The top five most-read daily news stories on VirginiaBusiness.com from Sept. 15 to Oct. 13 included news about plans for a second Virginia Buc-ee’s mega-convenience center, this time in Rockingham County.
Former Liberty University President and Chancellor Jerry Falwell Jr. alleged in a lawsuit that President Emeritus Jerry Prevo and Liberty executive committee members received more than $1 million from Liberty through “questionable, self-dealing transactions.” (Sept. 19)
Dominion Energy Services President Carter Reid, also Dominion Energy‘s executive vice president, chief of staff and corporate secretary, will retire Jan. 1, 2024. (Oct. 2)
1. Scott Wheeler, founder and CEO of Bay Power Solutions, received the Virginia Maritime Association’s Distinguished Service Award at its Oct. 5 Maritime Banquet. Photo courtesy VMA.2. L to R: Nathaniel L. Bishop, senior associate dean for diversity, inclusion and student vitality at the Virginia Tech Carilion School of Medicine and chief diversity, equity and inclusion officer and senior vice president at Carilion Clinic; Carilion Clinic CEO Nancy Howell Agee; Michael Friedlander, executive director of the Fralin Biomedical Research Institute at VTC and Virginia Tech’s vice president for health sciences and technology; and VTCSOM Dean Lee Learman at the Oct. 4 unveiling of a statue of Roanoke native Henrietta Lacks, source of the first immortalized human cell line in medical research. Photo by Matt Chittum/Virginia Tech.3. L to R: George Mason University President Gregory Washington; Kenneth Ball, dean of George Mason’s College of Engineering and Computing; Dexian Chairman Mahfuz Ahmed; Dexian CEO Maruf Ahmed; and Trishana Bowden, Mason’s vice president of advancement, joined a Sept. 14 dedication event for a gold trash can honoring the brothers and their philanthropy. (Mason alumnus Maruf Ahmed started out working on the university’s grounds crew as a student, mowing lawns and emptying trash.) Photo by Evan Cantwell/George Mason University.4. Plasser & Theurer CEO Johannes Max-Theurer (L) and Plasser American CEO Thomas Blechinger greeted Gov. Glenn Youngkin at the Oct. 5 ribbon cutting of Plasser American’s 82,000-square-foot manufacturing facility in Chesapeake. Photo courtesy Plasser American.5. Virginia Deputy Secretary of Commerce and Trade James Campos spoke at the Oct. 5 groundbreaking of CNX Resources’ Virginia headquarters office at the Richlands Professional Building in Tazewell County. Photo courtesy Virginia Coalfield Economic Development Authority.
A French nuclearpower company with its United States headquarters in Lynchburg is ramping up hiring to meet a growing global need for clean, low-carbon energy.
Framatome North America is recruiting for 200 positions in the U.S, about 125 of which are in Lynchburg, and it anticipates a “significant” number of additional openings in coming years, says CEO Katherine Williams.
Some of those employees will come from the 20-year-old Framatome Nuclear TechnologyAcademy at Central Virginia Community College in Lynchburg, which in May saw a major revamp after realizing its enrollment, which was limited to employees, had dwindled from a high of 25 students at a time to as few as five. The academy, a pathway to an associate degree, produces nuclear technicians who monitor and help maintain nuclear plants.
Nationally, about 600 openings for nuclear technicians are projected annually during the next decade.
Framatome has been in Lynchburg since 1989 and has about 1,320 employees in the location. It designs and provides equipment, services and fuel for nuclear power plants around the world. After noticing a skills gap in its entry level applicants, the company donated $1 million to CVCC to establish the academy in 2004. More than 100 employees have graduated from it, and 70% still work at Framatome, says Williams.
In May, Framatome announced it was donating $400,000 over four years to revamp the academy, adding equipment and condensing classroom instruction into semesters instead of two, five-week sessions annually for four years. (The rest of the time, Framatome’s students work at nuclear plants globally.) Employee pay was also made more competitive for students enrolled in the academy, which is tuition-free. Enrollment has reached a company goal of 30, says Marci Gale, head of CVCC’s mechatronics and electronics faculty.
The academy also is now open to the public; 16 non-Framatome employees have enrolled. Those who don’t work for another company that might cover academy tuition are likely to get an interview with Framatome.
L.A. Wills, 24, worked for a Framatome subcontractor when he learned about the academy. He’s in his third year now and works on steam generators for Framatome. He’ll graduate next year with a degree in applied nuclear mechatronics.
“Personally, it gives you an opportunity to show the company that you’re willing to put in the work to better yourself, so that way you can grow with the company,” Wills says.
Just a word of friendly warning: Our November cover story is one of the strangest tales ever told. I think it will thrill you. It may shock you. It might even horrify you. So, if any of you feel you do not wish to subject your nerves to such a strain, now’s your chance to … well, we warned you.
With that tongue-in-cheek nod to the introduction from Universal Pictures’ 1931 horror classic “Frankenstein” behind us, I confess that I’m writing these words in October, smack in the middle of that autumn month filled with ghosts and goblins and things that go bump in the night. And it’s appropriate to reference “Frankenstein,” given that this month’s cover story by Virginia Business Associate Editor Katherine Schulte is concerned with humanity’s quest to artificially replicate intelligence and how the business community hopes to harness that lightning-fast technology for increased productivity and profits — topics that can induce feelings ranging from excitement to dread.
Two of the most common refrains I’ve heard about artificial intelligence this year are these: “You may not lose your job to AI, but you will lose your job to someone who knows how to use it,” and “The opportunity outweighs the fear.”
To be sure, from the moment OpenAI unveiled its ChatGPTgenerative AI platform to the public one year ago, there have been strong scents in the air of both fear and money.
ChatGPT has passed the nation’s standardized bar exam, scoring better than 90% of lawyers who took the test. It’s been used to diagnose illnesses, research legal precedents and write everything from e-books and marketing emails to Excel formulas and computer code.
