–managed website that updates when new resources, such as venture capital firms, arise.

Strategy—Actively Promote Collaboration in Virginia*

Consistent with the other themes regarding the strategy of maintaining and grow-ing Virginia’s UAS leadership role, the Commonwealth’s UAS stakeholders need to maximize collaboration to implement this strategy. As described in our find-ings, the roundtable comments trended to the subject matter of collaboration. Vir-ginia’s UAS collaborative spirit is alive in the form of entities and activities such as 4-VA, but it must be scaled up to fully leverage all the Commonwealth’s UAS strengths and capabilities in a coordinated manner. As articulated in the roundtables, maximized long-term efficiencies and benefits for all Virginia stakeholders are typically realized if the UAS supply chain is enabled through Virginia-based entities, as opposed to involving out-of-state organizations. A primary barrier to the collaboration needed to achieve this condition is awareness of Commonwealth resources and capabilities.


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The human and financial resource platform concept applies to the comprehensive Virginia UAS community and can be used to communicate opportunities, needs, and capabilities across the academic, regional, industry, finance, and local, county, state, and federal government environments. Such collaboration can span the UAS spectrum, from research and testing activities at academic institutions to involving UAS industry stakeholders in UAS racing event sponsorship, participa-tion, and marketing. This Virginia UAS community collaboration, best managed by the CoE, can be maintained through a virtual construct and fortified through physically attended events periodically held throughout the Commonwealth. These events will not only facilitate immediate communication among Virginia UAS stakeholders, but also strengthen Virginia’s internal and external identity as a UAS hotspot.

Strategy—Undertake an Aggressive National and International Outreach Program That Spans UAS and UAS Tangential Fields and Markets*

Leverage of Vir-ginia UAS as-sets and resources is the foundation for maintaining and growing the Common-wealth’s UAS leadership posi-tion, but in-volvement of external UAS stakeholders is needed to max-imize Virginia economic growth through the UAS industry. This external interac-tion and activity is necessary to expand the consumer base, draw new stakeholders to Virginia, attract additional capital to the Commonwealth, and en-large the overall Virginia UAS ecosystem. Activities undertaken by other states and regions include UAS-focused outreach programs (hosting UAS-related con-ventions and regular attendance at UAS community conventions) and marketing through various media, such as conventions, websites, and advertisements.

To maintain its competitive position in the UAS industry, Virginia must plan and execute an aggressive outreach program to promote the Commonwealth’s UAS capabilities, resources, and assets to the larger UAS community outside its bor-ders. Its marketing plan should include coordinated efforts with current Virginia activities and efforts, such as the YesVirginia.org website that communicates the Commonwealth’s overall pro-business environment, promotion at UAS-related conventions and events, advertisements in electronic and traditional media, and others.

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Chapter 5 Recommendations

We developed recommendations and categorized them under three themes to en-compass the activities necessary for the Virginia UAS strategic economic growth plan. These categories, and the recommendations grouped within, address the most critical UAS business, technological, and political challenges and require-ments unveiled in the course of our research and analysis for the Virginia UAS strate-gic economic develop-ment plan. The three classifications are (1) collaboration, (2) mar-keting, and (3) start-up incentives.

COLLABORATION The UAS roundtables frequently discussed the need for and potential benefits of increased collaboration among the Virginia UAS community. The UAS industry strategies of other states, such as North Dakota and New York, show substantial coordination of their re-spective UAS stakeholders’ efforts and resources. Although the Commonwealth contains an impressive array of UAS assets and stakeholders, working alone each faces a severe disadvantage in competing with the collective resources of a state or region. Facilitating and encouraging collaboration among Virginia UAS stake-holders will mitigate this disadvantage. It will improve the competitive position of each stakeholder, magnify the Commonwealth’s aggregate UAS economic growth potential, and help secure a UAS industry leadership identity.

A collaborative culture in the Virginia UAS community is not for altruistic pur-poses, but rather to fulfill Virginia’s UAS vision to maximize and grow its UAS capabilities, capacities, and economy. The general needs of various roundtable at-tendees could be met by the capabilities of other stakeholders in attendance. An efficient and effective means of enabling communication, networking, and team-ing throughout the Virginia UAS community will give stakeholders a vital re-source with which to reach their objectives while leading to Commonwealth economic development. The subsections that follow describe specific collabora-tion activities we recommend to Virginia’s UAS community.

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UAS Platforms The Virginia UAS economic development plan’s strategies include the need for collaboration in the Virginia UAS community. The most effective, efficient man-ner to initiate this network is a centralized platform, through which all stakehold-ers can communicate, coordinate, and share and exchange knowledge and ideas. We recommend a web-based platform, a widely available and used technology—including forums and UAS-focused profile creation and search capabilities, em-ploying formats and structures similar to professional networking websites such as LinkedIn and Yammer—for Virginia UAS community collaboration.

The Virginia UAS CoE—focal point of the Commonwealth’s UAS community—is the most appropriate stakeholder to establish and manage this platform. The In-ternet-based nature of this platform lends itself to the CoE’s virtual construct. An-ticipated as having dynamic form and functionality, the Virginia UAS web-based collaboration platform will have the following initial structure:

Scaled accessibility, with greater access for Virginia UAS community members and limited access for non-Virginia UAS community members

Search capabilities by data elements, including requirement, capability, availability, and expertise

Posting capabilities by categories and data elements that include job and resumé postings, R&D expertise needs, teaming opportunities, technology questions, and UAS-related events and news

Direct contact information—voluntary and scalable—for Virginia UAS community members that enables the community to directly contact its members by preferred media and methods.

Meetings For efficiency and effectiveness, we recommend a web-based application for the collaboration platform, but supplementing this platform with periodic, face-to-face events will add great value. Communications and remote meeting attendance capabilities have greatly improved in recent years, but face-to-face meetings still are the best way to acquaint attendees, drive productive collaboration, and facili-tate “sidebar” interactions for knowledge sharing. Because of these advantages, we recommend holding quarterly meetings, similar to the roundtable events, at ro-tating locations throughout the Commonwealth. The quarterly frequency and changing locations will maximize stakeholder attendance opportunities.

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MARKETING Sources from EO 43 to the Wall Street Journal to the roundtable events see the UAS industry as a high growth field that has stimulated considerable state and regional effort to gain an industry leadership posi-tion. The charac-teristics that cause the UAS industry to be so compelling are the same ones that make it a complex business and economic case. The UAS field spans a wide vari-ety of areas, including physical infrastructure, academia and education, geogra-phy, laws and regulations, technology, manufacturing, retail, all levels of government, media, industry, agriculture, recreation, and countless others. This footprint presents a substantial economic impact in any geographic area or com-munity that sets itself apart as UAS industry leader. The potential impact has driven a highly competitive environment through the known UAS supply chain, and states and regions are striving to capture many of the same industry segments.

A basic component of a competitive business and industrial setting is marketing, defined by the American Marketing Association as “the activity, set of institu-tions, and processes for creating, communicating, delivering, and exchanging of-ferings that have value for customers, clients, partners, and society at large.”1 By that definition, communicating and exchanging offerings is a large element of marketing. Thus, no benefits or returns are gained from an enterprise’s assets if consumers are unaware of the goods or services those assets can provide. This concept applies to the Commonwealth’s own considerable portfolio of UAS assets and resources. For the purpose of UAS economic growth, the potential Virginia UAS stakeholders’ awareness of the benefits of Virginia assets is as vital as the assets themselves. Structured, targeted marketing and outreach efforts will achieve this awareness.

Internal Marketing Given the UAS field’s wide variety of groundbreaking aspects—including tech-nological, social, legal, and industrial—management of perceptions and para-digms is an appropriate tactic. Apprehension, uncertainty, and suspicion have accompanied the public’s growing exposure to UAS. Establishment of Virginia as

1 American Marketing Association, “Marketing,” About AMA, 2017, www.ama.org/ AboutAMA/Pages/Definition-of-Marketing.aspx.

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a UAS hotbed faces fewer challenges if its population is familiar with the associ-ated technology and appearance of crafts in the sky. The public’s greater comfort with UAS has a number of benefits, including an increased consumer base and a Commonwealth-wide identification with the UAS industry. These benefits will fa-cilitate and support a Virginia UAS ecosystem and culture that draw increasing assets and opportunities for the Commonwealth and its citizens.

A dedicated outreach campaign, targeting the general public and state and local governments, will expedite Virginia’s embrace of the UAS industry. The cam-paign’s objectives can include the easing of anxiety, informing of state and local legislations, and communication of the benefits and utility of a growing UAS in-dustry in Virginia. The Virginia UAS CoE is the appropriate stakeholder to initi-ate an outreach program that sets a cohesive and uniform message. The message can be amended and supplemented as necessary with the insight and ideas of other members of the Virginia UAS community.

Linked with Virginia UAS collaboration activities is the promotion of Virginia-based UAS services for use by the Commonwealth and local governments, utili-ties, and partnerships with other Virginia UAS companies. Although collaboration efforts elevate the awareness of Virginia-based UAS capabilities, pushing that in-formation to potential consumers and partners magnifies the possibility of tangi-ble benefits. Again, the Virginia UAS CoE is best positioned to initiate the campaign. It can begin with a tone set throughout its website and periodic face-to-face stakeholder events where the Virginia UAS identity and “Buy Virginia” theme are established. Further outreach concerning Virginia-based UAS capabili-ties should be made to the Commonwealth and local governments to inform them of both the applicability and benefits of UAS in various aspects—such as search and rescue, law enforcement, infrastructure inspection, and emergency response—and the availability of these functions in Virginia.

Efforts to increase the awareness of the Commonwealth’s various financial assis-tance sources fall within the recommended internal and external marketing activi-ties. Take that firm that located to Danville when informed of the financial benefits available: pushing this type of information will prevent similar start-up firms from migrating from Virginia or choosing to locate elsewhere. This can be accomplished by leveraging the CoE’s collaboration website, VDEP and YesVirginia.org’s website, and other media outlets and marketing activities at UAS events, conferences, and publications.

External Marketing Maximizing economic development calls for the introduction and circulation of untapped industry stakeholders and capital. Even if an industry is self-sustaining, its advancement in volume, economics, and innovation is greatly limited when it is isolated. Also, growth opportunities available through the larger aggregate mar-ket are not captured. In a dynamic and highly technological field such as UAS, this stagnation can quickly become contraction and ultimately extinction. For

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these reasons, Virginia must pursue a regular influx of stakeholders to the Com-monwealth in the form of industry, consumers, and others.

Marketing is a vital activity in achieving an influx of Virginia UAS stakeholders. Because these potential stakeholders and assets are external to the established Vir-ginia UAS community, they must be informed of the benefits and advantages of locating in the Commonwealth or executing business with a Virginia-based entity. Potential UAS stakeholders external to Virginia are not necessarily cognizant of the more passive sources of Virginia UAS information, such as the Virginia UAS CoE and YesVirginia websites, nor will they attend the periodic face-to-face col-laboration events.

This situation calls for pushing this information through attendance, exhibition, and speaking at UAS industry events, such as conferences, and follow-up commu-nications; these actions spread awareness of the Virginia UAS community and ex-pand the Commonwealth’s industrial network. Although these activities are relatively straightforward, substantial effort and skill are involved in their execu-tion. The person performing these efforts, “the face of the Virginia UAS commu-nity,” is most appropriately staffed by the Virginia UAS CoE. This person must know and be conversant about the majority of aspects of the UAS industry, pos-sess public speaking and networking abilities, be intimately familiar with Vir-ginia’s UAS-related assets and resources, and have the foresight to communicate how those resources best meet a potential stakeholder’s needs.

START-UP INCENTIVES The Commonwealth has several small business incubators: Abingdon, Fairfax, Williamsburg, and Richmond each have one. Business incubators provide start-up support from the ground up. Typically, an incubator furnishes office space, fast Internet, shared secretarial and mail room services, copying, and various simple office services that are easily shared. Some incubators also have mentoring pro-grams, oversight milestones, and even instruction classes for executing business-related items such as developing a business plan. Incubators are a boon to the cre-ative inventor who is more technically oriented and has not started or run a busi-ness before. The high technical content of nascent UAS business offerings implies that many start-up UAS innovators would benefit from the business-starting ad-vice that incubators can provide. Areas that are likely UAS hubs—such as Norfolk—or that need to stimulate the local economy—such as former coal towns—are highly recommended areas for small business incubators for UAS.

Some incubators also help navigate local and state processes for getting required permits or services, and related legal requirements such as writing contracts and understanding contracts and payment terms. An easily shared resource for navi-gating local, state, and legal processes enables entrepreneurs to focus on the barri-ers to the business instead of navigating known processes. We recommend providing such guidance through the incubators or the CoE.

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Many entrepre-neurs start with enough funding, from their per-sonal savings, friends, or family, to get through the first 6 to 12 months. Some in-cubators offer seed loans on the order of a few months’ expenses, tied to the use of their mentoring and oversight services. Typically, incubators operate a seed money loan fund on a self-funding basis. As older loans are paid back, they make additional money available to new entrepreneurs, so the pool of innovators that can be funded through an incubator loan fund is limited by the size of the initial fund; the health of the fund is determined by the success of the loans it makes. There is a tradeoff between the price of the loan in terms of the interest rate and the profitability of the incubator, with the balance determining the number of entrepreneurs the incu-bator can assist. Lenient loan terms mean a negative cash flow and ultimately less seed money available to innovators. These loans are often fairly risky and may carry interest rates of 10 percent. Seed loans are meant to assist the entrepreneur in building a client base and the business plan, up to the point where the company can present its business plan to a traditional bank for a business loan. Business loans are made on assets and collateral or the near-term expected revenue stream, so a business must be in or near production to qualify for a commercial bank loan.

The CoE can help connect incubators with entrepreneurs and furnish the business mentoring to help inventors find out early on how unique and how marketable their idea is. The CoE can also help innovators connect with the other needed parts of their total idea to reach production or a service offering more quickly.

In between seed loans and private bank loans is a period of difficulty finding funding—the National Business Incubation Association calls it the “Valley of Death.”2 In this gap, SBA loans and venture capital are sources of funding.

Venture capitalists are wealthy individuals or groups, known as “angel investors,” interested in funding ideas and start-ups many years in the future that have the po-tential for explosive, even disruptive growth. The anticipated high return is often a decade or more away. Because UAS applications have that potential, venture cap-ital funding is a very likely source of funding between seed and private loans or

2 Bridget Lair, “Revolving loan funds: How incubators establish and manage internal funds or network with others to serve client needs,” National Business Incubation Association, October 2011.

