Virginia Economic Review: Fourth Quarter 2019

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C O N V E R S AT I O N S WITH THOUGHT LEADERS: Joel Kotkin The New York Times Best-Selling Author Susie Adams CTO, Microsoft Federal Tad Deriso President and CEO, Mid-Atlantic Broadband Communities Corporation Steven Brint Author, “Two Cheers for Higher Education”

How an explosion of data is transforming business, jobs, healthcare, economic development, and more 1

The Dominion Energy GardenFest of Lights, featuring more than 1 million lights, handcrafted botanical decorations, and model trains, runs throughout the holiday season each year at Lewis Ginter Botanical Garden in Henrico County.

Contents 22 What’s Driving the Data Boom? Companies use the quintillions of bytes of data generated every day to glean insights on consumer behavior, equipment performance, and more. Read how Big Data became the force it is today

30 How Virginia Became the Data Center Capital of the World “Data Center Alley” made Ashburn the epicenter for global interconnection. But Virginia’s data center dominance dates back to a project the Commonwealth didn’t win

40 Down to a [Data] Science Virginia universities are training students to carve meaningful, actionable findings out of data from a variety of sources

48 Southern Virginia Rewrites Its Economic Story Micosoft’s investments and partnerships in Boydton and South Boston are positioning Southern Virginia as a tech destination

60 Going Below New subsea cables landing in Virginia Beach have created a burgeoning data center market in Hampton Roads and Richmond

4 Facts & Figures 8 Virginia Wins 12 The Future of Cities: A Conversation With Joel Kotkin 26 The Evolution of Cloud Computing: A Conversation With Susie Adams 52 Connecting Southern Virginia to the World: A Conversation With Tad Deriso 66 Preparing Students for Sustainable Jobs: A Conversation With Steven Brint 76 Meeting Global Demand for Health IT Services 80 Economic Development Partners in Virginia

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Virginia: A World Leader for Data Centers, Data Science, and Cloud Computing THE WORLD IS AWASH IN DATA.

Enormous amounts of data, growing exponentially. Data that is driving an explosion in cloud computing and data center investment. Data that is remaking industries and altering the geography of economic opportunity. Thanks to an advantageous location, the most capable telecommunications infrastructure in the world, an attractive tax environment, competitive, increasingly renewable power, and world-class tech talent, Virginia has long been the undisputed data center capital of the world. The Commonwealth of Virginia is now leveraging its global leadership position in data centers and its world-class universities (e.g., Virginia Tech, UVA) to strengthen its role as a global leader in cloud computing and the exciting new field of data science.

School of Data Science at UVA that launched with a visionary gift of $120 million) to fuel the explosion in demand for data science talent; and important new subsea cables landing in Virginia Beach. Inside are discussions with thought leaders, including Susie Adams, chief technology officer for Microsoft’s federal government business; Tad Deriso, president and CEO of Mid-Atlantic Broadband Communities Corporation, which built an advanced open-access fiber optic network in Southern Virginia; Joel Kotkin, whom The New York Times described as “America’s ubergeographer”; and Steven Brint, author of “Two Cheers for Higher Education.” We hope you enjoy this fascinating look at some of the most exciting things happening in Virginia.

Best regards, In this issue of Virginia Economic Review, we explore the world of Big Data, including what’s driving the data boom; how Virginia became the data center capital of the world; the remarkable expansion of the data center industry across the Commonwealth; the development of innovative new data science programs at Virginia’s universities (including a new


Stephen Moret President and CEO, Virginia Economic Development Partnership

The Middleburg Hunt & Hounds Review is part of the annual Christmas in 3 Middleburg Celebration.

Facts Figures


Data Center Market Northern Virginia

2 4



State with Highest 4-Year Graduation Rate

4 4 2


Best State for Growth Investment in Broadband


Best State for Online Business


Best Cities for Gamers: Highest Average Internet Speed Virginia Beach

3 3


State with Fastest Average Internet Speed


Best Cities for Gamers: Highest Average Internet Speed Chesapeake 5


n 2019, SmartAsset ranked Virginia’s higher education system as the best in the nation. Virginia also boasts high schools that stack up with any in the country. According to a recent WalletHub analysis, the Commonwealth has the best public schools in the South and the fourth-best public schools nationwide. Virginia’s strength in secondary education has students primed for success before they enter college. Virginia’s schools continue to represent one of the Commonwealth’s best selling points for companies looking to locate facilities.


FA C T S & F I G U R E S

1 Thomas Jefferson High School for Science and Technology

Public High School in the United States Thomas Jefferson High School for Science and Technology

8 Maggie Walker Governor’s School for Government and International Studies

Public High School in the United States Maggie Walker Governor’s School for Government and International Studies 7

Virginia Wins One of the most attractive aspects of locating in DanvillePittsylvania County is that we will be able to take advantage of the new Virginia Talent Accelerator Program, which will help us quickly attract and train the high-quality workforce we need to deliver for our customers. MIKE OWNBEY President and CEO, Morgan Olson

Morgan Olson, North America’s leading manufacturer of all-aluminum, walk-in step vans, will invest $57.8 million to establish a new assembly operation in a 925,000-square-foot plant in Pittsylvania County previously owned by IKEA. The Michigan-based company considered sites in multiple other states for the project, which will create 703 new jobs. In July, IKEA announced it would shut down its Ringgold facility, the company’s only manufacturing facility in the United States. Working with Virginia’s economic development team starting in May, existing building options had not worked out for Morgan Olson, but when the IKEA building became available, the unique real estate option — combined with a well-developed regional workforce development pipeline in Southern Virginia — gave the company the confidence to select Virginia for a new operation. With the expansion — the company’s fourth in six years — Morgan Olson will become the largest private employer in Pittsylvania County, and current employees at the IKEA plant, which was scheduled to stop production in December 2019, will receive priority consideration as part of the hiring process. The project is also notable as the first use of the new Virginia Talent Accelerator Program, a workforce initiative created in collaboration with the Virginia Community College System that accelerates new facility startups through the direct delivery of recruitment and training services fully customized to a company’s unique products, processes, equipment, standards, and culture.



Selected Wins Greater Richmond

Northern Neck

Shenandoah Valley

GlaxoSmithKline plc

Teal-Jones Group

Howell Metal

Pharmaceutical Product Development, LLC

Northern Shenandoah Valley

South Central Virginia

Jobs: 150 new jobs CapEx: $16.7M Locality: City of Richmond

Jobs: 200 new jobs CapEx: $63.7M Locality: Henrico County

Greater Richmond/ Virginia’s Gateway Region Cartograf

Jobs: 63 new jobs CapEx: $65.3M Locality: Chesterfield County

Hampton Roads DroneUp

Jobs: 41 new jobs CapEx: $130,000 Locality: City of Virginia Beach

Eagle Aviation

Jobs: 75 new jobs CapEx: $207,5000 Locality: City of Newport News

Jobs: 59 new jobs CapEx: $10.8M Locality: Westmoreland County

Blue Ridge Industries, Inc. Jobs: 13 new jobs CapEx: $3.7M Locality: Frederick County

Northern Virginia

Jobs: 170 new jobs CapEx: $10M Locality: Arlington County

Jobs: 102 new jobs CapEx: $8M Locality: Shenandoah County

Echo World Communications Jobs: 153 new jobs CapEx: $550,000 Locality: Brunswick County

Southern Virginia Teal-Jones Group

Jobs: 67 new jobs CapEx: $21M Locality: Henry County

High Purity Systems, Inc. Jobs: 105 new jobs CapEx: $8.5M Locality: City of Manassas

Roanoke Region Aeronyde Corporation Jobs: 25 new jobs CapEx: $350,000 Locality: City of Covington

SRP Companies

CapEx: $1.2M Locality: City of Virginia Beach

Roanoke Region

New River Valley

Southwest Virginia I81- I77 Crossroads


Northern Shenandoah Valley

Washington, D.C.

Northern Virginia Shenandoah Valley Central Virginia

Greater Fredericksburg

Greater Richmond

Northern Neck

Middle Peninsula

Lynchburg Region

Eastern Shore South Central Virginia

Southern Virginia

Virginia’s Gateway Region

Greater Williamsburg

Hampton Roads



The Future of Cities A Conversation with Joel Kotkin

Joel Kotkin is the Presidential Fellow in Urban Futures at Chapman University in Orange, Calif., and executive director of the Houston-based Center for Opportunity Urbanism. Described by The New York Times as “America’s ubergeographer,” he is an internationally recognized authority on global, economic, political, and social trends. Stephen Moret: There were some really interesting pieces in The New York Times recently. One was authored by Amy Liu and one of her colleagues at the Brookings Institution. They talked about the diverging economic fortunes of regions in the United States. Essentially, the big metros in general have been experiencing the most growth, midsize metros are second, then rural areas connected to the metros, and then detached rural localities. You’ve got this real separation or stratification of employment growth. I’m curious about your observations on that and how, in light of the big forces driving those shifts, you think communities, regions, and states could better position themselves for growth. Joel Kotkin: This certainly was the case over the last 10 years. But if you go back another 10 years, smaller communities, particularly more midsize areas, were doing better. New demographic data, which is probably the best thing to look at, is showing growth is now stronger in midsize metropolitan areas than in big ones. The big ones, you have to separate out. Houston, Dallas, Nashville, and Orlando are doing really well. New York is kind of the national average. Los Angeles is generally below the national average. So, it’s not a single story, and I think the migration trends and job trends are not as clear and as hierarchical as most planners would like them to be. People aren’t as stupid as planners think they are.



P R I M A RY C I T I E S V S . S U B U R B S G R O W T H R AT E S * Large metros in Snow Belt and Sun Belt, 2010–2018 Primary cities



1.4 SUN BELT 1.2



0. 6 SNOW BELT 0.0




– 10

11 20

– 11

12 20

– 12

13 20

– 13

14 20

– 14


*Average annual growth for primary cities and suburbs in metropolitan areas with over one million population in the Sun Belt (South and West census regions) and Snow Belt (Northeast and Midwest census regions) Source: Brookings Institution. William H. Frey analysis of U.S. Census Bureau population estimates released May 23, 2019



– 15

16 20

– 16

17 20

– 17



New demographic data, which is probably the best thing to look at, is showing growth is now stronger in midsize metropolitan areas than in big ones. JOEL KOTKIN Presidential Fellow in Urban Futures, Chapman University

Moret: One of the things I thought was really interesting in your book, “The Human City,” was the many, many references to Singapore. It really featured prominently. It’s a market that I’ve long been impressed with from the perspective of their transformational economic shift over the last few decades. You’ve been involved with Singapore for a very long time — I think going back to the early ’90s. From an economic policy and economic development perspective, over that long arc of time, what have they gotten right that so few places around the world have been able to achieve in terms of going from, really, a Third World country to one of the top five or so wealthiest places in the world?

was going to be important. Businesses depended on that strategic location. Then they started to move toward infrastructure, like the airport and having a great airline. If you’ve flown Singapore Airlines, you’d know what I’m talking about.

Kotkin: With Singapore, you have to start with the old saying that the threat of hanging tends to concentrate the mind. Singapore became independent under the worst of circumstances. It was an ethnically diverse place that was poor. When the British pulled out, they were really lost. Malaysia essentially kicked them out. What I think is brilliant is they said, “Okay, what is it that we have?” What they really have is human capital, particularly Chinese human capital, which means tiger moms.

Moret: When I travel the world, I ask executives of big, multinational global companies what development agencies have impressed them the most in their own travels. Those who feel like they have enough context to answer the question mention the Singapore Economic Development Board 95% of the time.

The second thing is they have a fantastic strategic location. Obviously, the port

They also managed their ethnic diversity really well, but not in a way that would be constitutional in this country, probably. For instance, they’ve tried to mix various ethnic groups in housing. I look at it as a social democracy using capitalist methods. The idea of using capitalism to bolster social democracy is really what I’d like to see more of in this country, but we’re not doing that very well.

Kotkin: Also, what they did was deal with the fact that they had very limited space. When you say you might advocate dispersion in this country or Australia or a country with lots of land, Singapore had no choice. What they’ve done is, instead of making people live in tiny

spaces, they built public housing that they then allowed people to buy. That public housing is considerably bigger. The average apartment in Singapore is on average twice that in Hong Kong, for instance. I think they’ve done a lot of really good thinking about things, and then they understood in the long run that their human capital was going to be the thing they had, and also a rule of law and predictability. There’s a cleanliness, there’s an efficiency that you get in Singapore. I think it’s the best-run city in the world. Moret: Part of that has to do with how they think about hiring and compensating their civil servants, right? Kotkin: Yes. This was something Lee Kuan Yew has written about and I think it’s very evident. The Mandarin class in Singapore is very well compensated, with the expectation that you’re not going to need to take a bribe. If you go to the exact opposite end, to Mexico or India where civil servants are paid very badly, of course they’re going to take bribes. You don’t have to be a genius to figure this one out. So, I think that they made a conscious decision that they were going to get really qualified, good people. I think Singapore made an effort to look at their situation and to change



[Kotkin] weaves an impressive array of original observations about cities into his arguments, enriching our understanding of what cities are about and what they can and must become. THE WALL STREET JOURNAL

over time. They realized initially that manufacturing was something where they had a comparative advantage. Now, they knew that once China was opened up — and Korea and Taiwan — they really couldn’t compete except at the very high end. So, they moved more and more toward high-end electronics, a lot of biomedical, tech, finance. They had a really good strategic vision. But the thing that keeps it together, and what we miss in this country, is any sense that we want to develop an


economy that has a place for the vast majority of people. You take a society like Silicon Valley, the very top has done really well and everyone else has done worse. Poverty in many ways is worse. Homelessness is worse. All amidst one of the greatest economic booms in history. You create wealth in the aggregate, but, as I would put it, people don’t live in the aggregate. They live their individual lives. I know many of my students here who come from the San Jose area say it has actually been very tough for their families

over the last 10 to 20 years. San Jose had been a very middle-class place before. I think that what one of things Lee Kuan Yew, again, out of necessity, understood is, in order to have a workable social order, you have to have a certain degree of wealth distribution that’s tied to some idea of social justice. They would never accept the idea that you shouldn’t work. I think that would be completely culturally unacceptable. Moret: One of the things I’ve observed about Singapore that I find really


Kotkin has a lot to say, and it demands a hearing. Wholesale reassessment of the role of our cities and the areas around them is overdue. NATIONAL REVIEW

remarkable is they’ve combined two different development approaches into one. In the United States, for example, we could look to places like Boston or Massachusetts, some of the highercost, more progressive states that put a tremendous amount of money into education and infrastructure. But they do very little to attract business or provide incentives.

very aggressive about attracting industry. Singapore has actually done both. They’ve created a world-class business climate with tremendous investments in infrastructure and human capital development, but they also, for strategic economic development opportunities, will make enormous investments and incentives if they think a project is strategic to where they’re trying to go.

