Abstract
New York’s Tech Valley demonstrates that it is possible to reverse long-term economic decline in an old industrial region through the right mix of public policies and private-sector engagement. Tech Valley’s success should dispel the notion that regional efforts to foster high-tech industry will necessarily fail because of embedded regional disadvantage. The experience has shown that regional competitive advantage can actually be grown and that public investments in research infrastructure can lead to a resurgence in well-compensated manufacturing jobs.
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Notes
- 1.
The risks associated with large-scale investments in advanced tools have been underscored by the winding down of the Global 450 consortium based at CNSE. That effort created the world’s first and only 450 mm wafer fabrication plant, but further work has been suspended because the industry participants do not plan to make the transition from the 300 to 450 mm wafer size in the foreseeable future, an outcome that was not foreseen when the project was launched. As a result, SUNY Poly is “trying to get rid of $115 million worth of one-of-a-kind pieces of manufacturing equipment for computer chip factories that don’t even exist yet.” See “SUNY Poly’s Tools on Sale,” Albany, The Times Union (September 30, 2017).
- 2.
Martin Schoolman, “Solving the Dilemma of Statesmanship: Reindustrialization Through an Evolving Democratic Plan,” in Martin Schoolman and Alvin Magid (eds.) Reindustrializing New York State: Strategies, Implications, Challenges (Albany: SUNY Press, 1986).
- 3.
Stuart W. Leslie and Robert H. Karagon, “Selling Silicon Valley: Frederick Terman’s Model for Regional Advantage,” Business History Review (Winter 1996); Laura I. Schulz, “Nanotechnology’s Triple Helix: A Case Study of the University of Albany’s College of Nanoscale Science and Engineering,” Journal of Technology Transfer (2011).
- 4.
Jason Chernock and Jan Youtie, “State University of New York at Albany Nanotech Complex,” in Georgia Tech Enterprise Innovation Institute, Best Practices in Foreign Direct Investment and Exporting Based on Regional Industry Clusters (Atlanta: Georgia Tech Research Corporation, February 2013, Prepared for the Economic Development Administration, U.S. Department of Commerce). p. 66.
- 5.
Centre for Research on Socio-Cultural Change, Rebalancing the Economy for Buyer’s Remorse (working Paper No. 87, 2011), pp. 29–30; “Why Doesn’t Britain Make Things Any More?” The Guardian (November 16, 2011).
- 6.
Ohio, for example, was devastated by the contraction of traditional manufacturing sectors like glass, rubber, and steel. However, a large number of small manufacturers remain who have proven able to parley traditional skills into new market areas. Machine tool makers, for example, moved into production of medical instruments and equipment. A number of universities and hospitals collaborated to establish the BioInnovation Institute to build on northeast Ohio’s leadership in polymers to establish a biomaterials industry, including replacement parts for aging bodies and treatments for skeletal and joint ailments. See generally National Research Council, Charles W. Wessner (ed.), Best Practices In State and Regional Innovation Initiatives: Competing in the 21st Century (Washington, DC: The National Academies Press, 2013), pp. 111–142.
- 7.
“$100 Million Boosts Tech Center,” Albany, The Times Union (April 24, 2001). The state had previously funded the establishment of the world’s first 200 mm research line, NanoFab 200, in 1996.
- 8.
IBM contributed $44 million and RPI and partner firms $34 million to the project. “A Magical Moment for Tech Valley—Many Await Chance to Use Supercomputers Which Will Link Region to a Powerful Network,” Albany, The Times Union (May 12, 2006).
- 9.
Quoted in Laura I. Schulz, “Nanotechnology’s Triple Helix: A Case Study of the University of Albany’s College of Nanoscale Science and Engineering,” Journal of Technology Transfer (2011), p. 564.
- 10.
The 300-mm research line established in the early 2000s at SUNY Albany was the only 300-mm facility at any university site in the world, and featured the most advanced manufacturing equipment available. In 2004, Albany NanoTech began using the world’s first 193-nm preproduction immersion lithography system for 300-mm wafers, an ASML machine valued at $26 million, which was characterized by one industry expert as “bleeding edge” technology not even available yet on the market. Shonna Keogan, a spokesperson for Albany NanoTech, commented in 2004 that “basically we have every single lithography tool being used for research into chip development for commercial markets,” including an extreme ultraviolet tool using technology that she characterized as “way, way off in the distance.” Michael Tittnich, et al., “A Year in the Life of an Immersion Lithography Alpha Tool at Albany Nano Tech,” in Proceedings of SPIE, Vol. 6151, Emerging Lithographic Technologies (2006).; “Albany NanoTech Fills Toolbox,” Albany, The Times Union (August 26, 2004). IBM’s John Kelly commented on the acquisition of the 193-nanometer immersion system, “that’s the first in the world and the most advanced lithographic tool and it’s sitting in Albany NanoTech.” See “Brain Power Will Win NanoTech Wars,” Albany Business Review (September 16, 2004).