Personally, I’ve used it to draft business letters and marketing materials. I find its efforts can generally be too effusive, but even requiring a little tweaking, it admittedly has saved me some time. Similarly, I’ve tasked ChatGPT with organizing large groups of data into spreadsheets. For those chores, the results have been a bit more uneven. ChatGPT can spit out a spreadsheet in a couple minutes or less, but it’s kind of like having a speedy college intern who requires some hand-holding and may be prone to mistakes. Sometimes, in its eagerness to please, ChatGPT will invent missing data without understanding that’s not helpful or appropriate. Other times, it may place data in the wrong rows or columns. However, even with correcting ChatGPT’s work, a job that might have taken me two or three hours on my own only took about 45 minutes to an hour to complete.
And while Virginia Business isn’t using AI to write news stories — sorry to disappoint, but this column was written by a ho-hum human — you may have guessed that the striking art adorning our cover and illustrating its accompanying feature story this month were generated using artificial intelligence.
The past year has seen dramatic improvements in AI art tools such as Midjourney and Adobe Firefly, which have learned from a huge body of existing images (mostly by human artists) to generate new artwork. With Adobe’s latest updates, a minimally skilled user like myself can generate startlingly creative works. In Photoshop, I can take a pastoral farm photo and instantly replace a barn with photorealistic cows just by typing in those words; it will appear as if the barn had never been there. That’s fantastic if I’m creating generic illustrations, but that might be problematic if I’m a real estate agent who’s marketing a specific property and decides to spiff it up to look better than reality. Because we humans are operating this tech, it is as rife with possibilities for productivity as it is for misuse. As Schulte reports in her story, Virginia companies from accounting firms to health care systems and law firms are exploring not only real-world applications for generative AI, but also how to install virtual guardrails around it.
Like Dr. Frankenstein, the geniuses who are spawning today’s AI tools are hardly pausing to consider the ramifications before sending their creations shambling into the world. And like Frankenstein’s lightning-birthed monster, generative AI’s existence presents a host of ethical questions that are fast following behind it.
Logan Barry began working as a reporter for The Progress-Index newspaper in Petersburg in 2018, less than a year before a merger placed his paper under the ownership of Tysons-based media conglomerate Gannett. In August, he joined a federal class action lawsuit filed in the U.S. District Court for the Eastern District of Virginia alleging Gannett engaged in reverse racial discrimination.
The suit claims Gannett — the nation’s largest publisher of newspapers, including its flagship, USA Today — hired a Black woman instead of Barry, who is white, for a role for which Barry feels he was more qualified. Barry’s lawsuit alleges that the hiring of “a Black woman with less accolades and experience … satisfied the racial quotas Gannett was seeking to achieve.”
Now running his own media relations consulting firm in Richmond, Barry says, “Management informed me that I was amongst the highest performers in the newsroom and that they intended to tap me for what I understood to be a full-time leadership role.”
In 2019, that leadership role was filled, and according to the complaint, Barry was never given the opportunity to formally apply for the role. He stopped working at the paper in 2020. (The woman whom he alleges was hired in his place could not be reached for comment for this story by press time.)
Barry is one of five named plaintiffs — all of whom are white — in the class action suit, which alleges Gannett’s diversity, equity and inclusion (DEI) policy is “an intentional, companywide and systematic practice of discrimination against non-minority workers.”
Although such suits have been filed in the past, they now appear to have more chance of succeeding, following the U.S. Supreme Court’s ruling in June that rolled back race-based affirmative action policies at universities. The six conservative justices found such policies violate the 14th Amendment’s Equal Protection Clause. The August suit against Gannett quotes from Chief Justice John Roberts’ opinion: “Eliminating racial discrimination means eliminating all of it.”
Although the ruling focuses on college admissions policies and not directly on workplace diversity, “the Supreme Court’s [decision] has some overlapping themes with the lawsuit against Gannett,” says Adam Sanderson, a Rochester, New York-based employment attorney representing the plaintiffs. Echoing Roberts, he adds, “The ruling has made clear that it is the court’s view that eliminating racial discrimination means eliminating all of it.”
As of Oct. 12, the lawsuit had not been served on Gannett, but it was expected to be served within 90 days of the complaint’s Aug. 18 filing. After the company is served, it will have 21 business days to respond, according to the court.
“Gannett always seeks to recruit and retain the most qualified individuals for all roles within the company,” Gannett’s chief legal counsel, Polly Grunfeld Sack, said in a statement. “We will vigorously defend our practice of ensuring equal opportunities for all our valued employees against this meritless lawsuit.”
The Supreme Court’s decision bars higher education institutions from using race as a factor in admissions as a means of achieving diverse student bodies, with the exception of U.S. military academies. The practice was already illegal for businesses under laws such as Title VII of the Civil Rights Act of 1964 that prohibit any kind of employment discrimination.
Still, experts say the ruling may have an increased impact on companies, as nonprofit legal advocacy organizations like Students for Fair Admissions — which sued Harvard and the University of North Carolina — begin to pivot toward suing businesses over their DEI policies.
University of Richmond law professor Hank Chambers says the U.S. Supreme Court may be willing to make more decisions on discrimination in private employment. Photo by Matthew R.O. Brown
In his concurring opinion on the ruling, Justice Neil Gorsuch wrote that Title VII, making it illegal for an employer to discriminate against someone because of race, color, religion, sex or national origin, should be interpreted the same as Title VI, which bars discrimination in any program or activity that receives federal funds and was a key policy used in the affirmative action decision.
This suggests the Supreme Court could be open to hearing further cases on the issue of discrimination, specifically in private employment settings, lawyers say.
“The case itself doesn’t really say much to businesses,” says Hank Chambers, a law professor at the University of Richmond who focuses on constitutional law and employment discrimination. “What it does suggest is that the court may well be willing to get back into the area and make some additional decisions or make some additional law in the area.”
Building enough cases to create or alter specific laws on employers’ DEI practices seems to be a primary goal for organizations that are suing companies for reverse discrimination, says Linda Goldman, a Los Angeles-based lawyer at Ogletree Deakins. “People are focusing and trying to expand a lot of these rules there and make law.”