Other states, such as in the Deep South, perhaps haven’t invested enough in infrastructure and education, but are

Kotkin: I see some analogies in the U.S., particularly in Texas and North Carolina. Those are two states I would immediately

shout out. One, they’ve invested tremendously in their education systems. They still play the incentive game but, fundamentally, they’ve done both. In Texas, they’ve done it on an enormous scale. I was just speaking at Texas Tech, which is in Lubbock. It’s a gigantic university churning out thousands of skilled engineers every year. We always talk about the University of Texas at Austin, but you have to look at Texas A&M and Texas Tech as real drivers. What’s interesting is that California used



to do that. California also had a very welcoming business climate at one time but, obviously, not anymore. Moret: It’s hard to believe now, right? Kotkin: It is hard to believe. But we also invested in our education system, and not just the University of California, Berkeley, but also the community colleges and state colleges. You have to have both. If you just have an education industry and you don’t have places for those people to go, they leave. Moret: That’s right. Especially the highly educated. Kotkin: Massachusetts hemorrhages people, and now California. We’re now educating people who go someplace else. Moret: When you look at the country overall, the higher educational attainment a person has, the higher their propensity to complete an interstate move, usually for a job opportunity. Sometimes for better, affordable housing arrangements, and so forth. The Northeastern U.S. is the biggest donor region in terms of producing far more college graduates than they’re actually able to retain. On the other hand, I forget how you describe the geography, but, basically, Texas and some of the surrounding areas are the biggest recipients of that. It’s been a few years since I’ve looked at this, but for all the new college-level jobs they have in Texas every year, they only produce about 70% of what they need and they get the rest for free from all the other states. Kotkin: In the case of Texas, they get all the southern states, like Louisiana. Why don’t we just put up a sign that says, “Do not go to a bar in Houston when LSU is playing,” because of the number of LSU graduates you run into. The same thing’s true with the universities of Alabama, Mississippi, Arkansas, Oklahoma. They send their kids to


Texas. This is like the California I moved to in 1971, where everybody was from someplace else and nobody ever thought about leaving. Moret: It’s kind of flipped a little bit. Kotkin: It’s flipped quite a bit. Now, if you don’t have money, you don’t have rich parents, you didn’t rob a bank, and you’re under the age of 40, you’re in trouble. Moret: When I was reading some reviews of “The Human City,” which were largely very positive, one that stuck with me was in The Wall Street Journal. It said, “The Human City’ does provide a vision for legitimate and pragmatic urbanism that could and should become mainstream. Indeed, at the end of the book, Mr. Kotkin seeks a constructive compromise with the anti-sprawl armies. His answer to ‘How should we live?’ is amid an ‘urban pluralism’ that encompasses the city center, as well as closed-in suburbs, new fringe developments, and exurbs.” Those who aren’t as familiar with your work tend to think of you as America’s champion for suburbs, and you are in a way. But I think what they miss is that you’re not really an anti-city or even an anti-density person. It’s more that you’re essentially making the case that when we really consider the full range of family styles and different levels of income, we need to have a diverse array of housing and neighborhood-type environments, from high-density to suburban, and others as well. Kotkin: In Houston, the young professional wants to live where the spousehunting is good and the food is good, where it’s a little bit hipper. But then when they get married and want to buy a house, that same person and their spouse have lots of options that are affordable for them. The problem we have here in California, most particularly in the Bay Area — but it’s happening in other places, too — is once you’ve gotten through the 20-something phase, there’s no place to go.

If you look at the new surveys from Joint Venture Silicon Valley, 45% of all workers in their late 20s and early 30s plan on leaving. That’s not a very healthy environment. What they’ll do is keep recycling that same group over and over again, but you can’t get somebody who’s going to be there for 10, 15, 20 years. The kinds of companies that leave places like California or New York are the companies that generally need somebody for the longer term. But if you’re just using 20-somethings, they’re like cannon fodder in the First World War. Moret: You make a mistake if you design the whole solution around that one demographic, because their desires will change over time. Kotkin: What you’ll see, even in the current circumstances, many of these companies, if they need mature management, will move more of their operations to more affordable cities. I think Apple’s new campus in Williamson County, outside of Austin, is about half the size of the spaceship in Cupertino. We see this here in Southern California, which, in my opinion, naturally, is the nicest urban place in the world to live. But the CEO who lives in Newport Beach is probably tempted to stay here. As one of them said to me, “Yeah, but my production workers ... if I pay them $18 an hour in Dallas or Oklahoma City, they can live a decent life. Here, they’re homeless. Literally homeless.” Moret: One of the things you wrote about in “The Human City” was how so many of the big engineering firms that had been in California have largely moved to Virginia and Texas over the years. Jacobs, Parsons, and others. Kotkin: The loss of this kind of company, as well as the McKessons, the Toyotas, and the Nissans, meant loss of anchors in their communities. People worked there for 20, 30 years, a lot of them making $80,000 to $150,000 a year. They had some degree of stability.


2018 N E T M I G R AT I O N F O R S E L E C T E D S TAT E S






North Carolina

South Carolina











Source: StatsAmerica

In my opinion, the Nissans and Toyotas should all be in Southern California. We’re the car design capital of the world. We have big Asian communities that have been here for a long time. We’re the biggest port where the stuff gets shipped in. We’re the biggest market. But they’re moving to Tennessee and Texas for reasons that we didn’t have to have. What’s shocking to me is how

little concern there is on the part of the California government about these companies leaving. When Toyota left, it was like nobody even paid attention. Then you get economic development officials saying, “Well, we’re at this higher stage of development. We don’t need those kinds of things. Those things are all going to leave us.”

Moret: We’ll just be all tech, basically. Kotkin: And we’ll all be a bunch of IPOs and a bunch of 30-year-old obnoxious rich kids running around. I don’t think you can base an economy on that. Moret: Before we leave “The Human City,” what would you say readers should



take as the top two or three lessons from that book? Kotkin: The first thing is what you mentioned about the idea of urban pluralism. You have to be able to give people lots of options. So, there has to be single-family neighborhoods. There has to be higher-density, downtown development. I think in most places that’s now well overbuilt, but certainly you want to have that. And you want to have maybe that middle. I’ll give you a good example: North Austin. The Domain is a mini-city in the north part of Austin. It has hotels, it has apartments. You could walk everywhere. It’s surrounded by single-family communities. People who live in those drive into The Domain when they want restaurants, shops, shows, whatever. Very much like The Woodlands. The Woodlands serves as the metropolitan center for a huge part of western Houston. These have been successful. Reston has been a success story. These areas are somewhat urban, somewhat suburban. The problem you now have is planners waiting to wipe out all the single-family houses. If you want to recruit people who are now being told that their area is no longer zoned single-family because the state of California’s decided that you can build a fourplex next door, that’s the most serious discussion we’ve ever had about leaving. Moret: In the latest Chief Executive magazine, we were happy to see Virginia moving up as one of the best states for business, but you wrote a piece in it entitled, “After Amazon: What Happened in New York Isn’t Just About New York,” that touched on some of these themes. I’m just going to read this passage toward the end: “This suggests a surprising future for the tech economy, particularly if the progressive tide continues to mount. An aging millennial population, growing dysfunction in centers like San Francisco,


and political radicalism all work against business investment and the migration of educated middle-aged adults to cities. The bad old days of urban decline may not return, but the bright high-tech future predicted for our urban cores may be far less promising than widely heralded.” You essentially make the case that high-cost tech hubs like the Bay Area or New York City may continue to be strong, but that over time we may see a more broadly shared set of metros that attract the tech jobs. We’re already seeing that to a large extent, in part because talented professionals eventually want to seek affordable housing where they can raise a family. By the way, I’ve seen this in my own life. My wife and I have considered moving to the Bay Area on two different occasions. We’re well-educated, lots of good options, but even with that and even with great job opportunities, the cost is just incredible. With all these things in mind, what do you think that secondary tech markets — not small metros, but let’s say the midsize metros that are experiencing growth in tech or that want to — what can they do to position themselves to participate more broadly? Kotkin: The first thing is to understand the typology. San Francisco, the Bay Area, the Seattle area, and, to a lesser extent, Boston, are just in a completely different phase than New York. New York’s tech location quotient is just about the national average. Moret: It’s big in an absolute sense, but not a high concentration. Kotkin: Same thing is true with Los Angeles, which used to be the largest concentration of scientists and engineers in the world when I wrote my first book. Then you have where the growth is going. There’s still Silicon Valley and Seattle. They’ve got the big companies, the capital networks. More private in Seattle, more venture in Northern California. But

basically you’ve got places like Orlando, Raleigh, Nashville. If you look at where the biggest growth is, if you look at the location quotient numbers in the computer-related and other high-end fields, that’s where it’s going. In the case of finance, lots of movement to Florida. I think what you’re seeing is that these secondary markets have the schools, the quality of life, and the cost. Moret: We’ve talked mostly about metro areas, the dense urban core, the largely suburban, connected localities but still in the metro area. What about regions that are predominantly rural? They’re largely experiencing decline. Certainly of population, often of employment as well. What can they be doing to position themselves for growth? Kotkin: Not every rural area, like every city, is the same. There seem to be several types of rural areas that are growing. Characteristics vary. They could be, let’s say, Midland to Odessa. Obviously, it’s energy. Moret: Sometimes there’s a major successful local employer. Kotkin: Like in Lubbock, it’s Texas Tech, really a driver. In other places it’s an amenity-based economy. Like Missoula, Mont., where people with skills are moving, even though their businesses may be located in the metropolis. They live there and use the internet. There’s clearly a bit of a demographic recovery, certainly in the micropolitan areas and, to a lesser extent, in the really rural areas. I think what’s going to happen in rural America if I were to project it, and I’ve been looking at this for 30 years, is you’re going to see some of these small towns die and some will really do well. When I looked at western Iowa, in particular, some communities were growing and looking really good. They usually had a hospital or a community college, maybe one really good employer, and they were doing fine. But if you went to the places far from the interstate, they didn’t have any plane


You have to be able to give people lots of options. So, there has to be single-family neighborhoods. There has to be higher-density, downtown development. JOEL KOTKIN Presidential Fellow in Urban Futures, Chapman University

service, no hospital, no community college. Those places have a harder time.

boutique hotel, really good restaurants, ethnic diversity.

The other thing you’re going to see is growth in exurbia. In other words, the fringes of the metros. That’s where the most rapid growth takes place now. Like in Des Moines, which is a very successful Midwest community. I asked the builders, “Where are people going?” They’re moving out to rural towns, 20 miles from Des Moines. Twenty miles in Des Moines means 20 minutes.

My friend Shaheen Sadeghi develops what he calls anti-malls — malls that are all just locally owned businesses. He said, “Every place is cool now.” If you want your avocado toast, you can get it pretty much anywhere. It used to be if you wanted a good cup of coffee, when you left New York, you didn’t get a good cup of coffee until you got to San Francisco. I’m not talking about Starbucks. Now, you can get a good cup of locally brewed coffee in almost every major city. Fargo has quite a few really good coffee shops.

Twenty miles here in California could be a lifetime. So, they’re moving into these towns. It’s the same thing I saw in Fargo. People moving to these little rural towns, 10, 15 miles away, which have a town square, good schools, and very coherent communities. On the other hand — and this is another aspect of this — when I first started going to Fargo about 20, 25 years ago, downtown was a pit. There was nothing. It was crappy hotels and crappy restaurants and no street scene at all. Right now, Fargo has a wonderful

Moret: How important is broadband access to rural development? Kotkin: The internet is a potential game-changer. When I first started working in that part of the country, in the Great Plains, it was really funny. You’d get a three-day-old newspaper that was all dog-eared. If you wanted to watch television, there’d be two stations and it was blurry.

Now, you can go to a rural community and get The Wall Street Journal online at the same time as the guy in New York gets it. And you have cable television. You can get the same crap there that you get here. I think that those cultural differences are less. Now, when you’re young, and particularly if you’re from an affluent background, you still want the New Yorks and the L.A.s, the San Franciscos and Chicagos. But as you get older, how often do you go to the jazz club? Friends in North Dakota say, “The Rolling Stones give concerts in Fargo.” In other words, the spread of popular culture has changed enormously. So, places you would have never thought of going to, you now go to. Moret: Joel, thanks again for making time to visit. It was great to catch up over breakfast. Thank you so much for being with us today. Kotkin: Oh, thank you.

For the full interview, visit


What’s Driving the Data Boom?

4,416,720 188,000,000 18,100,000 390,030 4,500,000 511,200 4,497,420 694,444

22 Source: Domo

Around the world, servers hum in the dark, churning through data that may have started as store security footage, a tweet, or a blood pressure reading. In the end, this data tells a story about people — how they think, how they make choices, and what risks they’re willing to take. But first, you have to sort through the noise. How does a company turn a massive stream of data into usable insights? Big Data enables companies to pluck time- and money-saving intelligence from massive information sets. In a world where seemingly every moment of our lives is being recorded and analyzed, that resource would go untapped if it weren’t for Big Data. Big Data, defined as the process of analyzing large-scale data sets that are too massive or varied for traditional data-processing software, has become the de facto tool companies turn to in order to make decisions, reach consumers, and increase their operations’ efficiency. It takes huge amounts of raw data, extracting pieces useful for a specific business or individual, and using that data to make decisions. The cornerstones of Big Data are volume, variety, and velocity. Variety means different types of data, and velocity measures how fast data is being uploaded onto and via these services. As for volume, Facebook stores an estimated 250 billion photos. Google processes 3.5 billion requests a day. Amazon’s Big Data engines take inventory on its 1.5 billion items in 200 warehouses worldwide every 30 minutes. For companies to gain actionable insights from data, that kind of scale is required. A study by analysis firm International Data Corporation stated the big data and analytics software market was valued at $60.7 billion worldwide in 2018 and was expected to grow at a five-year compound annual growth rate of 12.5%. This growth expectation is due to an increase

in Internet of Things (IoT) and artificial intelligence (AI) utilization within the data field, a shift to public cloud infrastructure, and “the increasing importance of data in the modern enterprise.” “Increasingly, data-driven insights will be required to make rapid business decisions. Successful businesses will take advantage of these insights to adapt quickly to changes in the global economy,” said John Walicki, chief technology officer of IBM’s IoT advocacy group.

THE CORNERSTONES OF BIG DATA Big Data is often seen as an umbrella term that comes with AI, machine learning, IoT sensors, Deep Learning, and edge computing. These are the tools the data industry uses to process and analyze data to turn it from raw inputs to gleaming insights. AI is the use of algorithms to train computers to mimic human behavior. Machine learning uses AI to find trends and patterns within large amounts of data. Combined with IoT sensors like home assistant speakers, health tracking watches, and internet-connected lightbulbs, machine learning can extract key insights about consumers’ habits and preferences. It can predict when someone will need to buy that product next or — better yet — predict what will convince them to buy that item now. Connected devices also provide insight into the machines that manage production. On the manufacturing floor, IoT devices streamline data collection processes to evaluate machines’ efficiency.