- 11.
Laura I. Schultz, “Nanotechnology’s Triple Helix: A Case Study of the University of Albany’s College of Nanoscale Science and Engineering,” Journal of Technology Transfer (2011), p. 561. “New Chips Mark UAlbany Milestone,” Albany Business Review (September 16, 2004). In December 2003 the Albany NanoTech 300 mm research manufacturing line fabricated its first 300-mm silicon wafer, representing the first-ever such achievement by a university. A university official commented that this achievement by a university/industry team was unprecedented: “other universities don’t even dream of doing something like this, much less doing it.”
- 12.
Youngstown, Ohio, for example, launched the Youngstown Business Incubator (YBI) in 1995, narrowly focusing on the goal of building a local cluster of business-to-business software firms. YBI invested in high-speed fiber-optics connections and a software-testing lab which would not have been cost-effective for small firms to acquire. The cluster grew dramatically, attracting, among other tenants, Turning Technologies LLC, which in 2007 was named the fastest-growing software company in the United States. PolicyLink, To Be Strong Again: Renewing the Promise in smaller Industrial Cities (2008), https://www.policylink.org/sites/default/files/ToBeStrongAgain_final.pdf; “Turning Technologies Rated Fastest-Growing,” Youngstown, Vindicator (August 24, 2007).
- 13.
“[T]he research facilities of Fraunhofer serve as external, very well-equipped research departments of the Mittelstand [medium-sized] firms.” In 2009, for example, the Fraunhofer began working with Roth & Rau, a firm with about 1100 workers, to develop manufacturing technology for the film photovoltaic cells. The Fraunhofer worked with the company to build a complete pilot manufacturing line at the institute to produce thin film PV cells efficiently—a project that resembled SUNY Albany’s nanotechnology research initiatives, albeit on a much smaller scale. “Especially for the Mittelstand [highly competitive, medium-sized German firms] the Fraunhofer are very attractive. They find new equipment and can figure out what they never could on their own.” See “German Innovation, British Imitation,” New Scientist (November 21, 1992); Christian Homburg (ed.) Structure and Dynamics of the German Misselstand (Heidelberg and New York: Physica-Verlag, 1999), pp. 58–59; For a thorough review of the Fraunhofer system and its advantages, see National Research Council, Charles W. Wessner (ed.) 21st Century Manufacturing: The Role of the Manufacturing Extension Partnership Program (Washington, DC: The National Academies Press, 2013), p. 252.
- 14.
Craig Boardman and Denis Gray, “The New Science and Engineering Management: Cooperative Research Centers as Government Policies, Industry Strategies and Organizations,” Journal of Technology Transfer (February 2010).
- 15.
Henry Etzkowitz, The Triple Helix : University-Industry Government Innovation in Action. (New York and London: Routledge, 2008); Bruce Katz and Mark Muro, “The New Cluster Moment: How Regional Innovation Clusters Can Foster the Next Economy,” Brookings (February 27, 2013).
- 16.
Alain Kaloyeros, “State is Well Poised for Nanotech Challenges,” in Albany, The Times Union (December 26, 2012).
- 17.
These entities are the Fuller Road Management Corporation, Albany Nanotech, Inc., and Nanotech Resources, Inc.
- 18.
Edward V. Schneier, John Brian Mortaugh, and Antionette Pole, New York Politics: A Tale of Two States. (Aramark and London M.E. Sharpe, 2010), p. 46.
- 19.
Laura I. Schultz, “Nanotechnology’s Triple Helix: A Case Study of the University of Albany’s College of Nanoscale Science and Engineering,” Journal of Technology Transfer (2011), p. 553.
- 20.
See case study of Northeast Ohio in National Research Council, Charles W. Wessner (ed.) Best Practices In State and Regional Innovation Initiatives: Competing in the 21st Century (Washington, DC: The National Academies Press, 2013), pp. 111–141.
- 21.
Jason Chernock and Jan Youtie, “State University of New York at Albany Nanotech Complex,” in Georgia Tech Enterprise Innovation Institute , Best Practices in Foreign Direct Investment and Exporting Based on Regional Industry Clusters (Atlanta: Georgia Tech Research Corporation, February 2013, Prepared for the Economic Development Administration, U.S. Department of Commerce).
- 22.
“Task Force to Report on Efforts to Lure Chip Fab,” Albany, The Times Union (September 13, 2000).
- 23.