Barry says he hopes his lawsuit will result in Gannett ceasing its DEI policy, though he did not specify whether he wants to see a change in the law. “I seek respect for my professional skills and my hard work,” he says. “I seek the same for all individuals.” (Barry did not address whether his case is funded or assisted by any third-party organization.)
Some of the national backlash to DEI could be a partial response to recent corporate hiring patterns prioritizing diversity, especially following the 2020 Black Lives Matter protests. During 2021, 94% of more than 323,000 jobs added by 88 S&P 100 companies went to people of color, according to a study published by Bloomberg News in September.
Just as higher education institutions have been fielding lawsuits about their admissions policies, businesses may see an uptick in litigation similar to the class action suit brought against Gannett in Virginia.
Laura D’Agostino, a Centreville-based lawyer with Pacific Legal Foundation, a nonprofit public interest legal organization that takes on libertarian and conservative issues around individual and economic freedom, is one of the attorneys looking to expand the law on diversity-related policies in both the public and private sectors. She’s representing a white former Seattle city employee who is suing the city government for allegedly fostering a hostile work environment due to its DEI initiatives.
While the case was brought against a public entity, D’Agostino believes it speaks to growing litigation over racially hostile work environments, which, she says, she expects to be the next major debate in law.
“Even though the Supreme Court’s ruling was specifically looking at things from the educational perspective, we believe that the principles articulated in there, particularly about the fact that people are to be viewed as individuals and that race cannot be this determinative factor, we think that this is slowly going to be impacting the private sector, as well,” she says.
Edward Blum, a conservative legal strategist who founded Students for Fair Admissions in 2014, has pivoted to targeting the private sector, filing three lawsuits in August. Two of those suits were brought against law firms offering fellowships for minorities, and the third was filed against an Atlanta-based venture capital fund providing grants to Black women who own small businesses.
In late August, a former executive at Morgan Stanley sued the multinational bank and financial services company in the U.S. District Court of the Southern District of New York, alleging in the lawsuit that he, a white man, was terminated in May and replaced by a Black woman “with significantly less experience and qualifications for the position.” According to the lawsuit, the action “was the result of the firm’s attempt to comply with its diversity and inclusion objectives.”
Rather than relying on Title VII, all four of these cases reference Section 1981 of the Civil Rights Act of 1866, a post-Civil War policy that’s becoming a popular tool in reverse discrimination suits, according to Goldman.
“A lot of what we’re seeing is organizations with an anti-DEI agenda, like the people who brought the [Students for Fair Admissions] case, bringing other claims under Section 1981 and seeking to expand that law,” Goldman says. “We didn’t see that before.”
Section 1981 is broader and has been more widely interpreted than Title VII, creating more of an opportunity to expand antidiscrimination laws to cover reverse discrimination claims.
Some reverse discrimination suits have been successful for plaintiffs, and those victories have come with significant dollar amounts; in June, a white Starbucks manager was awarded almost $28.3 million after alleging discrimination in her firing, and, in 2021, a Charlotte, North Carolina, jury awarded $10 million to an executive at Novant Health who claimed he was fired because he was white, although a U.S. magistrate judge reduced the amount to $4 million. While these high-dollar awards aren’t extremely common, their value is reason enough to give businesses pause.
Scott Shepard, a fellow at the National Center for Public Policy Research, a conservative think tank, and a graduate of the University of Virginia School of Law, says he expects to see a lot of companies with more newly established diversity programs roll back their policies as more lawsuits crop up. His goal is to also deter firms with longer-held DEI initiatives, which Shepard says can be done by “roundly” suing those businesses.
The U.S. Supreme Court ruling “was just a ratification for businesses that all of the many programs that they’ve initiated, particularly in the years since the summer of 2020, will be found illegal and will cost companies … a tremendous amount of money unless they start changing very quickly,” Shepard says.
Sustaining DEI
After Minnesotan George Floyd was murdered by a Minneapolis police officer in May 2020, there was a roughly 55% uptick in corporate job openings for diversity, equity and inclusion roles, the Society for Human Resource Management reported in 2020.
More recently, though, that demand has dwindled significantly, according to Tiffany Jana, founder of Richmond-based TMI Consulting, which provides DEI advising services to businesses ranging from small startups to Fortune 500 firms.
“Over the past year or two, we’ve seen like 300 chief diversity officers disappear, equity-related titles are disappearing, people are being laid off left and right,” Jana says. A Revelio Labs report showed the attrition rate for DEI roles was 33% at the end of 2022, compared with 21% for non-DEI roles.
“For the people who were looking for a reason to loosen their investment, for whatever reason, this ruling is giving them … more justification for taking their investments out of their DEI programs,” Jana notes. But businesses that are genuinely committed to DEI will be able to maintain their programs, as long as they ensure everything is strictly legal under existing laws, Jana adds.
“Even in the [Students for Fair Admissions] case, Chief Justice Roberts noted that diversity in general is a perfectly reasonable goal,” says Chambers, the UR law professor. “It’s really a question of how you get there.”
When it comes to avoiding litigation, there are several pitfalls companies fall into, but the bottom line is ensuring all recruitment and inclusion efforts have a tangible effect on the business and are clearly defined as a value-add to the business model, Jana says.
It’s important to stay away from explicit quotas or “too aggressive goals that start to look like a quota,” Goldman says, such as aiming for a percentage of the workforce to be made up of a certain identity within a certain timeframe.
Giving executives incentives for hiring diverse employees is not illegal, as quotas are, but it puts companies at higher risk for litigation, says Goldman, who described DEI policy as a “risk continuum.”
“This idea that DEI is risky is not a full picture. No DEI is also risky,” she says. “You have employees filing suits on both sides.”
When Shepard is researching companies that might be at risk of reverse discrimination suits, he keeps an eye out for three types of initiatives: policies incentivizing executives to hire or promote minorities, companies using only vendors owned by minorities, and training programs that divide people into groups.