Rather than relying only on routine maintenance checks, IoT devices can alert an operator in real time when a machine is running outside of its stated parameters, catching issues earlier and minimizing expensive downtime. Neural networks have also been trained to estimate when a machine may need maintenance based on past performance, wrote Maciej Iwaniuk, Ernst & Young Europe, Middle East, India, and Africa Advisory Center IoT/ OT integration leader, in a company post. “We have observed increased mean time between failures, shorter planned downtime, and a positive impact on overall equipment effectiveness. The results depend on multiple factors, such as the quality of historical data, the relevance of the collected information, and the impact of the applied solution on the maintenance strategy and procedures,” he wrote. “But based on the results, it is safe to say that a combination of data from sensors with machine learning can revolutionize the efficiency of operations and significantly increase asset utilization on the shop floor.” Big Data became a practical tool for businesses and government agencies once algorithms were created that made it possible to analyze data “in ways that people were never able to,” said Nikolas Kairinos, CEO and founder of Fountech, an AI company focused on Big Data solutions. “We can analyze big obvious patterns, but AI can pick up subtle, seemingly obscure trends that lead to positive results.” For example, when companies, organizations, and governments need to



answer a question — such as the quickest route for shipping a package — they take data from sensors on cars, traffic cameras, other shipping vehicles that have completed drop-offs, and other sources of data. Then they sift through it to find situations that match their problem. From there, they use that relevant data to make decisions like changing routes, adjusting the weight of a vehicle, or adjusting drivers’ schedules to get packages to their intended destinations faster.

PUTTING COMPUTATIONAL POWER IN MORE HANDS Until recently, those kinds of insights were out of reach for many companies. The ability to process massive data sets required expensive hardware that was difficult to secure outside of large companies, academic institutions, and government settings. Such capability was elusive for the average person until open-source data processing software system Apache Hadoop hit the internet in 2006, followed by Apache Spark in 2014. These open-source software tools made it possible to process large amounts of data off site using a network of computers to combine computational power, rather than requiring a supercomputer. “With the introduction of Hadoop and Spark at the beginning of this decade, techniques to process and mine large data sets became more efficient,” IBM’s Walicki said. The ability to process large amounts of data made its collection more important, and the cycle of increasing collection capabilities rolled along as computing power increased. With greater ability to turn raw data into useful insights, data began to become an essential tool for companies, and more resources were put into reducing the barriers to seeing what that data was trying to tell them. Even issues like network latency improved as access to the internet increased through the 2010s and most residential and industrial areas got connected.


“Data is everywhere,” Walicki said, “but the ability to extract value is still evolving.” Big Data’s impact may be invisible to the average consumer, but its effects are apparent nearly everywhere in the U.S. economy. “AI, right now, needs as much data as you can give it,” Kairinos said.

SPEED ADVANCES FROM CLOUD TECHNOLOGY Cloud computing’s emergence has also contributed to the rapid rise in Big Data over the past three or so years, said Dr. Julie Rosen, chief scientist and technical fellow at Leidos, a Reston-based research company with focuses in defense, aviation, biomedical, and information technology research. Cloud computing is typically performed at data centers, or “data lakes,” with substantial computing resources. But demand for faster processing without exceptionally high bandwidth began pushing data processing away from data centers and to distributed networks. This led to the rise of edge computing as a complement to data centers. “With access to cloud-based servers, system architectures now are moving the processing of data to the data [collection device or sensor], rather than moving the data to the computing processors,” Rosen said. “Computation is moved away from centralized data centers toward the edge of the network, where tasks are performed on devices such as mobile phones and network gateways. Conducting the tasks ‘closer’ to the consumer improves response time, or latency, as well as addresses bandwidth from node to node in the distributed network.” Today’s economy is built upon the tools Big Data has provided. E-commerce, bill payment, person-to-person transactions, and in-store digital transactions require secure, encrypted systems. This is only possible with large-scale data processing. “The ability to perform trusted, secure, private transactions is at the core of

every economy,” Walicki said. “No one would use their credit card or smartphone for commerce — typical retail and banking transactions — if their financial information and assets were at risk of being stolen. Secure data transactions, sometimes on a blockchain [system], have increased trust and reduced the friction of commerce.” Rosen said the capability to extract data insights is just as important as their ability to collect data. Without this, it doesn’t matter how much data you have. It may as well be useless. “This massive collection of data is not solely a demonstration of ‘the possible’ from developers of sensing mechanisms. As with most successful businesses, data collection must be conducted in close coordination with a mission or business need,” she said. “Data sitting in a repository or data lake will grow stale quickly unless it is explored, investigated, and analyzed in the context of a business need, a consumer’s question, or a researcher’s hypothesis. And this is where the greatest transformations are happening in the industry today. It’s the accessible data retrieval that is critical to inform decisionmaking.”

USE CASES ACROSS INDUSTRIES It may not be obvious how Big Data is playing a role in many traditional industries. But IoT and AI are touching every part of today’s industries. The real data deep dives are in emerging markets like unmanned vehicles. Cameras, light detection ranging systems, and other sensors on self-driving and driver-assisting cars catalog each person, car, stop sign, trash can, and bicycle as a unique element. They track traffic data, construction information, habits of pedestrians, and other variables that the vehicle would need to know to get from one place to another, in order to get to the destination quickly and safely.

A lot of people call it the next oil, the next currency. By itself, it’s going to be crude unless you can refine it. SUMEET VIJ Principal and Director of Artificial Intelligence and Data Science, Booz Allen Hamilton

That mapped data is highly valuable for other industries, such as logistics or software development. The information tracked can give a sense of how many people are walking on a street at a given time, how many have children or dogs with them, what types of cars are popular in an area, and which areas have a high concentration of bicycles. Insights gleaned from that information can also help the unmanned industry deploy their products safely and efficiently. That’s just the start of potential data uses since real-time surveillance has picked up speed with the proliferation of IoT and AI.

This real-time insight is solving problems that would inevitably arise if this data had to be parsed through by a team of humans. Leidos uses AI to predict movements in wartime theaters as well as developments in medical cases.

The aerospace industry uses Big Data in numerous ways: autonomous aircraft engine IoT sensors that measure fuel efficiency, and engineering decisions to increase safety, to name a few.


“Big Data, a lot of people call it the next oil, the next currency,” said Sumeet Vij, principal and director of artificial intelligence and data science at Booz Allen Hamilton, headquartered in McLean. “By itself, it’s going to be crude unless you can refine it. … Intelligence — the ability to process and add the edge itself and only get the [data] that’s valuable — is important.”

Big Data is currently used in circumstances such as determining which advertising video to display, evaluating which medical therapy could have the best efficacy for a given patient, or alerting operators to electrical grid components that need to be repaired. It’s particularly useful in situations where time is of the essence, whether in a boardroom or an operating room.

Experts say there’s potential for more affordable services and products, more autonomous services, and ways to make life safer. In a world where household IoT sensors, personal computers, smartphones, and other devices are constantly monitoring consumers, there’s an avalanche of data ready for companies to turn into smart insights. Before those products even reach customers, the manufacturing process also provides massive amounts of data enabling companies to create greater efficiencies.

“Turnarounds become quicker, maintenance becomes more effective, productivity goes up, and all those things are clearly driven by the connectivity of devices in the field with what you have in your enterprise resource system and your maintenance system,” said Daryl Roberts, senior vice president and chief operations and engineering officer at DuPont. Fountech’s Kairinos imagines a future where personal vehicles are unnecessary because AI and IoT within self-driving cars have become so efficient as to outpace human drivers’ safety records. Autonomous vehicles will be useful for myriad situations on and off highways, such as autonomous farming equipment, landscaping trimming, and drone usage for surveillance and other uses. In general, the factors that make Big Data useful for businesses are consumer satisfaction, cost reduction, and safety, regardless of the industry being targeted. Kairinos said that in the future, “artificial intelligence” will be as common a term as the internet is today: “Twenty years from now, we won’t be talking about AI. … It’ll just be weaved into how things are done.”


The Evolution of Cloud Computing A Conversation with Susie Adams

Susie Adams is chief technology officer for federal government business at Microsoft. She oversees and implements the technical strategy for the technology giant’s Department of Defense, civilian, and intelligence community businesses. VEDP President and CEO Stephen Moret spoke with Adams about data centers, Big Data, and the future of cloud and edge computing. Stephen Moret: When you think about Microsoft’s data center and Southern Virginia, do you have any sense of why that location was attractive to the company? Susie Adams: I will tell you Boydton is extremely impressive. There are two main power feeds that are both very greenfriendly. There’s hydropower and nuclear power. The town of Boydton is actually very small, with a population of around 400 people. We created 300 new jobs just in Mecklenburg County as of January 2019. It was a unique opportunity for us. The way we look at data centers is unique because we think in terms of generations. As we build a data center anywhere in the world, we learn from how that particular data center operates and we improve on that innovation in the next generation. If you tour the data centers, you can see that


evolution. There are no raised floors, for example. We’ve won several awards for some of our data center work. The one in Boydton is literally sitting on concrete slabs. There’s a hot and a cold aisle, and it has what looks like aircraft engines blowing in air from the outside. The data center actually runs in the summer much hotter than a traditional data center. It’s like a swamp-cooler effect, where hot air gets pushed up through the ceiling. It’s a very different way of looking at things. Moret: I always thought of them as being similar, but you’re describing innovations in the building itself. Adams: They’re all very different. They don’t look the same. Some of our data centers, due to their locations, are four and five stories high. Some are two. Some

are modular. We actually put a data center at the bottom of the ocean to see how that would work. We try a lot of different things from an innovation perspective just to see what works. How energy-efficient can we get our data centers by the standard of power usage effectiveness (PUE)? We met our goal globally of 1.2 PUE, where 1 is the ideal power usage effectiveness. I won’t say it’s an industry standard, but it is a way that most data center providers look at how efficiently they’re running a data center from a power perspective. Moret: What are some fields you see as key pipelines to work for a company like Microsoft in the cloud space? Adams: There’s a wide variety of roles inside Microsoft for people with all kinds of backgrounds. If we look at where the IT industry is going with cloud computing, most people are very comfortable now with the concept. The next question is how do we take the fact that it’s pennies on the dollar to host limitless data in a cloud and apply artificial intelligence and machine learning to that data to democratize AI? The cloud is what’s enabling this innovation too. The opportunities there are limitless. Imagine if a data scientist could simply go into a tool and use dropdown menus to choose machine learning algorithms that have already been tested by other data scientists and not just engineers essentially democratizing data science. You could even give this capability to citizen scientists or employees who don’t have a data science background. I tell my nieces and nephews, if you want to get a great job in computers these days, go into cybersecurity or data science. We don’t have the human capital we need as a country to be able to excel here. We’re playing around with some really cool technology right now, using AI for

translation services, and we have a project called InnerEye. It’s a research project that employs AI and machine learning to build innovative tools for automatic, quantitative analysis of three-dimensional radiological images to figure out where a cancer tumor is and delineate where the organs are relative to the tumor. You have an X-ray, MRI, or CT scan, and a human radiologist looks at that. What if you could use artificial intelligence through InnerEye to assist the doctor and augment their capability to help them deliver the radiation to the exact target, sparing organs from needless radiation. From a cybersecurity perspective, you start to look at how a combination of AI and Big Data science can augment a cybersecurity professional’s daily activities. The big thing here is being able to look at all the telemetry that’s coming from all the systems. Not just the network, not just NetFlow data, but all telemetry from every device. Your watch, phone, refrigerator — everything is a sensor these days. You’ll be able to start seeing anomalies and trends you normally wouldn’t. I think the next big trend will be an uptick in these capabilities to help us better secure our data and use that technology for good to augment human capacity. And then there is quantum computing. I’m not sure exactly how far we are as an industry from that. We’re working on quantum computing ourselves at Microsoft. But just imagine, computers today rely on 1s and 0s. Each bit has to be a 1 or a 0. With qubits, you can have both states at once. What this means is you can do calculations in minutes or hours that would today take a lifetime to compute. The innovation we are seeing today has all been enabled by the cloud and hyperscale computing. Moret: It seems as if computer science made the biggest single talent pipeline into hardcore tech jobs. But data science is definitely on its heels. It feels like absolute demand compared to computer science is not as large, but it’s growing much faster, perhaps. Does that resonate?


As we build a data center anywhere in the world, we learn from how that particular data center operates and we improve on that innovation in the next generation. SUSIE ADAMS Chief Technology Officer for Federal Government Business, Microsoft

Adams: It does. It takes unique talent and desire to want to do that, very similar to any engineering role. Think about processing sonar or radar. They use MATLAB today to create machine learning algorithms, and then run them on computers that take weeks to generate a model. Now you’ll be able to do this literally in minutes and train these models over and over again effortlessly. The other interesting trend is wanting to extend the cloud to the edge. It’s great that we have cloud computing capabilities today, but the world is still disconnected. How do I take a machine learning model hosted in the cloud and put it on a device on the edge so we can look at and analyze that data in real time? Think of a national disaster like a large fire. Firefighters are on the ground gathering real-time data and they want to know exactly where that fire will go next. If they had the AI and machine learning capabilities on an edge device in the field they could easily plug


this into the model and get a much better readout of what’s happening. Moret: Getting into data science as a big growth opportunity for Microsoft, I’m interested in what you think about that. Secondly, the decision for the company to make open-source software a big focus as well. Adams: It’s funny. When I joined Microsoft, everybody thought Microsoft wasn’t an open-source company, but we were already doing a lot in the open-source community. Open source is a critical part of Microsoft’s mission today. Our cloud services support most open-source software, our devices run open-source software and our engineering teams regularly contribute to open-source projects. It’s throughout our data centers, not just at the software layer, but at the hardware layer as well. It’s hugely beneficial. The same is true for big data and artificial intelligence.

There are four major open-source work streams at Microsoft. We consume, contribute, create, and collaborate with others in the industry. It’s a pretty critical part of everything we do. We support pretty much everything out there today. We also build on that and contribute back to the community. In fact, I think Microsoft engineers are one of the leading contributors to Linux today. Moret: What do you think is next in big data? Is it basically a massive increase in computing power from quantum computing, or something else? Adams: It’s not quantum yet. Right now, the way people are using big data is still clunky. You’ve still got to piece together a number of open-source projects. It’s very difficult to learn how to do, and you need a very special background in data science. I think what you’ll see is that as cloud tools evolve,

You’re going to see the ability to build machine learning algorithms very quickly and then move them to the edge. You will be able to run data you’re collecting in a field or remote location through the algorithm at the edge and send it into the larger sample hosted in the cloud. SUSIE ADAMS Chief Technology Officer for Federal Government Business, Microsoft

and we’ve already launched many of them on our platform, big data will be automated. It‘s going to democratize how you do these things. It will be much, much easier — very similar to when Hadoop was the standard, which wasn’t that long ago for big data. Hadoop generally consisted of 10 or 12 open-source projects, it took people months to get a Hadoop cluster set up. In the cloud, data scientists went through a wizard, configured some things, and it took 10 minutes to deploy that same cluster. I think the same is true for machine learning. You’re going to see the ability to build machine learning algorithms very quickly and then move them to the edge. You will be able to run data you’re collecting in a field or remote location through the algorithm at the edge and send it into the larger sample hosted in the cloud.

