BUSINESS SENSITIVE 1 Advancing the Aberdeen Proving Ground Region’s Technology Hub A Feasibility Assessment and Action Plan for a University Research Park Initiative Battelle Technology Partnership Practice October 9, 2013

2 Project Purpose and Methodology Purpose: Comprehensive assessment and development approach for advancing a University Research Park initiative based on the needs/opportunities at APG and across industry drivers in the region and how they can best connect with universities.

3 Summary of Assets & Gaps in APG Region’s Technology Development Key FactorAssets To Build UponGaps to Address Development Challenge: Growing the Technology Industry Base in the APG Region Technology Industry Major gains in tech industry for APG Region Increased presence of C4ISR related defense contractors Tech industry growth stalled in APG Region after 2007 Innovation Many inventors living in APG Region Significant base of SBIR and patent activity associated with APG tenant organizations Few companies in APG Region assigned patents, winning SBIR awards from APG organizations and venture-backed Development Challenge: Addressing Workforce Issues STEM Occupational Demand Strong projected demand for high-skilled workforce across range of skills from scientists to engineers to math and computer sciences to business and financial operations. Key need for integrated, hands-on post-baccalaureate and master’s programs to support APG – C4ISR, Chem/Bio, Business/ Financial Many of the newer and mid-to-small tech companies finding it hard to fill high-skilled jobs and not connected to top talent being generated STEM Occupational Supply Highly educated/skilled residents in region (42% AA degree or higher) Significant top talent generation of new university graduates just outside of APG Region STEM activities in region growing new pipeline initiatives – Towson-HCC new 2+2 facility; UDel-HCC-Cecil-DTCC Regional Cybersecurity Education Alliance Many of the high educated/skilled residents commute Hard for universities to aggregate demand and serve needs of APG organizations and contractors Development Challenge: Fostering a High-value Place Strategy Commercial Real Estate Established significant Class A Office & Flex Market around APG Class A Office and Flex Market is scattered across Routes 40 and 22 – lacks sense of place High vacancy rates found in Class A and Flex Limited mixed use development

4 APG Region’s Class A Office Park Market

5 Organizing for Success Guiding Principles Seek leverage and broader public-private partnerships Best practices can inform how to design Form should follow function Steering versus rowing Potential Opportunities Implementation Approaches Governance Operations Funding Approaches

6 Targeting outreach marketing to companies doing business with APG organizations (1 of 2) Rationale –Reliance on facilitating defense contractor relocations for client facing activities alone not ensuring technology industry growth –Outreach to companies doing business with APG organizations –Three targets: -Root emerging technology companies in the region – target SBIR recipients from APG organizations – 0ver 200 companies in the period -Raise the level of activities of those defense contractors who relocated to APG Region – many still have significant employment in Fort Monmouth region and in other sites to support APG-related activities -Seek the relocation of Chem/Bio defense contractors involved with JPEO and USAMRICD

7 Targeting outreach marketing to companies doing business with APG organizations (2 of 2) Proposed Program Design –Develop brand name for region to create a sense of place -Suggest allowing for focused messages on technology focus areas, such as “Aberdeen Technology District” … for cyberwarfare, sensor and detection systems, advanced material solutions. –Emerging technology companies: -Build upon incubation programs to create landing sites that address flexible leasing for short stays, favorable leasing costs and ability to maintain classified space. -Provide relationship development services – one-on-one meetings with key primes, protégé-mentoring relationships -Leverage presence of prototyping and testing facilities at APG –Existing technology-related defense contractors -Offer targeted incentives based on investment and job creation – such as Dayton’s attraction incentive to provide a grant for up to 50% of payroll taxes for technology companies creating five or more new FTEs in designated areas -Example: Harford County’s participation with State of Maryland to offer incentives for Smith’s Detection expansion -Leverage growing presence of emerging technology companies