Likewise, D’Agostino says she has taken a special interest in employee affinity groups, a concept from educational environments that has expanded into workplaces, which sometimes group individuals based on race, gender or other identity facets such as sexuality.
These are all issues that can be avoided with the right wording and human resources education, Goldman and Jana both say. Overarchingly, companies will likely be taking a closer look at their DEI policies.
Corporate reaction — whether to roll back policies, alter them to ensure legality or maintain the status quo — will depend on the quality of companies’ commitment to diversity, Jana says. “If we’re scared of every possibility of litigation, we will never get anything done.”
In 2016, amid concerns over how the Virginia Economic Development Partnership was being run, the General Assembly directed Virginia’s Joint Legislative Audit and Review Commission to examine VEDP‘s organizational management and performance.
“There was a perception, at least publicly, that [VEDP] was a fairly good organization that was successful in bringing in business,” says Hal Greer, director of JLARC, the state government‘s watchdog and oversight commission. However, “when we got there, we were just shocked to learn what was going on there in terms of the management of the organization — or lack thereof.”
Greer’s team at JLARC found that VEDP, the state authority charged with expanding and diversifying Virginia’s economy, lacked “fundamental things” like performance metrics, a marketing strategy, strong communication with partners and operational guidance for staff responsibilities, he says.
“It was very dark days” for VEDP, recalls Jay Langston, who worked at VEDP for nearly 14 years before becoming executive director of the Shenandoah Valley Partnership in 2018. “There was a little bit of this attitude, ‘We’ll tell you how to operate,’ rather than, ‘We’re here to assist.’”
There was also no structure around awarding incentives to businesses or monitoring whether companies were doing what they had promised in order to receive those incentives, resulting in a consistent problem of clawing back funds when businesses did not meet performance metrics.
VEDP “lacked a strategic plan,” says Greer.
A lot has changed in the seven years since Greer’s team reviewed VEDP, though. With new leadership, the organization is still working to catch up after inefficiency and mismanagement left Virginia behind many of its competitors as an attractive spot for business expansion and development.
As it aims to make up for lost time, VEDP’s plan for fiscal 2024 reaches far beyond the next year, representing a pivot from solely focusing on attracting major business developments to a more holistic approach aligned across government sectors to achieve overall economic well-being.
Catching up
Amid JLARC’s investigation, VEDP’s governing board of directors began to initiate a restructuring. VEDP’s CEO at the time, Martin Briley, stepped down in March 2016 following a closed board session to discuss personnel issues. An interim CEO was appointed the next day. JLARC released its report in 2017, outlining the many dysfunctions at VEDP and recommending a slew of structural changes.
“I would say it really started at the top. You had leadership that just was not committed to the fundamental aspects of running an organization,” says Greer.
Steven Moret, Louisiana’s former secretary of economic development, was hired as VEDP’s new CEO in 2017 and brought on his assistant secretary from Louisiana, Jason El Koubi, as his second-in-command.
“We basically set to work to make VEDP a stronger organization,” says El Koubi, who took over as VEDP’s president and CEO after Moret left in 2021. “We’re catching up fast, but we are still catching up.”
A big part of that is expanding VEDP’s marketing of Virginia as a great place to do business and positioning it higher on rankings of the best states for business climate, according to El Koubi.
“Virginia tends to do better on the rankings that are based on objective data than it does for the rankings based on the perceptions of corporate executives across America,” he says.
Before the JLARC report, VEDP was investing $0 in marketing, according to El Koubi, who says the state economic development authority now spends about $2.7 million annually on marketing. Still, VEDP is trailing its competitors by a significant margin, with some other economic development organizations investing more than $10 million per year, he says.
“We do a fantastic job of marketing Virginia to tourists,” Secretary of Labor Bryan Slater says. “But we need to do the same thing when it comes to attracting business and work. That involves taking an aggressive marketing approach.”
Another goal of VEDP is ensuring every region in Virginia plays a part in economic growth so anybody who lives in a particular region has access to jobs and other economic opportunities within commuting distance.
“We do a fantastic job of marketing Virginia to tourists,” state Secretary of Labor Bryan Slater says. “But we need to do the same thing when it comes to attracting business and work.” Photo by Matthew R.O. Brown
Innovative framework
To spur VEDP forward, El Koubi and his team have designed what he calls an innovative framework to guide their economic development strategy in the coming years starting with the state’s 2024 fiscal year, which began July 1.
The framework has three primary focuses: investing in Virginia’s strongest industries, building “ecosystems” that attract and drive business, and improving collaboration with other government agencies for a more holistic approach to economic development.
VEDP hopes to capitalize on the largest sectors within Virginia’s internationally tradeable industries: logistics, manufacturing and knowledge work (software, cybersecurity, financial services, etc.). Together, those three areas make up almost 65% of economic growth within the tradeable sector, according to VEDP.
“If we can lead in these core growth sectors, we’re going to lead overall,” says El Koubi.
Particularly in manufacturing and logistics, Virginia is not yet a leader but has enough momentum to move toward becoming one with enough investment, El Koubi adds. VEDP has been working closely with the Virginia Community College System to accomplish that goal, as VCCS has been focusing on increasing the number of manufacturing graduates it produces, according to VCCS Chancellor David Doré.
“When you invest in talent development at the community college level, that is going to drive economic development,” Doré says. “These go hand in hand.”
This was certainly true for the Lego Group when it chose Chesterfield County to be the site of a $1 billion factory complex, which broke ground in April. The Danish toymaker is using the Virginia Talent Accelerator Program, a training and recruitment service managed by both VEDP and VCCS, to help fill the 1,700 new jobs it’s bringing to the area.
“We are very pleased with our experience working with VEDP, beginning with site selection and as we’ve pivoted to hire and train our first group of colleagues,” says Carsten Rasmussen, chief operations officer, for the Lego Group. “VEDP and the talent accelerator have been instrumental in our ability to recruit, hire and train our new team.”