Recommendations

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equity. Venture capitalists are unlike banks in that the arrangement is more like a partnership; the investor may require close involvement in the development of the product and a seat on the board of directors or a chief executive position in the eventual company.3 Venture capital is generally granted in steps, can carry a com-pany to the point of launching production, and can help with mezzanine funding if needed. Venture capitalists are not necessarily hard to find, but the CoE can be a conduit for an introduction, and the CoE collaboration events are an ideal forum for bringing in venture capital investors.

COE PRIORITIZED ACTIVITIES Not all of these recommendations are within the purview of a potential CoE—some are legislative—and the CoE would not have unlimited reach either. Recog-nizing the limited funding available to enact these recommendations, we priori-tized them in terms of the activities that offer the highest return on effort, aren’t being accomplished independently by private entities (so assistance is needed), and fall within the purview of a CoE:

1. Promote collaboration in Virginia.

2. Strengthen the human resources pipeline between academia and industry.

3. Encourage university business innovation and partnering.

4. Attract UAS technologies and businesses to the Commonwealth.

5. Play to the UAS strengths of every region.

6. Undertake an aggressive national and international outreach program that spans UAS and UAS tangential fields and markets.

7. Plant 1,000 acorns (advocate for small businesses).

8. Coordinate the financial resources available in Virginia.

9. Change viewpoints regarding the UAS field and entrepreneurship in rural and small-city Virginia.

10. Encourage “Buy Virginia” (facilitate an enduring Commonwealth UAS ecosystem).

11. Encourage a strong UAS consumer base in Virginia.

12. Assist small businesses and entrepreneurs with locating business admin-istration services.

3 SBA, “Angel Investors,” www.sba.gov/starting-business/finance-your-business/

venture-capital/venture-capital.

5-8

Even this prioritized list of activities is more than can be accomplished with the known funding. The next section describes the initial CoE requirements and its business model to accomplish as many as possible.

COE BUSINESS MODEL The UMS Commission report recommends

a single unified voice for the UMS industry … dedicated individual or organization with both domain expertise and resources for maintaining market intelligence, marketing, and serving as an advocate for UMS firms both resident and potential entrants to the Commonwealth.

The commission’s recommendations are in harmony with the priorities listed and with our business model.

As noted in several roundtables, the Commonwealth contains all the elements needed for a UAS ecosystem within its borders. However, we often heard one member of the Virginia UAS community revealing the availability of a needed skill or opening, and then heard the need for the same resource from another at the same table. Too frequently, we heard one attendant asking for a skilled workforce and, at the same time, an instructor or professor asking for a real-world needs case around which to train students. The Commonwealth needs a mechanism similar to the roundtables to assemble members of the community who work in related fields but do not routinely talk to each other.

To jump-start collaboration, nothing works as well as face-to-face discussion. The first duty of the CoE is to promote such discussion. We recommend holding quar-terly workshops in the Commonwealth, rotating among regions, to begin such col-laboration. Given a structured agenda with discussion and network, such workshops could start satisfying the CoE’s recommended activities 1, 2, and 3. We suggest colleges or schools that are members of the CoE’s consortium host such workshops at no cost.

Also critically needed is an outreach effort beyond the Commonwealth, to entice UAS-related businesses to come to the state for testing, development, demonstra-tion, and partnering (recommendations 4 and 6). To attract national-level busi-nesses, a representative of the Commonwealth needs to attend national-level UAS conferences such as AUVSI’s Xponential, Air Traffic Control, and NASA’s an-nual UAS Traffic Management conferences; the FAA’s UAS consortium meet-ings; Done World Expo, and many more. A Commonwealth representative needs to attend a minimum of two of these per year. The purpose is to exhibit the strengths of UAS business in the Commonwealth and network and encourage

Recommendations

5-9

partnerships with other UAS companies looking for part-ners or test sites that Vir-ginia could provide.

National and international conferences and periodic, face-to-face collaborative events go hand-in-hand. Through networking inside the Commonwealth, a mar-keting director for the CoE would become aware of growing training programs, current testing and demonstrations, and sources of la-bor as well as funding. This knowledge offers a font of information for network-ing and exposure at the national or international discussions.

Finally, our recommendations are consistent with the current Commonwealth budget planning environment, in which limited funds are available for launching the CoE and its investments. To that end, we prioritized CoE recommendations and explained the rationale behind the ranking. The highest priority recommenda-tions, those that a CoE must minimally cover, are ones that will not develop natu-rally from a competitive UAS ecosystem; namely, marketing and inboarding to the Commonwealth.

We considered development of a self-sustaining CoE and related ecosystem. Alt-hough the CoE is required to provide an unbiased focal point for communications, outward facing marketing, and inboarding, other UAS stakeholders such as busi-nesses and instructors can and should assist the CoE in attending conferences to advertise the Commonwealth’s capabilities. Other state-based UAS CoEs rely on key members and board members to supply connections, know-how, and market-ing. Board members and their firms receive recognition as leaders of an officially recognized community; in return, the state-based CoE receives highly informed assistance in its mission.

Toward the end of self-sustainment, a number of tasks recommended for the CoE can be accomplished by grants to Commonwealth businesses and instructors in place of hiring a full-time equivalent (FTE) for the CoE. For example, the CoE could usefully offer tutorials to navigate state paperwork requirements to win state contracts for services such as UAS-based aerial surveying. That course mate-rial could also be developed through a grant to a college, technical school, or uni-versity instructor, professor, or adjunct. The CoE will require a web presence to connect the members of the CoE; that web presence could be developed and maintained by a stakeholder member of the CoE. Use of shared resources through the CoE can enable many connecting initiatives to take place at a lower cost than hiring an FTE to accomplish the same task.

5-10

The CoE may opt to charge a membership fee. Given that many stakeholders could be start-ups, membership dues are unlikely to cover the CoE costs in the near term. We recommend the CoE consider a scaled membership fee similar to those used by many professional organizations. For example, student and aca-demic institution memberships would be free, working professional memberships would be on a graduated fee determined by factors such as years of experience, and levels of corporate membership fees would be determined by the revenue or size of the company. For the CoE to be self-sustaining, most of the labor will ini-tially have to be pro bono, as the costs absorbed by dues are anticipated to be a relatively small percentage of the total CoE cost requirements.

The cost of membership in national-level trade associations is in the tens of thou-sands of dollars. Start-ups are not able to afford such levels of dues. Such mem-berships typically cover services such as marketing, public affairs, legal services, and library and research services, all beyond what we recommend for the basic CoE. The CoE will not be able to cover its own costs from membership dues un-less it is successful in helping UAS stakeholders secure business. In that potential future, the value of the membership pays for itself from future business. For the near future, we foresee a need to subsidize CoE basic salaries and operations costs.

POTENTIAL COMMONWEALTH REGIONAL UAS OPPORTUNITIES

Each Virginia regions’ strengths and characteristics relevant to the UAS industry were identified through examination of UAS roundtable comments and data re-search and analysis that includes community profile reports produced by the Vir-ginia Employment Commission and mapping of various natural and built physical infrastructure features. Each attribute was categorized by the same subject matters as those used for analyzing the roundtable comments. Additionally, potential op-portunity areas were developed and aligned with each characteristic. These oppor-tunities should be considered within the context of the recommendations for the Virginia UAS strategic economic growth plan. The UAS industry is projected to be a dynamic and quickly evolving field, with uses and areas of involvement ex-panding through vibrant innovation. The established opportunity areas, in con-junction with those potential market and applications such as agriculture, identified in the reports like “The Future of Unmanned Vehicle Systems in Vir-ginia,” provide a catalyst and foundation upon which each Virginia region can ini-tiate and progress its UAS industry development. Below are tables for each Commonwealth region, accompanied with a graphical depiction of the region’s geographic orientation within Virginia, indicating the alignment of the region’s UAS-relevant strengths and characteristics with the applicable subject matters and potential opportunity areas.

Recommendations

5-11

Figure 5-1. Region 1 Location

Table 5-1. Region 1 Potential UAS Opportunities

UAS-related characteristic Subject matter Potential associated opportunity

Substantial railroad infra-structure

Market; Inspection/monitoring of rail infrastructure Physical infrastructure

Substantial major electric distribution infrastructure

Market; Inspection/monitoring of electric distribu-tion infrastructure Physical infrastructure

Large areas of undevel-oped land

Physical infrastructure Flight testing and recreational events (e.g., drone races)

Large manufacturing in-dustry presence

Physical infrastructure Zoning, facilities, infrastructure in place to support UAS manufacturing activities

Low population density Physical infrastructure Flight testing Substantial number of ac-tive mines

Physical infrastructure Inspection/monitoring of mines and asso-ciated systems

Substantial number of abandoned mines

Physical infrastructure Inspection/monitoring of mines, associ-ated systems, or use of abandoned mines for UAS recreational events (e.g., races, obstacle courses)

Low population density Physical infrastructure Law enforcement applications in remote areas

5-12




High population percent-age with college degrees

Human/intellectual resources Available and qualified staff; potential em-ployee pipeline

Large number of college students

Human/intellectual resources Available and qualified interns and new hires; potential employee pipeline

Proximity to engineering research university


Network/collaboration/culture Opportunities for partnerships and tech-nological collaboration

Certificate of Authorization from the Federal Aviation Administration

Legislative/regulatory Beyond-Line-of-Sight UAS testing





Host of one of six FAA UAS Test Sites

Physical infrastructure Available use of an approved FAA test site



Low population density Physical infrastructure Flight testing Low population density Physical infrastructure Law enforcement applications in remote

areas Proximity to nationally-leading university UAS pi-lot training program

Training/Education Available and qualified pilots/UAS opera-tors

Recommendations

5-13










Proven record of eco-nomic development/re-identification

Network/collaboration/culture Culture, experience, and processes avail-able to facilitate influx of new companies and new technology



Low population density Physical infrastructure Flight testing Substantial manufacturing industry presence


5-14





Human/intellectual resources Available and qualified staff; potential employee pipeline











Market; Inspection/monitoring of rail infrastruc-ture Physical infrastructure

Proven record of eco-nomic development/re-identification

Network/collaboration/culture Culture, experience, and processes available to facilitate influx of new com-panies and new technology



Proximity to Richmond VA Market; Proximity access to Commonwealth gov-ernment agency headquarters Network/collaboration/culture

Recommendations

5-15











Proximity to multiple NASA and DoD installa-tions and sites

Market; Access to potential clients, access to sites (e.g., Wallops Island), increased ability to collaborate with other UAS stakeholders

Network/collaboration/culture; Physical infrastructure





Proximity to large technol-ogy and aerospace firms


Proximity to shoreline Physical infrastructure Environmental monitoring; Storm dam-age assessment

5-16






Proximity to DoD installa-tion/sites

Market; Access to potential clients, increased ability to collaborate with other UAS stakeholders Network/collaboration/culture





Proximity to shoreline Physical infrastructure Environmental monitoring; Storm dam-age assessment

Recommendations

5-17




Large concentration of venture capitalists

Finance/tax Increased exposure and access to po-tential funding sources








Proximity to FAA Head-quarters, Washington DC, and other federal agency headquarters


Proximity to multiple DoD installations and Pentagon






Proximity to AUVSI head-quarters

Network/collaboration/culture Increased ability to engage and monitor the UAS community

Proximity to large technol-ogy and aerospace firms


5-18












Low population density Physical infrastructure Flight testing Substantial manufacturing industry presence


Recommendations

5-19

















5-20

A-1

Appendix A Virginia Region County Composition

Table A-1 shows the counties and cities that constitute the Virginia regions.

Table A-1. Virginia Counties by Region

Region 1 Region 2 Region 3 Region 4 Region 5 Region 6 Region 7 Region 8 Region 9

Lee Giles Patrick Greens-ville

Southhampton

Spotsylva-nia

Loudoun Bath Nelson

Wise Craig Martins-ville

Emporia Franklin Freder-icksburg

Fairfax Highland Albemarle

Norton Covington Henry Sussex Isle of Wight

Stafford Fairfax City

Buena Vista

Char-lottesville

Dickenson Alleghany Pittsylva-nia

Surry James City Caroline Falls Church

Lexington Fluvanna

Buchanan Pulaski Danville Dinwiddie Williams-burg

King George

Arlington Rock-bridge

Louisa

Scott Radford Halifax Petersburg York West-moreland

Alexandria Augusta Greene

Russell Montgom-ery

Charlotte Prince George

Newport News

Northum-berland

Prince Wil-liam

Staunton Orange

Tazewell Roanoke Prince Ed-ward

Colonial Heights

Poquoson Richmond Manassas Park

Waynes-boro

Madison

Bristol Salem Bucking-ham

Hopewell Hampton Lancaster Manassas Harrison-burg

Culpeper

Washing-ton

Roanoke City

Cumber-land

Chester-field

Ports-mouth

Essex Rocking-ham

Rappa-hannock

Smyth Botetourt Mecklen-burg

Charles City

Norfolk King and Queen

Page Fauquier

Bland Floyd Lunenburg New Kent Suffolk King Wil-liam

Shenan-doah

Wythe Franklin Nottoway Hanover Chesa-peake

Middlesex Warren

Grayson Bedford Amelia Henrico Virginia Beach

Gloucester Frederick

Galax Lynchburg Brunswick Richmond Northamp-ton

Mathews Winches-ter

Carroll Amherst Powhatan Accomack Clarke Campbell Goochland Appomat-

tox

DRAFT—[Click here and type report #)] —4/3/17 A-2 06_CIT60T1_AppA_Regions

B-1

Appendix B Roundtable Attendees

Table B-1 shows the attendees of the various roundtable sessions in 2016.