8 Establish Commercialization Services Rationale –Weak presence of emerging, innovative companies in APG Region with a few notable exceptions … -Only four VC backed companies in region since 2003 and four SBIR funded companies across all federal agencies –Yet, strong base of inventors living in the APG Region including many who do not assign technologies to companies, or assign to nearby universities or to the Army Proposed Program Design –Develop a network of advisors resident in APG Region with technology, market and business expertise –Engage consultants who can perform market assessments and offer likely commercialization paths –Provide a competitive, matching fund for technology commercialization -Seek to leverage presence of prototyping and testing facilities at APG –Serve as a catalyst and then leverage availability of state-level resources -Such as MDBED Enterprise Investment Fund or TEDCO’s Technology Commercialization Fund

9 Advance an Educational Partnership Clearinghouse with APG Organizations Rationale –Lack of coordination across APG organizations in education and training … reflects diversity and number of organizations –Results in: -Mushrooming of ad-hoc, limited relationships with universities -Inability for APG organizations to aggregate needs and to identify potential university partners -No easy point of access or awareness of requirements by university partners Proposed Program Design –New initiative being advanced by APG organizations to create an educational partnership -Involves APG Region’s University in coordination with the Northeast Maryland Higher Education Advisory Board (NMHEAB) –Serve as a clearinghouse for identifying needs, aggregating demand and interfacing with universities –Recommend focus on advancing university graduate degree and certificate programs in the APG Region. -Pursue degree and certificate programs in areas of need – not stand alone courses. Will also better leverage engagement with DoD contractors -Have multiple university partners if demand is sufficient. -Advance a competitive process for selecting university partners – -Key selection criteria: tailoring of offerings to specific APG needs, investment in instructional labs, use of resident faculty, etc.

10 Advance an Specialized Institutes in High Priority Skills Development and R&D Areas (1 of 2) Rationale Address need in APG’s workforce to have more hands-on learning and a theory- to-application-to- practice approach to create effective, advanced skills development in emerging technology areas. At same time, seize opportunities for advancing collaborations with universities, particularly around applications development and other applied R&D. Proposed Program Design No one-size-fits-all approach Opportunity in Cybersecurity for integrated Education, Leadership and Applied R&D efforts –Need for multiple skills at APG … from mobile networks to computer systems to device level, from protection to offensive approaches –Wide span across APG organizations -- more than Team C4ISR –Calls for tailored graduate certification programs + leadership development –Plus need for talent pipeline for future workforce with ~20 new hires per year without any ramp up in efforts. –Next generation “systems of systems” engineering approaches into cybersecurity … calls for collaboration with universities and industry Chem-Bio Defense area calls for collaborative research and development efforts –Expose existing APG scientists to new techniques and advances to advance both detection and countermeasures –Expose promising doctoral students and post-docs to particular scientific issues DoD faces and facilitate recruitment –Leverage close proximity of unique facilities and pathogens that only APG staff and civilians with proper security clearances can handle –Focus on increasing collaborations of APG scientists with military universities (USUHS) and civilian universities –Benefit from having less classified space where APG scientists could more easily collaborate with universities

11 Develop Talent Connector for APG Region (1 of 2) Rationale –Key role of talent to 21 st century economic development – local communities compete on basis of ability to generate, retain and attract high skilled workforce –Challenge for APG Region to connect to its talent assets and ensure the transferability of skills –Key talent assets in APG Region that need to be facilitated. -High skilled residents, but nearly half commute to work outside of region – 6,000 computer, engineering and scientific workers and 15,000 management, business and financial workers commute -Nearby universities within 45 to 90 minute commute of APG generate over 2,000 STEM graduates each year –Substantial demand for high skilled STEM occupations in APG Region – 500+ annually across APG organizations and technology industry drivers –Many of the newer, mid-to-small tech companies to APG Region are finding it hard to fill high skilled jobs – don’t have relationships