Working collaboratively with VCCS is also part of building the business-friendly ecosystems referred to in VEDP’s innovative framework, which ideally will provide strong workforce talent to incoming or expanding businesses, as well as housing and health care for new employees.
“The innovation framework talks about building a stronger ecosystem,” says Doré. “I see the Virginia colleges as pivotal to that talent pipeline, which I think is central to VEDP’s plans.”
Creating site development opportunities across the state is another crucial aspect for building those ecosystems, El Koubi says. Virginia has had some major successes in attracting development projects, including Lego’s Chesterfield County facility and Amazon Web Services’ January announcement that it plans to invest an additional $35 billion building data centers in Virginia by 2040, but El Koubi says consistent funding is necessary to ensure these types of developments keep coming to the state.
“In selecting the Chesterfield County site,” Lego’s Rasmussen says, “we prioritized shared values, a skilled and diverse workforce, and infrastructure needed to support regional and national consumer demand.”
In January, Gov. Glenn Youngkin announced $90 million in site development grants through VEDP, and, in September, the General Assembly put another $200 million for site development into the revised budget. This kind of investment needs to be consistent going forward because Virginia is “decades behind” competing states, El Koubi says.
While Virginia has landed some major corporate headquarters in recent years, including Amazon.com’s multibillion-dollar HQ2 East Coast headquarters in Arlington County, it lags behind other Southern states in industrial site development. Out of more than 120 industrial development megaprojects landed by Southeastern U.S. states from 2015 to 2022, Virginia landed just one: the Lego plant.
“What we have not done at the state level is really assisting regions and localities with developing sites to address local expanding businesses … and new businesses that are coming in,” says Langston with the Shenandoah Valley Partnership.
Site infrastructure and many other attracting factors for business, such as low taxes, fewer regulations and better quality of life, are beyond VEDP’s direct control, which is why collaboration is such a major part of the authority’s plan going forward.
The final aspect of the innovative framework is a “whole-of-government approach” to economic development, with VEDP working closely in alignment with other state and local agencies, according to documents outlining the plan. This is something that will become even more important as Virginia establishes its new Department of Workforce Development and Advancement.
A bigger picture
The new department, which is still being formed, is charged with consolidating a litany of workforce-related agencies under one roof. In September, Youngkin appointed Carrie Roth, commissioner of the Virginia Employment Commission, as the department’s first leader.
Previously, the state’s workforce initiatives were spread across six cabinet secretaries,
12 agencies, roughly 30 individual divisions, 14 local boards and more than 40 websites, according to Slater, who spearheaded the creation of the consolidated department.
As the new department comes to fruition over the next year, VEDP will be a close partner and will act as a liaison between workforce development initiatives and prospective businesses looking to expand or locate in Virginia, Slater says.
“The VEDP is working on bringing all of the pieces together so that you’re really kind of working in a synergistic way,” he says. “I think that’s really the key … [to] how we deal with workforce development and economic development on a more comprehensive map and taking a 30,000-foot view of how it all fits together and how it all works.”
How workforce development is handled and who’s responsible for it have been hotly debated topics for several decades in Virginia’s legislature, as competing sides viewed it as something that should be business-focused versus worker- or education-focused.
The new department’s focus will be “a combination of the two,” working with agencies across state government and putting money directly into their hands, according to Bill Leighty, who served as chief of staff to Govs. Mark Warner and Tim Kaine and is helping to develop the new department.
“There’s a vast difference of opinion out there of exactly what workforce training entails,” Leighty says. “That is the whole point of the agency … to bring it under one common thread where everybody can work together and row in the same direction.”
The budget for the new department passed at the end of the summer, so it won’t be until July 2024, when the new budget goes into effect, that the department officially opens. Until then, it will be a matter of consolidating back-office operations like email addresses and accounting codes, which will likely cut back on some inefficiencies, Leighty says.
The real work will begin in summer 2024, when the department will be fully in motion — and VEDP will play a critical role in defining the department’s future.
“Then the great debate will … center on, ‘What are we going to use all these resources to do?’” Leighty says. “VEDP has to be very astute about what the future needs are going to be in targeting those training programs to the needs of the business community.”
The Appalachian College of Pharmacy has expanded its Doctor of Pharmacy program to the Southwest Virginia Higher Education Center in Abingdon in response to increased post-pandemic demand for pharmacists.
ACP aims to accommodate students from Abingdon and surrounding areas, helping to retain talent locally. Classes began at the center on Aug. 29, with 10 students in the cohort.
Susan Mayhew, ACP’s provost, dean and chief academic officer, says there were many factors behind the move, including demand and the college’s desire to expand recruitment along the Interstate 81 corridor.
“Nationwide, there has been a downturn in pharmacy admissions,” she says. “Just this year, we’re seeing a real uptick in demand of pharmacists, so I expect that supply and demand pendulum to start swinging the other way.”
ACP’s main campus is located in Oakwood, about an hour from the center in Abingdon.
“We can accommodate the students who live there so it’s more convenient for them to get that Doctor of Pharmacy degree,” Mayhew says. “We help retain them in the area. If they don’t move away to go to school, they’re more likely to stay where they got educated.”
After prerequisites, the college’s Pharm.D. program takes approximately three years to complete, compared with four years elsewhere. The first two years are predominantly classroom-based, with the final year consisting of pharmacy rotations.
Currently, only the second year is offered at the SWVA Center via synchronous delivery from the main campus in Oakwood. Along with an office at the center, ACP also has faculty there to assist students.
Mandy Stiltner, a second-year pharmacy student from Lebanon, used to have a 45-minute one-way commute to Oakwood; now it takes her 20 minutes to get to Abingdon. A mom with two kids, Stiltner now has more time for family and homework.
“I needed extra time to study, and it’s just a great option for those of us who are parents,” she says. After graduation, she plans to stay in the area and work.
The center is located on the campus of Virginia Highlands Community College.
“There are a number of students who are already coming to our campus,” says David Matlock, executive director of the center. “It’s just a natural fit. They can go from high school to the community college to the Appalachian College of Pharmacy and do it all right here on this campus.”
