The brave new world of modeling and simulation
Emerging industry may mean Hampton Roads from its dependence on military spending

by Lisa Antonelli Bacon
for Virginia Business
May 2006

Imagine that a hurricane is headed for the Virginia coast. It's a monster, with pounding winds of more than 100 miles per hour. Populous Hampton Roads sits right in its path. With the specter of Katrina branded in their minds, emergency planners decide to evacuate the area's 1.6 million people. Instead of chaos, they expect an orderly exodus because in the works is a plan on who should leave first, which roads will carry how much traffic and how long it will take to clear the region. This what-if scenario is being played, again and again, in the risk-free, cost efficient world of modeling and simulation.

Used for years by the American military to plan war games, M&S technology has evolved to the critical point where it has the power to revolutionize industries. Take health care. Medical students traditionally learn procedures under the old maxim “watch one, do one, teach one.” Yet these days students at Eastern Virginia Medical School in Norfolk use desktop surgical simulators to snip, suction and sew their way through virtual surgeries.

Meanwhile, research scientists at Old Dominion University’s Computerized Automatic Virtual Environment (CAVE) are developing a program to create a virtual operating room, equipped with a virtual surgical team that can engage in dialogue for consultation and assistance. If practice makes perfect, then modeling and simulation has the potential to drive down health care costs by reducing the number of malpractice suits. “Imagine if we could roll out a model health care system, and we didn’t have to figure in litigation costs?” says U.S Rep. J. Randy Forbes, R-4th.

If that sounds like so much pie in the sky, you’ll have to forgive Forbes, chairman of the Congressional Modeling & Simulation Caucus, the group charged with developing the M&S industry and its uses in government. It’s just that he sees great potential for the many uses of M&S in his Southeastern district, which includes some of military-dependent Hampton Roads.

Indeed, the capacity to change lives or direct history through modeling and simulation grows exponentially every day. Local, state and national governments already are relying on M&S to craft emergency plans to minimize the impact of large scale catastrophes, such as a Katrina-sized hurricane, or a possible avian flu epidemic. The implications of the spread of a flu virus from birds to humans are huge, in terms of both health and the economy. Early this year, in reaction to the avian flu threat, Italy’s poultry consumption dove 70 percent. In America, M&S enables scientists to plot possible scenarios and responses that would help safeguard poultry and people. “With modeling and simulation, we know what’s going to happen; we know how to train people. We know what we need to do and how it’s going to unfold,” says Forbes.

In Hampton Roads, proposed base closures threaten to dent the region’s military-based economy. Plus the area is losing a major employer. Ford Motor Co. announced last month that it will close Norfolk’s truck assembly plant in 2008, which employs about 2,500 workers (see story). Fortunately, the port is going great guns, and local government and economic development leaders are looking to M&S as another way to expand the area’s economy and draw investment from around the world. Already, the region is acknowledged as one of the country’s top three spots for the emerging M&S industry, along with Huntsville, Ala., and Orlando, Fla. Since 1997, when ODU established the Virginia Modeling, Analysis and Simulation Center (VMASC) in northern Suffolk (joining the Department of Defense’s Joint Warfighting Center there) the area has attracted a cluster of small- and medium-size companies, defense contractors and academic entities, leading some to refer to it as “Sim City.”

ODU’s center has outgrown its current home and plans to relocate next year to larger digs about two miles down the road. Going up is an $11.6 million building in a 32-acre, mixed-use office park that straddles the Suffolk-Portsmouth line near Interstate 664. Other signs the industry is gaining traction: The state may kick in as much as $27 million to help grow M&S in Virginia. Companies continue to invest in facilities near the VMASC, with Raytheon Co. planning to build a 22,000-square-foot simulation lab. Plus, since awarding the country’s first doctoral degree in modeling and simulation in 2003, ODU is enrolling more students on the M&S track.

“Old Dominion University plans to double the number of students in master's and doctoral programs in modeling and simulation,” says ODU President Roseann Runte. The expansion will promote applications of modeling and simulation in such areas as medicine, serious gaming, transportation and maritime supply and logistics. “The research activity and academic offerings will contribute to significant job generation for the region and the commonwealth.”

Yet for all its potential, modeling and simulation has yet to become common parlance. Far from it. In March, California transportation officials tested safety devices by driving a locomotive into a commuter train full of dummies. It was the eighth such test. Modeling and simulation could have performed the same test 100 times at no risk, a sliver of the cost and no cleanup. In fact, say proponents, that’s the beauty of replicating real-life scenarios with computer technology: It provides training, visualization and experience, and possibilities are limited only by the imagination. “M&S, once regarded as a military-driven industry, is exploding,” says Forbes.

Like any high tech industry, myriad uses for M&S are developing at the speed of light. And while the Department of Defense has been its biggest consumer up to this point, private companies are beginning to employ the technology to reduce costs, improve skills and change the way they do business. For instance, Coldstone Creamery and Cisco Systems have adopted instructional gaming (also called “serious gaming”) to train employees. And Canon Inc. is rolling out almost a dozen new instructional games to train its repair technicians. Industry experts project the instructional games market alone will reach $100 million in the next five years.

Slowly, word is getting out, not just about M&S, but also about Hampton Roads. More than 300 government officials, academics and industry representatives from 24 states met in Suffolk this past winter at the country’s first Modeling and Simulation Leadership Summit. They discussed the challenges of growing the industry and developed an agenda to take to Washington.

The state has already felt a groundswell. In 2004, M&S generated $24 million in state revenue. That amount is expected to grow to grow 125 percent by 2009. By some estimates, the industry already pumps more than $400 million a year into the Hampton Roads’ economy and has created more than 4,000 jobs with salaries twice the local average of $32,000. And that’s just the beginning. “By 2009, the number of jobs in modeling and simulation here will grow to 7,000,” says Robert Sharak, special projects director for the Hampton Roads Partnership. By that time, economic development officials say, the area M&S industry as a whole will balloon to nearly $1 billion.