Moret: What about cloud computing? Broadly speaking, what are some trends you think we can look forward to in the next three to five years? Adams: It depends on whether you’re talking about government or consumers. I think from a government perspective, you’re going to see data moving to the cloud at an accelerated pace. And we’re already seeing some trends around that. Then we’ll start seeing hybrid solutions in situations where it’s not appropriate to move the data. There’s always going to be data on premises and you’re going to need this hybrid experience. People will stop saying, “I need to migrate to the cloud,” but instead, the mantra will be, “I need to digitally transform the way I’m doing business.” If you ask any large government organization how many authoritative systems of record they have it’s typically an enormous number, and

many times they have no idea what some of the data is used for. People will ask, “How do I digitally transform, not modernize an app just to modernize?” We’ll start to see AI-infused applications where we’re adding capabilities, whether it’s a bot to help you augment a capability or just simple automation tasks put on top of an existing process. We’ll see advances in cybersecurity, zero trust solutions, and hybrid cloud capabilities that will allow people to manage the hybrid environment much more efficiently. Moret: Thanks so much for your time, and thanks for everything Microsoft has done for the Commonwealth. Adams: Absolutely.

For the full interview, visit


THE DAWN OF DATA How Virginia Became the Data Center Capital of the World

Central Virginia

DBT Data Shenandoah Valley

OnePartner ATAC Roanoke Region



Southwest Virginia Blacksburg



W y t h ev i l l e


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South Central Virginia

Map shows 30 publicly disclosed data center locations

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S o u t h B o s to n

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Greater Richmond/Virginia’s Gateway Region




irginia is home to the largest assemblage of data centers in the world, with Northern Virginia alone accounting for more than 100 (out of 504 known hyperscale data centers worldwide) that total more than 13.5 million square feet of data center space. Synergy Research Group estimates that 25% of U.S. hyperscale data centers are located in Virginia.

In Northern Virginia, network connectivity traces its roots to the U.S. government’s experiments in wide-area fiber optic networking in the 1960s. Today, an intersection of mission-critical fiber backbones connects Virginia to all major markets in the U.S., along with the highest density of dark fiber in the world. In fact, 70% of internet IP traffic is either created or passes through Loudoun County’s “Data Center Alley,” making Ashburn the epicenter for global interconnection. However, there’s more to the story. Virginia’s abundant, affordable electric power and growing sustainable energy generation, its business-friendly environment (including state and local incentives for the data center industry), stable climate with minimal natural disaster exposure, and educational initiatives training a tech-savvy workforce all support the continued growth of data centers across the state. The importance of the coordination between electric utilities, local government, and state agencies to attract new business and support existing data center expansions can’t be overstated. In Loudoun County, the approval process for data centers has been streamlined through a fast-track program, while Dominion


Energy’s ability to plan ahead and keep up with unprecedented development now supports 1,027 megawatts (MW) according to the CBRE 1H2019 North American Data Center report.

buildings. In June 2017, Digital Realty announced a merger with DFT, creating the largest single portfolio of data centers in Northern Virginia.


Despite those successes, it was a project Virginia didn’t land that helped launch the Commonwealth to its current heights. In 2009, Apple decided to build a $1 billion data center in Maiden, N.C., instead of Virginia. The next year, Virginia significantly expanded the state’s data center sales and use tax exemption on computer equipment.

In 1992, a consortium of private companies founded Metropolitan Area Exchange, East (MAE-East). A year later, the National Science Foundation awarded MFS/MAE-East a grant, establishing it as one of four original Network Access Points, along with Chicago, San Francisco, and Pennsauken, N.J. Rich Miller, founder and editor of Data Center Frontier, said data center momentum began to accelerate in Northern Virginia in the late 1990s, when America Online located its headquarters in Dulles and Equinix built its first data center nearby. “The Equinix campus quickly became the web’s busiest meeting place, creating a powerful network effect in which each new connection adds to the value of its digital ecosystem,” he said. After the dot-com bust that began in 2000, internet purpose-built data centers didn’t come back until 2007 with the development of the DuPont Fabros Technology (DFT) VA4 data center, the result of a collaborative effort to proactively attract data centers to Ashburn. Hossein Fateh, CEO and co-founder of DFT, provided the original hyperscalers (e.g. Yahoo!, Microsoft, and Facebook) a revolutionary infrastructure design: point-of-delivery architecture, a repeatable design pattern that maximizes scalability. In 2007, Digital Realty Trust made a significant entry into the Ashburn market, acquiring Loudoun Exchange’s first three


In Virginia, data center companies receive exemptions for sales and use taxes on equipment and software if they invest more than $150 million in capital investment and create 50 new jobs paying at least one and one-half times the average prevailing wage, with those requirements lowered for projects located in unemployment-distressed communities or in Enterprise Zones. The Virginia General Assembly recently extended those economic incentives through 2035. In addition, many localities offer reduced personal property taxes on data center computers and related equipment. In 2018, the General Assembly enacted a bill that created a specific classification for data centers for valuation purposes, assessed at the local level.

TRACKING RECORD GROWTH Data center strategist Allen Tucker has tracked data center activity in Virginia for more than 20 years. He recently compiled data on net absorption for co-location data centers located in the top six U.S. markets from 2015 to 2018. Northern Virginia data center leasing accounted for 62% of the megawatts absorbed in the top six U.S. markets during 2018, a significant increase from 44% of total bookings in 2017.


The Equinix campus quickly became the web’s busiest meeting place, creating a powerful network effect in which each new connection adds to the value of its digital ecosystem. RICH MILLER Founder and Editor, Data Center Frontier

N E T A B S O R P T I O N I N T H E T O P S I X D ATA C E N T E R M A R K E T S MWs Northern Virginia



Pacific Northwest

Northern California


300 270




150 115


100 65



42 39 38 33

36 31 16





43 38 20



30 14


40 40 20 16


40 20 25

22 20

EOY19 Prediction

Source: Allen Tucker, real estate strategist



RagingWire, Ashburn


This is one of the first examples of new data center markets emerging around the strategic changes in the subsea cable market where new cable routes are guided by the needs of hyperscale customers who want to control their data and costs. RICH MILLER Founder and Editor, Data Center Frontier

Additionally, Tucker has projected Virginia leading the pack in likely endof-year 2019 net absorption, with the caveat that one large hyperscale booking in any of the top six markets could shift the numbers higher. Hyperscale leases can be massive, often 10MW to 20MW or much larger, which drove a record 270MW of bookings in Northern Virginia during 2018. Tucker noted that Northern Virginia data center leasing declined to 86MW in the first half of 2019 compared to the record-breaking 173MW booked in the first half of 2018, but also pointed out that no other data center market in the world has ever exceeded 70MW of annual absorption.

WHAT’S DRIVING DEMAND? Amazon is just one of the global cloud giants often referred to as “hyperscale” companies that have a significant presence in Virginia, including Microsoft Azure/ Office 365, Facebook, Alphabet’s Google Cloud, IBM Cloud, Oracle Cloud, Apple, Alibaba, Yahoo!, Uber, LinkedIn,

and Dropbox, along with many other household names. The public cloud lives in these data centers. The relentless growth of data continues to be driven by e-commerce, wireless networks, social media, streaming content, software as a service, artificial intelligence, machine learning, virtual reality, gaming and machine-to-machine communication, also known as the Internet of Things (IoT). All those factors point to continued growth in cloud services. In an October research note tracking global hyperscale data centers, John Dinsdale, chief analyst and research director at Synergy Research Group, noted that an additional 151 hyperscale data centers were in various stages of planning or building.

VIRGINIA’S EMERGING DATA CENTER MARKETS Data center campuses have popped up in other Virginia communities, including Prince William County and the city of Manassas in Northern Virginia. A

combination of appealing land prices and support from the NOVEC Energy Solutions electrical utility has created an additional data center corridor often referred to as “Innovation Alley.” Another reason for increased development in the area is that hyperscale cloud providers prefer more than one availability zone in a region in order to provide customers with greater resiliency for their workloads. These factors also help to create demand in other areas of Virginia, including Henrico County, home to Facebook and Bank of America facilities. Activity in Henrico County has been buoyed by its location, just 100 miles from the MAREA-BRUSA subsea cable landing station in Virginia Beach. “This is one of the first examples of new data center markets emerging around the strategic changes in the subsea cable market,” Miller said, “where new cable routes are guided by the needs of hyperscale customers who want to control their data and costs.”


[AWS’s cloud associate’s degree with Northern Virginia Community College is] an exciting new step in creating a cloud workforce — a key component of the emerging tech skill set needed to fill the 21st-century talent pipeline. TERESA CARLSON Vice President of Worldwide Public Sector Business, Amazon Web Services


Equinix, Loudoun County

SUSTAINABLE GREEN ENERGY Hyperscale companies are finding willing partners in Virginia’s energy utilities, which have been responsive to demands for renewable energy. Dominion Energy and AWS have partnered on six projects totaling 260MW in Virginia that involve long-term power purchase agreements to provide solar energy to support AWS’s renewable energy goals, while Facebook’s data center will run entirely on renewable energy. In March 2018, Microsoft announced the purchase of 315MW of energy from two new solar projects in Virginia. This represents the single largest corporate purchase of solar energy ever in the U.S. Dominion’s solar capacity has increased by more than 630% since 2015, with nearly 745MW in operation or under development.

That’s not the only renewable energy source where the Commonwealth is leading the way. In September 2019, Dominion announced its ambitious Coastal Virginia Offshore Wind project, the first wind project in the United States built by an electric utility company. The company estimates the project will generate more than 2,600MW of energy by 2026.

A DATA-READY WORKFORCE A rapidly growing data center industry requires an educated workforce with proper skills to support the hyperscale growth, the digital transformation of businesses, and numerous government agencies and contractors with significant operations in Virginia. Amazon Web Services launched its first cloud associate’s degree with Northern Virginia Community College in 2018.

Teresa Carlson, vice president of worldwide public sector business at AWS, called the new degree program “an exciting new step in creating a cloud workforce — a key component of the emerging tech skill set needed to fill the 21st-century talent pipeline.” The expansion of the AWS Educate program includes grants to enhance K-12 computer science programs, the addition of nine community colleges, and five new university participants (Hampton University, Old Dominion University, Virginia Commonwealth University, Virginia State University, and Virginia Tech). George Mason University announced its planned four-year degree program with AWS in June. In a nutshell, Virginia welcomes data centers with open arms, and the results over the last decade speak for themselves.


We have chosen Fairfax County, considered the East Coast center of technology innovation, for its proximity to the nation’s capital, a vibrant business community, access to several international airports and Metro’s Silver Line, and an incredibly diverse and highly educated workforce. MICHAEL SAYLOR CEO, Microstrategy


The Potomac River’s Great Falls sit on the Virginia-Maryland border. The park and the river are popular with outdoor enthusiasts for activities like kayaking, whitewater rafting, and rock climbing.


Down to a [data] science Several Virginia higher education institutions now offer courses to help students and working professionals learn how to use data to inform decision-making and solve problems ­â€” and some are helping to shape research that could ultimately impact medical, financial, and numerous other fields.


Virginia Tech students work on their capstone project in Prof. Mark Embree’s Computational Modeling and Data Analytics class.


major combines instruction on topics such as data analytics and machinelearning strategies with academic elements from the university’s statistics, mathematics, computer science, and physics departments. “All science now is really fueled by data,” College of Science Dean Sally Morton said. “There’s a need to understand how to use data effectively. By itself, data is nothing. It takes analysis to make it information that is actually [useful].”

All science now is really fueled by data. There’s a need to understand how to use data effectively. By itself, data is nothing. It takes analysis to make it information that is actually [useful]. SALLY MORTON Dean, Virginia Tech College of Science

The data extraction and analysis skills students learn in the CMDA Bachelor of Science program could be applied in business, engineering, or other roles.

which makes it very attractive for employers,” Morton said. “People are doing a lot of mathematical modeling to simulate what’s happening in the world. Data speeds up discovery.”

“Our data science degree has an emphasis on computation and simulation,

CMDA candidates can choose to pursue a biology-, physics-, or economics-based

track and can also work on a semesterlong assignment with a corporation. “Unlike most majors, it doesn’t just encompass one department,” Morton said. “[The program] has been tremendously popular, both among students and employers.”



Prof. Jon Kropko teaches students in his Practice and Application of Data Science class, currently housed in a temporary location as the school prepares to break ground on its new School of Data Science.


Virginia announced plans to establish its first new school in more than a decade — one dedicated to helping students learn practical data science applications. Featuring courses taught by dedicated faculty and others with joint appointments in other UVA schools, the new School of Data Science is an evolution of UVA’s Data Science Institute, which had been granting Master of Science degrees in Data Science since 2015. Currently housed in a temporary location, the school is slated to break ground on a new building in the first quarter of 2020, thanks in part to a $120 million gift UVA received — its largest on record — from the Quantitative Foundation, a private philanthropic organization based in Charlottesville.

In addition to the usual students from STEM disciplines, students from nursing, history, and other areas have participated in the program, according to School of Data Science Founding Dean Phil Bourne, who said businesses’ growing demand for quantitative skills has helped fuel interest in data science-related instruction. “Employers were beginning to identify the need to have this kind of training,” Bourne said. “It is endemic across all fields — there’s data wherever you are that potentially has the ability to improve what you’re doing.” Along with its 11-month on-site master’s program and an online version, Bourne said the school hopes to develop Ph.D., undergraduate, and continuing education courses on the topic.


Prof. James Baldo, the director of George Mason University’s Master of Science in Data Analytics Engineering program, works with graduate students using cloud-based resources to analyze large datasets.


to become data scientists and analysts in sectors ranging from marketing to government intelligence study topics such as data mining, predictive analytics, and risk analysis in George Mason University’s Master of Science in Data Analytics Engineering program.

The school also offers a 12-credit data analytics graduate certificate program, which is open to individuals with an undergraduate degree. Last spring it debuted an online version of its data analytics M.S. program, so students are no longer required to come to the school’s Fairfax campus at least two nights a week.

The training, according to James Baldo, director of the program, helps prepare them to work with data to find solutions for a broad range of problems and present the findings to stakeholders.

Both master’s options, Baldo says, will help prepare participants to handle the type of diverse, potentially challenging data-science-based, problem-solving employers need help with.

Approximately 10 concentrations, including applied or business analytics and cyberdata mining, are offered; students can also pick electives to create a custom course load.

“[Working with] this large volume of data is very tricky,” Baldo said. “In many cases, data has to be conditioned, cleaned, and prepared to be used for analysis. That takes a lot of time — and requires people with the right skill set.”


“It’s innovative and pretty fast-paced. We try to give people a foundation with these courses,” Baldo said.


Sunita Dodani, M.D., Ph.D., left, meets with staff of the EVMS-Sentara Healthcare Analytics and Delivery Science Institute (HADSI).


LAUNCHED IN 2016, Eastern Virginia

Medical School’s (EVMS) Healthcare Analytics and Delivery Science Institute (HADSI) provides grants of up to $25,000 and data science-related assistance for projects designed to help improve health outcomes in the Hampton Roads region. Through a partnership with regional medical services provider Sentara Healthcare, HADSI is able to provide EVMS faculty, medical students, and residents with access to patient information for research projects from Sentara hospitals. Additionally, with the support of the EVMS Brock Institute, HADSI also provides Virginia Hospital Information data for research purposes. The institute also offers data-related services, according to HADSI Director Dr. Sunita Dodani, M.D., Ph.D., such as helping researchers design a database or interpret analysis results.

activities, external funding, and improved value proposition of healthcare. “Patients were getting admitted with acute knee injuries,” Dodani said. “An abscess, many times, goes hand-in-hand with kidney damage, [but] a nephrologist would never know. Through this research, if care management changes or a lab value is higher, an electronic medical record system sends an alert to everybody taking care of the patient.” HADSI provides research support to medical students, residents, and fellows and conducts regular research boot camps in collaboration with the graduate medical education office. “We have resources and skills — people here who are experts in healthcare for research purposes,” Dodani said. “And capitalizing on the use of Sentara electronic medical record data can result in improved healthcare delivery.”