Table B-1. Virginia 2016 UAS Roundtable Attendees

Organization Roundtable site Organization type

4-VA JMU Academia Danville Community College, Manufacturing & Technical Services

Danville Academia

Dickenson County Public Schools Abingdon Academia George Mason University JMU Academia Germanna Community College JMU Academia James Madison University JMU Academia Liberty University Danville Academia Mid-Atlantic Aviation Partnership (MAAP) JMU Academia Mountain Empire Community College Abingdon Academia New River Community College Abingdon Academia Norton City Schools Abingdon Academia Patrick Henry Community College Danville Academia Piedmont Virginia Community College JMU Academia Southwest Community College Abingdon Academia Southwest Virginia Higher Education Center Abingdon Academia UVA Wise Abingdon Academia Virginia Tech Abingdon Academia County of Buckingham VA Danville Local government Prince Edward County Danville Local government Wise County Abingdon Local government NASA Langley Research Center Virginia Beach Federal government NASA Wallops Flight Facility Virginia Beach Federal government Naval Surface Warfare Center, Dahlgren Division, Senior Representative for Unmanned Aerial Systems

Virginia Beach Federal government

Navy Warfare and Development Command Virginia Beach Federal government NOAA Virginia Beach Federal government USAF Virginia Beach Federal government American Aerospace (AATI) Danville Industry or economic

development agency Adaptive Aerospace Virginia Beach Industry or economic

development agency

B-2



Alleghany Highlands Economic Development Corporation, Clifton Forge, VA

JMU Industry or economic development agency

Aurora Flight Sciences JMU Industry or economic development agency

AVID, LLC Virginia Beach Industry or economic development agency

Center for Innovative Technology (CIT) JMU Industry or economic development agency

City of Danville Economic Development and Future of the Piedmont Foundation

Danville Industry or economic development agency

ComSonics, Inc. JMU Industry or economic development agency

Crutchfield Corporation Abingdon Industry or economic development agency

ODU Business Innovation Center Virginia Beach Industry or economic development agency

Dominion Resources Danville Industry or economic development agency

Draper Aden Associates JMU Industry or economic development agency

Dynamic Aviation in Bridgewater, VA JMU Industry or economic development agency

Eastern Shore Defense Alliance Virginia Beach Industry or economic development agency

Virginia Beach Federal Facilities Alliance Virginia Beach Industry or economic development agency

Hazon Solutions: CEO and Co-Founder Virginia Beach Industry or economic development agency

Virginia Aerospace Business Association (VASBA) Industry or economic development agency

Jacobs, CTO JMU Industry or economic development agency

KSI Data Sciences Danville Industry or economic development agency

LMI Virginia Beach Industry or economic development agency

McguireWoods Danville Industry or economic development agency

Mid-Atlantic Regional Spaceport Virginia Beach Industry or economic development agency

Momentum Aerospace Group JMU Industry or economic development agency

National Institute of Aerospace (NIA) Virginia Beach Industry or economic development agency

Roundtable Attendees

B-3



Newport News Shipbuilding, Huntington Ingalls Virginia Beach Industry or economic development agency

Newport News Virginia Tech Research Park Virginia Beach Industry or economic development agency

NEXUTECH Virginia Beach Industry or economic development agency

Noblis Danville Industry or economic development agency

Cyberavnet JMU Industry or economic development agency

Peninsula Technology Incubator, AUVSI Virginia Beach Industry or economic development agency

Raytheon JMU Industry or economic development agency

Reinvent Virginia Beach Virginia Beach Industry or economic development agency

Roanoke Regional Partnership Abingdon Industry or economic development agency

Southwest Virginia Technology Council Abingdon Industry or economic development agency

Southwest Virginia Workforce Development Board Abingdon Industry or economic development agency

Stinger Ghaffarian Technologies Virginia Beach Industry or economic development agency

Strategic Plans and Policy Supreme Allied Command Transformation

Virginia Beach Industry or economic development agency

StratoMech LLC JMU Industry or economic development agency

Techsburg Abingdon Industry or economic development agency

The Institute for Advanced Learning and Research Danville Industry or economic development agency

Tobacco Region Revitalization Commission Abingdon Industry or economic development agency

UAV Pro Danville Industry or economic development agency

Virginia Growth Alliance Danville Industry or economic development agency

Virginia Space Grant Consortium Virginia Beach Industry or economic development agency

Virginia UAS JMU Industry or economic development agency

Williams & Mullen Danville Industry or economic development agency

City of Danville Danville Local government

B-4



VA House of Delegates (86th District) JMU State government Office of Del. Danny Marshall Danville State government Secretary of Technology Virginia Beach State government Senate of Virginia Virginia Beach State government U.S. House of Representatives Virginia Beach State government U.S. Senate Virginia Beach State government VA Army National Guard Danville State government VDOT Danville State government Virginia Senate Virginia Beach State government Virginia, House Appropriations Virginia Beach State government

C-1

Appendix C Roundtable Comment Matrix

Table C-1 shows the roundtable comments by organization type, industry aspect, subject matter, and roundtable.

Table C-1. Roundtable Comment Matrix

Organization type Comment

UAS industry aspect Subject matter Roundtable

Academia Virginia has the largest robotics team participation in the world

Capability Human/intellectual re-sources

JMU

Industry/EDA Allegheny County looks to have a drone racing competition (1st one was in May 2016)

Capability Network/collabora-tion/culture

JMU

Industry/EDA A group approached Allegheny County to have an event (95 pilots)-Stone Blue Festival


JMU

Industry/EDA Event (drone racing festival) held on flat top of mountain

Capability Physical infrastructure JMU

Industry/EDA 62 acres being donated for the pur-pose to learn to fly drones


Industry/EDA Greenbrier & Homestead also in the county and have interests in a “drone package” to offer customers

Capability Market JMU

Industry/EDA 4 locations (in Alleghany County re-gion) where they can learn to fly (as well as an old gym-Drone Zone)


Industry/EDA (Alleghany County region) Also has an underground mine (3 ½ acres with a course set up for qualifica-tion)


Industry/EDA (Local UAS stakeholders) Working w/disabled veterans to learn to fly

Capability Training/Education JMU

Industry/EDA (Drone racing competition) survey asked how to encourage entrepre-neurship

Capability Market JMU

Industry/EDA Venture capital (they connected a person w/a potential source)


JMU

Industry/EDA Business in area committed to ac-celerator to build a racing business


JMU

Industry/EDA Test on the course (Forestry) Capability Physical infrastructure JMU Industry/EDA Legislation is a barrier to racing in

cities/metro areas but not in rural Allegheny area

Capability Legislative/Regulatory JMU

Industry/EDA Old factory (unusual spots) is de-sired (by UAS operators)


C-2




Industry/EDA IN Manassas and has a lot of things to see


JMU

Industry/EDA Aurora-built and flown 26 UAVs w/no crashes


JMU

Industry/EDA Built one of the largest UAVs (80 hr flight) (Orion)


JMU

Industry/EDA Engineering and R&D company Capability Human/intellectual re-sources

JMU

Industry/EDA R&D team collocated w/MIT Capability Human/intellectual re-sources

JMU

Industry/EDA 2 MFG facilities-One is expanding Capability Physical infrastructure JMU Industry/EDA They can build special purpose air-

planes-other companies can use their to meet missions (put sensors on the airplane to detect methane)


JMU

Industry/EDA CoE (NM has one); most of them are pretty limited and what they are trying to do; NM provides the facili-ties, but it’s not enough in NOVA; 64 North is unique b/c of the wealth of education sources and compa-nies-all the people in the game; maybe Innovation is the focus of the CoE


JMU

Industry/EDA Hiring HS kids w/parent permission Capability Human/intellectual re-sources

JMU

Academia Need a new way of thinking about the challenge; created a new de-gree (Cyber Security Engineering)


Academia Purpose (applicability) of the de-gree is to be taught by potential em-ployers


Industry/EDA VA has a strength of engineering education


Industry/EDA Discriminate VA w/the strength of its engineering curriculum


Industry/EDA CA has too much regulation (VA doesn’t)


Academia VA has strong universities Capability Training/Education JMU Academia State known for educating the engi-

neers Capability Training/Education JMU

Industry/EDA UVA has a master’s for Data sci-ence


Academia “4 VA” was created to consolidate resources and curriculum among VA universities (collaboration of 5 universities)


Academia Shared courses Capability Training/Education JMU

Roundtable Comment Matrix

C-3




Academia HS robotics is a tie-in w/drones and cool w/younger students (attract them to STEM)-NOVA labs


Academia Graduating students developed a program to use cameras on drones to find land mines and another group developed a mine-destroying drones to follow; forestry-count wildlife; measure stream health w/a filtered camera


Academia We are good at integrating systems to figure out how to solve a problem


Academia 4 VA is a formal program funded by the governor


Industry/EDA There are VCs in NOVA Capability Finance/Tax JMU Industry/EDA VA Tech has a smaller scale of re-

search focused on gov’t that can compete w/GTIR (GA Tech Institute of Research) (using the model)


Industry/EDA VA has a diverse geographic land-scape (advantage)


Industry/EDA VA has not put a lot of regulation on the airborne


Industry/EDA Farmers supplement income by us-ing land for testing (state commis-sions)


Industry/EDA VA is Ahead of the curve Capability Network/collabora-tion/culture

JMU

Industry/EDA 4 VA is good Capability Training/Education JMU Industry/EDA Shenandoah has airspace to de-

velop b/c it is not busy Capability Physical infrastructure JMU

Industry/EDA Shenandoah airport is ideal (Class G airspace) for testing


Industry/EDA Energy corridors to enable indus-tries to test in an uncontrolled (inter-act w/other crafts in a real world scenario)


Industry/EDA FAA is looking for safety cases and VA can set up


JMU

Industry/EDA Blue Ridge Community College- Capability Human/intellectual re-sources

JMU

Industry/EDA Night certified, IFR-FAA is keeping the human in the loop (human on the stick)


JMU

Industry/EDA Shenandoah valley has road infra-structure, academic infrastructure,


Industry/EDA The access is available in Shenan-doah Valley


Academia The relationship w/FAA is estab-lished


JMU

C-4




Academia Shenandoah valley has lots of re-sources


JMU

Industry/EDA Had an autonomous unmanned systems effort here at the learning center


Danville

Industry/EDA Headed by VA Tech Capability Human/intellectual re-sources

Danville

Industry/EDA The enthusiasm hasn’t diminished Capability Network/collabora-tion/culture

Danville

Industry/EDA Fit mfg through precision tooling & metrology


Danville

Industry/EDA Serve robotic operations Capability Human/intellectual re-sources

Danville

Industry/EDA Community college working with schools to provide first year training while still in HS

Capability Training/Education Danville

Industry/EDA Setting curriculum for college credit Capability Training/Education Danville Industry/EDA Student will have 1 year credit upon

HS graduation Capability Training/Education Danville

Industry/EDA 2nd year completed at college cam-pus


Industry/EDA Significant financial aid Capability Training/Education Danville Industry/EDA Student can get recognized certifi-

cation after 1 year out of HS Capability Training/Education Danville

Academia Focus on pilot training Capability Training/Education Danville Academia Other schools have end-product fo-

cus (provide something companies that provides efficiency_


Danville

Academia Success of VA academia is to pro-vide consistent products to the in-dustry


Danville

Academia Produce a student who can step into the different roles


Danville

Academia Strengths-being here in VA is nice b/c there is less legislative restric-tive than some other states, gov’t is pro-UAS, Need to be able to train students in real airspace is im-portant, best assets is the diversity of schools to reach different groups, their curriculum includes being trained in manned flight to learn the fundamentals,

Capability Legislative/Regulatory Danville

Academia Partner w/local industries (TEXTRON Systems is most valua-ble)


Danville

Academia Partnership sets their program apart that allows students to get certified before graduating


Danville


C-5




Academia Textron gets to look at students & students get to look at Textron


Danville

Academia Proximity to Fort Pickett is a strength of VA and ability to

Capability Physical infrastructure Danville

Academia Community colleges are focused on some more niche areas-design, data analysis, data acquisition, etc.


Danville

Academia Have VA Tech agriculture Capability Network/collabora-tion/culture

Danville

Academia VA Tech research is supported by Liberty operators at a low cost)


Danville

Academia Produce safe & consistent product Capability Human/intellectual re-sources

Danville

Academia Create people who can acquire data & how to manage


Danville

Academia Create consistent operators who are professional


Danville

Academia Operators understand the world they are in and remain flexible


Danville

Industry/EDA Putting together a trade association for all unmanned vehicles (to in-clude ground & maritime)


Danville

Industry/EDA VA has a lot of excellent universi-ties and collaboration with industry is important


Danville

Industry/EDA Students to fill the growing human resource need


Danville

Industry/EDA Strong business climate & tax struc-ture

Capability Finance/Tax Danville

Industry/EDA Proximity to DC (and FAA) Capability Network/collabora-tion/culture

Danville

Industry/EDA Geographically fits the whole spec-trum that can be model any situa-tion that could be faced


Industry/EDA Strong defense community Capability Market Danville Industry/EDA A lot of the tech is out of Defense Capability Human/intellectual re-

sources Danville

Industry/EDA University strength and this has been talked about by Trade Associ-ations


Danville

Industry/EDA Learning about different opportuni-ties through events like Roundtables


Danville

Industry/EDA James River was one of the best demos of unmanned maritime


Danville

Industry/EDA Trade Association looking to create (Sep 08) will be unique to VA


Danville

Industry/EDA Danville has been supportive Capability Network/collabora-tion/culture

Danville

C-6




Industry/EDA Huge economic benefit (to cus-tomer) when you’re a start-up

Capability Market Danville

Industry/EDA Don’t dismiss the small start0-ups b/c they bring the innovation


Danville

Industry/EDA Found launch place is super sup-portive


Danville

Industry/EDA Felt like he was wanted-was not be-ing dismissed


Danville

Industry/EDA Impressed by data infrastructure (infrastructure is in place and in-vestments to bring tech companies)


Industry/EDA Won an NC contract that made Danville makes sense


Industry/EDA Liberty is close for the test range (lots of test ranges in NC and Lib-erty)


Industry/EDA Launch place (Danville) gave them some cash to get started in office space

Capability Finance/Tax Danville

Industry/EDA You can make the noise in Danville Capability Network/collabora-tion/culture

Danville

Industry/EDA You can piggyback the energy that is here (this is different than Hamp-ton Roads)


Danville

Industry/EDA When Danville realized that it was going to lose its industries, they re-alized it had to do things like sell its hospital to a for-profit & got $250M endowment that supports the Launch Place and the fiber, and other


Danville

Academia Save VA initiative Capability Network/collabora-tion/culture

Danville

Academia Dealt with the bandwidth Capability Physical infrastructure Danville Industry/EDA Small businesses not in VA who

spent $100Ks to fly in VA (transport their stuff) and the cost of test & chase support


Industry/EDA Find it an ideal place b/c of the low population density


Industry/EDA Openness to fly was nice Capability Physical infrastructure Danville Industry/EDA Don’t see a great driver to come to

VA, but the topography & MAAP are draws


Danville

Industry/EDA Interested in using Liberty’s flight training programs


Industry/EDA Education and cyber program in Danville is world class



C-7




Industry/EDA Danville CC is starting a program to determine what qualifications are needed (e.g., utilities experience)


Industry/EDA Working w/VA Tech to solve the data analysis question


Danville

Local gov’t They have a lot of assets people don’t understand (get lots of band-width to a location easily)


