Part 4 of 5: How the Carilion / Virginia Tech Model creates long-term competitive advantages that extend far beyond healthcare

The Ecosystem Paradox That Defines Competitive Advantage

Most regional economic development efforts focus on attracting companies from elsewhere, offering tax incentives, building infrastructure, and competing for relocations. This approach treats economic development as a zero-sum game where regions compete to redistribute existing resources rather than creating new value.

The Carilion / Virginia Tech Model demonstrates a fundamentally different approach: building innovation ecosystems that generate sustainable competitive advantages through integrated capabilities, talent development, and community engagement. Rather than competing for existing resources, this model creates new economic value that compounds over time.

The results indicate a strategic shift in how regions can compete: from attracting external investment to developing internal capabilities that become increasingly difficult for competitors to replicate.

The Foundation: Integrated Institutional Excellence

Research Enterprise Scale

The Fralin Biomedical Research Institute represents the cornerstone of the ecosystem approach. With $375 million in total grants and contracts since 2010, $241 million currently active across 45 research teams, and 685 personnel, including faculty, staff, and students, the institute has achieved a research scale that rivals much larger, established institutions.

Under the leadership of Executive Director Michael Friedlander, the institute comprises 45 distinct research teams, with an average annual salary of $105,000 for faculty and staff, creating a substantial high-wage employment base that demonstrates the economic viability of research excellence as an economic development strategy.

Educational Integration

The Virginia Tech Carilion School of Medicine’s approach to workforce development creates sustainable competitive advantages through integrated excellence. The school has achieved a residency match rate of more than 99% since 2014, with over 95% of students securing their first-choice specialty. Alumni have matched into programs in 36 states plus Washington, D.C., demonstrating competitiveness with graduates from established institutions.

The school’s requirement that all students complete publishable research produces physician-scientists at a rate that rivals much larger programs. More than half of VTCSOM students find research mentors at the Fralin Biomedical Research Institute, creating direct integration between education and discovery.

Workforce Pipeline Excellence

The nationally award-winning Translational Biology, Medicine and Health (TBMH) graduate program exemplifies the ecosystem’s workforce development approach. The program has graduated 104 students (over 90% with doctoral degrees) with remarkable career outcomes:

• 40% have secured research positions at major universities, including Duke, Emory, Johns Hopkins, Harvard, Mayo Clinic, Stanford, UC Berkeley, UC San Francisco, University of Michigan, University of North Carolina, University of Pittsburgh, University of Virginia, Vanderbilt, Virginia Tech, and Yale
• 20% have joined pharmaceutical or medical device companies and biotech startups
• Others have taken positions with federal agencies, private foundations, and health systems

The Economic Multiplication Effect

Research Investment Returns

The institute’s financial performance demonstrates compelling returns on ecosystem investment. Current metrics include:

• $241 million in active grants and contracts
• $51 million in new funding annually
• $76 million in current year expenditures
• $212 million in three-year expenditures
• $686 million in total spending since inception

Most significantly, the institute has generated a cumulative economic impact of $1.7 billion since its inception, demonstrating a 2.5 times multiplier effect on research expenditures.

High-Wage Job Creation

The ecosystem approach creates employment opportunities across various skill levels while maintaining a focus on high-wage positions. The average salary of $105,000 for faculty and staff at FBRI alone attracts talent from national and international markets, creating spending power that benefits the broader regional economy.

Each high-skilled position in healthcare innovation creates approximately 3.2 additional jobs throughout the regional economy, from specialized services to housing and retail. The current 685 employees at FBRI support over 2,000 additional regional positions through this multiplier effect.

Strategic Partnerships That Create Network Effects

Industry Recognition and Validation

The ecosystem has attracted major industry recognition that validates its competitive advantages:

• Johnson & Johnson Innovation established JLABS in collaboration with the Virginia Tech Corporate Research Center, providing regional startups with access to JLABS programming, resources, and mentorship
• Media coverage spanning The New York Times, The Washington Post, The Wall Street Journal, USA Today, Forbes, CNN, BBC, ABC’s Good Morning America, CBS Evening News/60 Minutes, NBC Nightly News, NPR’s All Things Considered, Discovery, National Geographic, Bloomberg, Associated Press, and Reuters
• Ten startup companies launched in Roanoke with small business grant funding.
• International partnerships are attracting researchers from leading global institutions

Strategic Geographic Expansion

The Children’s National Hospital partnership demonstrates how ecosystems can extend competitive advantages across geographic boundaries. The Fralin Biomedical Research Institute operates a 12,000-square-foot facility on the Children’s National Research & Innovation Campus in Washington, D.C., creating pediatric research capabilities that neither institution could achieve independently.