The outcomes of these projects are tremendous such as increase in scholarly




in Computer Science degree with a data science concentration at Virginia Commonwealth University are able to test out their classroom work through experiential learning opportunities, according to Krzysztof Cios, Ph.D., professor and chair of VCU’s Department of Computer Science. In one instance, a group of students helped a finance company create an application to manage internal requests — an issue the company had been struggling to solve. “Bringing students from computer science, the arts, and other disciplines together to solve this challenge helped the team look at the problem from different angles,” Cios said. “The result was a new, practical solution the company, in fact, has implemented.” Because students in virtually any major could benefit from some exposure to data science, the school also created a four-course Fundamentals in Computing specialization for undergraduates,

which debuted in spring 2019. The specialization is open to all VCU students in any major other than computer science. “Whatever major they have or job they go into, students with an understanding of data science and computer programming are able to serve as a bridge between companies and data,” said John D. Leonard II, Ph.D., executive dean of the VCU College of Engineering. To help technology professionals increase their computer science skills without having to leave the workforce for an advanced degree, the Department of Computer Science also began offering post-baccalaureate graduate certificates in data science in 2019. “Years ago, the pace at which one needed to renew skills was much slower. With rapidly changing technologies and new paradigms, people in the workforce have to update their skills fast to stay relevant,” Cios said. “Our undergraduate and graduate degrees and post-baccalaureate certificates help students do just that by picking up skills they may not have learned before.”

Whatever major they have or job they go into, students with an understanding of data science and computer programming are able to serve as a bridge between companies and data. JOHN LEONARD II, PH.D. Executive Dean, Virginia Commonwealth University College of Engineering


Students work on a smart home simulator in Prof. Sherif Abdelwahed’s lab. The simulator is a testing ground for numerous new 47 home technologies.

Southern Virginia Rewrites its Economic Story Microsoft’s investments in Boydton and South Boston and its regional partnerships are positioning the region as a tech destination A CENTURY AGO, South Boston was

a tobacco-producing stalwart. In 1927 alone, the town accounted for more than 20 million pounds in tobacco sales. The Great Depression came and went. Tobacco still helped fuel the local economy, but it was never the same. South Boston had the same problem as so many other small towns across the country: It needed an economic spark. Then Microsoft arrived in Southern Virginia in 2010. The Washingtonbased technology company has been a neighbor for nearly a decade, building a massive data center in nearby Boydton. The company’s latest community partnership has provided the needed spark to South Boston.


The town has cleared the remnants of a tobacco warehouse to construct the 15,000-square-foot SOVA Innovation Hub, the first new building in downtown South Boston in more than 40 years. The project, which will bring everything from a coworking space to electric car chargers to town, is the result of a partnership between Microsoft and local economic developers. For Microsoft, it represents a bigger platform for its TechSpark initiative, a civic program to foster greater economic opportunity and job creation throughout the region. In 2017, Southern Virginia became one of six regions in the country selected for TechSpark. The program focuses on promoting skills and employability, increasing access

Southern Virginia Higher Education 49 Center, South Boston

Elementary school students in South Boston use Ozobots to learn coding principles.

to broadband, and helping local organizations thrive through digital transformation. “We believe technology is a force for good, but we must ensure that everyone has access to the benefits it provides,” Virginia TechSpark Manager Jeremy Satterfield said. “Our goal is to make the opportunities of our rapidly evolving digital economy accessible to all people.” South Boston-based Mid-Atlantic Broadband Communities Corporation (MBC) played a major role in first bringing Microsoft to Southern Virginia a decade ago. MBC President Tad Deriso believes another symbol will hammer that point home: the iconic Microsoft logo emblazoned on the side of the building upon completion of construction in 2020.

RIPPLE EFFECTS The construction of the largest data center in Southern Virginia has had effects across the region. As it was first conceived, Microsoft’s East Coast hub for online services landed in Mecklenburg


County as a $499 million project that would create 50 jobs. Then-Gov. Bob McDonnell called the project “the largest economic investment in Southern Virginia history.” “It ripples through everything that happens in a local economy: restaurants, hotels, convenience stores,” said Mecklenburg County Administrator Wayne Carter, who has been in county government since the original Microsoft project was announced. In January 2019, the most recent of six expansions to the enterprise data center was announced, this time adding more than 100 new jobs. The effort was orchestrated through the collaboration of VEDP, Mecklenburg County, and the General Assembly’s Major Employment and Investment Project Approval Commission. Among the factors that attract data center operators to the state are sales and use tax exemptions and the Commonwealth Development Opportunity Fund, which supports private-sector investments and expansions in the state.

Students program Nila the robot through Halifax County Public Schools’ Girls Who Code club, where students in grades 3-12 learn about STEM careers.

Microsoft’s total investment amounted to $1.99 billion and more than 250 jobs before this most recent expansion was announced. The company has created more than 1,800 jobs throughout the Commonwealth, which doesn’t include non-Microsoft jobs supported by the company’s activity.

CONNECTING THE COMMUNITY In 2009, Microsoft began eyeing Southern Virginia as a potential site for the data center that would eventually call Mecklenburg County home. The other state under consideration was North Carolina, which had beaten out the Commonwealth for similar projects at the time. Also complicating matters was a 50-mile fiber gap that left the site isolated. That’s when MBC stepped in, proposing to extend the network to meet Microsoft’s needs and make the Boydton site a viable option. MBC leadership took six trips to Microsoft’s headquarters to help secure the partnership. This proved to be a critical connection for Southern Virginia in coming years.


We’ve been able to demonstrate that we can provide the infrastructure and workers Microsoft needs — and accommodate their schedules. We’re hoping they’ll continue to grow here and get another site to keep going for another 10 to 20 years. WAYNE CARTER Administrator, Mecklenburg County

MBC has since partnered with Microsoft on its Airband Initiative to bring broadband access to rural communities using unclaimed TV bandwidth. So when Deriso learned that Microsoft was considering Southern Virginia for its TechSpark program, he knew his backyard was uniquely suited to benefit from the initiative. The Virginia TechSpark win set the stage for the SOVA Innovation Hub collaboration. “We said, ‘We need your brand, we need your smarts, and we need your passion and creativity,’” Deriso explained. “Microsoft is massive. But what we’ve found from their leadership — from the top all the way down — is that once they see an idea and the vision behind it, and say ‘Yeah, we can get behind this,’ then they’re behind it all the way.” MBC is covering the $5 million price tag for the SOVA Innovation Hub. The building will only help expand the scope of the engagement Microsoft has already undertaken, including:

◾ Providing free community Wi-Fi throughout Boydton, thanks to a partnership with the local data center and Lake Country Internet. ◾ Launching the Microsoft Technology Education and Literacy in Schools computer science education program, which is now in every high school in the TechSpark region. ◾ Supporting IT training delivered by Southside Virginia Community College and the Southern Virginia Higher Education Center through curriculum assistance, hardware donations for IT labs, student scholarships, mentorship from Microsoft employees, and internships at the Microsoft data center, helping to create a highly skilled technical workforce in the region. ◾ Partnering with Halifax County Public Schools’ Mentor Role Model program to launch the region’s first Girls Who Code club, which gives students in grades 3–12 the opportunity to learn about STEM careers.

LOOKING AHEAD As the partnerships and wins add up across Southern Virginia’s towns and counties, they’re not confined to those localities. Rather, they’re projected onto the greater region and, in some cases, the entire Commonwealth. Carter believes Microsoft won’t be the last company to see the value of partnering with the region. “We can use this same template for other projects so they can move this through the system quickly,” he said. “Speed to delivery — that’s what everyone is working toward.” As for MBC’s Deriso, he’s already envisioned what success looks like inside and outside the SOVA Innovation Hub. “I would love to see the coworking space crowded, and the parking lot packed,” he said. “And then someone is going to have to construct a new building.” That’s more than a spark. That’s a techinspired economic revitalization.


Connecting Southern Virginia to the World A Conversation with Tad Deriso

Tad Deriso is president and CEO of Mid-Atlantic Broadband Communities Corporation (MBC), a South Boston-based 501(c)(4) nonprofit organization that has built an advanced open-access fiber optic network in Southern Virginia. VEDP President and CEO Stephen Moret spoke with Deriso at a recent meeting in Danville about his work creating worldclass fiber infrastructure in rural Southern Virginia. Stephen Moret: Can you tell us what the catalyst was for creation of MBC, and how it all came together? Tad Deriso: We started this project in 2001. In rural Southern Virginia, there were lots of job closures, lots of traditional industries going away — tobacco, textiles, manufacturing — never coming back again.

So they came down and said, “Wow, we love your workforce. We love your taxes. We love everything about Southern Virginia. But, man, your telecom infrastructure doesn’t work for us. You have one fiber route in and out and little chance for competition to serve our longterm fiber connectivity needs.”

A lot of Southern Virginia business and political leaders and the newly formed Tobacco Commission asked, “How do we change the trajectory of our economy? How do we attract technology companies to do some things here?”

Some businesses were getting T-1s, which is 1.5 megabits of connectivity, for $8,000 a month. It was very difficult for the region to convince high-tech companies to locate here and help transition our economy. There was really no way to do that because of the infrastructure, lack of broadband, and lack of competition.

What was interesting is they were recruiting AOL, which was looking at a data center expansion from Northern Virginia. The internet was in a rapid growth stage and one of the AOL board members was from Southern Virginia and suggested, “Wouldn’t it be a great economic story to have a massive multihundred-million dollar investment in rural Virginia?”

Old Dominion Electric Cooperative was my client at the time, and they were laserfocused on how to improve the economy of Southern Virginia by building some kind of fiber network infrastructure. We asked, “How do we get fiber to every single industrial park in Southern Virginia?” The idea was to build this advanced, openaccess fiber infrastructure and connect to private-sector networks so they do what




The idea was to build this advanced, open-access fiber infrastructure and connect to private-sector networks so they do what they do best, which is provide competitive access at competitive pricing. TAD DERISO President and CEO, Mid-Atlantic Broadband Communities Corporation

they do best, which is provide competitive access at competitive pricing. Moret: Then you essentially charged them an access fee. Deriso: Exactly. Whether it’s dark fiber or optical transport, connecting their networks to Southern Virginia was the key. It was an interesting first 30 days on the business case, because we took a quick look and said, “If you get 100% of the business in this region, you can’t even cover the debt service of $70 million of capital. So either some grants need to be involved, or we’ve got to subsidize this thing somehow.”


That’s where the Tobacco Commission came in and said, “Our job is to invest in infrastructure to help revitalize our region. How do we do that?” We then developed this idea to build a fiber network throughout Southern Virginia, using public dollars to fund an infrastructure that traditionally the private sector would build. There was no business case for the private sector to make, so we said, “Let’s open up access and make it strictly wholesale. We’re not competing in the retail space, we won’t hook up residential homes or serve businesses or schools directly. Let’s form MBC. Let’s make it a not-for-profit organization, and let’s get it done.”

The Tobacco Commission and the U.S. Department of Commerce liked what we put together and funded the first $6 million from the Department of Commerce Economic Development Administration, which led to a match from the Tobacco Commission for $6 million. We had $12 million to start building, and there were additional phases in investment from the Tobacco Commission. So we were building out Southern Virginia, and then other groups were building out Southwest Virginia with tobacco dollars and federal dollars.

SOVA Innovation Hub, South Boston

We started in January of 2004 and finished the first phase of construction in early 2006, when we turned the lights on. We started seeing internet service providers, telecom carriers, and cable companies take advantage of this network because they’d never had an opportunity to cost-effectively extend their reach into rural Southern Virginia. Now you’ve got this amazing ecosystem that’s developed over the years to greatly reduce the cost of access. Southern Virginia is no different than Northern Virginia, Richmond, or Hampton Roads when it comes to retail broadband pricing.

We just wanted a level playing field. Thanks to public-sector grants from the Commission and federal sources, we were able to do that. It’s been amazing to see the impact in the region. Moret: When we look back over the multi-decade existence of the Tobacco Commission, this would have to be one of its great success stories. Deriso: I think they’ve said that, and we appreciate it. We take our fiduciary responsibility very seriously. We used their grant dollars to build this infrastructure that’s a critical economic development asset for

Southern Virginia and will be here for many decades to come. We sell optical transport services, dark fiber, and colocation to private-sector telecom providers. Those revenues help support MBC’s operations and fund our ongoing capital projects, economic development support activities, and reinvestments in our communities through sponsorships of high school robotics teams, social programs, and matching funds for our technology partners. Moret: How much in total has been invested in the infrastructure so far?



Some in Microsoft say that [the data center in Southern Virginia] is the largest in their portfolio worldwide, and some in the industry say it’s one of the top five largest data center sites in the world. Look at the impact of that. That’s happening literally in a town of 500 people. Who would’ve thought that could happen? TAD DERISO President and CEO, Mid-Atlantic Broadband Communities Corporation

Deriso: About $100 million in capital grants, which includes $60 million from the Tobacco Commission, about $40 million from federal sources. We have reinvested an additional $35 million from MBC earnings back into the network infrastructure. It just continues to grow, expand its footprint with more projects, more customers, and more investment in Virginia. Moret: When you go back to the beginning and the economics you envisioned, the scope and the business model, how close has it been to what you originally expected? What’s different than what you expected? Deriso: We actually looked back a few years ago at that original business plan I developed as a consultant in Atlanta. What we thought we would price things and what we thought the bandwidth would be were not even close. We anticipated, “We’ll have all this fiber, we can do T-1s, we can do OC3s. So, 100-megabit, 300- and 600-megabit, that’s a lot of bandwidth.” Those expectations were blown away with the arrival of Ethernet services,


massive demand from our ISPs and carrier customers, and new electronics that allowed MBC to deliver gigabits cost effectively. Today, our backbone has 1.2 terabits of capacity and can be upgraded to 12 terabits with the addition of a few pieces of electronics. The growth and scale of our industry continues to defy our expectations, and we’re able to help bring those benefits to rural Virginia. Moret: Obviously, one of the big things you all had in mind was, how do we unlock some economic development opportunities that wouldn’t otherwise happen? It’s been almost 20 years now since the genesis of this. What types of economic benefits or private-sector activity do you think have resulted from this unique model you built? Deriso: Probably the biggest one is from our local economic developers. They no longer have to answer the question, “Where’s broadband in my industrial park?” And of course, the data center industry was taking notice and worked very closely with VEDP back in the day to help land the Microsoft data center in Southern Virginia. In 2008,

Microsoft did a search for a site to build a large East Coast data center hub. From Maine to Florida, they started whittling sites down and ended up with two sites, in Virginia and North Carolina. We really had to step up to the plate and make this work for Microsoft. During that site selection process, one of their biggest concerns was that the North Carolina site was right on the major internet backbones, closer to the interstate, with a lot of access. The Virginia site wasn’t near those routes. Connecting back to those networks was 50 to 70 miles away. We were involved in those early meetings, so we raised our hand and said, “We’re this company called MBC and we can help solve this.” Thanks to VEDP involving us in those early meetings, we were able to play a role in solving the fiber network access problem. We made a bunch of trips to Redmond, Wash., over a six- or sevenmonth span to get them comfortable with our open-access carrier class network and how they could reach the networks that were important to them.


