Can region’s modeling and simulation industry diversify away from government contracts?

By Hugh Lessighlessig@dailypress.comDaily Press

6:40 p.m. EDTApril 16, 2014
The region’s modeling and simulation industry has been married to the defense community for years, but with military budgets dwindling, companies might want to try speed dating.
That assessment, from the CEO of an area “mod-sim” firm, was echoed in various ways this week at the MODSIM World Conference in Hampton, which brought together 380 representatives from the industry, government and academia. The conference began Tuesday at the Hampton Roads Convention Center and ends Thursday.

Today’s mod-sim businesses, once considered an emerging industry on a fast growth track, need to sidle up to other areas of the economy such as health care, transportation and public safety, experts said. The problem: Leaders in those fields probably aren’t familiar with mod-sim technology.


And whether it is the speed dating analogy described by MYMIC President and CEO Jay Bhatt, or the concept of “managed serendipity” from consultant Marty Kaszubowski, the sense was this transition must be organic – from the grassroots – as opposed to having one organization steer the industry in a different direction.
Some industry executives offered practical examples of how to get it done.
Waymon Armstrong is co-founder and president of Engineering and Computer Simulations, based in Orlando, Fla., considered an industry hotspot. The company also has an office in Norfolk, and Armstrong gave Wednesday’s keynote speech, ominously titled “Diversification or Desperation?”
His moment of truth happened three years ago when the government narrowly averted a shutdown, but which still resulted in his company not receiving funding. He had to lay off employees.
“We came back to our Monday morning meeting and we said, we’re going to have to do something. We’re going to diversify,” he said.
Armstrong said he hopes to reach a 50-50 mix between civilian and government work. His more immediate goal is 20 percent. The company is getting commercial contracts, but they simply aren’t as big as Pentagon jobs at the moment. However, he’s made a successful pivot in several areas.
Its military experience in battlefield medicine led them to a contract with the Department of Veterans Affairs, and a project known as “Virtual VA,” where providers and patients can get information and consultations, plus other services. It also provides simulations that train businesses in responding to crises.
But the selling job is far from a slam dunk.
“We’re going into a whole new clientele that doesn’t understand modeling and simulation training,” he said.
It also involves a culture change within the mod-sim industry. Seeking Defense Department business is a matter of competing for available jobs, not going out and actively seeking problems to solve. Mod-sim vendors are accustomed to long-term procurement contracts from the Pentagon, whereas large corporations require a much faster turnaround.
“You have to become more agile, you have to become flexible,” he said.
Is the industry at a crossroads? Absolutely, he said.
MYMIC, the Portsmouth firm, has expanded into the private sector with port-related business. Two of its leaders attended a Tuesday night round table discussion on how to “brand” Hampton Roads as a center of technological excellence.
Thomas W. Mastaglio, company chairman, wondered if some of the air has left the industry. He’s spent decades in the mod-sim business, and served as founding executive director of the Virginia Modeling, Analysis and Simulation Center at Old Dominion University.
“Having been here in the beginning, I sometimes wonder if the whole M-and-S concept has gotten too long in the tooth,” he said. “We’ve just heard about it too much. People are tired of it. We don’t have the energy we once had.”
He attributed some of that to institutions and businesses being in their own niche.
“How do we kind of redo that? Do we start calling ourselves ‘gaming’? I just worry about that sometimes.”
Bhatt – of the speed dating comment – runs MYMIC today, and he added to Mastaglio’s observation.
“The reason why we may be feeling tired is we’ve been trying to approach building back our business through old methods, going back to the government, the procurement methods, the way contracts are structured,” he said. “We just can’t apply that in the commercial world.”
Bhatt said he remains upbeat about the industry’s future.
“I think we’ve got all the tools,” he said. “We just need to breathe some new life into it, and we’ll be successful.”
The industry has a strong advocate in Congress from Hampton Roads: Rep. Randy Forbes, R-Chesapeake, who chairs the congressional Modeling and Simulation Caucus.
In a statement, Forbes said the industry “remains critical to our area for economic growth and job creation,  and in a time of declining budgets, it remains one of the best returns on investment.”
He called the Hampton Roads area “one of the best models in the country for M&S collaboration” with government, education and industry working together.
Contact Hugh Lessig at 757-247-7821.
You can see the newspaper article here
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