Originally Published MPMN June 2008

REGIONAL FOCUS: SOUTHEASTERN VA

Medical Industry Finds Friendly Harbor in Hampton Roads

Southeastern Virginia combines a conducive business climate with unique geographical advantages

Daniel Grace

Encompassing several cities and a large harbor, the region know as Hampton Roads is home to approximately 1.7 million people, making it the 33rd largest metropolitan area in the country. Long known for its powerhouse aerospace and defense sectors, the state of Virginia as a whole has begun in recent years to broaden its scope. In 2007, the state topped the “Best State for Business” survey conducted by Forbes magazine.

A pro-business government, a variety of federally funded R&D facilities, and a well-educated workforce are driving forces behind the state’s surge. The medical industry, though lagging behind other sectors in the state, is showing signs that major progress is ahead. Virginia was recently ranked fourth in a study by Lux Research—a provider of strategic advice on emerging technologies—that assessed each state’s potential for economic growth through nanotechnology. “[Medical] is not our biggest industry at the moment—not in Hampton Roads or in the state overall—but the legislators and planners definitely view its growth as important,” says Jerry Giles, a representative of the Virginia Economic Development Partnership (Richmond, VA; www.yesvirginia.org), a state advocacy group. “It’s an up-and-coming industry in our state.”

On the Wings of Yesterday

Teledyne Hastings Instruments (Hampton, VA; www.teledyne-hi.com) has been supplying gas-flow meters, flow controllers, and vacuum measurement instruments to the medical industry for many years. One wouldn’t know it, however, judging from the interior of the company’s headquarters. There, the most prominent items on display relate not to medical manufacturing but to outer space, including a framed photograph of the first lunar landing. “NASA was the first adopter of a Hastings gauge back in the late 1960s,” explains Clair Dorsey, a sales engineer.

NASA’s Langley Research Center was established in Hampton in 1917. It has since been joined by a slew of aviation companies as well as a number of armed services air installations, which, taken together, constitute one of the world’s major aerospace clusters. But rather than viewing success in the aerospace industry as coming at the expense of the medical industry, most locals view the two as complementary. “I think [the move to medical] was a natural transition for our company to make,” Dorsey says. “Accurate leak testing and flow monitoring are vital to both industries.”

The kinds of equipment and components the two industries demand coincide in many cases. Both sectors, for example, need high-performance metals and plastics, factory automation equipment, and a variety of electronic components. “The overlap [between the two industries] is definitely common here,” confirms Vic Chatigny, group vice president at Measurement Specialties (Hampton, VA; www.meas-spec.com), a supplier of sensors and pressure transmitters. The company, a long-time partner to the medical industry, moved its headquarters from New Jersey to Hampton Roads in 2004 and has recently taken a cue from its neighbors, announcing plans to expand its facility to include government aerospace projects. But in light of a growing (and aging) population, medical remains a company priority. “We view our capabilities in sensors for implantables and diagnostic equipment as two of our biggest potential areas for growth,” Chatigny says.

Other companies in the area may soon follow the path of Teledyne-Hastings, according to Giles. “When you look at the projections for growth in the life science industry, I think that companies grounded in traditional area industries could begin to gravitate over,” he says.

Southern Hospitality

In naming Virginia the best state for business in 2007, Forbes cited the regulatory environment, economic climate, and growth prospects, but one key ingredient of the state’s success went unmentioned: hospitality. “We work actively with companies considering or planning a move to Virginia to make the transition as easy as possible,” Giles says. The Virginia Economic Development Partnership has also developed one of the most advanced business site-selection search engines in the country, allowing companies to browse available sites instantly based on workforce needs, facility specifications, and surrounding infrastructure.

Once settled, new businesses can expect to draw from an eager workforce, especially in the Hampton Roads area. Each year, approximately 15,000 armed services members based in the area exit the military, according to statistics from the Hampton Roads Economic Development Alliance (Norfolk, VA; www.hreda.com). Satisfied by the cost and quality of living, many elect to remain in the area. “We draw many of our employees from the armed services,” Chatigny says. “It’s a readily available pool of labor that offers a high degree of technical training.” In addition, there are at any given time, on average, 30,000 military spouses available to work.

Graduates of the colleges—Old Dominion University (Norfolk, VA; www.odu.edu) and William and Mary (Williamsburg, VA; www.wm.edu)—also provide attractive hiring options for local medical firms. “The engineering school at Old Dominion is well regarded, and we employ graduates from there,” Chatigny says.

Research facilities are another resource that companies in the area can potentially tap. Closest in proximity is the Medical School of Virginia (Richmond, VA; www.medschool.vcu.edu), which plans to open an expanded facility—totaling 185,000 sq ft—later this year. Over the last two years, the school increased the number of NIH grants it submitted by 38.5%.

Finally, just as tourists flock to the area each summer to enjoy the coastline along Virginia Beach, so can medical firms experience the pleasures of the area’s geography. In particular, the shoreline location offers enormous shipping benefits. The moniker “Hampton Roads” refers to the area as a whole as well as the port area—“Roads” is the short form of roadstead, where ships can anchor. The Hampton Roads port links Virginia to more than 250 other ports in more than 100 countries. With its four marine terminals, the shipping center is the third-largest by volume on the East Coast in terms of general cargo, and the leading port in the country in total tonnage. “With the amount of overseas outsourcing that goes on today, the proximity of the port has the potential to offer significant economic benefits to local companies,” Giles notes.

Banking on the Future

Air-Tite Products (Virginia Beach, VA; www.air-tite.com) has been supplying components for IV and laboratory applications for many years. In the years ahead, as healthcare providers adopt emerging technologies, the company foresees its business growing as a result. “[Virginia] situates us well to draw these new customers,” says Paul Oberdorfer, company vice president. “Fast turnaround time is one of the biggest competitive factors in today’s market, and our location next to a major shipping terminal is going to help us expand the business.”

Medical Laboratory Solutions Inc. (Norfolk, VA; www.medlabsolutions.com), a provider of maintenance and refurbishment services to medical companies that own third-party analytical and testing equipment, is doing its part to expand the area’s medical industry—one person at a time.

“Replacing in-house analytical and testing equipment is something that a lot of companies can’t afford to do often,” says Randall Reagan, company founder and president. “Unfortunately for them, it happens frequently that equipment manufacturers will release new versions of equipment and from that point forward no longer offer to maintain previous models.” '

How does Med Lab Solutions offer maintenance expertise comparable to that of the firms that originally manufactured the equipment? In at least two cases, it has meant recruiting the original maintenance staffers to come to Virginia. “If an engineer has worked on a specific piece of equipment for years, sometimes it makes more sense for him to follow the equipment rather than to stay on with the company,” Reagan explains. “In those two instances, the workers I hired certainly weren’t seeking out Norfolk, but both guys ended up discovering that it’s a great place to be.”

Copyright ©2008 Medical Product Manufacturing News