We were excited to play a small role in securing Microsoft’s investment in Southern Virginia. It’s been incredible to watch their growth from 2010 to today, it’s never stopped. If you look at Microsoft corporately — their cloud product Azure, Xbox, Office 365, machine-tomachine communications, international connectivity — it’s blossomed into massive economic impact in Southern Virginia. What’s really been amazing is to see how that changed perceptions. What used to be an empty industrial park for 10-plus years all of a sudden has activity and construction. Some in Microsoft say that the data center is the largest in their portfolio worldwide, and some in the industry say it’s one of the top five largest data center sites in the world. Look at the impact of that. That’s happening literally in a town of 500 people. Who would’ve thought that could happen? Moret: As we look at development across the Commonwealth and our smaller metro areas in rural regions of Virginia, one of the big challenges they face is lack of broadband access. Now we’re excited that the Governor and the General Assembly are taking action to enable other communities across Virginia to be successful, particularly rural communities. What are your thoughts on what the state’s been doing to step up efforts to encourage broadband deployment? Deriso: It’s been great to see the state take a leadership role in figuring this out. It’s not a complex problem to expand broadband. It’s a dollars and cents problem. So the technology part is easy. It comes down to having fewer people to connect, but it costs the same to put a mile of fiber in Danville as it does in Dulles. It becomes challenging. The state subsidizing that is great. But what we’re really excited about is that the state asked, “How do we enable the private sector to solve this problem?” Several of our customers are participants in the state’s VATI program to acquire some of those matching subsidy dollars.

The Tobacco Commission still invests in last-mile projects. What we like to see is that everybody’s got a little skin in the game. It’s not a handout, it’s, “Hey, private sector, you put some money in, we’re going to help you get your business case right, and then you’re going to make that last-mile connection happen in these rural areas.” We’re excited to see that and it has led to renewed interest in last-mile investment from ISPs, the telco and cable companies, and the electric cooperatives. Moret: What have been the biggest challenges MBC has faced over the years? Deriso: Our biggest challenges have been just trying to expand the network and raising capital as a tax-exempt organization. We’ve had some projects where we do a lot of cell site connectivity and backhaul, helping to improve cellular connections and wireless broadband in rural areas. To deploy that, we get RFPs from our customers where we can feasibly reach 30% to 40% of those tower sites based on economics that work. Traditionally, we spend $4 to $5 million a year on capital projects. We’ve been looking at some long-term projects for some of our customers that would require a substantial increase in capital spending. For any capital project, we run it through our model to ensure we have an effective ROI/IRR to ensure we’re able to continue investing for the long term. Moret: Data centers have become a big focus for Virginia, as you’re well aware. We’re not just a leader in the region or the country. We’re the world leader of data center development. What do you think makes the Commonwealth so attractive for the data center business, and where do you think it could go in the future? Deriso: The biggest impact Virginia has is Ashburn. If you look back to where the internet started and why everything developed the way it did, there was a lot of connectivity in Northern

Virginia. Ashburn continued to grow. Five or maybe eight years ago, the largest pockets of internet connectivity globally were between London and New York. Well, fast-forward to today and the largest places of internet peering and connectivity in the world are between Ashburn and Amsterdam. Suddenly, Virginia is right in the epicenter of the global internet infrastructure because of all the connectivity and investment. There’s really no way around that, which is a great problem to have. I think Virginia has historically been great for business capital investment. We have a competitive tax policy for data center recruitment and being a businessfriendly state certainly helps data center operators direct billions of dollars of investments to the Commonwealth. Other regions throughout Virginia continue to grow with data center investments. A lot of that’s due to the power infrastructure. Dominion Energy and Appalachian Power have robust power grids and continue to add renewable energy to their generation portfolios, which is important for the data center industry. We continue to see growth in data center recruitment from Southern and Southwest Virginia, Richmond, and cable landing stations in Virginia Beach; all are connecting to make bigger things happen. That’s been a tremendous advantage for Virginia and will continue to be for the foreseeable future. Moret: What do you foresee with the new cable landings at Virginia Beach? Deriso: The three cables that have been announced connect Virginia to Spain, France, and Brazil. We worked with our local partner, Cox Communications, to extend fiber and conduit infrastructure in Virginia Beach that supports those cables. We’ve been excited to see how these global internet giants (Microsoft, Facebook, Telxius, Google) are connecting Virginia with the world.


New York and New Jersey have been the prime landing spot for subsea cables from Europe. When Hurricane Sandy hit five or six years ago, it disrupted a lot of network access for some very large telecom and internet companies. That’s when Microsoft and other tech companies said, “We’ve got to diversify this. It’s not good long-term to have all these cables landing in this geography.” So they spent a lot of time looking and ended up in Virginia Beach because that’s the closest, most efficient connect point to Ashburn geographically.


The subsea cables in Virginia Beach really highlight Virginia’s role as an internet infrastructure powerhouse and will bring substantial marketing and PR benefits to our economic development efforts. Will the average consumer see any cost benefit from these cables? Everyone will experience greater reliability and scalability of cloud services and connectivity, but we’re not going to see consumers receiving gigabit internet service at home for $2 per month. Moret: When you look back, what accomplishments are you most proud of ?

Deriso: It may sound cliché, but what makes me proudest about MBC is the team we’ve built in South Boston. We go to industry meetings nationally and globally and give out our business card and people ask, “South Boston, Va.? Where is that?” What’s been exciting is to see the growth and dedication of our 20-person team in South Boston. There are not many hightech companies in South Boston yet, and having an opportunity to work with MBC and make a positive impact on our rural communities is really fulfilling to see.


Suddenly, Virginia is right in the epicenter of the global internet infrastructure because of all the connectivity and investment. There’s really no way around that, which is a great problem to have. TAD DERISO President and CEO, Mid-Atlantic Broadband Communities Corporation

Moret: As MBC moves into its third decade from its conceptual founding, what do you see happening in the next 10 years? Deriso: Just from a core business principle, we continue to expand our fiber network to different parts of Virginia through our partners. Customers will ask us to connect to areas they need to reach, and we work with them to figure out how to make that happen. We’re all about creating partnerships and leveraging technology to deliver positive

impacts. The SOVA Innovation Hub is our latest initiative with Microsoft. The new 15,000-square-foot building in downtown South Boston will serve as our new corporate headquarters and the Microsoft collaboration will drive more investments to our local and regional partners to support digital skills and computer science training development. We see the co-working space in the Hub being able to drive new startup and entrepreneurial initiatives and will be exciting to watch new opportunities develop from smalltown Virginia.

Moret: Tad, congratulations on what you’ve all accomplished in the last nearly two decades. Thank you for the leadership you’ve provided, and thank you so much for the impact MBC is having on Southern Virginia and the Commonwealth as a whole. Deriso: Thank you so much, Stephen. I appreciate it.

For the full interview, visit


GOING BELOW Subsea Cables Drive Economic Development in Virginia


orthern Virginia has long been known as the data center capital of the world, owing to its status as one of the original four Network Access Points (NAP). That industry dominance, however, has created a need for other data center markets to emerge and provide further options for companies looking to take advantage of Virginia’s tech-savvy workforce. However, a new world-class data center hub is taking shape along Virginia’s Interstate 64 corridor between Virginia Beach and Richmond. The installation


of the MAREA and BRUSA subsea cables that land in Virginia Beach and terminate in Richmond has connected this region with European, Latin American, and South American markets. The facility where these cables terminate is a mega-data center outside Richmond. This unique combination of internet assets and capabilities has created what is called the Richmond NAP — the location where subsea fiber cables, powerful data centers, and terrestrial networks all converge to provide access to some of the fastest data transmission in the world.

MAREA is an ultra-high-speed 200 terabits (TB)/second fiber optic cable originating in Bilbao, Spain — 200TB/ second is equivalent to downloading 12,000 high-definition movies per second — owned by Microsoft and Facebook and operated by Telxius, a Spanish telecommunications infrastructure subsidiary of the Telefónica Group. BRUSA is a 138TB/second cable owned and operated by Telxius originating in Rio de Janeiro. Both cables are among the most data-rich, highest-speed connections in the world.

Installation of MAREA cable

W A WORLD-CLASS DATA CENTER IN RICHMOND The MAREA and BRUSA sea cables were established in Virginia Beach in response to growing demand by U.S. companies for high-capacity, low-latency connectivity to Europe and South America. Both cables land at the Virginia Beach Cable Landing Station, which is owned and operated by Telxius. In Richmond, QTS Realty Trust, a provider of hybrid colocation and megascale data centers, owns the closest Tier 3-designed data center to the MAREA and

BRUSA cables. The 1.3-million-square-foot facility features more than 500,000 square feet of raised floor capacity and provides a wide range of IT infrastructure services. The combined capabilities of the QTSTelxius partnership are now attracting technology and internet companies to the I-64 corridor. The Richmond NAP is an attractive alternative for companies looking for the fastest, most effective internet routes to foreign markets, including Bank of America’s recent expansions in Henrico County and Facebook’s coming data center in White Oak Technology Park.

ATTRACTING MAJOR CLIENTS Capital investments have increased sharply in Henrico County since the deployment of the cables, with the county accounting for 53% of announced statewide investments in data processing and hosting, compared to just 6% from 2008–2016, according to a Mangum Economics report. “The confluence of the MAREA and BRUSA next-generation subsea cables and the QTS Richmond NAP are establishing Richmond as a premier North American global interconnection


Just a few years ago, you rarely heard talk about subsea cables when you were talking about data center infrastructure. Today, virtually every data center is making interconnection with subsea cables a priority to support data-driven global business. SEAN BAILLIE Chief of Staff, QTS Realty Trust


MAREA cable, on a ship in the Atlantic63 Ocean

Dunant Google

Saint-Hilaire-de-Riez, France Bilbao, Spain



Microsoft, Facebook, Telxius

South Atlantic Express

Puerto Rico

Fortaleza, Brazil


St. Helena

Rio de Janeiro, Brazil

BRUSA Telxius

Cape Town, South Africa

Submarine Communications Cables Existing Cable Planned Cable Source:


hub,” said Sean Baillie, chief of staff for QTS Realty Trust said. Facebook’s $1.75 billion data center campus is scheduled to become operational in 2020. The company is one of many looking to take advantage of increased capacity. More growth is expected as companies increasingly seek other routes through the Richmond NAP to major East Coast and Midwest cities. “With more people using the internet, existing internet infrastructure is struggling to handle all the traffic,” Facebook representative Melanie Roe said. “We work with many different partners on submarine cable systems that can help address this bottleneck by providing more capacity between more diverse locations.” An expanding data center industry also creates hundreds of new IT positions. An influx of data centers and fiber providers requires highly skilled talent to install fiber and build terrestrial IT infrastructure and run the facilities. Other regional benefits from the cables and Richmond NAP are: ◾ Enhanced connectivity for local businesses ◾ Growth of suppliers and vendors that support the IT industry ◾ Sustained growth for the regional construction industry as more data centers are built ◾ Higher internet speeds and reduced risk of failure outages “The NAP is an absolute game changer for Henrico County,” Henrico County Manager John Vithoulkas said. “With access to some of the fastest subsea cables in the world, the NAP puts Henrico County and central Virginia on the map with the 10 other U.S. major interconnection hubs. I do not believe that the impact the NAP will have on the quality of life for our region can be fully realized yet.”

Facebook Vice President of U.S. Public Policy Erin Egan, Telxius Chief Operating Officer Rafael Arranz, and Microsoft President Brad Smith discuss the MAREA subsea cable at a press conference announcing the project.

A PROMISING FUTURE The subsea cables are fueling growth in the nearby Hampton Roads market in addition to increased activity in Richmond. Recent Hampton Roads data center announcements include: ◾ Globalinx Data Centers plans to build a 150,000-square-foot, three-phased data center campus in Virginia Beach, including a 10,750-square-foot, carrierneutral cable landing station. ◾ ACA International has announced it will construct a 130,000-square-foot data center in Virginia Beach that includes corporate headquarters offices and a Tier 3 data center to provide neutral colocation services and to serve as the cable landing station for future subsea telecommunications cables. ◾ PointOne will invest $80 million to build two 31,000-square-foot facilities in Virginia Beach that will house computing data centers and a cable landing station for future subsea cables. Companies with global markets expect instant communication and collaboration with partners and customers around the world, relying on infrastructure that provides 24/7/365, high-performance connectivity. The I-64 corridor is an ideal geographic location for North American

access to subsea cables that provide these high-speed connections. ACA International and Telxius plan to land new high-speed cables at Virginia Beach. Large content providers such as Google, Microsoft, Facebook, and Amazon are also increasingly involved in funding and constructing new cables. “The internet and its growth, such as the new QTS Richmond NAP, means every company is global and as such has access to new customers, technologies and even employees,” Baillie said. “Just a few years ago, you rarely heard talk about subsea cables when you were talking about data center infrastructure. Today, virtually every data center is making interconnection with subsea cables a priority to support data-driven global business.” Virginia provides an advanced network of IT infrastructure assets and data center providers, as well as available fiber easements, tax breaks, scalable power, and a highly educated workforce. “This confluence of domestic and international connectivity has established the region as an international business destination, setting the stage for the next wave of investment and economic growth,” Baillie said.


Preparing Students for Sustainable Jobs A Conversation with Steven Brint

Steven Brint is distinguished professor of sociology and public policy at the University of California, Riverside, and the author of “Two Cheers for Higher Education.” VEDP President and CEO Stephen Moret caught up with him on a recent trip to the West Coast to discuss his work in, and analysis of, higher education in the 21st century.


Stephen Moret: You had a chance to get to know Clark Kerr and work with him, I think, on at least one book. What are your reflections on the role he played in the development of higher education in California and the country? Steven Brint: Clark Kerr was the most important figure in American higher education — and possibly global higher education — in the mid-20th century. He was very instrumental in the development of the California Master Plan, which created a three-tiered system in California. That was where you had community colleges, then the state colleges, and the University of California. That was emulated in many states outside of California.

Clark Kerr was the most important figure in American higher education — and possibly global higher education — in the mid-20th century. STEVEN BRINT Distinguished Professor of Sociology and Public Policy, The University of California, Riverside

He built the University of California. Seven members of the Association of American Universities are UC campuses. Berkeley, during his chancellorship, was thought to be the best balanced, outstanding research university in the country, which is quite an accomplishment for a public university when you have private universities like Harvard and Stanford.

anything that would surprise him, or any observations he might have based on your experience with him?

education. There was a chapter you wrote in that book called “The Rise of the Practical Arts.”

Brint: I think certain aspects of change since his death might come as a bit of a surprise to him. The connection of universities with the business community was not nearly as advanced, although it was happening in the early 2000s.

I was fortunate to meet him when he was quite elderly. He gave the keynote talk at a conference I organized when he was 89 or 90. He spoke without notes, in full paragraphs. We marveled at his capacity, even at that advanced age. So, a remarkable person.