“In a Forest, Two Roads Diverge,” Albany, The Times Union (May 9, 2004).
- 24.
Martin Schoolman, “Solving the Dilemma of Statesmanship: Reindustrialization Through an Evolving Democratic Plan,” in Martin Schoolman and Alvin Magid (eds.) Reindustrializing New York State: Strategies, Implications, Challenges (Albany: SUNY Press, 1986).
- 25.
“North Greenbush Isn’t the Only Site Having Trouble,” Schenectady, The Daily Gazette (October 29, 1999).
- 26.
Kelly Lovell, president, Center for Economic Growth, “Task Force Heads West in Order to Lure Chip Fab Plant,” Schenectady, The Daily Gazette (October 29, 2000).
- 27.
“Scientists Explore the Future of Computer Technology,” Albany, The Times Union (December 11, 1990); Michael Fury and Alain E. Kaloyeros, “Metallization for Microelectronics Program at the University of Albany: Leveraging a Long-Term Mentor Relationship,” IEEE Explore (1990).
- 28.
Robert W. Wagner, Academic Entrepreneurialism and New York State’s Centers of Excellence Policy, Ph.D. dissertation, (SUNY Albany, 2007).
- 29.
“Sematech, SUNY Albany Seal EUV Lithography Program,” Solid State Technology (January 29, 2003).
- 30.
“Albany No Longer a Secret in High Tech Chip World,” New York Times (July 19, 2002).
- 31.
John S. Munsey, “Project Case Study: High Tech Land Development,” Civil and Structural Engineering (May 2006).
- 32.
“Buzz Helped Attract AMD—Saratoga Economic Development Corp. Chief Says Targeting Behind-the-Scenes People Was Key,” Albany, The Times Union (September 15, 2007).
- 33.
“New York’s Big Subsidies Bolster Upstate’s Winning Bid for AMD’s $5.2 Billion 300-mm Fab,” Site Selection (July 10, 2006); “GlobalFoundries—2010 Gold Shovel Project of the Year,” Area Development (July 2010).
- 34.
John Frank, senior vice president of M&W Zander, the engineering company specializing in building semiconductor fabs, observed that CNSE was “a critical enabler in the eyes of a chip manufacturer. To be this close to a center of excellence in nanotech research, development, and manufacturing can be a major factor in the success of a new plant.”
- 35.
“Tech Valley Vision Pays Off Big—Chip Maker AMD Hopes Rivals Will Also Build Plants in Region,” Schenectady, The Daily Gazette (June 24, 2006).
- 36.
Semiconductor Industry Association, Maintaining America Competitive Edge: Government Policies Affecting Semiconductor Industry R&D and Manufacturing Activity (March 2009).
- 37.
See summary of April 4, 2013 symposium keynote address by RPI President Shirley Ann Jackson in National Research Council, Charles W. Wessner (rapporteur), New York’s Nanotechnology Model: Building the Innovation Economy (Washington, DC: The National Academies Press, 2013).
- 38.
In 2012 Pedro Gonzalez, GlobalFoundries’ staffing manager for Fab 8, said in an interview that about 65% of the company’s hires were technicians directly involved in the manufacturing process. “Talking About Fab 8’s Work Force,” Albany, The Times Union (September 9, 2012).
- 39.
“VCC Planning Nanotech Program,” Schenectady, The Daily Gazette (January 18, 2003).
- 40.
“HVCC Training Goes Nanotech—Deal with Albany Gives Semiconductor Students Hands-On Experience on Most Advanced Equipment,” Albany, The Times Union (December 15, 2006).
- 41.
“School to Boost Growing Sectors—HVCC to Build Center in Malta to Train Workers for Semiconductor, Alternative Energy Fields,” Albany, The Times Union (December 14, 2007).
- 42.
“Tech Center Gets $2.15 Million Grant,” Glens Falls, The Post Star (November 17, 2014). The Semiconductor Technology Certificate requires completion of 25 credits in courses which include Digital Electronics, Chemistry, Semiconductor and Nanotechnology, Semiconductor Methodology and Process Control, Semiconductor Manufacturing and Nanofabrication Processes, Vacuum and Power RF, and Electromechanical Devices and Systems. Hudson Valley Community College, College Catalog (2015–16), p. 122.
- 43.
When AMD was considering establishing a wafer fabrication plant in Luther Forest, HVCC communicated with the company and sent two faculty members to AMD’s Dresden fabs to map out the skill sets the company would require and develop an appropriate curriculum. After GlobalFoundries took over the Luther Forest project from AMD, it became apparent that AMD had a more highly developed skill set than GlobalFoundries sought. GlobalFoundries wanted technicians with “foundation skills” which the company would train itself. Accordingly, in 2015, HVCC created a new “Mechatronics” degree program, aligned with what GlobalFoundries wanted, combining mechanical and electrical engineering, motor control systems, and information technology to direct the systems that power semiconductor manufacturing equipment. “HVCC Offers New Engineering Degree in Mechatronics,” Troy, The Record (March 8, 2015).