Recent collaborative projects are developing AI applications specifically for pediatric health contexts, including federated learning systems, multimodal foundation models, and predictive analytics. Five research teams, combining researchers from Virginia Tech and Children’s National, are advancing projects funded by grants from the Sanghani Center, the Virginia Tech Innovation Campus, Children’s National, and the Fralin Biomedical Research Institute.

The Blue Ridge Innovation Corridor: Regional Scale Strategy

Multi-Regional Coordination

The Blue Ridge Innovation Corridor (BRIC) represents the next evolution of ecosystem development. This coalition spans from Danville to Martinsville to Roanoke and Blacksburg, encompassing over 710,000 residents and positioning itself as Virginia’s fourth major innovation region.

The corridor’s strength lies in its distributed capabilities across this broad region: Virginia Tech’s research excellence in Blacksburg, the Institute for Advanced Learning and Research anchoring the Danville region, comprehensive healthcare infrastructure in Roanoke, and Martinsville’s advanced manufacturing capabilities, which connect the entire network.

Project VITAL as a Scaling Model

Project VITAL (Virginia Innovations and Technology Advancements in Life Sciences) exemplifies cross-regional funding and coordination. The $14.3 million GO Virginia investment establishes a collaborative network spanning multiple regions, connecting Virginia Tech’s various campuses with clinical partners, community colleges, and industry.

The project connects Virginia Tech’s main campus in Blacksburg, the Fralin Biomedical Research Institute in Roanoke, and the Children’s National partnership in Washington, while involving Virginia Western Community College and the Roanoke-Blacksburg Technology Council for workforce development.

Community Integration as Competitive Advantage

Authentic Community Engagement

The ecosystem’s sustainability depends on meaningful integration of community voices and patient advocacy into both governance structures and implementation processes. This community integration doesn’t dilute research quality—it enhances it by ensuring that breakthrough discoveries address real-world healthcare needs.

The Community Advisory Council structure comprises patient and family representatives, community organization delegates, local business leaders, educational representatives, and municipal leaders who provide input on research priorities, facility development, and program expansion.

Patient-Centered Innovation

This community-centered approach creates patient experiences that traditional single-institution models struggle to match, while ensuring that research priorities align with authentic community needs. The integrated model enables patients to receive cutting-edge treatments developed through regional collaboration while staying close to family and community support networks.

Infrastructure Investment and Facility Development

State-of-the-Art Research Facilities

The Fralin Biomedical Research Institute operates in a 239,000-square-foot facility housing advanced equipment including:

• 3.0 Tesla MRI
• MRI-guided focused ultrasound machines
• 3D printing and bioprinting facilities
• Electron microscopy facilities
• Linear accelerator for cancer treatment in companion animals

The recent addition of a second research building doubles the institute’s capacity and positions it for continued growth while maintaining the collaborative culture that generates competitive advantages.

Clinical Infrastructure Expansion

The expansion of Carilion’s clinical facilities creates research opportunities that extend beyond traditional academic medical centers:

• Carilion Taubman Cancer Center, opening in 2027 represents a $100 million investment that will establish the region as a destination for advanced cancer care
• Advanced cardiac unit positioning Southwest Virginia as a leader in cardiovascular research and treatment
• Advanced kidney treatment facilities are creating opportunities for nephrology research and dialysis innovation
• Manufacturing wet labs enabling on-site development and testing of medical devices and pharmaceutical compounds

The Virginia Tech Innovation Campus Connection

Multi-Regional Strategy

The Virginia Tech Innovation Campus in Northern Virginia adds crucial dimension to the ecosystem strategy. Located in Arlington, the Innovation Campus extends Virginia Tech’s reach into the Washington, D.C. metropolitan area, creating a triangle of innovation connecting Blacksburg, Roanoke, and the nation’s capital.

The Innovation Campus’s focus on technology and artificial intelligence directly complements the healthcare innovation happening in Roanoke. The Campus’s expertise in AI and data analytics enhances the pediatric health research being conducted at Children’s National, while clinical insights from Washington inform technology development in both Arlington and Roanoke.

Strategic Infrastructure Convergence

The ecosystem’s AI capabilities are being significantly enhanced by Google’s expanding Virginia data center infrastructure. Google’s $1 billion investment in Northern Virginia data centers (WJLA, 2024), combined with the June 2025 announcement of a new facility in Botetourt County (Broadband Breakfast, 2025), creates unprecedented computational resources within proximity to the healthcare innovation network.