The role of universities in technology development obviously was also happening, but has continued and flourished. I would say also the global character of some American universities with branch campuses in foreign countries, lots of exchange with other countries, both scholarly and student exchange, that’s advanced quite a bit since his time.

Around that same time, I read a piece by Dick Scott at Stanford. I’m forgetting where it was published, but he talked about the practical arts and liberal arts. He also made a distinction and talked about this third category, which he categorized as vocational programs. I think in your scheme this would essentially represent the newer entrants to the practical arts, things like parks and recreation management and construction services, which involve occupation-specific knowledge but maybe without as much grounding in theoretical framework.

Moret: What was he like on a personal level? Brint: I wouldn’t say he was a “life of the party” type of person, but he was genuinely interested and he made numerous inquiries, for example, about me and my family. I had the sense he was a warm, but obviously cerebral, person.

I don’t think he would be that surprised because we’ve already been dealing with this since the 1970s, but trying to come up with other resources besides state funding. That has continued to be a big issue. Most trends that we’ve seen were products of the ‘70s and ‘80s when he was around.

Moret: He passed away a little over 15 years ago. If he had a chance to come back for a day or two and observe higher education in 2019, do you think there’s

Moret: In 2002, nearly two decades ago, you edited a book called “The Future of the City of Intellect,” which had a big impact on my thinking about higher

Is there anything you want to share around that topic, as you think about the implications or the differences of these types of programs and the employment outcomes that they experience after the fact? Brint: I think there are a couple of factors here. One is obviously market demand for different subjects. Another is the rigor of the subject. If you look at pay scale, which is one of the ways you see the average incomes of


THE PERMANENT DETOUR Underemployment’s Long-Term Effects on the Careers of College Grads STEM majors are less likely to be underemployed than other college graduates, but not all STEM majors are equal. Underemployment rates range from a low of 29% in engineering to a high of 63% in parks, recreation, and leisure studies. % Underemployed in first job % Underemployed five years later



Parks, recreation, and leisure studies



Liberal arts



Physical sciences



Mathematics and statistics



Computer & information sciences and support services



Engineering Source: Burning Glass, “The Permanent Detour”


college graduates, maybe the first 10 are all engineering disciplines, at mid-career. That’s a combination of very robust demand and rigorous curriculum that not every student can succeed in. We know that rigorous curriculum is not really in some way the key factor. Latin and Greek, for example, are very rigorous as far as demands on students, and yet you don’t have market demand.

for students who are different. Maybe it’s the way their brains are wired or their developed skills, what have you. There’s a place for them. But it’s true that the place in the labor market is not equal for all of these disciplines. Some part of the problem that we see in the humanities and other disciplines now is that universities are oriented toward those that have labor market demand.

Here’s something that’s interesting about study time and the expectations for analytical and critical thinking that we have looked into and in which we had surprising results. We felt it’s likely that analytical and critical thinking would be a bigger factor in the humanities and social sciences. Because they’re often taught in seminar-style classrooms, where there’s discussion of text and you have to write papers, where you compare and contrast and use evidence to support your arguments. At least, that was the tradition I grew up in, when I was taking humanities and social science classes.

Moret: When we talk about connections between higher education and the labor market, it’s largely grounded in this notion of human capital development. We tend to think of that as something the education system has a monopoly on. But as we look at people and their development in the long course of their career, a tremendous amount of their human capital development actually happens in the context of their work life.

We were very surprised in the study we did of the University of California, at least as far as the survey results were concerned. We didn’t see strong differences across disciplines in the analytical and critical thinking experiences that students had. We did see strong differences in their selfreported study time, not surprisingly, in the natural sciences and engineering. Reported study time was significantly greater than in other disciplines. I think that’s a testimony to their difficulty. They’re maybe more rigorous and difficult in some ways, although I think it’s also worth saying that not everybody who can grind through an engineering curriculum would succeed in other fields. Most engineering students may not have the interpretive skills that you would need in a communications major or in other humanities. Students who do well in engineering may not do well in those disciplines. And so I think one thing that’s wonderful about universities is that there’s a place

One of the things I came to appreciate more about these ranges of different employment outcomes for graduates in different degree fields is that a lot of the mid-career earnings advantage of engineering grads, for instance, is not so much that they studied engineering, because many aren’t working as engineers 15 years later, but rather that because a large percentage of them secure collegelevel employment, they’re in the types of occupations that further develop that human capital and give them access to other college-level jobs. There was a report last year by Burning Glass, a big data analytics company, called “The Permanent Detour.” It was a synthetic longitudinal study where they analyzed millions of résumés of college graduates. Some of what they found wasn’t new. We’ve known about underemployment for a long time. They found what underemployment looked like, and it was pretty sticky. It wasn’t just that a large percentage of college graduates initially are underemployed, it’s that most of those who initially don’t get a college-level job essentially don’t get one later on. So,


One thing that’s wonderful about universities is that there’s a place for students who are different. Maybe it’s the way their brains are wired or their developed skills, what have you. There’s a place for them. But it’s true that the place in the labor market is not equal for all of these disciplines. STEVEN BRINT Distinguished Professor of Sociology and Public Policy, The University of California, Riverside

while unemployment starts off at 40% or so, it goes down pretty quickly. But it actually levels out at around 30% for the adult, full-time employed population of bachelor’s grads and above in the U.S. Part of it is this issue that if folks don’t attach relatively quickly to a college-level occupation, they end up not getting there. When you think about underemployment, what I’ve come to believe is that this transition point — we talked about colleges preparing people for their seventh job — there’s a lot of truth in that. But the first job is really important in setting a trajectory for the future.

STUDENT LOANS OWNED A N D S E C U R I T I Z E D , O U T S TA N D I N G Billions of dollars

1,700 1,600 1,500 1,400 1,300 1,200 1,100 1,000 900 800

Brint: When I was doing research for my book, “Two Cheers for Higher Education,” I ran into work by the Federal Reserve in New York that showed very high levels, like you report, of













Source: Board of Governors of the Federal Reserve System



H I G H E R E D U C AT I O N ’ S G O L D E N A G E

88% Colleges and universities that reported the same or increased publication counts, 1980–2010

Moret: I want to shift gears to your terrific new book, “Two Cheers for Higher Education,” published in 2018 by Princeton University Press. It’s gotten a lot of great reviews. One of my favorite quotes was Steven Mintz with Inside Higher Ed, who said, “The most thorough, sweeping, and balanced book that I’ve read on the strengths and weaknesses of contemporary colleges and universities.” Could you tell us about the title? What’s that about? Why did you write it? What are the big things you explore in the book?

+60% Increase in number of master’s degrees conferred in all fields, 2000–2014

20x 10x 10x

Increase in patents generated by universities, 1980–2014

Increase in inflation-adjusted research expenditures at major research universities, 1980–2010

Increase in number of students who attend highereducation institutions, 1950–2019

Source: The Chronicle of Higher Education, 2019

40% or more initial underemployment. Historically, that’s melted over time, but it may be for new cohorts it’s not melting. As you say, that’s a huge issue. If you have 30% of students unable to move out of that underemployed non-college-level job, and they have accumulated debt, and they’ve gone to college with high expectations, that’s an issue. It could be that some of the public opinion we’re seeing now that’s a little more


critical of the role of higher education is connected to that sticky problem. This is not a phenomenon that’s just due to higher education. Obviously, it has to do with the structure of the labor force, how that structure is changing, and the number of college-level jobs available. But universities and colleges need to be aware of what’s happening in the labor market and take it into account as they’re preparing students.

Brint: “Two Cheers for Higher Education” is a title that was thought of against the backdrop of higher education scholarship, which tends to be very pessimistic about the state of higher education. The thoughts are that students are deeply in debt, tuition is going up, some of these issues of underemployment, many adjunct professors teaching classes. This is not a success story. But when you look at the data, you see that, in fact, American higher education is doing quite well as an institution. For example, R&D expenditures in constant dollars went up more than nine times between 1980 and 2015. The number of published papers went up at least four and a half times during that period. Citations are harder to count because they increase slowly, but we don’t see any reason to believe that they haven’t also increased. We looked into important inventions, and even though corporate R&D is three or four times the level of university, by my estimate, universities were responsible for about 40% of the most important inventions during the period we looked at. A lot of our consciousness is shaped by ideas that come out of universities. Everybody now uses the terms “emotional intelligence” and “social capital.” These ideas didn’t come from out of the blue, they came from university professors and university research.


The classroom is one arena, and the most important one, for learning. But there are other arenas for learning on the university campus. STEVEN BRINT Distinguished Professor of Sociology and Public Policy, The University of California, Riverside

We also looked at enrollment, which I think has nearly doubled between 1980 and 2015, the years I looked at in the book. It’s the same at the graduate level. If the institution were failing as badly as many scholars feel, and if it were on the brink of being reorganized by online entrepreneurs, I would doubt that there would be such robust growth in enrollment. But it gets only two cheers because of problems we haven’t solved. Perhaps the most important one is the quality of teaching and the amount of learning in higher education. Many students aren’t learning as much as they could. We have problems of cost, affordability. We have online competition that threatens to erode some of the developmental advantages of the physical campus. We have the growth of an adjunct labor force that’s very poorly paid. And we have some speech controversies. I think there’s some truth to what has been said about the climate for speech being non-conducive for certain ideas. So there are reasons for concern. Even though we see a very successful institutional arena, only two cheers because we have a long way to go to solve some of our problems. Moret: When I think of discussions about higher education in the U.S., we get a lot of attention around educational attainment and cost and student debt.

But compared to those two very important things, the amount of focus on learning is way, way behind. In fact, one of the major national higher education institutions a few years ago actually raised an alarm, saying it’s great that we want more people to go to college, but we need them to actually learn the critical thinking and communication skills that we espouse when we talk about higher education. Why do you think there’s not more attention on that topic? Brint: Now, there’s attention also to graduation rates. That’s good. But I couldn’t agree more that sometimes they say equality without quality is hollow. There’s no doubt students could be learning more in college. And we have to look at it in a complex way, because they’re learning outside the classroom, too. In fact, I just published a paper about the co-curriculum of student clubs and organizations. Students gain some adult skills in those arenas, too. They learn how to run meetings, recruit new members, put on events. Many students have those experiences, at least students who go to big universities. There are sometimes as many as 1,000 clubs or more at UC Berkeley. At some of these colleges, there’s one club for eight or nine students. You really have an opportunity there. So the point is that the classroom is one arena, and the most important one, for

learning. But there are other arenas for learning on the university campus. The issues are profound as far as learning goes. There’s very good evidence that students are not reading much of the assigned work. You can do things to increase student engagement and participation, which is one factor. If students are just passively listening, that’s not good. You need to break up the classes, have them talk about problems, and then report out and answer questions constantly in class. Many techniques encourage that. I even give out points to students who have not talked up if they’re willing to hazard an answer to a question. We do a lot of that. Accountability is important, too. Frequently, if not every class session, you have to ask students to write 100 or 150 words about what they read. That creates an accountability for reading. It’s very hard to write well unless you read, and you read deeply. I think it really is up to the individual instructors, with the institution’s help, to take what’s being learned in the research literature, disseminate that, and then help professors bring it into their practice. I also talk about student evaluations of teaching. Students are good evaluators of some dimensions of teaching, but not all. They cannot say whether they are learning as much as they could be learning. I write positively



E D U C AT I O N A L AT TA I N M E N T, 2 0 1 5

Proportion of 18­–24 Age Group

Graduation From High School 92%

Graduation From a 4-Year College 34%

Enrollment in a Postgraduate Program 17%

Graduation From any Postgraduate Program 14%

Graduation With First Professional or Doctoral Degree 5%

Source: Author’s estimate from NCES 2015, table 104.20; James E. Rosenbaum, Caitlin E. Ahearn, and Janet E. Rosenbaum, “Bridging the Gap: College Pathways to Career Success,” 2017; Camille L. Ryan and Kurt Bauman, “Educational Attainment in the United States: 2015,” 2016; as shown in Brint, “Two Cheers for Higher Education”

about the Weiman-Gilbert Teaching Practices Inventory, which allows college teachers to see whether they are following practices that the research literature consistently shows to have a positive impact on learning. Moret: You talk about how the universities negotiate a variety of competing demands and missions. As I think about where learning stands, it seems part of it has to do with where administrative leadership is focused. Particularly with public universities, states have largely retreated as a primary funding partner. We move toward state-affiliated versus state-funded institutions. University presidents increasingly are having to spend a large percentage of their time on fundraising and external affairs.


It seems that maybe the balance has gotten off in terms of the quality of the learning environment and supporting learning, as in competition with some of these other missions of the institution. Brint: I do agree with that. Of course, there’s a lot of variation from institution to institution on this.

One of the easiest ways to raise additional revenue — at least in areas of the country where we see population growth — is to grow the size of the student body and bring in more state dollars if you’re public, but also more tuition dollars. Even very selective places like Princeton and Yale have grown a little bit over time, and Stanford has grown significantly.

They’re very much changing, with, for example, more market-based master’s degrees at liberal arts colleges. But if you look at it from the administration’s point of view, trying to make payroll, and do all the things universities are asked to do, including compliance with a lot of regulation, they require robust growth in several different resource bases. That’s why universities chase donors and contracts and sell services to other entities.

Again, looking at it from the administrator’s point of view, bodies are important. Human capital development and cognitive development, from the administrative point of view, may be less important than the flow of bodies into and out of the institution. I think they can say, “Well, look, our graduation rates are pretty high,” but what can students do who graduate? That’s left as a black box. I think the incentives and pressures on


The incentives and pressures on administrators are to expand resources, and one way to do that is expand enrollment. That doesn’t come necessarily with the proviso of how much we have to contribute to cognitive and human capital development. So it’s up to the professors and support staff of the learning centers and the academies of distinguished teachers who help improve teaching and learning. STEVEN BRINT Distinguished Professor of Sociology and Public Policy, The University of California, Riverside

administrators are to expand resources, and one way to do that is expand enrollment. That doesn’t come necessarily with the proviso of how much we have to contribute to cognitive and human capital development. So it’s up to the professors and support staff of the learning centers and the academies of distinguished teachers who help improve teaching and learning. That’s where that focus is, the traditional aims to develop competence and help students develop their cognitive capacities. That’s where it’s going to have to come from. Moret: In the book, I got the sense you suggested that as universities have grown and become more accessible to a broader socioeconomic strata in the country, there’s been a bit of bifurcation, maybe even in academic expectations. It seemed as if you were suggesting that in some cases there are less rigorous tracks within degree fields. Does any of that resonate with what you were trying to say? Brint: There are less rigorous tracks for sure. I’ll cite Elizabeth Armstrong and Laura Hamilton, who talk about “business lite” tracks like recreation

and fitness and sports management, and even aspects of marketing and communications as being lowexpectation fields, where students often can get by on the force of personality and even physical appearance. So there’s that set. I think there’s another set of disciplines in cultural studies fields that are often reputed to have fairly low expectations of students. So, yes, I think there are differences among the disciplines as far as that’s concerned, and they’re not entirely tied to the market, interestingly enough. If you go into business school, there are aspects that are quite rigorous. I think finance, accounting, probably strategy. But other parts of business school may not be. It’s often said business school is a networking opportunity and not necessarily a cognitive development opportunity for some students. And yet, there’s demand for business students. For sure, what you’re saying is right. There are disciplines that early in our conversation you identified as vocational disciplines. I think that’s where we have

the biggest issues with respect to the bifurcation you identify. Moret: One of our big interests in Virginia is leveraging higher education to drive quality job creation and economic growth in the Commonwealth. Virginia has a very strong economy. It’s a wealthy state, overall. It has somewhat underperformed in job growth over the last decade or so, largely tied to our over-reliance on the federal government. When you have BRAC, we tend to have a slowdown. But on this theme of leveraging higher education for economic development, when we had the opportunity to compete for the Amazon HQ2 project, we decided to make our case primarily on a historic investment in public universities, colleges, and community colleges to expand computer science and related education to support not just Amazon, but the whole tech sector. What do you think states and universities could be doing to better leverage the potential for higher education to contribute to region and state economic development?