- 44.
Youngstown, Ohio, for example, was historically very heavily oriented toward steel manufacturing. At the end of the 1990s, the steel industry entered a deep recession and 31 plants in or near Youngstown shut down between 2001 and 2006. In 2007, the city’s population of 82,000 was roughly half of what it was in 1967. In the 12 years between 2000 and 2012, Youngstown lost 40,500 jobs. A Cleveland-based economist estimated that it would take 52 years for the city to return to its employment levels of 2000. “Mahoning Valley Expert: Region’s Recovery Will Take Decades” Youngstown Vindicator (September 23, 2012).
- 45.
Presentation by Daniel Armbrust, National Academies Symposium, New York’s Nanotechnology Model: Building the Innovation Economy, Troy, New York, April 4, 2013.
- 46.
An AMD Board member once observed that building a wafer fab under such conditions is “like Russian roulette [but with a twist.] You pull the trigger and 4 years later you learn whether you blew your brains out or not.” Hector Ruiz, Slingshot: AMD’s Fight to Free an Industry from the Ruthless Grip of Intel (Austin, TX: Greenleaf Book Press, 2013), p. 8.
- 47.
Katherine Derbyshire, “Building a Fab—It’s All About Tradeoffs,” Semiconductor Magazine (June 2002).
- 48.
GlobalFoundries’ Director of Government Affairs, Mike Russo, lead the national private-sector working group to provide guidance in the establishment of the National Network of Manufacturing Innovation (NNMI), now “Manufacturing USA”.
- 49.
Edward V. Schneier, John Brian Murtaugh, and Antionette Pole, New York Politics: A Tale of Two States (Armonk and London: M.E. Sharpe, 2010), p. 24.
- 50.
New York is not the only state in the United States characterized by balkanized local government, which is found in a number of older states. Northeastern Pennsylvania, for example, “is divided into hundreds of small political jurisdictions that often compete for residents, businesses, and property tax revenues.” The average number of taxing districts in each of Ohio’s 88 counties is 50, and as an Ohio foundation director observed in 2010, “the way we are fragmented governmentally impairs our ability to compete globally.” <http://www.institutepa.org/PDF/indicators/jeedregionalization12.pdf>; “Philanthropy a Way of Life of Greater Clevelanders,” The Plain Dealer (December 26, 2010). “Work Together, Or It Won’t Work,” Albany, The Times Union (February 28, 2003).
- 51.
Toledo, Ohio, for example, led by University of Toledo and funded by the state, undertook an effort to transform itself from a city dependent on glass manufacturing into a center for photovoltaic research and manufacturing—but this effort was cut short in and after 2011 by massive Chinese dumping of PV modules which devastated the industry.
- 52.
State support for semiconductor investments is not a new phenomenon. See, for example, Laura Tyson’s reference to the visible hand of the government in the development of the semiconductor industry, Who’s bashing whom: Trade conflict in high-technology industries, (Institute for International Economics, 1993).
- 53.
President’s Council of Advisors for Science and Technology (PCAST) “Report on Ensuring Long-Term U.S. Leadership in Semiconductors” (Washington, DC: Executive Office of the President, January 6, 2017).
- 54.
As noted in the front matter of this book, the study also drew on interviews carried out by the authors and numerous articles from The Times Union (Albany ), The Daily Gazette (Schenectady), the Albany Business Review (Albany ), The Post Star (Glens Falls), The Record (Troy ), The Saratogian (Saratoga Springs), The Buffalo News (Buffalo ), The Observer-Dispatch (Utica ), The Daily Messenger (Canandaigua), and the Post-Standard (Syracuse). These are not individually included in the bibliography.
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As noted in the front matter of this book, the study also drew on interviews carried out by the authors and numerous articles from The Times Union (Albany ), The Daily Gazette (Schenectady), the Albany Business Review (Albany ), The Post Star (Glens Falls), The Record (Troy ), The Saratogian (Saratoga Springs), The Buffalo News (Buffalo ), The Observer-Dispatch (Utica ), The Daily Messenger (Canandaigua), and the Post-Standard (Syracuse). These are not individually included in the bibliography.
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Wessner, C.W., Howell, T.R. (2020). Conclusion. In: Regional Renaissance. International Studies in Entrepreneurship, vol 42. Springer, Cham. https://doi.org/10.1007/978-3-030-21194-3_10
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