12 Develop Talent Connector for APG Region (2 of 2) Proposed Program Design –For tapping resident workforce that commute, it is proposed that the APG Region STEM Talent Connector activities include: -Maintaining an up-to-date database of available high skilled positions among the region’s firms and APG organizations. -Undertake active outreach to local residents to identify those in STEM occupations working outside of the region and providing a single point of contact for them to consider positions in the region, including serving as an honest broker to match interested workers with employers and providing information on requirements for gaining security clearances. -Developing a cadre of trained, volunteer peer career mentors to consult with local residents in STEM occupations on facilitating their transitions to new job opportunities in the region. -Targeting education and training programs to close any gaps on specific software applications or knowledge of federal contracting, etc –For STEM pipeline and broader access to large base of university students nearby the APG Region, proposed activities include: -Support a matching grant program for mid to small technology firms in the APG Region seeking STEM interns. -Partnering with local workers in the region who are university alumni of nearby universities and career services offices at their former schools to speak about the career opportunities in the APG Region and quality of life.

13 Advance Transit-Oriented Mixed Use Development Hubs in APG Region’s Technology District (1 of 2) Rationale –Despite creation of significant base of Class A office and flex properties over last decade, it is highly scattered development and lacking in mixed use development. –High vacancy rates and low absorption key issue for APG Region’s Class A commercial real estate market –Particular concern that without more quality mixed use development, APG Region will be less competitive to nearby developments – “new urbanism” at White Marsh and University of Delaware’s STAR Campus at old Chrysler facility. Proposed Program Design –Likely first mover opportunities for mixed use development are planned transit oriented developments around the Aberdeen MARC station and Perryville MARC station -Create walkable communities around transit with access to housing, retail, restaurants and recreation. -Another potential TOD mixed use development would be at Edgewood MARC –Conceive of TOD mixed-use developments in the context of broader Aberdeen Technology District -Focus on key corridors with route 40 as the backbone from Edgewood through Aberdeen, Havre de Grace and across the Susquehanna River to Perryville. -Leading offshoot corridor along route 22 from downtown Aberdeen to I-95 interchange -Needs to be public-private partnership collaboration for common signage, marketing and discussions on ways to enrich the live-work-play environment found within the Aberdeen Technology District

14 Summary of Initiatives Growing Regional Technology Industry Base Fostering High Value Place Strategy Advancing Workforce Development Initiatives Targeting outreach marketing to tech companies doing business with APG organizations -- emerging, innovative companies serving APG, those involved in C4ISR to grow operations in region and Chem/Bio involved with JPEO and USAMRICD Target technology commercialization services to “APG Regional Inventors” Initiatives Support establishment of Education Partnership with APG for Educ & Training Clearinghouse Create “talent connector” for the APG Region to broader regional university talent and to high skilled residents who commute Advance Specialized Institutes for Cybersecurity Education and Applied Research and Chem/Bio University Collaborations Initiatives Advance TOD mixed-use development hubs for growing APG Region Technology District

15 Broad Implications for Implementation Breadth of opportunities and related program activities encompass large part of overall economic development –Key elements include: physical development, business development, innovation/commercialization and education & workforce development Implication #1  University Research Park Initiative will require broad support as a top economic development priority of APG Region to succeed –For Harford County, this suggests it is governed overall by the Economic Development Advisory Board Implication #2  Collaboration across county, city, state government with APG will be critical –Beyond collaborations between Harford and Cecil, even within Counties will need collaboration on master planning –Engage state authorized boards (NMHEAB) along with broader state support for initiatives to promote technology industry growth around APG

16 Industry Guidance and Engagement Will Come from Overlapping Governing Boards Growing Regional Technology Industry Base Fostering High Value Place Strategy Advancing Workforce Development Economic Development Advisory Board URP Board Northeast MD Higher Education Board Strategic Priorities Governance Mechanisms

