Capital Region in top 50 for corporate R&D spending
By: Larry Rulison
Albany- Despite the fact that General Electric Co., GlobalFoundries and companies like SI Group have all downsized their local operations in recent years, the Capital Region is an emerging force when it comes to corporate research and development spending.
That’s according to the Center for Economic Growth in Albany, citing a June report by the National Center for Science and Engineering Statistics, which is part of the National Science Foundation.
The NSF data shows that the Capital Region (specifically the Albany-Schenectady-Troy metropolitan statistical area) was host to $1.256 billion in corporate R&D spending in 2015 (the most recent data available).
That’s enough to rank the Capital Region 43rd in the country, putting it just ahead of Cleveland, Boulder, Colo. and Tucson, Ariz., as well as Rochester.
The No. 1 metro area for corporate research and development spending is San Jose, Calif., in the heart of Silicon Valley, with a staggering $48.8 billion in corporate R&D spending in 2015. The San Jose area is home to Intel Corp., the world’s largest computer chip maker, along with Apple, the maker of the iPhone.
The No. 2 area is San Francisco, with $25.1 billion. Combined, those two metro areas, San Jose and San Francisco, account for $74 billion in corporate R&D spending in 2015, out of $356 billion nationwide.
The New York City metro region, which includes Jersey City and Newark, hosted $22.38 billion in corporate R&D spending.
The NSF R&D numbers include spending by the companies themselves, with a small portion coming from other sources such as the federal government, customers or business partners. In the Capital Region, the breakdown is $923 million in direct corporate spending, and $333 million from other sources.
That $333 million amount is larger than many other metro areas that have higher overall corporate R&D spending. But that is not a surprise since GE especially, often gets matching grants from the federal government (like the Department of Energy) for its research projects at the GE Global Research Center in Niskayuna. A GE spokesman said that GE’s research goals, especially in renewable energy and electrical grid technologies, often overlap with the public interests of the federal government.
The Center for Economic Growth says that the biggest corporate research spenders in the region include GE, SABIC (which has a plastics factory in Selkirk), SI Group in Niskayuna, Momentive Performance Materials in Waterford, Tokyo Electron (at SUNY Polytechnic Institute in Albany), GlobalFoundries in Malta, and IBM (at SUNY Poly).
One of the biggest drivers of corporate R&D spending in the Capital Region is of course SUNY Poly, which by itself is a major center for both corporate research spending and state and federal research spending.
Steve Ference, a SUNY Poly spokesman, said that the school had $352 million in research spending during the fiscal year that ended June 30, although that was a mix of corporate and federal and state spending, meaning not all of that counted in the figures cited by CEG.
GlobalFoundries, which makes computer chips, specifically chose the Capital Region for its Fab 8 computer chip factory to be near SUNY Poly so it could use SUNY Poly’s clean rooms for cutting-edge research.
“SUNY Poly received 136 awards (research grants) during this period and boasts 47 distinct project principal investigators, with federal, state, and private funds supporting nearly 200 organized research projects and everything from fellowships to public service and training,” Ference said.
Among the research grants that SUNY Poly has recently received is a $6.25 million grant from the Naval Research Laboratory. The grant was awarded to SUNY Poly professor Ji Ung Lee for artificial intelligence hardware development. IBM recently established an AI research center at SUNY Poly that is planning to spend $2 billion over five years.
Applied Materials, which makes equipment used in chip manufacturing, is also creating a new research center at SUNY Poly that will add to the R&D spending totals in the Capital Region over the years.
“Applied Materials is another business poised to become another major private R&D employer in the Albany metro area,” CEG said in its report. “The company is establishing an $850 million Materials Engineering Technology Accelerator Center at SUNY Polytechnic that will employ 400.”