Eight years after it was first proposed, Virginia’s first onshore wind farm remains grounded behind regulatory, legal and political obstacles.
Charlottesville-based Apex Clean Energy first announced plans for its Rocky Forge wind farm in 2015. Apex aimed to have blades spinning by 2017 on 25, 550-foot-tall wind turbines on North Mountain, in a remote section of Botetourt County.
At first, the project seemed on track. County supervisors granted a permit in 2016, and a year later the Virginia Department of Environmental Quality granted final approval. But then Apex ran into issues finding a buyer for the proposed wind farm’s energy.
Years passed before Dominion Energy struck a deal to purchase the power and resell it to Virginia state government to help meet its goal of sourcing at least 30% of electricity for state agencies from renewable energy sources. More obstacles developed, and the contract expired and wasn’t renewed.
Wind technology also evolved, prompting Apex to reformulate its proposal, reducing the number of turbines from 25 to 13, but increasing the size of each to 643 feet high.
Additionally, a group of landowners in Botetourt and Rockbridge counties organized against Rocky Forge, joined by grassroots group Virginians for Responsible Energy. In 2020, 13 landowners filed a lawsuit challenging the DEQ’s approval. A circuit court upheld the permit, but the decision was appealed to the Virginia Court of Appeals. The group also has challenged the county’s extension of a site plan deadline and its approval of a temporary concrete-making facility near the Rocky Forge site.
Botetourt County spokesperson Tiffany Bradbury says county staff are still reviewing the newest plans for Rocky Forge. The county is allowing tree cutting and forestry at the site, “but we have issued no approvals for construction,” writes Bradbury.
Onshore wind projects require willing private landowners and proximity to transmission lines that can move the power to where it’s needed, says Dan Crawford, chair of onshore wind promotion for environmental group the Sierra Club’s Roanoke chapter, which supports the project.
“Some people tell me, ‘We don’t need turbines on our mountains; we’re going to have offshore wind,’” Crawford says. “We need everything we can get. We need offshore, especially for big consumption near the shore, and we need onshore. It’s competitive in terms of price, and it works. People just don’t want to see it.”
Eric Ingram wanted two things as a kid: blue hair and to travel to space.
As CEO of Alexandria-based aerospacestartupScout Space, Ingram found the freedom to establish his now-trademark electric-blue hair. And it might provide the boost to reach that other goal.
Ingram co-founded Scout Space in 2019 while he was furloughed from his job as an aerospace engineer for the Federal Aviation Administration during the federal government‘s shutdown in late 2018 and early 2019.
Scout Space manufactures and develops sensor-based systems to enable satellites to safely navigate space while collecting data about what’s going on in orbit. As the race to dominate space continues, orbital space is becoming crowded. Safe and sustainable navigation is becoming increasingly important. Without controls in place, space could be a minefield.
“If you get a fender bender on the highway, you do not ruin the highway for the next 25 years,” says Ingram, a 2013 graduate of Old Dominion University. “If you get into a fender bender in space going 17,000 miles an hour, that debris cloud could potentially disrupt that entire orbital slot for 25 years.”
Scout Space landed early success in 2021 when it piggy-backed onto a demonstration mission with Colorado-based startup Orbit Fab, which is developing space-based fueling stations, on the SpaceX Falcon 9. Orbit Fab needed a system that could help it practice for “rendezvous and docking guidance algorithms,” says founder and CEO Daniel Faber. The company didn’t have money for cameras, so Faber reached out to Ingram and Scout Space co-founder and Chief Technology Officer Officer Sergio Gallucci, both of whom he met when they interned for a previous company Faber ran.
That set off a frantic race to build a payload in six months, and the result allowed Scout Space to prove itself. In June, Scout Space, which has reached about $9 million in total revenue to date, closed a seed round for an undisclosed amount, with Reston-based federal contractor Noblis as majority investor. Scout Space is using the funding to establish an office and lab in Reston and plans to double its technical team to about 20 employees by the end of 2024.
Scout Space has three missions planned in the next nine months and a large product announcement set within the year, Ingram says.
“Everything I’m doing,” he says, “is [with] the end goal of me hopefully going to space at some point.”
You come down with coldlike symptoms. Flu season is here, and a new COVID subvariant is circulating. As the illness lingers, you question whether you should see a doctor.
Imagine putting your symptoms into a chatbot connected to your doctor’s office or health system that can retrieve your medical records, evaluate your information and recommend next steps.
“It could make recommendations on … should you be seen by one of our providers in the emergency room? Should you have a virtual visit with a provider? Should you have just a conversation with a triage nurse? Or do you need to schedule an appointment with a provider?” says Dr. Steve Morgan, senior vice president and chief medical information officer at Roanoke-based health system Carilion Clinic.
Such a scenario isn’t science fiction — it exists now, through artificial intelligence-powered tools like Microsoft’s Azure Health Bot.
“Although we don’t have it now, we’re building the infrastructure to be able to employ that type of technology,” Morgan says. Carilion has already embraced other AI software, like a dictation system for medical notes.
One year after ChatGPT came on the scene, redefining expectations for AI capabilities, industries have already begun adopting AI chatbots in varying forms, including creating their own models. In this Wild West of rapidly developing tech, companies’ workforce training methods range widely, from encouraging employee exploration to structuring rollouts.
Generative AI tools like ChatGPT — AI platforms used to synthesize new data, rather than just analyze data as AI has been traditionally designed to do — are built on large language models (LLMs) that are essentially “glorified sentence completion tools,” says Naren Ramakrishnan, the Virginia Tech Thomas L. Phillips Professor of Engineering and director of Tech’s Sanghani Center for Artificial Intelligence and Data Analytics.
“They sound so realistic and so compelling because they have been trained or learning on a ridiculous amount of data,” enabling the AI engines to learn which words make sense in context, he explains.