Federal gov’t a lot of progress w/unmanned work-ing group


Virginia Beach

Federal gov’t MAAP efforts have come a long way


Virginia Beach

Federal gov’t FAA head gave him the commit-ment to give clearance

Capability Legislative/Regulatory Virginia Beach

Federal gov’t Unmanned capability to public in the next year or so

Capability Legislative/Regulatory Virginia Beach

State gov’t VA is a tiny step ahead of other states


Virginia Beach

Federal gov’t We already have advantages (e.g., VA Tech)


Virginia Beach

Federal gov’t 1 of six sites to take lead nationally Capability Network/collabora-tion/culture

Virginia Beach

Federal gov’t Have critical military and NASA presence


Virginia Beach

State gov’t Invested heavily into VA Tech Capability Network/collabora-tion/culture

Virginia Beach

State gov’t Invested in a runway at Wallops Capability Physical infrastructure Virginia Beach

State gov’t Wallops is a hidden gem Capability Physical infrastructure Virginia Beach

State gov’t Wallops is open for business (lots of infrastructure)

Capability Physical infrastructure Virginia Beach

State gov’t Navy is heavily involved at Wallops Capability Physical infrastructure Virginia Beach

State gov’t Interest from NRO Capability Physical infrastructure Virginia Beach

State gov’t Modeling & simulation at ODU Capability Network/collabora-tion/culture

Virginia Beach

State gov’t There is always room to make addi-tional investments that provide a substantial ROI

Capability Finance/Tax Virginia Beach

Federal gov’t over $1B R&D assets in VA Capability Finance/Tax Virginia Beach

Federal gov’t Built up a consortium of unmanned players/partners


Virginia Beach

Federal gov’t Virginia Beach Unmanned Systems Exchange


Virginia Beach

C-8




Federal gov’t Brought for workforce development, business incubator, tech providers, all together to determine what needs to be done to move forward (over 200 people) re: Virginia Beach Unmanned Systems Ex-change


Virginia Beach

Federal gov’t A lot of assets in this community Capability Physical infrastructure Virginia Beach

Federal gov’t NASA establishing relationships w/intermediaries to expedite access to NASA resources (NIA, GenEd, Tech Center) so companies can come to them and avoid NASA bu-reaucracy


Virginia Beach

Federal gov’t Tech is already here Capability Human/intellectual re-sources

Virginia Beach

Federal gov’t using UAS for ops, education (STEM), environmentally, facilities, DoD (aerostar),


Virginia Beach

Federal gov’t have some assets (runway & air-space) that can be included in port-folio


Federal gov’t same barriers re: airspace but not enough for full


Federal gov’t bring education unclassified w/ expertise


Virginia Beach

Federal gov’t growing knowledge in UAS w/differ-ent programs (ground & maritime & air)


Virginia Beach

Federal gov’t endless supply of expertise Capability Human/intellectual re-sources

Virginia Beach

Federal gov’t willing to participate in a plan of ac-tions


Virginia Beach

Industry/EDA experience in entrepreneurship Capability Human/intellectual re-sources

Virginia Beach

Industry/EDA huge amount of assets in VA Capability Human/intellectual re-sources

Virginia Beach

Industry/EDA Changed the focus of the incubator to bring in as many UAS companies as possible


Virginia Beach

Industry/EDA Huge group put together to get fed-eral funds


Virginia Beach

Federal gov’t Mfg piece-could you create a shared maker place-YES


Federal gov’t would we know enough to outfit-YES


Virginia Beach

State gov’t Place in Ashburn Capability Physical infrastructure Virginia Beach


C-9




State gov’t A lot of universities have shared maker space


State gov’t Existing assets re: shared maker space


Industry/EDA we have a lot of colleges and uni-versities


Virginia Beach

Industry/EDA Access will be in the southwest of the state


Industry/EDA Fredericksburg is zoned correctly Capability Physical infrastructure Virginia Beach

Industry/EDA Hampton Roads is executing right now


Federal gov’t we have a company that will make those marketing calls


Virginia Beach

State gov’t There does exist some VCs in the Hampton Roads


State gov’t Parallel structure in VA (Go Vir-ginia) that will look where the state wants to invest its dollars


State gov’t Go Virginia is the vehicle moving forward re: state’s role


Federal gov’t See potential for a bulk of knowledge and expertise


Virginia Beach

Federal gov’t NASA has been leaning forward to bring the community together


Virginia Beach

Local gov’t Define where they are: Central Ap-palachia; Appalachian commission issued a grant for Unmanned Vehi-cles

Capability Finance/Tax Abingdon

Local gov’t Looking to buy a facility and bring it to VA


Abingdon

Local gov’t First integration of drones w/human aircraft


Abingdon

Academia MAAP started 3 ½ years ago. Capability Network/collabora-tion/culture

Abingdon

Academia VA Tech leads the effort Capability Network/collabora-tion/culture

Abingdon

Academia Team w/MD & NJ Capability Network/collabora-tion/culture

Abingdon

Academia Way ahead of MD & NJ Capability Human/intellectual re-sources

Abingdon

Academia Flying about ½ of all the hours of all six of the UAS test sites


Abingdon

Academia Focused early on flying a lot Capability Human/intellectual re-sources

Abingdon

Academia MAAP New Focus: Flight testing of unique aircraft


Abingdon

Academia Will be able to fly w/out observers soon (hope)

Capability Legislative/Regulatory Abingdon

C-10




Academia Can certainly train whatever skill set is needed (to include design & use)

Capability Training/Education Abingdon

Academia Uses CAD & 3D Mfg Capability Training/Education Abingdon Academia Providing drones in different curric-

ulums (e.g., photography, use drones to solve problem chal-lenges)


Academia Doing something similar to KP Capability Training/Education Abingdon Academia Printing bodies in the printing clas-

ses (3D) Capability Training/Education Abingdon

Academia Co-curriculum Capability Training/Education Abingdon Academia Competed at a Helicopter society

(1st 2 year college) Capability Network/collabora-

tion/culture Abingdon

Academia They have a flight simulator Capability Physical infrastructure Abingdon Academia Have 85 acres behind the college Capability Physical infrastructure Abingdon Academia Use a drone to research & monitor

the acres Capability Training/Education Abingdon

Academia Strong engineering programming training


Industry/EDA Tobacco commission does have R&D and funds entrepreneurs


Industry/EDA There is a lot of potential-this is what the commission does to draw companies in the region


Academia You have two critical advantages in region: 1-Jack Kennedy who has pulled together a lot of stuff to do this, 2-several pots of money that is not accessible by the rest of the state (Appalachian regional com-mission, VA Coal Field, Tobacco commission)


Local gov’t R&D would fit well here b/c of the emptiness of the land

Capability Physical infrastructure Abingdon

Local gov’t Take advantage of the landscape to use as a test range & airspace that will draw in the R&D companies and that technology will inform the educators of ways to train students & perpetuate further growth

Capability Physical infrastructure Abingdon

Academia Can provide interns for cheap labor Capability Human/intellectual re-sources

Abingdon

Academia Agree that it would be cheap labor to use community college students


Abingdon

Academia All three region community colleges collaborated to support larger enti-ties


Abingdon


C-11




Industry/EDA Some of the assets this area has in-clude Technology Council of SW VA worked w/all these college and Jack Kennedy and noted this as a priority of ours (13 county area), The community college are able to custom tailor training (Frontier came here b/c of that)-cooperate b/t colleges and businesses


Abingdon

Industry/EDA Crutchfield has 120 employees in SW VA


Abingdon

Industry/EDA Regarded as US leader in elec-tronic consumer equipment


Abingdon

Industry/EDA They are more than a retailer-they provide expert call support


Abingdon

Industry/EDA He has 60 experts in using drones that provide call-in support


Abingdon

Academia Small business council Capability Network/collabora-tion/culture

Abingdon

Industry/EDA Roanoke & valley share a lot of ad-vantages (VA Tech)


Abingdon

Industry/EDA VA tech is a huge research and tal-ent advantage


Abingdon

Industry/EDA Roanoke Valley is mfg center and maintained that specialty


Abingdon

Industry/EDA Speaks to advanced mfg Capability Human/intellectual re-sources

Abingdon

Industry/EDA Training pipeline Capability Human/intellectual re-sources

Abingdon

Industry/EDA They have had a variety of custom-ers (machine shop) w/~20 ppl (shop & engineers)(


Abingdon

Industry/EDA Centered on aircraft propulsion Capability Market Abingdon Academia There is a lot of resources in VA

tech of which there may not be wide-ranging knowledge


Abingdon

Academia A lot of research is being done in all spans (biology, DoD, commercial


Abingdon

Industry/EDA Add insurance to the supply chain b/c there is no one to underwrite the event

Challenge Market JMU

Industry/EDA They can’t get enough of the right kinds of engineers-Can’t get enough software engineers to ad-vance technology

Challenge Human/intellectual re-sources

JMU

Industry/EDA Young developers don’t want to go to college anymore b/c they don’t need it and it delays their earning time


JMU

C-12




Industry/EDA gov’t requirement for degrees dis-suades talent from pursuing gov’t work;


JMU

Academia You need the people who can do what you need to be done


JMU

Academia Students have not heard of the op-portunities

Challenge Training/Education JMU

Academia Language courses-JMU uses GMU instructor for class but doesn’t work for STEM


Industry/EDA (Entrepreneurs) afraid of getting ideas stolen

Challenge Network/collabora-tion/culture

JMU

Industry/EDA Difficulty in assessing State as a venture capital (VA does well but killed by MA and CA)

Challenge Finance/Tax JMU

Industry/EDA Big VCs want a continual flow of ideas and deals


JMU

Industry/EDA Start-ups need collaboration Challenge Network/collabora-tion/culture

JMU

Industry/EDA Flow of information in Challenge Network/collabora-tion/culture

JMU

Industry/EDA NSF (National Science Foundation) is looking for good ideas


JMU

Industry/EDA VA culture is not the same and deal flow not the same (re: profes-sors/researchers getting to keep their developments for commerciali-zation)


JMU

Industry/EDA VA needs to put incentive to profes-sors to work w/start ups


JMU

Academia Academic world thought still re-volves around discouragement of professors working outside


JMU

Academia It is hard to compete against grants (to make up the difference b/t grants and salary


JMU

Industry/EDA Tax incentives-bringing new but not for existing expansion or start-ups

Challenge Finance/Tax JMU

Industry/EDA Engineering & Recruitment really hard in VA and get them to stay


JMU

Industry/EDA Making the education exciting-it’s important to get support to under-stand there’s more to the curricu-lum-awareness of opportunities available through the engineer de-grees


Industry/EDA Get kids excited w/the education and level of education


Industry/EDA NM has no regulations Challenge Legislative/Regulatory JMU Industry/EDA You have to compete w/NM Challenge Market JMU


C-13




Academia What does the future look like-how do they plan and articulate this to HS students (recruits)

Challenge Training/Education Danville

Industry/EDA Legislative has been fairly favorable but pressure to tighten this will con-tinue

Challenge Legislative/Regulatory Danville

Industry/EDA Courage from policy makers-this is a disruptive tech (concerned about privacy, etc.) and must be dealt


Industry/EDA Frustrations of small businesses are many in this environment

Challenge Other Danville

Industry/EDA Difficult in VA b/c they are bigger players in this state that command attention


Danville

Industry/EDA When you’re a start-up, no one be-lieves what you say (dismissive)


Danville

Local gov’t Contract Laws and policies make procurement from small businesses very difficult


Local gov’t Almost impossible for small busi-nesses to contract w/state & local gov’ts


Local gov’t There are no small companies on the state contract vehicles


Industry/EDA More successful competitors have a lot of contract (administrators, not operators)


Industry/EDA Contracts are “licenses to learn” Challenge Legislative/Regulatory Danville Industry/EDA Small businesses can’t afford to

deal w/Contract management Challenge Finance/Tax Danville

Industry/EDA High barriers of market entry Challenge Finance/Tax Danville Industry/EDA Need a guy to call to negotiate the

contract Challenge Legislative/Regulatory Danville

Industry/EDA Bandwidth in distressed areas is more expensive than relocating to metro areas

Challenge Physical infrastructure Danville

Industry/EDA The infrastructure support in small counties comes at a premium cost

Challenge Physical infrastructure Danville

State gov’t There are a lot of administrative challenges that is time consuming


Industry/EDA It is hard to compete Challenge Legislative/Regulatory Danville Industry/EDA Small companies getting $200 to

$300K seed is a challenge in VA so they go elsewhere

Challenge Finance/Tax Danville

Industry/EDA The spirit and energy need to be-come part of VA’s culture


Danville

Industry/EDA If you think VA can change policies and do what needs to be done, it will be a tough fight but it will be worth it


Danville

C-14




Industry/EDA It involves cultural change-bureau-cracy needs to be pushed aside


Academia There is a discrepancy b/t urban and rural


Academia The closer you get to the border, the poorer you become b/c of some of the policies


Industry/EDA The subject matter is difficult Challenge Market Danville Industry/EDA Need to articulate why this industry

is important to VA Challenge Market Danville

Industry/EDA Large Danville contractor milked the system and bypassed his company


Industry/EDA Big companies kill innovation and still get the incentive packages


Danville

Industry/EDA Smaller companies face customer requirements and need to be trained to work in a specific environ-ment (e.g., experience in utilities)


Industry/EDA For instance, you need qualified linemen in the craft


Danville

Industry/EDA What utility companies are looking for needs to be put to college


Industry/EDA Users don’t know what is available re: UAS capabilities

Challenge Market Danville

Local gov’t He doesn’t understand how UAS will drive employment


Local gov’t Where are the jobs are coming from?


Industry/EDA In the modern economy, a company can provide no jobs, but put the lo-cation on the map


Local gov’t He needs to see something that in-dicates where the job growth origi-nates


Industry/EDA UAS industry is more complex than many others


Industry/EDA It is a risk-an investment may reap 4 jobs or a much greater upside


Industry/EDA What are the barriers-we are talking about Beyond Line of Sight


Industry/EDA FAA is not small business friendly Challenge Legislative/Regulatory Danville Industry/EDA Need to get this correct b/c if one

party commits an accident, all suffer Challenge Other Danville

Industry/EDA The real issue is to grow the entre-preneurial capability, not just UAS.


