The Center for Innovative Technology (CIT) has basically implemented original legislative intent, despite problems in the areas of mission, governance, administration, and accountability.

CIT Background Information. The General Assembly established the Innovative Technology Authority (ITA) based on recommendations from the 1983 Governor's Task Force on Science and Technology. CIT is a private, non-profit corporation that serves as the operating arm of the ITA. CIT was formally incorporated on July 1, 1984. The first executive director was officially appointed in January 1985. Since its inception, CIT has had five directors, including one acting director.

CIT's mission is to promote economic growth by enhancing the ability of Virginia universities to develop and transfer technology to industry. It implements this mission primarily by co-sponsoring research projects with industry. Over the past seven years, CIT reports that it has funded more than 600 projects involving more than 550 companies, 460 university professors, and 1,000 students. In addition, CIT markets and licenses intellectual property developed at the universities. Finally, some of CIT's programs provide direct services to business and industry across the Commonwealth.

For fiscal years 1985 through 1992, the Commonwealth provided $80.7 million for the programs and operation of CIT and $21.2 million for the construction of the CIT Building. CIT received $8.7 million in State funding for fiscal year 1993. CIT estimates that it will also collect $1.9 million in nonstate revenue. Therefore, total revenue available to CIT is approximately $10.6 million for fiscal year 1993.

Study Mandate. Item 267 of the 1992 Appropriation Act mandated that a study be conducted by an independent review committee. This is the first comprehensive external review of CIT since its inception. The Review Committee was appointed by the Governor, the General Assembly, and the CIT Board Chairman. Four industry advisors were appointed by the Review Committee Chairman from business and high technology communities. Staff of the Joint Legislative Audit and Review Commission and the Department of Planning and Budget jointly provided support to the committee.

State Vision for Economic Development. The Review Committee concluded that science and technology efforts should be an integral part of the economic development strategy of the Commonwealth. However, it found that current State strategic plans for economic development and for science and technology are insufficient and do not allow CIT to be an effective team player in meeting the objectives of the Commonwealth.

The Review Committee recommends that the 1993 General Assembly consider adopting a resolution requesting the Secretary of Economic Development to prepare a strategic plan for economic development in the Commonwealth. It also recommends adopting a resolution creating a task force to coordinate the development of a statewide strategic plan for science and technology. CIT should play an important role in these planning efforts.

CIT Mission. CIT was intended by its founders to be an engine of long-term economic growth. The Review Committee recommends that CIT expand its mission to include three strategies to promote economic growth in the Commonwealth: maintaining its current efforts to develop and transfer university-based technology; increasing emphasis on efforts to support high technology industry; and aggressively pursuing research and development facilities and contracts in the federal government and private sector.

Programs and Outcomes. CIT's programs reflect legislative intent, emphasizing the development and transfer of university-based technology to the private sector. Businesses sponsoring individual projects with CIT are generally satisfied with relationships and outcomes. CIT also appears to have leveraged substantial funds from industry and the federal government. However, quantitative outcome measures, such as the number of jobs created and retained, are limited. The Review Committee recommends that CIT continue to develop its evaluation system and that the CIT Board of Directors approve an evaluation process.

CIT's mission, strategies, and successes are complex and often not understood. This has resulted in diverse and inflated expectations of CIT's role. Research and technology development are risky and long-term investments. Decision-makers should not evaluate the success of university research and technology development solely on quantitative outcome measures, particularly in the short-term. The Commonwealth can reasonably expect, however, substantial long-term benefits from CIT in the next five to 10 years.

Over time, CIT has tried to be more responsive to the needs of industry by solving short-term technical problems and by providing assistance in commercializing new technologies. However, the Review Committee found that the scale and scope of CIT programs that serve high technology industries and the current industrial base in the Commonwealth are not sufficient. The Review Committee recommends that the Secretary of Economic Development, in collaboration with other appropriate entities, conduct a comprehensive review of needs and resources for industrial extension services.

Governance and Accountability. Substantial changes are recommended in CIT's governance, administration, and accountability. The CIT Board should have greater industry representation and include the Secretaries of Education and Economic Development. The proposed board composition would ensure the articulation and coordination of industrial and State interests. The CIT Board should be more involved in setting policies, providing direction, and establishing strategic priorities. It should also actively seek the involvement of key industry and technology leaders through advisory boards and other mechanisms. The CIT President should make substantial changes in the organization, structure, and management of administrative functions.

CIT should be maintained as a private non-profit corporation. It should also be retained in the Education Secretariat to emphasize the long-term outcomes to be expected from the Commonwealth's investment in CIT. This placement should be periodically reassessed to ensure consistency with CIT's mission.

Finance. Finally, the Review Committee concluded that State funding for CIT is appropriate to ensure that the economic development objectives of the Commonwealth are emphasized. CIT should pursue funding from other sources to supplement State funds. In addition, the Review Committee found that the present level of State funding is sufficient for CIT to maintain its current programs. However, substantial changes in CIT's mission and programs would result in either the need for additional funding, or the redistribution of current funds among programs, or both.

As an independent entity receiving substantial State general funds, CIT must be more accountable for how tax dollars are spent. CIT needs to develop a "culture of accountability" to State government and the public. Periodic external evaluations should be conducted and CIT should provide non-proprietary information as requested by the Commonwealth.

Conclusion. After an unsettled early history, CIT has achieved stability and is beginning to develop a record of accomplishment. Its mission needs to be focused more directly, however, on stimulating economic growth through a balance of university-based and industry-based strategies.