The Botetourt County facility, located just 20 minutes from Virginia Tech’s medical campus, represents strategic positioning that could accelerate AI-driven healthcare breakthroughs. This proximity eliminates computational bottlenecks that currently limit large-scale genomic analysis, protein folding simulations, and real-time diagnostic AI applications.

AI Workforce Development

Virginia’s AI job market has experienced significant growth, with AI-related job postings nationally up 42% compared to late 2022, according to University of Maryland researchers tracking the post-ChatGPT AI surge (AIMaps.ai, 2024). The state Virginia’s Has Jobs AI Career Launch Pad partnership with Google that provides 10,000 free scholarships for AI training, creating a robust talent pipeline that directly benefits the healthcare innovation ecosystem.

Virginia also offers the first Master’s degree in AI from a public institution in the United States, demonstrating a long-term commitment to workforce development in artificial intelligence applications across industries, including healthcare (Virginia Has Jobs, 2024).

The combination of computational infrastructure, workforce development, and medical research excellence positions Virginia as a premier destination for AI-driven healthcare innovation that extends far beyond traditional tech hub models.

Faculty Excellence and Recognition

National and International Recognition

FBRI faculty have achieved national and international recognition, including:

• Election as Senior Member of the National Academy of Inventors
• Children’s Cancer Research Fund Emerging Scientist Award
• Fellow of the Biomedical Engineering Society
• Fellow of American Institute for Medical & Biological Engineering
• Fellow of the American Society for Clinical Investigation
• Fellows of the American Association for the Advancement of Science
• Fellows of the American Psychological Association
• Alfred P. Sloan Foundation fellows
• Kavli Fellows of the National Academy of Sciences
• Fellow of the American Heart Association

This recognition demonstrates that the ecosystem attracts and develops talent competitive with the most prestigious research institutions while maintaining a commitment to regional collaboration and community benefit.

Economic Development Through Innovation

Entrepreneurship and Commercialization

The ecosystem’s approach to entrepreneurship fosters sustainable economic development through technology transfer and the formation of startups. The ten startup companies launched with small business grant funding demonstrate the capability to translate research discoveries into commercial applications that benefit the regional economy.

The Johnson & Johnson JLABS partnership offers regional startups access to programming, resources, and mentorship, connecting Southwest Virginia’s innovation ecosystem to global pharmaceutical markets.

Regional Economic Transformation

The combination of research excellence, clinical innovation, educational transformation, and industry partnership creates economic development that extends far beyond healthcare:

• High-wage employment attraction and retention
• Tax base enhancement through increased property values and higher incomes
• Supply chain development supporting the biotechnology and medical device industries
• Tourism and conferences bring external revenue to the region
• Quality of life improvements are attracting families and businesses across sectors

The Replication Framework for Regional Leaders

Essential Components for Ecosystem Development

Based on the Virginia experience, successful innovation ecosystems require:

1. Academic Medical Partnership: Research-intensive medical education with mandatory research requirements
2. Clinical Innovation Partner: Health system committed to breakthrough infrastructure and research collaboration
3. Research Institute: Independent biomedical research organization with diversified funding
4. Workforce Pipeline: Educational programs addressing healthcare workforce needs across skill levels
5. Regional Coordination: Formal collaboration mechanisms across institutions
6. Community Integration: Authentic engagement ensuring research serves community needs
7. Innovation Infrastructure: Physical and digital platforms enabling discovery and commercialization
8. Multi-Source Funding: Diversified financial foundation combining federal, state, private, and clinical revenue

Implementation Lessons

The Virginia experience suggests systematic approaches to ecosystem development:

• Start with proven partnerships rather than attempting comprehensive networks immediately
• Invest in relationship infrastructure including travel, communication, and coordination staff
• Prioritize community engagement as fundamental requirement, not afterthought
• Plan for leadership transitions through governance structures that preserve collaborative culture
• Diversify funding early to avoid vulnerability to single source disruptions

Measuring Ecosystem Success

Quantitative Performance Indicators

The ecosystem’s success is measurable across multiple dimensions:

• Research Impact: $375 million in total grants and contracts, $241 million currently active
• Clinical Translation: Multiple breakthrough treatments and devices developed through regional collaboration
• Economic Development: $1.7 billion cumulative economic impact from research activities
• Workforce Retention: 70% of nursing graduates remain in the region, 40% of doctoral graduates at major universities
• Industry Recognition: Johnson & Johnson partnership, extensive media coverage, international collaborations