OpenAI‘s ChatGPT became a household word shortly after OpenAI released a demo of the conversational AI platform on Nov. 30, 2022. ChatGPT is capable of performing many of the same tasks as human knowledge workers — ranging from drafting emails, business letters, reports and marketing materials to performing paralegal duties, writing computer code, putting data into spreadsheets and analyzing large amounts of data — and it can produce finished work in as little as one second to a few minutes, depending on length and complexity. In March, OpenAI released an updated model, ChatGPT-4, available to subscribers. GPT-4 scored better than 90% of human test-takers on the Uniform Bar Exam, the standardized bar exam for U.S. attorneys.
Generative AI has garnered huge investments. Microsoft has reportedly invested $13 billion in OpenAI since 2019, and Amazon announced in September that it would invest up to $4 billion in Anthropic, an OpenAI rival that has also received $300 million in funding from Google.
In a survey of 1,325 CEOs released in early October by KPMG, 72% of U.S. CEOs deemed generative AI as “a top investment priority,” and 62% expect to see a return on their investment in the tech within three to five years.
Generative AI is developing at a blistering pace. On Sept. 25, OpenAI released a version of ChatGPT that can listen and speak aloud. It’s also able to respond to images.
AI is already changing the work landscape, says Sharon Nelson, president of Fairfax-based cybersecurity and IT firm Sensei Enterprises. “It’s a bolt of lightning. … We’re seeing it go at the speed of light, and I can only imagine that it will go faster still.”
McGuireWoods is providing training on AI basics, ethical use and prompt engineering, says Peter Geovanes, the firm’s chief innovation and AI officer. Photo courtesy McGuireWoods/AI background illustration by Virginia Business staff
As the tech has quickly progressed, large Virginia companies have formally adopted AI tools and are creating standard AI training policies and processes for their employees.
Reston-based Fortune 500 tech contractor Leidos is providing varying levels of training for employees based on their needs, ranging from those who need to build awareness of AI to subject matter experts. Leidos builds curricula with a mix of external courses from suppliers like Coursera and in-house content, says deputy chief technology officer, Doug Jones.
Like many companies, Leidos is creating an internal AI chatbot, although the company also plans to offer it to customers. The chatbot will focus on IT and software questions, allowing workers to search for answers specific to the firm.
Businesses with troves of documents can easily adapt an LLM to be specific to their documents and processes, Ramakrishnan says: “I’m noticing everybody wants to create their own LLM that’s specific to them that they can control. Because they certainly do not want to send their data out to OpenAI.” Because ChatGPT learns from its interactions with humans, information entered into the tool could be shared with another user.
Businesses are also taking advantage of generative AI tools built specifically for their industries.
Virginia’s largest law firm, Richmond-based McGuireWoods, is beginning to use CoCounsel, an AI tool designed for attorneys and built on GPT-4 that should allow attorneys to enter client data securely in the near future. Thomson Reuters acquired CoCounsel’s developer, Casetext, in April for $650 million in cash.
CoCounsel has a range of uses, like drafting a discovery response or helping an attorney brainstorm questions for a specific deposition. An attorney preparing to depose an expert witness could feed the tool the expert’s published papers and ask it to summarize them or ask it whether the expert has ever taken a position on a particular subject in them, explains McGuireWoods Managing Partner Tracy Walker.
A widening reach
ChatGPT isn’t always a reliable source, as it sometimes can fabricate detailed answers, a phenomenon referred to as “hallucinations.” One attention-grabbing misuse of ChatGPT that demonstrated this problem occurred when lawyers representing a client in a personal injury case against Avianca Airlines cited six fabricated cases as legal precedent, based on research using ChatGPT. A federal judge fined the firm — Levidow, Levidow & Oberman — and two lawyers $5,000 apiece.
Walker stresses that responsible attorneys will look up and read cases cited by an AI chatbot, but CoCounsel also provides a safeguard, says Peter Geovanes, McGuireWoods’ chief innovation and AI officer: It’s been instructed not to provide an answer if it does not know it.
McGuireWoods is taking a two-phased approach to CoCounsel’s rollout. The first phase, which started in September and is running through the end of the year, is a pilot program with about 40 attorneys. While Casetext completes its security review of CoCounsel, McGuireWoods’ pilot group is using only public data to test hypothetical uses of the tool. Starting in early 2024, McGuireWoods’ phase two testing will likely expand to about 100 attorneys.
In the meantime, Geovanes is leading foundational training about generative AI. The firm’s first brown bag webinar session was set for Oct. 17. Although the curriculum is designed for attorneys, recordings will be available for any interested employee. McGuireWoods also plans to offer outside courses about the responsible and ethical use of generative AI.
For attorneys selected for the pilot program, the firm will also offer specialized training from Casetext on “prompt engineering” — how to phrase questions to the chatbot to get the desired responses.
In Roanoke and the New River Valley, Carilion is preparing to pilot a new layer of an existing AI-powered transcription tool built for clinicians. The system has used Nuance’s Dragon Medical One, which transcribes clinicians’ notes as they speak, for “a number of years,” Morgan says.
Microsoft purchased Nuance for $19.7 billion in March 2022. In March 2023, Nuance launched Dragon Ambient eXperience (DAX) Express (now DAX Copilot), which is based on GPT-4. It listens to a clinician-patient conversation and drafts clinical notes seconds after the appointment. Morgan hopes to begin piloting DAX in the first quarter of 2024. Because they’ve used Dragon, practitioners likely won’t need much training to adjust to DAX, he says.
Additionally, Carilion is participating in a pilot test of an AI component in the MyChart patient portal offered by Carilion’s electronic medical records vendor, Epic. The AI tool is designed to draft responses to patient questions sent through the portal, taking into account a patient’s medications and medical history. Six Carilion practitioners are participating in the pilot, which started in September, receiving on-the-fly training from Epic and providing feedback.
Examining new terrain
Smaller Virginia companies with fewer resources seem to have taken a more cowboy approach to the new AI frontier, setting ground rules before encouraging employees to explore generative AI tools on their own.