Danville

Industry/EDA Trade association would be inter-ested in the road blocks being faced re: legislation


State gov’t VA needs to act quickly and capital-ize on its current position


Virginia Beach


C-15




Federal gov’t Main challenge is to understand the picture and regulations at lower level (safety of flight)

Challenge Legislative/Regulatory Virginia Beach

Federal gov’t Airspace is the biggest challenge to meet FAA req’ts


Federal gov’t Beyond line of sight operations is a challenge re: policy and guidance


Federal gov’t regulatory guidance is lagging tech-nology


Federal gov’t Frequency allocation to ensure bandwidth is allocated to ensure re-mote signals (FCC)


Federal gov’t Ran into stove pipes between differ-ent areas, however they are realiz-ing the stovepipes are hindering everyone


Virginia Beach

Federal gov’t Put together a menu of NASA capa-bilities across VA


Virginia Beach

Federal gov’t One thing not discussed is National Security & criminal aspects that we will need to get ahead


Federal gov’t Support STEM but nothing specific to UAS that generates a generation of understanding

Challenge Training/Education Virginia Beach

Industry/EDA couple of clients (NASA engineer recognizes a client need, but he is headed to ND to connect with cus-tomers)

Challenge Market Virginia Beach

Industry/EDA Price & time is detrimental in VA for UAS

Challenge Finance/Tax Virginia Beach

Federal gov’t How do we execute to say we’re better than ND?


Virginia Beach

Federal gov’t Create and communicate a one-stop-shop in VA


Virginia Beach

Industry/EDA Everyone is going to start doing this at the end of the month


Industry/EDA ND has led it through investment Challenge Finance/Tax Virginia Beach

Federal gov’t with 107 out, this will accelerate Challenge Market Virginia Beach

Industry/EDA Figure out to take a perspective to attract the things they need


Industry/EDA Business needs business Challenge Market Virginia Beach

Industry/EDA Strike a balanced approach busi-ness projects and government


Industry/EDA Costs a lot of money to use govern-ment testing sites


State gov’t How do we reach out to the people in Silicon Valley VCs


C-16




State gov’t Getting more VCs Challenge Finance/Tax Virginia Beach

Federal gov’t Challenge is getting spillover from commercial world b/c the frames are different


Federal gov’t Baseline tech is the same, but USAF needs are very different from commercial space


Federal gov’t Need over-land space to run test Challenge Physical infrastructure Virginia Beach

Federal gov’t Try to find the path of least re-sistance

Challenge Other Virginia Beach

Federal gov’t Why isn’t the state making VDOT to use UAS for inspections so there is a market?


Industry/EDA FAA regulations Challenge Legislative/Regulatory Virginia Beach

Industry/EDA What’s inspiring the children to as-pire to be UAS

Challenge Training/Education Virginia Beach

Industry/EDA Policy is the largest hindrance Challenge Legislative/Regulatory Virginia Beach

Industry/EDA Still confusion re: where some can and can’t fly


State gov’t The technology zone allows locality to set parameters w/out state in-volvement


Industry/EDA Capital is always king-how do we pay for everything?


Local gov’t Bring Aurora flight sciences to the region do business

Challenge Market Abingdon

Local gov’t Unhappy with $$ going to Wallops Challenge Finance/Tax Abingdon Local gov’t Unable to get Southwestern Region

funds Challenge Finance/Tax Abingdon

Local gov’t FLIRTY(?) had a portion of the funds

Challenge Finance/Tax Abingdon

Local gov’t Workforce is the key to attracting these companies. They don’t want to come to the region if they can’t get pilots.


Abingdon

Local gov’t Make this region part of the Com-monwealth-don’t give it all to Wal-lops


Abingdon

Academia Challenges: Larger Aircraft, control-ling multiple aircraft. Line of sight

Challenge Legislative/Regulatory Abingdon

Academia Barriers-geography and the lack of coordination


Abingdon

Academia VCSS hasn’t bought into the UAS program

Challenge Training/Education Abingdon

Academia A lot of stuff technology-wise to un-derstand



C-17




Local gov’t Providing zero money to entrepre-neurs


Local gov’t There has to be a source re: Capital Challenge Finance/Tax Abingdon Local gov’t Do the educators really know what

to teach Challenge Training/Education Abingdon

Industry/EDA They are always competing with themselves


Abingdon

Local gov’t Virginia is not high in R&D, espe-cially in this region


Abingdon

Academia VEDP-lack of incentives a topic Challenge Finance/Tax Abingdon Academia Those who are educating students

Held to VCCS to build a curriculum Challenge Training/Education Abingdon

Academia Need to know what these jobs are that he should train his students


Academia If they are training for jobs, they need a common theme


Abingdon

Industry/EDA Companies helping out are on the West Coast


Industry/EDA Would love to work w/Aurora but there has been barriers


Industry/EDA Spoke w/NASA Langley, but fund-ing was not there


Academia Barriers of entry (seed money) for the market and VA is not good in helping finance entrepreneurs


Academia Remoteness is a barrier for attrac-tion of companies, but also a strength to allow “crashes”

Challenge Physical infrastructure Abingdon

Academia Look are the technologies that they will need to have in five years


Local gov’t MAAP is viewed as a VA Tech pup-pet


Abingdon

Local gov’t What kind of superstructure does the Commonwealth need so doesn’t appear as a VA Tech initiative


Abingdon

Academia How do we pull this together? Challenge Network/collabora-tion/culture

Abingdon

Academia Who is the glue in the Common-wealth?


Abingdon

Academia SEN Warner expected MAAP to be the glue, but not enough funding and that’s not what universities do.


Abingdon

Academia The best students may not be think-ing logically when they pick where they work


Abingdon

Academia They don’t have the access to the resources at VA Tech


Abingdon

State gov’t We are not going to get a $30M like ND or NY

Constraint Finance/Tax JMU

Industry/EDA Section 43 written for UAS Constraint Legislative/Regulatory JMU

C-18




Industry/EDA FAA policy is going to drive innova-tion

Constraint Legislative/Regulatory JMU

Industry/EDA Funding pressure due to earmark cancellation killed the effort

Constraint Finance/Tax Danville

Academia Barriers-Cost is a barrier, commu-nity colleges are more small UAS focused (flying, mfg, design) helps mitigate the cost,


Industry/EDA Conservative state (fiscally, so-cially, & culturally) that may not ac-commodate a “disruptive” tech

Constraint Network/collabora-tion/culture

Danville

Industry/EDA Everything done has been to bring mfg that isn’t the same that left 40 years

Constraint Network/collabora-tion/culture

Danville

Industry/EDA Grants are sometimes conditioned not to use/announce b/4 governor is able to announce


Local gov’t To get money, they have to be con-vinced that employment will happen


Local gov’t A case needs to be built for every loan or investment


Industry/EDA Hampton Roads is dominated by DoD

Constraint Market Danville

Industry/EDA The way FAA works won’t change Constraint Legislative/Regulatory Danville State gov’t Money is going to be tight in VA Constraint Finance/Tax Virginia

Beach Federal gov’t whatever you do at the commercial

level, there must be a civil-military transparency (resiliency coordina-tion must be enabled and an ongo-ing dialogue)

Constraint Legislative/Regulatory Virginia Beach

Federal gov’t Concern about controlling the plat-forms (airspace or collision avoid-ance)


Federal gov’t Protection of individual rights is a constraint


State gov’t Counter side will involve a lot of R&D

Constraint Market Virginia Beach

Federal gov’t sense and avoid is not there-need to use chase planes;


Federal gov’t security and classification is some-thing that needs to be dealt with


Federal gov’t can’t get involved into legislative ac-tions


Federal gov’t won’t get into binding relationships Constraint Network/collabora-tion/culture

Virginia Beach

Industry/EDA Commercial based is difficult in VA b/c of regulations


Industry/EDA Wallops is not a solution for com-mercial entities w/out DoD backing



C-19




Industry/EDA don’t think larger UAS will be com-mercially viable


Federal gov’t There are national brands that are looking for communities (rural) that want to be a test site for delivery


Industry/EDA There is difficulty to find the funding Constraint Finance/Tax Virginia Beach

State gov’t Prefer to do things w/out being told b/c once it is code, it will never leave


State gov’t Be careful the way you push legis-lation


Industry/EDA 107 rule makes a big difference; it has to maintain visual line of sight, so it’s not that big of a game changer


Academia $850K will not go far Constraint Finance/Tax Abingdon Local gov’t There is no real runway (i.e., fund-

ing justification?) for Tobacco com-mission to do R&D

Constraint Finance/Tax Abingdon

Local gov’t The problem w/gov’t processes is its 9 to 12 months


Academia Community Colleges draw from Dif-ferent pool of money from the K12


Academia His training is limited to his region and his region only.

Constraint Training/Education Abingdon

Industry/EDA Average age 14 to 30 years old (re: drone racing competition partici-pants)

Opportunity Human/intellectual re-sources

JMU

Industry/EDA Make-Buy (buy components from subs as opposed to making every-thing in-house)

Opportunity Network/collabora-tion/culture

JMU

Industry/EDA Don’t always need gov’t support to work w/industry & academia


JMU

Industry/EDA Built their own infrastructure to sup-port the competition

Opportunity Other JMU

Industry/EDA Costs a lot to go to NM Opportunity Finance/Tax JMU Academia Demand is high for skills and capa-

bilities re: UAS Opportunity Human/intellectual re-

sources JMU

Academia Agriculture is an interesting oppor-tunity

Opportunity Market Danville

Industry/EDA A lot of agencies looking for test center

Opportunity Physical infrastructure Danville

Industry/EDA What is industry doing now is com-panies putting resources into UAS


Industry/EDA Part 107 will change the way com-panies consider UAS use and get more involved


C-20




Industry/EDA Technology work is causing a lot of interest (good & bad) and has caused a sense of urgency


Industry/EDA Pilot projects to use facilities (shut down military bases for example)


Industry/EDA Actively involved in supporting VA test range initiative


Industry/EDA They have 3000 orders to do re-mote inspections (commercial) and Dallas PD, movie production


Industry/EDA The businesses is here already Opportunity Market Danville Industry/EDA No one is waiting for Part 107 Opportunity Market Danville Industry/EDA FAA has given some businesses

latitude prior to 107 Opportunity Legislative/Regulatory Danville

Industry/EDA They are doing businesses every-where but VA


Industry/EDA Silicon Valley is too expensive (la-bor is extensive)

Opportunity Finance/Tax Danville

Industry/EDA One experience that is typical for SBs-were going to participate an event but couldn’t get any travel costs to support, so NASA did it at a 5x costs


Industry/EDA Applications and education/devel-opment of applications will drive the market

Opportunity Training/Education Danville

Industry/EDA Many of their new customers don’t care about the UAS, but putting their systems on UAS


Local gov’t Prince Edward has money to loan to small businesses


Industry/EDA It is a risk that an individual com-pany will take off, but there will be A COMPANY that explodes


Industry/EDA Lots of different elements that can be included like data management, UAS mfg, design,


Industry/EDA There is a chance to build a center of gravity in this region


Industry/EDA It is a different market-UAS is a world-wide market


Academia Sustainability of hardware is im-portant in UAS (crashes)


Academia Human Factors and the teaming/in-tegration of necessary skill sets (e.g., Lineman & pilot for power-lines)


Danville

State gov’t VDOT will be a customer at some point



C-21




Federal gov’t major CA company may move test-ing to VA

Opportunity Market Virginia Beach

Federal gov’t market moving quickly (on hobbiest side) but none built in America


Federal gov’t working w/French to maybe move to VA


Federal gov’t Triant program-want to land this at Wallops


State gov’t Unmanned is a game changer Opportunity Market Virginia Beach

State gov’t VA is perfectly positioned to be a leader in all realms


State gov’t Industry is transformative to econ-omy re: workforce (e.g., truck driver turns into a “pilot”)


State gov’t R&D, Production, Application op-portunities in VA


Federal gov’t Assist in Environmental, Agricul-ture, Commercial apps is limitless


Federal gov’t A lot of commercial opps (mfg) Opportunity Market Virginia Beach

State gov’t Interest from military in using the Wallops runway


State gov’t DHS (CBP and USGS) have signifi-cant unmanned office & looking for test and evaluation center


Federal gov’t NATO does not have an overarch-ing UAS vision


Virginia Beach

Federal gov’t started w/Karen Jackson to under-stand what impact they can have on VA


Virginia Beach

Federal gov’t KJ told them unmanned systems is an area of impact


Federal gov’t Eastern shore farmers would like to use the land


Federal gov’t counter piece is big in their domain Opportunity Market Virginia Beach

Industry/EDA reincarnation of cell phone tech Opportunity Market Virginia Beach

Industry/EDA faster growing industry Opportunity Market Virginia Beach

Industry/EDA Opp w/Triant Opportunity Market Virginia Beach

Industry/EDA His hub wants to be the pillar of the CoE


Virginia Beach

Industry/EDA 107 is the entry and make it an op-portunity


Industry/EDA Wallops wants DoD or government or contractors to use the space

Opportunity Physical infrastructure Virginia Beach

C-22




Federal gov’t Developing operational tactical ca-pabilities is the focus


Federal gov’t There is opportunity in this area Opportunity Market Virginia Beach

Federal gov’t Smaller threats and understanding how they work


Federal gov’t Bigger UAS from the threat per-spective are under control


Industry/EDA If the group understands the threat and support an initiative to develop security standards

Opportunity Legislative/Regulatory Virginia Beach

Federal gov’t Understands the growth of knowledge is faster than they can pace and wants to leverage the commercial world’s


Virginia Beach

State gov’t Legislation included UAS CoE and Business Accelerator

Opportunity Other Abingdon

Local gov’t FLIRTY is delivering pizzas in New Zealand

Opportunity Market Abingdon

Local gov’t Could get firms to come here w/in-centive funds

Opportunity Finance/Tax Abingdon

Local gov’t Talking to EASIS systems to do electronics mfg for DoD


Local gov’t Israeli firm wants to use technology for abandoned mines land


Local gov’t They have a “quiet” airspace. (i.e., little traffic)

Opportunity Physical infrastructure Abingdon

Academia Working w/Dominion Power re: power line inspection


Academia Emergency response support & looking at a larger capability in dis-aster response


Academia Investigating work w/Insurance companies re: damage assessment


Academia Investigating package delivery Opportunity Market Abingdon Academia Mt. Empire been looking at it for 2

½ yrs as a “hobby” and became a bigger

Opportunity Training/Education Abingdon

Academia Spoke w/Flirtey to develop a ~24 credit program that is yet to be ap-proved by VA (VCCS-Virginia Com-munity College System)

Opportunity Training/Education Abingdon

Academia Huge potential & need Opportunity Human/intellectual re-sources

Abingdon

Industry/EDA ID companies in the arena who have been approved for Phase 1 and let them know about