106 64


81 64

Health Professions

164 41


109 40

Visual/Performing Arts

Biological Sciences Communications Political Science Liberal Studies/Humanities History








91 32 54 31 65 29 84 25 40 22 47 18 35

Source: Adapted from Quoctrung Bui, “What’s Your Major? 4 Decades of College Degrees in 1 Graph,” 2014; as shown in Brint, “Two Cheers for Higher Education”

Brint: There are some good examples out there. The Georgia Research Alliance is a program that builds around star scientists who are recruited into the major universities in Georgia and are provided with funding as well. I think they have contributed for graduate students and post-doctoral researchers a lot. Part of the deal with the Georgia Research Alliance is the expectation that


new technology development will be part of the agenda for these professors who are hired through the program. New York state has had these Centers for Excellence for a long time, and I think some of them have been quite successful. There’s a big nanotechnology corridor in Albany, for example. California has had the Centers for Science. Some of them have been very successful.

By and large, only a few states have seen higher education as a huge part of state economic development. Some campuses, though, have also made this a priority. And you’ve seen a lot of spin-off business development on certain campuses like Austin and Ann Arbor. Salt Lake City is an interesting one. Boulder, Colo., is interesting. Those universities — through their engineering and natural sciences —


they’re not always started by faculty — sometimes graduate students — they have developed industrial clusters. They try to foster them through business accelerators, incubators, and other programs like that. Part of what I wanted to get at in the book was, where do we see this happening and where do we not see it happening? There are some issues that universities have to solve, such as, is there venture capital nearby? Is there good transportation to venture capital if it’s not nearby? One problem at places like Cornell and the University of Illinois at UrbanaChampaign is that they’re in rural areas. There’s not fantastic transportation to large urban areas, to venture capital. They have great scientists and engineers there, but they’re isolated. Cornell actually moved to New York City to start Cornell Tech because they couldn’t make it happen in Ithaca or in the regions near Ithaca. Moret: This is one of the great challenges of universities. The university by itself, in some ways, is not enough. You need capital, you need talent. Otherwise, you end up producing IP that gets commercialized in other places. Brint: Exactly. Some of our greatest universities haven’t been terribly successful in the economic development arena. Another great example is Penn State. Tremendous university, but located in the middle of Pennsylvania and not near anything else. You can go to Penn State and you’ll see very few firms in State College. Yet, you have this tremendous talent base. So, location has something to do with it. And also the traditions of the university have something to do with it. Johns Hopkins University is an important example. They’re in the city of Baltimore, but they have almost nothing to do with Baltimore because they’re primarily interested in academic acclaim and government research contracts.

They’re the ivory tower, in a way. Other institutions are similar. The University of Chicago is one. It’s a very mixed and interesting situation. I would say at the state level there are some successful examples. But most of these ran into the same kinds of problems. For example, you get a new gubernatorial administration, and the new administration has new priorities and doesn’t like what the old administration did. Also, firms sometimes have very short time horizons. They will invest for a little while, then they’ll decide this investment isn’t paying off. It’s a tricky terrain to navigate. Moret: If you look at the geography of economic growth in the United States, we see this separation happening where the big metros are doing the best, midsized metros second-best, small metros third, and then at the bottom are the rural and unattached localities. I recently thought about big universities vis-a-vis small colleges. Maybe in some ways this scale question renders itself in a similar fashion. Bigger schools can offer students a no-compromises experience. You have all these different academic disciplines, the full variety of extracurriculars that you talked about. You could have an honors-college experience in the context of the big state school. Do you think that this bifurcation of economic growth in metro areas could almost be applied in similar ways to the more acute challenges that some small colleges are having in comparison to our bigger schools? Brint: I think a couple of things are going on. One is that large universities are attractive for a whole variety of reasons. For some students, it’s the football team. For others, it’s the variety of disciplines that they can study, or the co-curricular, extracurricular, activities. The college-

town atmosphere. They have a lot going for them. They’re usually much better supported, too, because they have philanthropy and they’re usually better supported by the state when there is good state funding. The other thing that seems to be going on is that in the places losing population, the colleges are struggling. It’s especially the regional comprehensive centers that are struggling. Often, the big state university is doing okay. So we’ve seen mergers, we’ve seen some closings. It’s very unusual for a public college or university to close, so mostly they’re merging. I haven’t done an analysis of this, but I’m pretty sure there’s a geographical aspect to this, and it’s related to population growth, population decline, or stasis. We’re definitely getting uneven development on several levels in the United States at this moment. But I think it’s interesting — to circle back to Clark Kerr — that in his time, it was thought that the big universities were problematic because they were too big and students felt anonymous. You remember, even the Free Speech Movement at Berkeley was about students being treated like, or processed, as if they were cattle or something like that. They said that one of the phrases was, “Don’t fold, spindle or mutilate,” like they were punch cards. In fact, it seems those concerns were unwarranted because the places that have the greatest attraction now are, just as you say, the large, vibrant research universities. Moret: Congratulations on all the great things you all are doing at UC Riverside. I hope that we’ll be able to stay in touch in the future. Brint: Me, too. It’s been a pleasure. Thank you, Stephen.

For the full interview, visit


Meeting Global Demand for Health IT Services TO PROPEL ITS GROWTH in Virginia,

Harris Healthcare is forging partnerships internationally. “A big part of our strategy is to grow in our current international markets, but also expand into new markets,” said Jeremy Trabucco, executive vice president at Harris Healthcare, based in Herndon. By drumming up demand for its products internationally, Harris Healthcare hopes to not only grow its revenues but also create new jobs in Virginia, Trabucco said. The organization is a business unit of Ottawa, Ontario-based Harris Computer, which is a subsidiary of Constellation Software, a $20 billion publicly traded company on the Toronto stock exchange. Harris Healthcare sells a range of software tools to help hospitals, doctors, and nurses deliver medical services to patients safely and effectively. Those tools are prime candidates for export because the global market for digital health products — ranging from electronic health records to wireless patient monitoring devices — is expected to explode from $86 billion in 2018 to $504 billion in 2025, according to Global Market Insights, a research and consulting firm.


With this outlook in mind, Harris Healthcare is focusing its international expansion efforts on a handful of its software tools for hospitals, including: ◾ QCPR-Novus Electronic Health Record, which creates and integrates paperless processes, such as for clinical documentation and electronic prescribing. ◾ Novus Portal, which can be integrated with any electronic medical record system and allows patients to view and download their health information, including medications, discharge instructions, and test results. Patients also can schedule and track their appointments and complete online forms. ◾ AcuityPlus: Nursing Resource Management, which determines appropriate staffing levels of nurses based on patients’ needs, including the severity and complexity of their medical issues. ◾ Harris Antimicrobial/Infection Control, which allows hospitals to collect, manage, and analyze data about infection cases and potential outbreaks as part of their antimicrobial and infection-control programs and optimize the selection of antibiotics.

◾ SynergyCheck Interface Monitor, which proactively monitors interfaces between software systems at an organization and sends alerts when problems occur. ◾ Uniphy Health Clinical Communications, a configurable, extensible communications and collaboration mobility platform which enables secure text, voice, and video communication on mobile devices between providers. Harris Healthcare is already selling some of those products in the United Kingdom, Canada, Saudi Arabia, and Kuwait. In the United Kingdom, Lancashire Teaching Hospitals (LTH) NHS Foundation Trust is one of Harris Healthcare’s marquee customers. Lancashire Teaching Hospitals, which serves people in Northwest England, operates 960 hospital beds at

Harris Healthcare, Herndon

Our approach is to have a local partner who understands that market, has connections, and can get stronger and quicker leads into that market. RYAN BRUNSWICK Strategic Partnership Manager, Harris Healthcare

Royal Preston Hospital and Chorley and South Ribble Hospital. The health care provider transitioned from paper to digital records by installing QCPR-Novus Electronic Health Record and is one of the first hospital systems in the U.K. to

have integrated physiological monitoring devices with electronic patient records and deployed e-prescribing functionality. Building off these successes internationally, Harris Healthcare

is moving forward in new markets. But it isn’t renting office space or hiring employees overseas. Instead, it’s developing partnerships with local technology companies or software resellers in each international market.



U . S . H E A LT H C A R E I T M A R K E T, B Y A P P L I C AT I O N

2012–2020 (USD Billion)


Electronic Health Records Computerized Provider Entry Systems


Electronic Prescribing Systems Picture Archiving and Communication Systems


Lab Information Systems


Clinical Information Systems Telemedicine and Telehealth













Source: Grand View Research

The partners will then add Harris Healthcare’s digital solutions to the lineup of products they sell. Affiliating with a local company solves one of the biggest hurdles to selling internationally — “Getting your foot in the door and getting known by the decision-makers in those markets,” as Ryan Brunswick, strategic partnership manager at Harris Healthcare, put it. “That is why our approach is to have a local partner who understands the local requirements, has connections, and can get stronger and quicker leads into that market,” he said. But finding the right partner isn’t easy. “Not every company that is interested in you is going to be the right fit for you, and vice versa. You have to find the right strategic fit. That takes evaluating many different opportunities,” Brunswick said. For help, Harris Healthcare turned to VEDP and its Virginia Leaders in


Export Trade (VALET) international business acceleration program. Harris Healthcare — which joined the program in 2018 and will finish its two-year term in January 2020 — is one of 25 companies that participate in VALET each year. The companies develop sales plans and business-expansion strategies and enter new markets.

In the U.K. and other technologically mature markets, electronic medical records are commonplace. Hospital executives in those countries might be more interested in Harris Healthcare’s tools to improve nursing resource management or infection control, or to manage interfaces connecting disparate software tools.

“Leveraging the services of the VALET program has enabled us to analyze multiple markets simultaneously to make the most informed decision about which markets to focus on. It supplements our ongoing efforts,” Trabucco said.

But those advanced software services would be considered a luxury in less mature markets, where hospitals would be more interested in replacing paper charts and prescriptions with an electronic health-records and medication-ordering system, Brunswick said.

To evaluate the potential of various countries as export markets, Brunswick researches such factors as the amount of money each country spends on health care services and the degree to which local hospitals use digital processes — such as digital patient records and prescriptions — to care for patients.

Government laws and regulations also play a role in deciding which products to sell in a given market. Ireland and Scotland, for example, both have minimum staffing regulations that ensure hospitals deploy an adequate number of qualified nurses during each shift to


Not every company that is interested in you is going to be the right fit for you, and vice versa. You have to find the right strategic fit. That takes evaluating many different opportunities. RYAN BRUNSWICK Strategic Partnership Manager, Harris Healthcare

take care of patients safely. These type of regulations is part of what Harris Healthcare looks into when deciding which markets to pursue, Brunswick said. The acuity-based staffing solution available in the Harris Healthcare portfolio aligns with these country regulations and ensures safe staffing. But sometimes there is no better way to measure the potential of a market than to visit there in person. To that end, Brunswick has been on VEDP-sponsored trade missions this year to Mexico, Brazil, and Australia. Brunswick says the most valuable aspect of the program is the ability to leverage in-country consultants to open doors during market visits. The program has also helped define Harris Healthcare’s international strategy and identify opportunities and insights on where to focus. A typical country visit includes meetings with potential partners and resellers as well as local health systems or a hospital providing insights on the market and opportunities. Additionally, trade missions often align with industry conferences that are attended. Collectively, these meetings provide a comprehensive understanding of where the country is in their digital transformation and how Harris Healthcare solutions can advance their digital journey to the next level.

G L O B A L H E A LT H M A R K E T The projected market value of AI within healthcare is set to explode over the next few years

$2.1B 2018(E)


$36.1B 2025(E)

Global IOT Market Within Healthcare $USD 2017




Global mHealth Market 2016




Source: Grand View Research


Economic Development Partners in Virginia VEDP works in close partnership with local and regional economic development organizations. For a full list of local and regional partners, visit In addition, VEDP regularly works with a wide network of statewide partners, including: State Leadership Partners

Project Delivery Partners


Center for Innovative Technology

General Assembly

Policy and Programmatic Partners

Major Employment and Investment (MEI) Commission

Colleges and universities across the Commonwealth (e.g., UVA, Virginia Tech, William & Mary)

Secretary of Commerce and Trade

CSX, Norfolk Southern, and short-line railroads

Virginia Department of Small Business and Supplier Diversity

Secretary of Finance

Dominion, AEP, and other electric utilities

Virginia Department of Taxation

The Port of Virginia

Virginia Department of Transportation

Virginia Community College System Virginia Department of Agriculture and Consumer Services Virginia Department of Environmental Quality

GO Virginia

Virginia Department of Housing and Community Development

State Council of Higher Education for Virginia

Virginia Department of Rail and Public Transit

Virginia Agribusiness Council Virginia Association of Counties Virginia Business Council Virginia Business Higher Education Council Virginia Cable Telecommunications Association, Manufacturers Association, Virginia Maritime Association, Virginia Realtors Association, and many other trade associations

Virginia Tobacco Region Revitalization Commission Virginia Tourism Corporation

Virginia Chamber of Commerce, as well as many local and regional chambers of commerce Virginia Economic Developers Association Virginia Farm Bureau Virginia Municipal League Virginia Planning District Commissions Virginia Rural Center


Virginia’s Technology Councils



Roanoke Region New River Valley




Southwest Virginia






I81-I77 Crossroads 77 58




Northern Shenandoah Valley


Washington, D.C.

66 81

Northern Virginia

211 33


Shenandoah Valley


Greater Fredericksburg

Central Virginia


95 81

Northern Neck







Eastern Shore

Middle Peninsula 13

Greater Richmond Lynchburg Region

60 288




Greater Williamsburg


Virginia’s Gateway Region




South Central 360 Virginia

Southern Virginia






Hampton Roads




$1.1 billion

A m o u n t c o m m i t t e d t o w a r d V i r g i n i a ’s T e c h Ta l e n t I n v e s t m e n t P r o g r a m


Graduates in computer science and related fields in excess of current levels Already one of the most educated states in the country, Virginia has committed $1.1 billion t o w a r d i t s T e c h Ta l e n t I n v e s t m e n t P r o g r a m t o more than double the number of graduates in computer science and related fields. The addition of more than 31,000 graduates in these highdemand fields over the next two decades will ensure a steady stream of qualified Virginians are prepared to fill the jobs of the future.


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