March 19, 2013

Region thrives amid high-tech revolution

By: Paul Grondahl

Source: Times Union

Albany

There is a quiet revolution gathering velocity in the Capital Region, although no government has been overthrown, no throngs of citizens have protested in public squares and no shots have been fired.

It is being waged far from public view, in secure laboratories where researchers in white lab coats use syringes to squeeze droplets of cells in solution into test tubes in preparation for DNA extraction.

In many cases, it is a revolution not visible to the naked eye, conducted on a nanoscale.

Researchers have come from many countries, bringing intellectual brilliance as well as a fresh dynamism and a spectrum of cultural diversity to the region. Many are engaged in basic research to advance knowledge; others are working toward practical applications: new treatments for cancer and Parkinson's disease; more powerful and smaller computer laptops; new materials to improve the efficiency of power transmission lines; and a synthetic alternative to wringing pulp from pig intestines in Chinese slaughterhouses to produce the blood thinner heparin.

It is a revolution taking place behind the sleek and shiny white facade of the $14 billion University at Albany's College of Nanoscale Science and Engineering, or CNSE; amid the sprawling complex of modernistic buildings at the $7 billion GlobalFoundries chip fab in Malta; and deep in labyrinthine, multimillion-dollar laboratory arrays at the GE Global Research facility in Niskayuna and on the campus of Rensselaer Polytechnic Institute in Troy.

This high-tech transformation, years in the ripening, represents a sixth age in the ongoing reinvention of the region's economy. It began in the Dutch Colonial era of beaver trading at Fort Orange. It was carried through the westward expansion of trade with the opening of the Erie Canal in 1825. It moved beyond the region's ascendancy in the Industrial Age with its iron manufacturing and New York Central Railroad operations. It was fueled by a postwar manufacturing boom when Schenectady was "the city that lights and hauls the world," with tens of thousands employed at the General Electric and American Locomotive plants. It was stabilized by the Rockefeller-era expansion of state government marked by construction of Empire State Plaza.

And now, the high-tech revolution is here. It is real, and it is accelerating.

It is high time, it would seem, to retire the "Smallbany" parochial put-downs.

One indicator is a recent study by the Brookings Institution that ranked the Capital Region 18th out of all metro areas in the United States in terms of patents issued to inventors per million residents, with an annual average of 971 patents between 2007 and 2001. The study said regions that ranked high in discovery and invention benefited from robust high-tech research institutions and a highly skilled workforce such as those found locally.

GE, one of the world's largest companies with operations around the world, chose to invest significantly in new facilities and to expand its workforce in Niskayuna, home to 2,000 research scientists, or two-thirds of GE's global force of 3,000 scientists.

In addition, President Barack Obama made three visits since 2009 — to Hudson Valley Community College, GE and CNSE — to utilize the region's high-tech industry as a photo-op backdrop.

"I get more emails from overseas about what's going on at Nano than I get locally, which is a great indication of where this region fits in the technology food chain," said Alain Kaloyeros, senior vice president and CEO of CNSE, which has created 3,100 nano jobs with an average annual salary of $92,000 and seeded a total of 13,000 jobs when factoring in corollary businesses that serve CNSE.

Kaloyeros noted that it was a watershed moment when Samsung sent its recruiters from Austin, Texas, for the first time recently to scout new talent at a recruitment job fair in the Capital Region.

"It started with Gov. Mario Cuomo 20 years ago, and we're now with Gov. Andrew Cuomo and we've learned from the mistakes that Austin and other places made," Kaloyeros said. "I call it the Cuomo economic development circle of life. We have taken control of our own destiny and anchored all these companies here. Since they spend north of 20 percent of their revenues on innovation, it doesn't make financial sense for them to leave."

The region's tech success is no longer a local story.

"The Capital Region is clearly on the world stage," said F. Michael Tucker, president and CEO of the Center for Economic Growth. "The challenge now is to buckle down and renew our efforts in the public-private partnerships that made it happen and to buckle down and make sure that this isn't a flash in a pan."

"The Capital Region is absolutely at the head of the pack in the technology sector in the U.S. and people around the world are talking about us. It's a real phenomenon and it's growing," said Donald Siegel, chair of the School of Business at the University at Albany. He is president of the Technology Transfer Society and editor of an international journal that studies technology commercialization around the world.

Another sign for Siegel is the fact that the National Academy of Sciences will hold a major conference on nanotechnology at Hudson Valley Community College in Troy in April rather than at an established high-tech hub such as San Diego, Austin, Boston or the Research Triangle in North Carolina.

"It's not hype," Siegel said.

"The technology sector has been a spectacular success in the region, nothing short of transformative," said Kevin O'Connor, president & CEO of Tech Valley Communications and former president of the Center for Economic Growth. "I came here in 1980 and those of us who have been here all along sort of got desensitized to it. Industries have cycles that go up and down and there is no question we are now at the head of the pack in the nanotechnology and semiconductor industries."

No longer is the high-tech sector scenario a running joke, as it was in 1998 when Wallace Altes, then president & CEO of the Albany-Colonie Chamber of Commerce, coined the term Tech Valley at a brainstorming meeting with four others in a conference room.

Jay Burgess suggested "Techneurial Valley," a blending of technology and entrepreneurial. Luckily, Altes broke in. "That doesn't fall from the lips," he said. "Almost immediately, we all blurted out 'Tech Valley.' " A branding slogan was hatched, and immediately greeted with laughter and the sneers of naysayers.

"Nobody has been laughing at us or rolling their eyes at the phrase for at least the past seven or eight years," said Altes, who is currently chairman of the Troy Industrial Development Agency. "There's an awful lot going on in the tech sector now. GlobalFoundries put a pretty thick dollop of icing on it."

Taking the full measure of the high-tech revolution is an elusive target. James Ross, a state labor markets analyst since 1979 and the dean of the region's number crunchers, concedes that it is hard to quantify. Technology is spread across a dozen labor statistics categories they track. But in tallying just two of them — manufacturing and professional, scientific and technical — there were at least 52,000 tech jobs in those categories in the region in January and there are likely tens of thousands more. The tech total is rising in contrast to a decline in the number of state employees, which stood at 49,500 this January.

"Historically, the biggest sectors in this region have been higher education, state government and health care, which is a three-legged stool," Ross said. "It's not as stable as adding a fourth leg and making the stool a chair. That's what the growing technology sector has provided, a fourth leg. High-tech creates a stronger, more diverse economy moving forward."

The Innovators — those researchers toiling in the region's labs to make the magic happen and to make cash registers hum — are the engines that drive that growth.