Industry/EDA Maintain communication what the needs are and draw it down here


Abingdon


C-23




Industry/EDA Matchmaking Opportunity Network/collabora-tion/culture

Abingdon

Industry/EDA When you have an idea, call her so she can help out


Industry/EDA IF they (Community Colleges) have a class on UAV, They are looking to hire more people


Abingdon

Industry/EDA Will help out some of the educa-tional facilities w/drones


Abingdon

Industry/EDA Mfg’s come to his center and de-liver training classes to his people


Abingdon

Academia Majority of students in their UAS classes are professional people who use UAVs in their jobs (realtor, deputies/LE)


Local gov’t Before the end of this year, real es-tate agents will use this technology


Industry/EDA UAS translates to advanced mfg Opportunity Market Abingdon Industry/EDA Extends beyond mfg, there is po-

tential for R&D and technology Opportunity Market Abingdon

Academia Growth is had by addressing these new technologies and work w/ researchers


Abingdon

Academia ND has some significant weak-nesses (e.g., weather)

Opportunity Physical infrastructure Abingdon

Academia ND has spun off what USAF was doing


Abingdon

Industry/EDA She wrote a white paper for Cincin-nati group (insurance Co.) so they would underwrite the event

Requirement Market JMU

Industry/EDA They (drone racing competitors/par-ticipants) want a park (e.g., loca-tion) to operate drones

Requirement Physical infrastructure JMU

Industry/EDA Recreational activities Requirement Market JMU Industry/EDA re: skill sets; Requirement Human/intellectual re-

sources JMU

Industry/EDA Connect industry w/in-grown talent Requirement Human/intellectual re-sources

JMU

Academia Career education Requirement Training/Education JMU Academia You need to create something cool Requirement Training/Education JMU Academia How do you help students connect

w/businesses? Requirement Network/collabora-

tion/culture JMU

Industry/EDA We need to market the assets of VA


Industry/EDA Part of the CoE should be a market-ing plan


Academia Coordinate the state’s marketing plan


Academia Hard for universities to inform the governor’s office in real time

Requirement Other JMU

C-24




Industry/EDA Physical location is irrelevant-the Commonwealth is the hub

Requirement Network/collabora-tion/culture

JMU

Industry/EDA Areas where critical skill sets needed-the best students at schools are committed b/4 they graduate

Requirement Human/intellectual re-sources

JMU

Industry/EDA Set up an internships (subsidized) to make them attractive


JMU

Academia In state companies need to offer more internships


JMU

Industry/EDA Figure out how to get industry more engaged w/Universities


JMU

Industry/EDA If industry has a critical fill-they need to call a university


JMU

Industry/EDA Internships to keep talent around Requirement Human/intellectual re-sources

JMU

Industry/EDA Need broadband access w/online development capacity to allow young employees to work remotely

Requirement Physical infrastructure JMU

Industry/EDA Expediting intellectual property from universities


JMU

Industry/EDA Start ups have difficulty connecting w/universities


JMU

Industry/EDA Change culture from the top Requirement Network/collabora-tion/culture

JMU

Industry/EDA Governor & Secretary can talk to the provost


JMU

Industry/EDA Reach out to private companies Requirement Network/collabora-tion/culture

JMU

Academia You have to put money behind changing culture (to incentivize re-searchers & academia)

Requirement Finance/Tax JMU

Industry/EDA UAS Requirement Training/Education JMU Industry/EDA Minimal regulations Requirement Legislative/Regulatory JMU Industry/EDA Let the entrepreneurs “crash” their

stuff and learn Requirement Legislative/Regulatory JMU

Industry/EDA Encourage tax incentives to “take care of our own” to help them flour-ish

Requirement Finance/Tax JMU

Industry/EDA Minimum regulation to allow indus-try to grow

Requirement Legislative/Regulatory JMU

Industry/EDA Need to ensure pilots are certified (CERTIFICATION)


Industry/EDA Link b/t academia and industry: models exist (Training (mfg) b/t in-dustry and community colleges)


JMU


C-25




Industry/EDA CMU, Duke, and UK had processes to take cool stuff and get it out to small companies (licensing)-Doesn’t seem to be the case in VA universities


JMU

Industry/EDA Big companies look for innovative solutions-there has to be an incen-tive to get it out there


JMU

Industry/EDA SWARMING is a legislative prob-lem (1 person controlling multiple vehicles is a problem)


Industry/EDA Most crucial element is beyond line of sight issue


Industry/EDA Figure out the Beyond line of sight Requirement Legislative/Regulatory JMU Academia Need a clearing house to connect

people in the community and make them aware of each other


JMU

State gov’t Want the general assembly to stay out of this


Academia Best thing is the legislature did was “stay out of it”


Academia Want a product for industry (i.e., students)


Danville

Industry/EDA States are using UAVs to inspect bridges and survey-VA could do more with this at state and local lev-els

Requirement Market Danville

Industry/EDA Look at opps from budget stand-point to help out schools and indus-try

Requirement Finance/Tax Danville

Industry/EDA Commitment-won’t happen tomor-row, but will in a couple of years; jobs won’t come immediately but will come big; need to stay the course

Requirement Other Danville

Industry/EDA Capital-it will take money from in-dustry (and the state & local) in terms of infrastructure to support; tax breaks for entrepreneurs; bigger companies to do R&D would like tax breaks


Industry/EDA Recommendation that few new laws are introduced (laws always make things harder); most chal-lenges can be dealt with through existing framework

Requirement Legislative/Regulatory Danville

Industry/EDA Keep an open environment for R&D (make it easier to do testing)


C-26




Industry/EDA Support universities and industries, make sure they are not competing against each other


Danville

Industry/EDA In order for this to work at all levels, information must be shared (i.e., how do the traffic lights work across jurisdictions, flying across counties)


Industry/EDA Terrific support from other states Requirement Network/collabora-tion/culture

Danville

Industry/EDA VA needs to support small busi-nesses (real small businesses) bet-ter who bring innovation much faster


Danville

Industry/EDA Start ups don’t care about tax breaks, more support from local gov’t


Industry/EDA VA Support would be capital, micro-capital (200 to 400K with a shorter processes), access to customers like law enforcement, infrastructure-there is no champion to help them navigate bureaucracy, capital doesn’t have to be grants-loans and investments are just as good


Industry/EDA They are at every test range but Virginia’s

Requirement Physical infrastructure Danville

Academia You need to have workforce availa-ble


Danville

Industry/EDA Micro loans would be powerful Requirement Finance/Tax Danville Industry/EDA State and regional and local con-

tracts that would be available for small businesses to bid (set asides for VA companies) would be a big draw


Industry/EDA Logistics and support to get into the air are expensive-seed money would assist and accelerate flying in VA


Industry/EDA Internet bandwidth limitations will hinder data delivery in real time

Requirement Physical infrastructure Danville

Industry/EDA VA hasn’t figured out its elevator speech


Industry/EDA There are no tools in state toolbox to help SBs


Danville

Industry/EDA Need to realize that employees don’t have to be at a desk some-where to get credit


Industry/EDA Need to have an honest conversa-tion w/Governor & tobacco commis-sion



C-27




Industry/EDA Most economic development peo-ple are using the wrong metrics


Industry/EDA Don’t use mfg as the main metric b/c it is not appropriate


Industry/EDA If only mfg is only being helped, this is not applicable to modern indus-tries


Industry/EDA Need to plant lots of acorns and not transplant big trees (i.e., grow busi-ness organically and not simply re-locate a big business)


Local gov’t Help localities who can’t attract big companies grow and attract the small businesses


Industry/EDA Perception is the old business mod-els isn’t happening in UAS industry


Danville

Industry/EDA The day of recruiting a large plant is not modern b/c big companies now sub out the components


Danville

Industry/EDA Have a clearinghouse to access people and collaborate


Danville

Federal gov’t Hampton Roads-how big are your AVIA chapters? Make sure those organizations are layered in as stakeholders


Virginia Beach

Federal gov’t make calls in terms of marketing to bring more business to the state


Virginia Beach

Federal gov’t make sure FAA gives VA the air clearance

Requirement Legislative/Regulatory Virginia Beach

Federal gov’t Need to establish who is a leader Requirement Network/collabora-tion/culture

Virginia Beach

Federal gov’t Airspace needs to be coordinated Requirement Legislative/Regulatory Virginia Beach

State gov’t make sure we are making the in-vestments that can exploit these opportunities

Requirement Finance/Tax Virginia Beach

State gov’t R&D has to be a part of the plan Requirement Network/collabora-tion/culture

Virginia Beach

Federal gov’t Don’t think of NASA as a customer but more a provider of technology


Virginia Beach

Federal gov’t they need something to keep it go-ing and made Daniel Morris the belly button to keep the consortium running


Virginia Beach

Industry/EDA Mfg is big step to get past prototyp-ing


Virginia Beach

Industry/EDA Great opp to share (re: Shared Maker Space)


Virginia Beach

Industry/EDA We can have all the tech & assets, but powering this is access to talent


Virginia Beach

C-28




Industry/EDA Talent acq and retention is im-portant to draw companies


Virginia Beach

Industry/EDA Creating an ecosystem and place where companies want to be


Virginia Beach

Industry/EDA Connect and collaborate and lever-age the assets and capabilities quickly


Virginia Beach

Industry/EDA connect our universities together and provide conduit where compa-nies can access


Virginia Beach

Industry/EDA Get students to stay after they grad-uate


Virginia Beach

Industry/EDA Create an orb of awesomeness that connects UAS workers at the pro-ject level-need to build it out-con-nects works with relevant knowledge


Virginia Beach

Federal gov’t Get him a list of specifics of what’s needed

Requirement Other Virginia Beach

Federal gov’t Need communities to raise their hands


Virginia Beach

Federal gov’t Need to have a proposition in VA to do 10% of VDOT inspections to UAS

Requirement Market Virginia Beach

Federal gov’t Legislatures need to make sure FAA clears airspace

Requirement Legislative/Regulatory Virginia Beach

State gov’t Give a list of incentives to draw mfg Requirement Market Virginia Beach

State gov’t Give the legislatures a list and they will tell what is and not feasible


Industry/EDA Go to every community to volunteer to be a trial for delivery


Virginia Beach

Industry/EDA there needs to be initiative for mar-ket development

Requirement Market Virginia Beach

Industry/EDA Create connection between cus-tomers and providers


Virginia Beach

Industry/EDA Establish vouchers to absorb test site costs


Industry/EDA Workforce training in community colleges for pilots & standards

Requirement Training/Education Virginia Beach

Industry/EDA Technology standards Requirement Legislative/Regulatory Virginia Beach

Industry/EDA Access to capital and business ac-celerators


Industry/EDA Seed funds Requirement Finance/Tax Virginia Beach

Industry/EDA Commonality around Commission recommendations


Virginia Beach


C-29




State gov’t Is there a role, outside of funding, possibly coordination that CoE could perform


Virginia Beach

State gov’t Let him know issues to make him aware of the situation


Federal gov’t Need state to act and looking for funding


State gov’t WE need to get behind a uniform voice to voice to Mark Warner & others


Virginia Beach

State gov’t Think about whether we should do a state-wide Roundtable


Virginia Beach

Industry/EDA Connecting to each other Requirement Network/collabora-tion/culture

Virginia Beach

Industry/EDA Connect where the tech, custom-ers, talent, and suppliers are


Virginia Beach

Local gov’t Want the VA Tech to approve his programs


Abingdon

Academia Focusing on Beyond Visual line of sight

Requirement Legislative/Regulatory Abingdon

Academia Get clarification from FAA re: regu-lations when it comes to education use of drones


Academia Lack of clarity in the rules-no one gives clear pathway re: education


Academia Money would be great from the re-search standpoint

Requirement Finance/Tax Abingdon

Local gov’t Virginia Economic Development Partnership (VEDP) needs to give attention to this area


Local gov’t VEDP does nothing in this arena. Not in the game. Get serious to market VA to this state.


Academia Add incentive for companies to come here


Academia Need funding to train Requirement Finance/Tax Abingdon Academia Clear red tape to put drones in air

for educational purposes Requirement Legislative/Regulatory Abingdon

Local gov’t Need to have collaboration among the different centers that they don’t have today


Abingdon

Industry/EDA Company collaboration is key Requirement Network/collabora-tion/culture

Abingdon

Academia Need to connect VA Techs students with companies like they do in Sili-con Valley


Abingdon

Local gov’t Look at VA Department of Aviation Requirement Legislative/Regulatory Abingdon Academia Breakdown the barriers for Commu-

nity Colleges to work w/other 4 year universities


Abingdon

C-30




State gov’t Think about the whole supply chain Vision Market JMU State gov’t Gather regional perspective & pre-

pare for 2017 legislative session Vision Other JMU

State gov’t What’s the biggest bang for the buck? (re: Commonwealth invest-ment)

Vision Other JMU

State gov’t Come away w/actionable steps (re: Roundtable session)

Vision Other JMU

State gov’t Start with a vision-What’s success going to look like in 3 to 5 years

Vision Other JMU

State gov’t What are the primary strengths in this region? Key assets? What are you doing now? What are your bar-riers? What would you like to see VA do?

Vision Other JMU

Industry/EDA Asked via email survey about what is the next thing (to drone racing competitors)

Vision Market JMU

Industry/EDA They are looking for Recreation Ed-ucation Training funding-”come and learn to fly a drone”

Vision Market JMU

Industry/EDA They are writing a grant & creating partnerships

Vision Finance/Tax JMU

Industry/EDA Maintenance is a key (for educa-tion)-Learn to fix a drone

Vision Training/Education JMU

Industry/EDA (Local community college) Working on curriculum (Drones 101)


Industry/EDA Teaching labs for flying Vision Training/Education JMU Industry/EDA Retail (at resorts & schools) Vision Market JMU Industry/EDA Maintenance (need to maintain &

repair vehicles, etc.) Vision Market JMU

Industry/EDA Take econ development or educa-tion: looking for pilots have practical application (engineering) to teach (MFGs looking for this) to teach SOCOM, etc. (flying down chim-neys, in bldgs., etc.)


Industry/EDA Vision Market JMU Industry/EDA Yes (in response to “Have you con-

sidered 3D manufacturing to re-place props?”)