Community Benefit Outcomes

• Healthcare Access: Advanced treatments available locally rather than requiring travel to distant centers
• Educational Opportunities: Career pathways from technical training to doctoral education
• Economic Opportunity: High-wage employment across skill levels in growing industries
• Quality of Life: Combination of career advancement and community engagement

The Strategic Advantages of Ecosystem Approach

Sustainable Competitive Advantages

The ecosystem approach creates competitive advantages that strengthen over time:

• Talent Development: Integrated educational programs producing workforce capabilities that benefit regional employers
• Research Infrastructure: Generating intellectual property and industry partnerships that compound over time
• Community Engagement: Building social capital that supports continued collaboration and innovation
• Network Effects: Each successful partnership creates credibility and momentum for additional collaborations

Resilience Through Diversification

The ecosystem’s diversified structure creates resilience against economic disruptions:

• Multiple funding sources reducing vulnerability to single stream disruptions
• Diverse industry partnerships providing stability across economic cycles
• Regional coordination enabling mutual support during challenging periods
• Community integration ensuring local support for continued investment

Looking Forward: From Regional Success to Global Model

The Next Decade Vision

By 2035, the ecosystem aims to achieve:

• National Cancer Institute designation providing federal recognition and additional funding
• International research partnerships expanding beyond individual collaborations to comprehensive institutional relationships
• Regional population growth for the first time in decades through economic opportunity attraction
• Global model export providing technical assistance to other regions developing similar capabilities

Scaling the Model

The ecosystem’s next evolution involves:

• Horizontal scaling across multiple regions while maintaining network connectivity
• Vertical integration, including supply chains, regulatory partners, and global networks
• Digital infrastructure enabling real-time collaboration across geographic boundaries
• Predictive coordination using AI to anticipate needs and coordinate resources

The Strategic Imperative for Regional Leaders

The Question of Competitive Positioning

As evidence mounts that ecosystem approaches can generate sustainable competitive advantages across research, education, economic development, and community benefit, the question for regional leaders is not whether these models work—the question is whether they can implement them before other regions establish network effects that become difficult to replicate.

The Carilion / Virginia Tech Model demonstrates that this implementation is possible, measurable, and scalable. The question is whether leaders have the strategic vision to prioritize long-term ecosystem development over short-term competitive positioning.

The Choice That Defines Regional Future

Regions face a strategic choice: continue competing for existing resources through traditional economic development approaches, or invest in building innovation ecosystems that create new economic value while serving authentic community needs.

The Carilion / Virginia Tech Model provides a proven framework for the ecosystem approach, demonstrating that regional collaboration can generate competitive advantages that traditional models cannot match. The question is whether regional leaders have the vision and commitment to build sustainable innovation ecosystems that serve both global competitiveness and authentic community benefit.

The ecosystem approach isn’t just about economic development—it’s about creating sustainable competitive advantages that strengthen over time while serving the communities that support them.

This is the fourth post in a five-part series examining the Carilion / Virginia Tech Model for healthcare innovation.

Coming Next Week: Part 5 examines “The Global Future of Healthcare Innovation” — exploring how distributed innovation networks may reshape healthcare delivery worldwide while creating new models for international collaboration.

References

AIMaps.ai. (2024). AI Jobs Growth – Virginia. https://www.aimaps.ai/virginia.php

Broadband Breakfast. (2025, June 30). Google Buys Land for New Data Center in Western Virginia. https://broadbandbreakfast.com/google-buys-land-for-new-data-center-in-western-virginia/

Fralin Biomedical Research Institute. (2024). About us. Virginia Tech. https://fbri.vtc.vt.edu/about.html

Virginia Has Jobs. (2024). Activate Your AI Potential. https://virginiahasjobs.com/ai/

Virginia Tech Carilion School of Medicine. (2024). Student achievement and outcomes. Virginia Tech. https://medicine.vtc.vt.edu/about/student-achievement.html

Virginia Tech News. (2025, February 10). Statewide initiative aims to position Virginia as a leading hub for biotechnology innovation. Virginia Tech News. https://news.vt.edu/articles/2025/02/outreach-gova-project-vital.html

WJLA. (2024, April 30). Google announces $1 billion investment to expand data center campuses in northern Virginia. https://wjla.com/news/local/virginia-data-center-campuses-campus-google-1-billion-dollar-investment-prince-william-county-governor-glenn-youngkin-residents-debate-controversy-jobs-resources

William E. Amos, DCS, is Chairman for GO Virginia Region 2 and a retired Corporate Executive from GE Digital, with over 30 years of experience in technology innovation initiatives worldwide.