Will Melton, president and CEO of Richmond-based digital marketing agency Xponent21, is also leading a regional work group focused on preparing Richmond’s workforce for AI. Xponent21 initially used Jasper, an AI software tool for writing and marketing, but the firm now uses ChatGPT for tasks like information analysis and developing initial copy, which then goes through human editors.
“I think that the biggest thing that these tools give us is freeing up time that is … spent on monotonous activities that don’t have a lot of value,” like helping employees spend less time writing social media posts or blogs and more time speaking with clients, he says.
Ben Madden, board president for the Northern Virginia Society for Human Resource Management, has begun using ChatGPT in his HR consulting work, asking the AI tool to draft job descriptions and synthesize information for presentations and policy documents.
“Having it be able to do tasks that may take longer without having the support of supercomputers behind it is where I continue to probably see it being used and being able to make my life easier as either a business owner or even for my clients,” says Madden, whose one-person consultancy, HR Action, is based in Arlington County.
Another Richmond-based business beginning to adopt AI is accounting firm WellsColeman, which updated its internet acceptable use policy to include guardrails for AI and ChatGPT usage, like prohibiting employees from entering client data into the platform.
Nevertheless, the firm has encouraged its employees to get familiar with ChatGPT, says Managing Partner George Forsythe. In full firm meetings, leadership will sometimes demonstrate how they’ve recently used ChatGPT, and staff can ask questions or discuss possible uses.
“We’re using [ChatGPT] as an initial step in gaining familiarity with areas that are not part of our everyday expertise. It’s an easy way to get a broad brush on any topic area,” says Forsythe. After verifying the information given, staff can use it as a starting point for their research.
Forsythe has consulted ChatGPT with general management questions like how to communicate with an employee having leadership challenges and has also used it as a marketing aid.
“When it comes to selling our services, I’ve asked it to put together a proposal and make it intriguing and have a hook,” Forsythe says, and he’s been pleased with the results.
Similarly, Winchester-based accounting firm YHB is using generative AI tools for marketing questions that aren’t firm-specific.
“Our team uses [ChatGPT] a ton to help understand and interpret tax laws and information like that,” says Jeremy Shen, YHB’s chief marketing officer. They’ll also ask the chatbot if a website post will have a high search engine optimization score.
The firm is working on selecting an AI tool to formally implement, whether ChatGPT Enterprise, Microsoft’s Copilot or another. For now, “we just kind of said, ‘We know you’re using it. We know people are using it. Here’s some guardrails … but discover and let us know if you come up with something useful,’” Shen says.
Carilion Clinic is participating in a pilot for an AI feature being tested by the health system’s electronic medical records vendor, says Dr. Steve Morgan, Carilion’s senior vice president and chief medical information officer. Photo by Don Petersen/AI background illustration by Virginia Business staff
The new steam engine?
Out of 31,000 people surveyed across 31 countries, 49% are worried that AI will replace their jobs, according to a Microsoft survey released in May. That same month, a CNBC/SurveyMonkey poll found that 24% of almost 9,000 U.S. workers surveyed are worried that AI will make their jobs obsolete.
It’s not an unfounded fear. In 10 years, AI automation could replace about 300 million full-time jobs, according to a March report from Goldman Sachs researchers, but it could also raise the global GDP by 7%, or nearly $7 trillion. In May, IBM CEO Arvind Krishna said AI could replace up to 7,800 jobs — 30% of the company’s back-office workers — over five years.
A refrain commonly heard among AI’s proponents is, “AI won’t take your job, but someone who knows how to use AI will.” It’s paraphrased from a statement made by economist Richard Baldwin, a professor at the International Institute for Management Development, during the 2023 World Economic Forum’s Growth Summit.
“I see some paralegals perhaps being replaced by AI, and only some, because there are some paralegals that have other advanced skills as well,” says Nelson with Sensei Enterprises, who is also an attorney and former president of the Virginia State Bar. Lawyers who do simpler tasks like drafting wills or divorce contracts might be vulnerable to being supplanted by AI, too, she says.
Comparisons to prior technological advances abound. “When the world switched from horse-drawn transport to motor vehicles, jobs for stablehands disappeared, but jobs for auto mechanics took their place,” Federal Reserve Board of Governors member Lisa D. Cook said in a September speech at a National Bureau of Economic Research conference. Workers’ adaptability will depend on their “portfolio of skills,” she said.
Supporters say AI will make employees more productive, which can help industries weather labor shortages and let workers put aside rote tasks to focus on higher-level work, which could increase their job satisfaction.
In the world of government contracting, the constraints on some workers, like getting security clearances and working in-person in a classified environment, can make hiring difficult, says Leidos’ Jones.
“We actually find sometimes we can take some of the tasks that are not as engaging for our own employees [like data entry] … off their plate, and they can spend more time doing the things that are really powerful and unique to humans,” he says.
Forsythe also sees AI as an aid to staff: “Right now, the war is for talent. … If we can’t find more people, one of the things we can do is try to change their roles … and support them in manners that make their jobs easier, not so that way they’ll do more work, but so that way they remain part of the firm and don’t feel overburdened,” he says.
Or it could just improve workers’ quality of life. In an early October interview with Bloomberg Television, JPMorgan Chase CEO Jamie Dimon predicted that time savings from AI could result in a universal 3.5-day workweek — though he also said that he anticipates that AI will result in lost jobs.
While AI will eliminate jobs, it will also create them, experts say. The Washington, D.C., region had almost 1,800 listings for AI-related jobs at the end of August, according to Jones Lang LaSalle. Leidos and Boeing were among the companies with the most openings for AI positions.
New roles are emerging, like “prompt engineers” who develop and refine prompts or queries for AI tools to get the most valuable and appropriate responses. At the end of September, OpenAI rival Anthropic was seeking a “prompt engineer and librarian” hybrid position in San Francisco with a salary range of $250,000 to $375,000.
“The people who study the future of work, they say that certain jobs will go away,” Ramakrishnan says, “… but then there will probably be new jobs created that we don’t know yet.
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