Vision Market JMU

Industry/EDA doing a drone race under the guise of an airshow (piggyback) re: Insur-ance Challenge

Vision Market JMU

Industry/EDA Get into the aviation insurance busi-ness

Vision Market JMU

Industry/EDA younger generation have ideas re: technology (e.g., goggles),

Vision Market JMU

Industry/EDA Innovation Vision Market JMU


C-31




Industry/EDA Everyone is building something in their garage

Vision Network/collabora-tion/culture

JMU

Industry/EDA You don’t build it all; you find smart people and buy the technology and make it your own


JMU

Industry/EDA Cooperative connected industries to deal with Make-Buy


JMU

Industry/EDA They are looking at DARPA tech (and others) and using the tech de-veloped under their contracts and go commercial (productization)


JMU

Industry/EDA ALIAS-reduce the pilot workload w/tech (robotics)

Vision Market JMU

Industry/EDA Pilots want tech that can reduce workload (but don’t want a robot flyer, but a robot copilot-checklist); smart eyes that look over your shoulder

Vision Market JMU

Industry/EDA They have 60 former interns work-ing as engineers

Vision Human/intellectual re-sources

JMU

Industry/EDA Incubator Concept-bring in entre-preneurs and expose their technol-ogy to the Raytheons, etc. (big companies)


JMU

Industry/EDA Digital engineer-dealing w/digital data & cyber understanding


JMU

Industry/EDA Pushing ABET to consider this trend


Academia Data as a weapon Vision Market JMU Academia Working on a systems engineering

as a focus Vision Market JMU

Academia Data analytics & forensics Vision Training/Education JMU Academia Drone management Vision Training/Education JMU Industry/EDA Take courses for Data Science

(JHU) for data science Vision Training/Education JMU

Industry/EDA CoE can be used to marshal this talent?


JMU

State gov’t Yes; CoE can be used (to marshal talent w/in VA)


JMU

Academia Grow local pipeline Vision Human/intellectual re-sources

JMU

Academia Avoid sending funding out of state by encouraging collaboration w/in in-state colleges


JMU

Academia COLLABORATION Vision Network/collabora-tion/culture

JMU

Academia The challenge is bigger than a tech-nical solution-you need public rela-tions, writers, etc. to work together


JMU

C-32




Academia These kind of integrated approach and technology to get ahead of the pack; this is an up and coming mar-ket


JMU

Academia WE could be a top 5 state Vision Other JMU Academia Have a partnership w/the country of

Columbia Vision Network/collabora-

tion/culture JMU

Academia VA is the best kept secret Vision Other JMU Academia Let everyone steal the ideas to rise

the tide Vision Network/collabora-

tion/culture JMU

Academia Big fear of entrepreneurs b/c steal-ing ideas, but the difficulty is not the idea, but the work itself


JMU

Industry/EDA They all have VC hubs centered around a university program


Industry/EDA Create a VC hub Vision Finance/Tax JMU Industry/EDA Demoday across the different uni-

versities Vision Network/collabora-

tion/culture JMU

Academia Working together by collaborating a proposal across universities (to compete w/MITs)


JMU

Industry/EDA Georgia Tech vs. VA Tech (com-parison)


Industry/EDA Georgia Tech has a research insti-tute (GTIR)


Industry/EDA Drone air ships for shipping Vision Market JMU Industry/EDA How do you compete w/Google,

etc. re: (Workforce talent recruit-ment)?


JMU

Industry/EDA Penn state gave away Intellectual Property


JMU

Industry/EDA MIT doesn’t pay much b/c they en-courage professors to work w/start ups


JMU

Academia MIT mash-ups: Business guys come up w/how to make $$ from ideas, but engineers come up w/the idea itself


JMU

Industry/EDA Graduated Oklahoma State Univer-sity (ME & Aerospace)


Industry/EDA Competitions that was attended by private industry (cap stone project)


JMU

Industry/EDA OSU made a SpeedFest competi-tion


JMU

Industry/EDA OSU started a UAS masters/PhD program


Industry/EDA Covers the business aspect (entre-preneurial)


Industry/EDA How to build large aircraft Vision Training/Education JMU Industry/EDA Students going to college Vision Training/Education JMU


C-33




Industry/EDA Do away from hands-on training Vision Training/Education JMU Industry/EDA Do you need HS to push college on

kids? Vision Human/intellectual re-

sources JMU

Industry/EDA Airships & Next big thing w/Swarm-ings

Vision Market JMU

Industry/EDA Limited to aerial loses a lot with other systems (marine, ground)-don’t ignore

Vision Market JMU

Industry/EDA OSU (Oklahoma State University) Vision Training/Education JMU Industry/EDA Possibility to make VA a hub is ex-

citing and important Vision Market JMU

Industry/EDA UAS does not have a big hub yet Vision Market JMU Industry/EDA A lot of Lockheed’s tech came from

small companies or academia Vision Human/intellectual re-

sources JMU

Industry/EDA Lockheed came up w/Center of In-novation to show off to businesses


JMU

Industry/EDA Holistic approach Vision Other JMU Industry/EDA Public safety integration of UAS Vision Legislative/Regulatory JMU Industry/EDA Beyond line of sight capability-re-

gionally deployed asset for disaster response; replace rotary crafts w/UAS


JMU

Industry/EDA Start off w/the assumption that the CoE is distributed


JMU

Industry/EDA Do not create a physical presence for the CoE


JMU

Academia Work together (VA wide) to create the environment (transactional) to get universities & companies con-nected


JMU

Academia Get universities & companies to col-laborate


JMU

Academia There is a research/faculty group in every area that industry should make a lasting relationship


JMU

Academia Work together to understand each other’s need


JMU

State gov’t Case Western has a strong Co-Op program


JMU

State gov’t Industry should consider Co-Ops Vision Human/intellectual re-sources

JMU

State gov’t Look at it from the cash flow & em-ployment perspectives


Academia WE have been looking at the younger population that is becom-ing the minority in the student world (community college)


JMU

Academia WE are talking about training at a completely different level


C-34




Academia Need to put together a proposal to attract industry

Vision Other JMU

Academia Want to see students hired by VA companies

Vision Training/Education Danville

Academia Looking to partner with companies like Aurora, Hazon, etc.


Danville

Academia Strengths-Vision is that the student will fly UAS as an entry job and then fly medium to large UAS, help companies scale up,

Vision Training/Education Danville

Academia Don’t get too focused on a specific UAS size b/c thinks that medium UAS will soon replace small if only for scale of economies (flight time)

Vision Market Danville

Industry/EDA Success is to make VA the preemi-nent UAS place in US


Danville

Industry/EDA Legal framework to use products and services just like they do with any other product today

Vision Legislative/Regulatory Danville

Industry/EDA Has an important aspect for the citi-zens of the state


Danville

Industry/EDA State & local governments use these products is a metric

Vision Market Danville

Industry/EDA VA should have a role in this Vision Market Danville Industry/EDA Relocated here ~ 3years ago

through Warner initiatives Vision Network/collabora-

tion/culture Danville

State gov’t Make Fort Pickett a training center Vision Network/collabora-tion/culture

Danville

Industry/EDA Develop an ecosystem of entrepre-neurs


Danville

Federal gov’t unmanned has a potential to be as transforming as cell phones (all three medias)

Vision Other Virginia Beach

State gov’t Think beyond the technology so VA is prepared to lead the way


Virginia Beach

State gov’t Think beyond tech develop, but think about how it will change VA and how VA can take advantage

Vision Market Virginia Beach

State gov’t the more we can capture the es-sence of testing, the more we can capture the mfg


Virginia Beach

State gov’t Would be great if military could share the tech used in classified ap-plications would help draw


Virginia Beach

State gov’t want to leverage VA resources Vision Network/collabora-tion/culture

Virginia Beach

State gov’t We are the cusp of something that is really great for VA economy



C-35




Federal gov’t too many people focus on the NOW and don’t take time to respond to what’s going to happen in the future


Federal gov’t everyone agrees that this is going to be big


Federal gov’t Want to see UAS focused programs in the area


Virginia Beach

Industry/EDA Common themes among compa-nies surveyed: (1) Develop market and customers, (2) Testing, (3) pathways around bureaucracy (streamline), (4) workforce develop-ment, (5) understand what tech is out there and connect companies and workers, (6) mfg and fabrica-tion is lacking (prototyping takes too long and no opps for iterative de-signs), (7) a voice w/legislatures and policy makers-frustration among small & medium busi-nesses-create a conduit where an-swers are made available (coordination), informal Hub for in-novation that centralizes collection of laws & regs, source of answers, vehicle for opportunities, incubation and acceleration, efforts to gener-ate content to generate ideas to uti-lize UAS, incorporate existing programs and integrate those pro-grams-recognize that a focus on UAS has to be maintained; coordi-nate & support other regional activi-ties-

Vision Other Virginia Beach

Industry/EDA Working w/Langley to use some un-derutilized space for other compa-nies-set up a voucher system to test w/out going through admin pro-cess and costs (e.g., insurance, etc.)

Vision Physical infrastructure Virginia Beach

Industry/EDA VA needs to focus on what’s next after 107


Industry/EDA Where do we position ourselves next


State gov’t Certification & safety should be a pillar of CoE

Vision Legislative/Regulatory Virginia Beach

State gov’t Requirements for operators Vision Legislative/Regulatory Virginia Beach

Federal gov’t Set the standards Vision Legislative/Regulatory Virginia Beach

C-36




Federal gov’t Training program or clearing house Vision Network/collabora-tion/culture

Virginia Beach

Industry/EDA What is the Vision:-show we can get together and take advantage of the opportunities


Virginia Beach

Industry/EDA Get together commercially and get the legislation one list


Virginia Beach

Industry/EDA Silicon Valley funds a lot of technol-ogy there

Vision Finance/Tax Virginia Beach

Industry/EDA local industry and VCs got together to reinvest with those small projects


Industry/EDA Similar to UAS advocate & asset coordinator


Virginia Beach

Industry/EDA Break down barriers Vision Network/collabora-tion/culture

Virginia Beach

Industry/EDA Fund the municipalities’ UAS capa-bilities


Industry/EDA State is not going to drive the mar-ket, they need to take out the road-blocks

Vision Legislative/Regulatory Virginia Beach

Industry/EDA UAS benefits will drive the market on its own


Local gov’t Traveling to recruit aerospace firms to be part of the Commonwealth


Abingdon

Academia Purpose is to help integrate UAS into the National Airspace system & grow UAS business in VA


Abingdon

Academia Focus on significant flights now ver-sus flight hours


Abingdon

Academia Main Focus Areas: (1) Certification of the vehicles-challenge is trans-late FAA regulations to

Vision Legislative/Regulatory Abingdon

Academia 3 key things: 1-Prioritize & focus on some key areas, (lack of Common-wealth approach is detrimental) There are strengths in VA and there is work to be done


Abingdon

Academia Take a look at Blackstone VA that is quietly adding jobs


Abingdon

Academia Lots of opportunities & need to work together is critical


Abingdon

Academia Go beyond just supporting/enabling research and DO research


Abingdon

Academia Trying to imbed UAS-related clas-ses into programs such as GIS pro-grams

Vision Training/Education Abingdon

Academia Included UAS in the tech camps Vision Training/Education Abingdon Academia Working to make sure the aware-

ness of the program is out there Vision Market Abingdon


C-37




Academia Vision for the region: Short-provide region w/regulatory environment and facilities; Long-to include man-ufacturers and draw them to the re-gion and employ the workforce;

Vision Other Abingdon

Academia Want to expose the kids to the tech-nology, Incorporate drones, virtual reality,


Academia Provide jobs for their students Vision Human/intellectual re-sources

Abingdon

Academia Partner w/folks so you can move forward


Abingdon

Academia 3 ½ years ago got interested in drone tech


Industry/EDA CoE-are you speaking of Brick & mortar?

Vision Physical infrastructure Abingdon

Consultant NO-re: Brick & Mortar CoE Vision Physical infrastructure Abingdon Academia Use of drones Vision Training/Education Abingdon Academia Use GIS tech Vision Training/Education Abingdon Local gov’t Do R&D for application Vision Market Abingdon Industry/EDA Glue for UAV is Jack Kennedy Vision Network/collabora-

tion/culture Abingdon

Academia Interested in Economic develop-ment in the area

Vision Other Abingdon

Academia Looking at different fields to train their students and keep them in the region


Abingdon

Academia Carnegie Mellon started the Robot-ics Center (possibly a model for VA Tech?)


Academia His magic wand SBIR-like program (Small Business Innovation Re-search) in VA for businesses and a technology transfer

Vision Finance/Tax Abingdon

Academia Seed money for companies Vision Finance/Tax Abingdon

C-38

D-1

Appendix D Virginia-Based Financial Sources and Incentives

Table D-1 shows the various finance sources in Virginia for possible support of UAS efforts.

Table D-1. Finance Sources

Source organization Financial source

type Accessibility constraints

Agricultural Best Management Practices Credit

State government Available to individuals and corporations that are en-gaged in agricultural production for market and have a soil conservation plan in place to provide significant im-provement to water quality in Virginia’s streams, rivers, and bays. To be eligible for the credit, the plan must be certified in advance by the local Soil and Water Conser-vation District

Commonwealth’s Development Opportunity Fund

State government Must meet COF eligibility requirements

Commonwealth Research Commercialization Fund

State government For-profit technology companies in Virginia commercial-izing qualified technologies, products, or services that have a reasonable probability of enhancing the Com-monwealth’s national and global competitiveness

Credit for Taxes Paid to Another State

State government Individual taxpayers; guidelines differ based on resi-dency status (e.g., resident, a nonresident, or part-year resident)

Economic Development Access Program

State government For manufacturing, processing, research and develop-ment facilities, distribution centers, regional service centers, corporate headquarters, government installa-tions or similar facilities, or other qualifying establish-ments that also meet basic employer criteria as determined by the VEDP; For costs associated with the qualifying establishment of the land, the building, and newly purchased manufacturing or processing equip-ment

Enterprise Zone Act Credit1 State government Qualified investors and job creators within designated Enterprise Zones and for eligible expenses incurred for taxable years beginning on or after January 1, 2012, but before January 1, 2017.

1 Effective July 1, 2005, the Enterprise Zone Act credit has been replaced with a grant pro-

gram administered by the Department of Housing and Community Development (DHCD). Certain businesses that signed agreements with DHCD prior to the expiration of the Enterprise Zone Act credit provisions may continue to claim the business tax credit and the real property improvement credit.

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Enterprise Zone Job Creation Grant (JCG)

State government For businesses to be located within the boundaries of an Enterprise Zone the businesses must create at least four net new permanent full-time positions over the base calendar year that earn at least 175% of the Fed-eral Minimum Wage1, 150% in High Unemployment Area; Firm must offer to cover at least 50% of em-ployee’s health insurance premium; excludes personal service or food and beverage positions

Fertilizer and Pesticide Application Equipment Credit

State government For individuals and corporations for equipment pur-chased to provide more precise pesticide application. Applicants must be engaged in agricultural production for market and have a nutrient management plan ap-proved by the local Soil and Water Conservation Dis-trict.