17 Thank You and Discussion Growing Regional Technology Industry Base Fostering High Value Place Strategy Advancing Workforce Development Initiatives Targeting outreach marketing to tech companies doing business with APG organizations -- emerging, innovative companies serving APG, those involved in C4ISR to grow operations in region and Chem/Bio involved with JPEO and USAMRICD Target technology commercialization services to “APG Regional Inventors” Initiatives Support establishment of Education Partnership with APG for Educ & Training Clearinghouse Create “talent connector” for the APG Region to broader regional university talent and to high skilled residents who commute Advance Specialized Institutes for Cybersecurity Education and Applied Research and Chem/Bio University Collaborations Initiatives Advance TOD mixed-use development hubs for growing APG Region Technology District

18 Appendix: Program Development Activity -- Detailed Summary Program ActivitiesGovernanceOperations Funding Approaches Best Practice Examples Targeted outreach marketing to companies doing business with APG (i.e., SBIR cos, C4ISR cos, NBC Industry Group) Economic Development Advisory Board Primary economic development function Existing economic development funding Dayton Development Corporation Commercialization services to APG Regional Inventors URP Board to oversee & advise on activities, funding Economic development function for staffing to do outreach, generate network, solicit proposals, create mentoring Need an ongoing source of public funding Seek support from angel investors/serial entrepreneurs Oklahoma’s Innovation to Enterprise (I2E) – OKC and Tulsa primarily Innovate Arkansas Educational Partnership Clearinghouse APG Organizations with participation of University / NMHEAB University Center at HEATAPG and local with specific project support from State Suburban MD Technology Council Advancing Specialized Institutes for Cybersecurity and Chem/Bio University Collaborations URP Board in conjunction with APG Organizations Identify university lead with guidance of APG Possibly house as part of CERDEC technical support lead APG, with specific project support from State and local government sources and industry Air Force Institute of Technology Talent Connector for Students and Residents University / NMHEAB Economic development function given need for close working relationship with companies Possibly tap university relationships of STEM Pipeline and Clearinghouse Local with leveraging industry support Students – Ohio Third Frontier, Massachusetts Life Sciences Center Existing Workforce: Pittsburgh Digital Greenhouse, Iowa, Oklahoma Advancing transit-oriented mixed use development hubs for growing the APG Region’s Technology District. Each of the planned TOD developments at Aberdeen and Perryville are being advanced by their local governments in broader partnerships. Each unit of government and private developer would continue to be responsible for their own activities. Each of the planned TOD efforts would involve its own mix of federal, state, local and private investment. Dayton, Ohio Huntsville, Alabama

19 Appendix on Best Practice Highlights (1 of 2) Best Practice Lesson on Targeted Outreach: Dayton, Ohio Aerospace Hub for Innovation and Opportunity -Pursue broad public-private partnership efforts to brand the region and leverage relationships through alliance marketing -Involves wide range of incentives including an “attraction incentive,” “sensor commercialization funding,” “gap financing for industry projects.” Best Practice Lesson on Commercialization: Oklahoma’s Innovation to Enterprise (i2E) and Innovate Arkansas –Focus on technology commercial market gap – “valley of death” –General activities include – assessing technology; proof of concept and prototyping; mentoring and development of business and mgt teams; securing venture funding Best Practice Lesson on Educational Partnerships: Montgomery County, Maryland Technology Council in Late 1980s –Initially organized around the educational and training needs of the technology industry  Shady Grove Campus for University of Maryland System

20 Appendix on Best Practice Highlights (2 of 2) Best Practice Lessons for Specialized Institutes: –Naval Postgraduate School in its master’s level systems engineering program offers deep skills to practice development required for an effective DoD workforce. –Air Force Institute of Technology history reflects how such activities can grow to meet broad range of technology focus areas and work in collaboration with universities to kick-start its efforts. –University of TN-ORNL Joint Institutes – link research with focus on talent development – Advanced Materials Institute sponsor graduate students; Institute for Biological Sciences advancing interdisciplinary doctoral program in energy bioscience. Best Practice Lessons for Place-based Development: –Significant and long term trend in university research park development towards increased mixed-use development. –Huntsville’s Cummings Research Park – now nearly 4,000 acres so its own district – with new lifestyle center created in 2007, known as Bridge Street Town Centre