Report shows strong impact, predicts economic growth for Virginia Tech Carilion Health Sciences and Technology Campus
May 23, 2018
The Virginia Tech Carilion Health Sciences and Technology Campus is an economic boon for the region and the state, and its growth will continue through at least 2026, according to the first ever economic impact report for the Roanoke campus.
The study was conducted by the Weldon Cooper Center for Public Service’s Center for Economic and Policy Studies, which is based at the University of Virginia and provides policy analysis, economic forecasting, regional studies, and more.
The report analyzed current and future spending and employment growth at the campus, which is a physical representation of the unique partnership between a public institution, Virginia Tech, and Carilion Clinic, the third-largest private health system in Virginia.
The campus comprises the Virginia Tech Carilion Research Institute, the Virginia Tech Carilion School of Medicine, and the out-patient clinical operations of Carilion Clinic in Roanoke. In July, the School of Medicine, a nonprofit corporation managed by Carilion, will become Virginia Tech’s ninth college, while the research institute will remain as one of the university’s eight institutes.
The report spotlights what leaders have known for years — the VTC campus is a significant force in the region’s economic health. Its influence on Roanoke’s economy will keep growing, mostly as a result of new initiatives and expansions connected with the research institute and federal grant money fueling its research.
“It’s a good baseline to have so that you can assure folks who are interested either from an entrepreneur point of view or philanthropic point of view that this is a very sustainable enterprise,” said Nancy Howell Agee, president and CEO of Carilion Clinic, of the report.
In fiscal year 2017, about 1,699 people worked at the VTC campus. By 2026, that number is expected to increase 85 percent to 3,147, according to the report.
Also, total spending at the campus is estimated to climb to $190.3 million in 2026. That is a 350 percent increase from 2017 spending. The campus’ economic output in the state, which includes money generated through the VTC enterprise and its employees, is projected to reach $465 million in 2026. In 2017, economic output was $214 million.
“In Roanoke, those numbers are pretty striking,” said Michael Friedlander, founding executive director of the research institute. “They would mean a lot for our community.”
Much of the campus’ projected employment growth will stem from research institute expansions.
Construction already has begun for a new 139,000-square-foot biomedical research facility to house current programs, such as brain research and cardiovascular science, as well as new programs, such as metabolism and obesity and a comparative oncology research center. The new facility is expected to open in 2020, and it will add at least 300 jobs.
Also, institute faculty have launched six start-up companies since the institute opened in 2010. The report projects that there will be at least 10 additional spin-off companies in 2025 and 25 in 2035.
Additionally, the campus’ student population will increase to about 800 students by 2025, from 300 currently, and more than 1,000 by 2035.
This kind of growth attracts talented employees and investments in VTC work, Friedlander said.
“When people start to see there’s an optimism and growth and a real plan for the future, it gives them confidence to invest,” said Friedlander, who also is vice president for health sciences and technology at Virginia Tech. “For our own colleagues, attracting students who want to come here and other faculty to work with us, they’ll see this as a real hot spot that’s up and coming that needs to be on their radar.”
City leaders, including Bob Cowell, Roanoke City manager, expect the success of the VTC campus to have a ripple effect in the Roanoke Valley, boosting its reputation as an attractive place for businesses to locate.
“It shows local vibrancy,” Cowell said.“It’s a good measure of how much economic activity is being generated.”
The city promotes the Roanoke Innovation Corridor, an area comprised of the VTC campus with Carilion Roanoke Memorial Hospital, the Jefferson College of Health Sciences, downtown Roanoke, and future industrial developments along Jefferson Street and Williamson and Franklin roads.
Friedlander said he sees the potential for a cluster of incubator spaces housing some of the institute’s start-up businesses and outside industry partners to eventually locate along this corridor. There are also four other sites on the campus, ripe for future development.
Significant federal grant awards for research also are pumping money into Roanoke’s economy. In its first seven years, institute researchers landed more than $100 million in grants, including a portfolio of more than $20 million in annual extramural research funding, which is money from outside entities, such as the National Institutes of Health. This funding represents new money coming to Roanoke that goes toward operating the institute, creating and paying salaries, and purchasing support services from local vendors, Friedlander said.
He projects that the institute’s annual research grant funds will exceed $25 million by fiscal year 2022. He also plans to recruit six new research team leaders in the next two years to add to the institute’s 25 teams. The institute is recruiting for an additional 25 to 30 new research teams, driven by the opening of the new biomedical facility.
Virginia Tech President Tim Sands praised former university president, Charles Steger, and Carilion leaders, including Ed Murphy, former Carilion president and CEO, for creating this successful partnership, announced in 2007.
“I believe that this VTC initiative is redefining the public good that a research university can generate in the communities that it serves,” Sands said.
This is only the beginning of the campus’ influence, said Heywood Fralin, who heads the external volunteer stakeholders for this VTC initiative.
“If we all get behind this effort and support it, we can totally change the skyline of Roanoke, adding thousands of high-paying jobs,” he said.
— Written by Jenny Kincaid Boone