Besides becoming a major driver of the state’s economy, M&S could shift the region’s centuries-long reliance on military spending. In Hampton Roads, economic growth has long been tied to the ups and downs of defense spending. After 9/11, a ramp-up in defense spending and homeland security helped boost the area’s economy for several years. Yet, prospects don’t look good for the near future. There has been talk of moving one of Hampton Roads’ nuclear aircraft carriers to Mayport, Fla., which would cost the area’s economy more than 5,000 jobs and $188 million in wages and benefits. Plus, the federal Base and Realignment Commission is threatening to close Oceana Naval Air Station in Virginia Beach (see story) if certain restrictions on encroaching development aren’t met. Therefore, a surge in a new industry is a welcome development.

So far, competition in the M&S field is scarce but serious. Orlando has been cultivating a skilled work force for decades. Its modeling and simulation work force of 64,000 far outstrips Virginia’s 4,000. But proposed state funding along with a private buy-in could lock in Hampton Roads as a national M&S center.

In addition to modeling and simulation, the port of Hampton Roads continues to be a powerful growth engine for the region and the state. For nearly 400 years, explorers and sailors, fishermen and traders have navigated the stretch of water at the confluence of the James River and the Chesapeake Bay. Today, city-sized warships, towering oil freighters and container barges ply the waters of Hampton Roads, connecting Virginia to world commerce. The Virginia Port Authority (VPA) is positioning itself to overtake New York as the busiest port on the East Coast, with major upgrades, private investment and improved ground transportation options.

To meet the needs of an expanding global market, sparked largely by trade with China, the port authority has invested more than $300 million in equipment and cranes to handle more and bigger cargo. The commitment spurred major investments from private industry, including a $450 million marine terminal for Maersk Sealand, one of the world’s largest shipping lines, owned by Danish conglomerate A.P. Moller Group.

But while the ocean seems infinite, terminal space is not. According to the VPA, Hampton Roads will outgrow its capacity for container cargo in just six years. Earlier this year, after months of considering issues such as the impact on area wetlands, the U.S. Army Corps of Engineers cleared the way for construction of a marine terminal on Craney Island, a 600-acre expanse of sand and earth dredged from nearby harbors. Cost estimates for such a transformation range from hundreds of millions to billions of dollars, which could call for private-sector investment.

Further challenging the ports’ speed of growth are clogged transportation routes. For years, ongoing roadwork on I-64 near the Hampton Roads Tunnel has snarled traffic, threatening timely delivery of goods to and from the ports. The port authority continues to press for a third crossing to ease traffic flow and provide more direct routes to international terminals. But even if construction of a third crossing were under way, it would take years to complete. Meanwhile, the Port of New York and New Jersey continues to upgrade, and Savannah adds more and more distribution centers to welcome imports to its port.

Just a few miles from the ports, M&S specialists at the not-for-profit VMASC center are hard at work on projects in another growth area for Virginia, homeland security. For nearly a decade, scientists have been quietly testing, researching, developing and simulating events to provide solutions for situations ranging from combat to health care, from transportation to job and professional training. In fiscal 2004, the center kept its staff of 50 busy with more than $10 million in research contracts with partners in academia, government and industry.

Even before VMASC, the region enjoyed a sort of covert reputation as a national center for M&S. Long before people bought their first video joystick, the military was acting out the finer points of armed engagement on video screens. The U.S. Joint Forces Command center in Suffolk uses psychologically-based behavior models to not only predict, but also show developing crowd behavior in specific military scenarios. Nearby, Suffolk plans to use the technology to update the city’s master plan for growth. And modeling and simulation will also play a role in planning for the area’s third crossing. “We want to move M&S into as many areas as we can,” says Roland Mielke, VMASC’s interim executive director.

As private industry awakens to its ever-expanding uses, M&S is growing in pockets, bringing more jobs and tax revenues. Vienna-based C2 Technologies Inc. is doubling its Hampton Roads staff after winning a $346 million contract to develop M&S programs to craft training and combat policy for the Army. Lockheed Martin has opened a $35 million Center for Innovation in Suffolk, where Northrop Grumman and General Dynamics have begun their own efforts to capture some of the military’s M&S contracts. And, in a public-private partnership, 17 companies are working with the commonwealth to establish the Emergency Management Training, Analysis & Simulation Center.

In the rapidly evolving world of IT, technical skills can become outdated almost as quickly as a pint of milk. If M&S continues to metastasize at its present rate, the current work force won’t be able to meet the demand for skilled employees. In the past, students seeking a career had to cobble together courses and work-study programs to gain the necessary skills. ODU now offers full curricula for graduate degrees in M&S. Starting this fall, Tidewater Community College will offer associate degrees in M&S. Late last year, Suffolk agreed to buy 57 acres at TCC in hopes of attracting and fostering collaboration with more M&S concerns. Focused on doubling research efforts, as well as developing and filling graduate programs in area colleges, part of the proposed state funding is earmarked to develop the education needed to build a skilled work force in time to meet demand.

Meanwhile, the rest of the world isn’t standing by. By 2008, India will have turned out another 100,000 high-tech engineers. China will have added another 300,000 to its skilled work force. Without planning and funding, the United States will be just an also-ran in the IT economy. “If we don’t want to stagnate, we need to do this to maintain our technical edge,” says Forbes. “We have all the ingredients here to turn the area into a modeling and simulation hothouse. The key isn’t what we’re doing today, but what we’ll be able to do tomorrow and the day after tomorrow.”