Governor’s Agriculture and Forestry Industries Development Fund (AFID)

State government Facility that produces “value-added agricultural or for-estal products and demonstrates a minimum of 30% of the agricultural or forestry products to which the facility is adding value will be grown or produced within the Commonwealth of Virginia on an annual basis in nor-mal years.

Major Business Facilities Job Tax Credit

State government 25–50 job creation threshold

Major Eligible Employer Grant State government Minimum capital investment of $100 million and create >1,000 jobs

Port of Virginia (POV) Economic and Infrastructure Development Grant Program

State government Company that: (i)Locates or expands a facility within the Common-wealth of Virginia; (ii)Creates at least 25 new, perma-nent full-time positions for qualified full-time employees at a facility within Virginia for one full year; (iii)Is in-volved in maritime commerce or export or imports man-ufactured goods through POV; (iv) Is engaged in one or more of the following: the distribution, freight forward-ing, freight handling, goods processing, manufacturing, warehousing, crossdocking, transloading, or wholesal-ing of goods exported and imported through POV; ship building and ship repair; dredging; marine construction; or offshore energy exploration or extraction

Virginia-Based Financial Sources and Incentives

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Qualified Equity and Subordinated Dev Investments Credit

State government Individual and fiduciary taxpayers making a qualified in-vestment in the form of “equity” or “subordinated debt” in a pre-qualified small business venture that is defined as (i) annual gross revenues of no more than $3 million in its most recent fiscal year, (ii) principal office or facil-ity in the Commonwealth, (iii) engaged in business pri-marily in or does substantially all of its production in the Commonwealth, (iv) has not obtained during its exist-ence more than $3 million in aggregate gross cash pro-ceeds from the issuance of its equity or debt investments and (v) is primarily engaged, or is primarily organized to engage, in the fields of advanced compu-ting, advanced materials, advanced manufacturing, ag-ricultural technologies, biotechnology, electronic device technology, energy, environmental technology, infor-mation technology, medical device technology, nano-technology, or any similar technology-related field determined by regulation by the Department of Taxa-tion to fall under the purview of this section

Rail Industrial Access Fund State government For localities, businesses, or industries seeking access to a common carrier railroad (e.g., connect new or ex-panding businesses to the freight railroad network)

Research and Development Tax Credit

State government For individuals and businesses for qualified research and development expenses for taxable years beginning on or after January 1, 2011, but before January 1, 2022.

Telework Expenses Tax Credit2 State government Employers for eligible expenses incurred for allowing employees to telework pursuant to a signed telework agreement for taxable years beginning on or after Janu-ary 1, 2012, but before January 1, 2017

Tobacco Region Revitalization Commission

State government Only serves Amelia, Appomattox, Bedford, Brunswick, Buckingham, Campbell, Charlotte, Cumberland, City of Danville, Dinwiddie, City of Emporia, Franklin, Greens-ville, Halifax, Henry, Lunenburg, City of Martinsville, Mecklenburg, Nottoway, Patrick, Pittsylvania, Prince Edward, Sussex, Bland, Bristol City, Buchanan, Caroll, Dickenson, Floyd, Galax City, Lee, Norton City, Russel, Scott, Smyth, Tazewell, Washington, Wise, Wythe Counties/Cities

Transportation Partnership Opportunity Fund (TPOF)

State government For any agency or political subdivision of the Common-wealth of Virginia for any transportation project or any transportation facility within the Commonwealth of Vir-ginia.

Virginia Business Ready Sites Program

State government Applications by Sept. 1, Minimum of 100 contiguous de-velopable acres

Virginia Economic Development Incentive Grant

State government Must meet VEDIG eligibility requirements

Virginia Economic Development Partnership

State government Must be a business located in Virginia or looking to lo-cate to Virginia

2 Credit is for eligible expenses incurred for taxable years beginning on or after January 1,

2012, but before January 1, 2017.

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Virginia Jobs Investment Program State government Limited to projects that create basic employment in the Commonwealth, 50% revenue must be out of state

Virginia Research Investment Fund (VRIF)

State government Only public institutions of higher education in Virginia are eligible as lead applicants

Worker Retraining Tax Credit State government For employers to claim a tax credit for the training costs of providing eligible worker retraining to qualified em-ployees for taxable years beginning on or after January 1, 1999. The credit may be applied against individual income tax, estate and trust tax, corporate income tax, bank franchise tax, and taxes imposed on insurance companies and utility companies

The Workforce Investment Act State/local government

Must be a public institution

Virginia Enterprise Zone (VEZ) State and local governments

For businesses and zone investors who create jobs and invest in real property within the boundaries of desig-nated enterprise zones

Virginia Economic Development Loan Fund

Federal/state/local government

Must meet federal EDA & VSBFA Requirements

Business Seed Capital Local government Small businesses in Roanoke city, Roanoke County, Vinton, Salem, Botetourt County, Craig County, Coving-ton, Clifton Forge, and Bath County

Defense Production Zones Local government Businesses located in defense production zones and: (i) support national defense, including, but not limited to, logistics and technical support, or (ii) designers, de-velopers, or producers of materials, components, or equipment required to meet the needs of national de-fense; (iii) companies deemed ancillary to or in support of the aforementioned categories

Individualized county-based incentives

Local government Only applicable to whichever county the business is looking into

Technology Zones Local government Each locality designs and administers its own program

Virginia Coalfield Economic Development Authority

Local government Must be in Virginia’s e-region

Center for Regional Economic Competitiveness

Non-public entity Work for fee-for-service basis

CIT GAP Funds Non-public entity Exclusively for companies headquartered, and with an express desire to grow in, the Commonwealth of Vir-ginia.

Council for Community and Economic Research

Non-public entity Membership organization

Virginia-Based Financial Sources and Incentives

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Environmental Compliance Assistance Fund

Non-public entity Small business as defined in §10.1-1197.1 of the Code of Virginia (e.g., 100 or less employees); Project must be certified as eligible by the Department of Environ-mental Quality (DEQ) for air quality or pollution preven-tion projects, or by the Department of Conservation and Recreation (DCR) for Agricultural Best Management Practices (BMPs); Capital must be used for one of the following: 1) equipment to comply with the federal Clean Air Act, 2) equipment to implement voluntary pol-lution prevention measures, or 3) equipment or struc-tures to implement voluntary agricultural best management practices (BMPs)

Small Business Microloan Program

Non-public entity Business currently operating in Virginia, be in good standing with the State Corporation Commission or other applicable state or local licensing authority, and have been in operation for at least two (2) years. Busi-nesses must also meet at least one of the following cri-teria to be an eligible borrower: (i) Have $10 million or less in annual revenues over the last three years; (ii) Have a net worth of $2 million or less; (iii) Have fewer than 250 employees

State Small Business Credit Initiative (SSBCI) Virginia Capital Access Program

Non-public entity 501c3s and any for-profit corporation, partnership, lim-ited liability corporation, limited liability partnership, joint venture, sole proprietorship, cooperative or other entity which is authorized to conduct business in the Com-monwealth of Virginia and meets the VSBFA’s defini-tion of “small business.” Borrower cannot have more than 250 employees in Virginia or 500 employees over-all; Funds are available for working capital, expansion, equipment and most other business needs

Foreign Trade Zones Federal government Businesses located in designated in foreign trade zones

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Appendix E COE Staff, Requirements, and Timeline

COE STAFF Though recommended as a virtual construct, the Virginia UAS CoE requires a staff to execute its activities recommended in the economic growth plan. To max-imize efficiency and streamline requirements, we suggest only staffing positions with workloads estimated at an annual FTE level of effort for the CoE. We rec-ommend outsourcing other CoE responsibilities and activities, particularly those temporary or required as needed.

The CoE FTE positions, with an overview of their respective roles and responsi-bilities, are as follows:

Virginia UAS CoE Program Coordinator. This position is largely respon-sible for the administrative management of the Virginia UAS CoE. The program coordinator’s duties include managing and controlling the CoE’s website and content, coordinating and scheduling CoE events such as peri-odic collaboration meetings and UAS-related conference attendances, managing and controlling access to Virginia UAS CoE websites, manag-ing any CoE-outsourced services or goods, supporting marketing and col-laboration events on site, and serving as the Virginia UAS CoE’s primary point of contact.

Virginia UAS Marketing Manager. This position is “the face of the Vir-ginia UAS community,” responsible for promoting Virginia’s UAS indus-try and capabilities internally and externally. Activities in executing these duties include setting agendas for and facilitating discussions at the peri-odic collaboration meetings, attending UAS conferences and industry events, developing Virginia UAS marketing strategies, developing Vir-ginia UAS marketing and promotion material through all appropriate and necessary media (such as brochures, website content, industry journal ad-vertisements, and exhibition booths), presenting at UAS industry events, manning exhibition booths at UAS industry events, networking among the national and international UAS communities.

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OTHER REQUIREMENTS In addition to CoE staffing, requirements associated with the outsourced website development and maintenance, travel, and materials for a booth and marketing material exist:

Website development. Given the virtual construct of the Virginia UAS CoE and the web-based platform for collaboration and knowledge transfer and sharing, development of a professional and adaptable UAS CoE web-site is essential. Although this aspect is vital in the economic development plan’s execution, it predominantly a one-time requirement at the initial standup of the CoE and its website. It does not require an FTE position, and we recommend outsourcing the services.

Website operations and maintenance. Requirements for website operations can include domain name registration, site hosting, communications security—such as Transport Layer Security (TLS)/Secure Sockets Layer (SSL), content delivery network (CDN), and Virginia UAS community membership payment processing. The majority of websites need some de-gree of maintenance and updating. To support the dynamic characteristics of the UAS industry, along with the anticipation of a growing Virginia UAS community, the CoE’s website will require rapid access to these ser-vices as needed. Because these activities are not expected to be continual, outsourcing maximizes practicality.1

Marketing event attendance and material. UAS conference and event at-tendance is a core Virginia UAS CoE responsibility, vital in Virginia UAS marketing activities, networking, and overall industry awareness. We identified a notional set of four separate, predominant conferences related to the UAS industry that can be considered for attendance by the Virginia UAS CoE: the Consumer Electronics Show (CES), AUVSI, Air Traffic Control Association (ATCA), and American Institute of Aeronautics and Astronautics (AIAA).

Fortifying the marketing objectives of conference attendance is the devel-opment and production of marketing material, including a portable dis-play. We expect this display to be used for all conferences, with marketing material specific to the Virginia UAS community. A tabletop display effi-ciently meets these objectives and requirements and is complemented by other ancillary marketing devices such as pamphlets.

1 We assume Commonwealth of Virginia in-house website maintenance and operations capa-

bilities are not available on a partial FTE basis for use by the Virginia UAS CoE.

COE Staff, Cost, and Timeline

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Virginia UAS CoE staff travel will be required to support the periodic Vir-ginia UAS community collaboration meetings. We assume the Marketing Manager and Program Coordinator will travel to these meetings.

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Appendix F Virginia Infrastructure Maps

ELECTRIC ENERGY TRANSMISSION LINES Figure F-1. Major Electric Transmission Lines in Virginia

Source: Virginia Polytechnic Institute and State University, “Virginia Energy Patterns and

Trends”, https://www.energy.vt.edu/vept/electric/vapowerlines.asp.

RAILROAD LINES Figure F-2. Virginia Railroad Map

Source: Virginia Department of Rail and Public Transportation, “Planning-Rail Reference Mate-

rials”, http://www.drpt.virginia.gov/media/1133/final_rail-map-aug2012afor_wall_prints.pdf.

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ACTIVE GAS AND OIL MINES Figure F-3. Active Gas and Oil Mines in Virginia

Source: Virginia Department of Department of Mines, Minerals and Energy, “Division of Gas

and Oil”, https://www.dmme.virginia.gov/webmaps/DGO/.

ABANDONED COAL MINES Figure F-4. Abandoned Coal Mines in Virginia

Source: Virginia Department of Department of Mines, Minerals and Energy, “Virginia Aban-

doned Coal Mine Feature Inventory”, http://vadmme.maps.arcgis.com/home/webmap/ viewer.html?webmap=d8ea5313fd0b4feea8ddd8a768c58b17.

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Appendix G Virginia Region Demographics and Colleges

REGION 1 Table G-1. Region 1 Figures

Figure category Figure # students

Populationa 390,738

Land Area (square miles)b 5,977 Population density (population/square mile) 65.4 Population % (18–64) 60.6%

% Population w/Associate’se 8.6%

% Population w/Bachelor’se 10.8%

% Population w/Associate’s or greatere 25.1% # of Public Colleges 4 12,704

# of 4-Yr Collegec 1 2,221 # of Community Collegesd 3 10,483

% of Population in College 3.25% a Source: U.S. Census Bureau, as of July 15, 2015. b Source: U.S. Census Bureau. c Source (figure includes undergraduate and graduate students): State Council of

Higher Education for Virginia, “Colleges and Universities,” http://www.schev.edu/ index/students-and-parents/explore/virginia-institutions.

d Source: Virginia Community College System, http://www.vccs.edu/about/where-we-are/impact/vccs-annual-enrollment/.

e Source: Virginia Employment Commission, “Community Profiles,” https://data.virginialmi.com/vosnet/lmi/default.aspx?pu=1&plang=E.

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Populationa 777,592

Land Area (square miles)b 5,893 Population density (population/square mile) 132 Population % (18–64) 62.9%





% of Population in College 8.87% a Source: U.S. Census Bureau, as of July 15, 2015. b Source: U.S. Census Bureau. e Source (figure includes undergraduate and graduate students): State Council of



e Source: Virginia Employment Commission, “Community Profiles”, https://data.virginialmi.com/vosnet/lmi/default.aspx?pu=1&plang=E.

Virginia Region Demographics and Colleges

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Figure category Figure # studentsc Populationa 373,530

Land Area (square miles)b 6,701 Population density (population/square mile) 55.7 Population % (18–64) 59.3%









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Populationa 1,236,268











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Populationa 496,997









e Source: Virginia Employment Commission, “Community Profiles,” https://data.vir-ginialmi.com/vosnet/lmi/default.aspx?pu=1&plang=E.


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Populationa 525,115











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Populationa 421,195










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Documents

COMMONWEALTH OF VIRGINIA UNMANNED AERIAL …UAS industry includes good access, several flying ranges, excellent roadways, numerous universities, users, and use case populations. But