April 07, 2011

Regional Hubs Seen As Driver For N.Y. Economic Growth

By: by Joseph Spector, Journal Albany Bureau


At a business park encircled by mature pine trees in Saratoga County, 1,500 construction workers this month were busily welding air ducts and laying floorboards for a 300,000-square-foot computer chip factory.

At the same time, recruiters from the facility's owner, GlobalFoundries, were in an administrative building trying to lure top engineering students from some of New York's top colleges, including Cornell University, the Rochester Institute of Technology and Rensselaer Polytechnic Institute.

By late next year, GlobalFoundries plans to hire 1,400 employees - a remarkable number for the struggling upstate economy - as it opens a state-of-the-art $4.6 billion factory to manufacture 12-inch silicon wafers to power electronic devices such as cellphones and computers. High tech long has been a staple of the Hudson Valley, led by IBM.

"We have to have an extraordinary workforce in terms of not just the numbers, 1,400 people, but people with certain skill sets," company spokesman Travis Bullard said. "So we have to be able to recruit. There are universities here that are graduating some of the best scientific and engineering minds."

About a half-hour drive south, the College of Nanoscale Science and Engineering at the University at Albany is doing the research in nanotechnology that is driving the industry. Its work fuels the ideas for places like GlobalFoundries, IBM in East Fishkill, Endicott Interconnect Technologies in Broome County and the Infotonics Technology Center in Canandaigua, Ontario County.

What the Albany area has created between its private high-tech companies and colleges is the blueprint for what Gov. Andrew Cuomo and economic-development officials envision for the entire state.

They say the state's economic revival will be tied to whether regional hubs can be developed to capitalize on an area's workforce, colleges and private businesses.

"This is all part of what I like to call internal harvesting," said Michael Manikowski, the economic-development director in Ontario County. "This is really the key to effective economic development in my view. You really need to look at the assets in a region."

The effort is starting to bear fruit. For example, the Buffalo area is focused on medical research, the Canandaigua center is working to manufacture computer technology, and the Hudson Valley is targeting biotechnology companies.

Alain Kaloyeros, the head of the Albany nanotech center, sees the work in the Albany area as growing through the New York State Thruway corridor. Already the nanotech center has expanded into facilities in Syracuse, Utica and Canandaigua.

"The role of a university in the 21st century has evolved from just giving degrees to serve as this hub for innovation and education, and this is what we view our role as being," he said.

What has worked so well for the Albany area, Kaloyeros explained, is that the nanotech center first lured companies to do their research in the region. Now they are doing their manufacturing there as well.

For example, Sematech, a consortium of chip manufacturers, this year moved its headquarters from Austin, Texas, to the Albany facility. The Silicon Valley firm Group4 Labs Inc., which is developing energy-efficient semiconductor wafers, announced it is opening a manufacturing facility there as well - with as many as 50 jobs. It also plans to hire 94 people at a manufacturing facility in Syracuse.

The sprawling $7 billion nanotech center, aided over the years by millions in taxpayer dollars, is unrivaled in the world for a public college. It has 2,500 employees from 250 companies. The average salary is $81,000.

The technology there drew in Ashok Sood and his Magnolia Solar company, initially based in Boston.

"Once you go beyond the R&D area, how do you bring it to the next level?" Sood said. "And that infrastructure doesn't exist anywhere, and this nanotech center here is probably one of the best facilities in the world."

IBM, which has its own chip manufacturing facility in East Fishkill, also employs hundreds of workers at the center. The college announced an agreement this month with IBM to license the company's 28-nanometer technology - the fastest and smallest chips being developed - so the research can be conducted there.

Spin-off companies and training programs have developed around the center, including at the nearby Hudson Valley Community College and Watervliet Arsenal.

GlobalFoundries, which is 70 percent owned by the government in the United Arab Emirates, is a partnership with Advanced Micro Devices. Part of the reason the facility was built in Malta was because it already had its roots at the Albany center. Salaries at GlobalFoundries will average about $60,000 a year.

It was also lured to the region by a $1.4 billion grant and tax-break package by the state - the largest public-private investment in New York history.

Brian McMahon, executive director of the state Economic Development Council, said the Albany region has created a template for business development in New York.

"It's that partnership between the universities and the private sector that is really going to drive most of the growth in most of the regions around the state," he said.

The regional hub approach comes as SUNY is seeking more independence to develop public-private partnerships. For example, the University of Buffalo has a UB 2020 development plan that recently passed the Senate, while the other university centers, including Binghamton, are seeking similar latitude.

"I think all of the regions have sort of that hub opportunity," said Brian Sampson, executive director for Unshackle Upstate, a business group.

Sampson and others see that model as key to the state overcoming its high taxes and stigma of having an unfocused development model that has turned off businesses. Last year, the national Tax Foundation ranked New York as having the nation's worst business climate.

"It's just unfortunate that the state's economic development programs have been disjointed and they don't talk to each other. The regional development councils will bring all the economic-development opportunities together," Sampson said.