June 9 2017

Semiconductor summit looks for ways to continue progress

The Daily Gazette

By: John Cropley 

Technology changes make field a challenge

Economic development is a journey rather than a destination, especially when it involves high-tech industries such as computer chips, speakers at a semiconductor conference said Thursday.

In various ways, each made the point that technology evolves so quickly that planning for the next stage must begin before the construction of the current stage is over.

The Center For Economic Growth held the 87/90 Semiconductor Summit at the Saratoga Springs City Center as a way of assessing the massive successes the Capital Region has achieved in developing its tech landscape over the past two decades, and determining how to continue that progress amid shifting global and regional trends.

CEG President and CEO Andrew Kennedy said the construction of the GlobalFoundries computer chip factory in Malta and the development of a computer chip research consortium in Albany have made the Capital Region the crossroads of the semiconductor industry in the Northeast — the “87/90” in the name refers to the two interstate highways running north, south and west from the region through New York and beyond, forming a route along which tech industries can easily spread from here.

The name “Tech Valley,” which seemed optimistic at best when adopted in the 1990s, has long since gone from marketing slogan to statement of fact.

Empire State Development President and CEO Howard Zemsky said the current state administration is committed to continuing to foster this growth, which has happened with extensive promotion and financial assistance from the state.

But Zemsky said the focus of economic development needs not to be just infrastructure and money; people and places are important. The most pressing problem for high-tech industry is lack of qualified workers, he said, and the best way to attract qualified workers is creating an environment — particularly in urban downtowns — where they will enjoy living and recreating.

“We need to make every one of the upstate cities magnets,” he said.

Zemsky also noted that the surge of high-tech development has done great things for trained professionals, but not for less-skilled workers. 

“This is a state that recognizes not everybody has participated in the economic growth,” he said. “If you’re simply selling your labor, it’s been hard to keep up with inflation.”

To reduce that income disparity, he said, Gov. Andrew Cuomo has been pushing things like middle-class tax cuts and free middle-class SUNY/CUNY tuition.

During a panel discussion led by Kennedy, five people deeply involved in technology-based economic development gave their opinions on the Capital Region’s accomplishments, and how to keep them moving forward.

The consensus: 

— There’s a time-consuming web of regulations facing development in New York state that needs to be simplified, or at least factored into planning. 

— To attract a tech companies, make the difficult choice to invest in advance in sites with necessary approvals and utility service.

— Invest in workforce development so there will be someone to work there.

During a question-and-answer session, Marty Vanags, president of the Saratoga County Prosperity Partnership, the county’s designated economic development agency, asked how best to position the area for the next big thing.

— Stay ahead of the curve, advised Michael Relyea of the Amanus Consulting Group, the former president of the Luther Forest Economic Development Corporation. Opportunity goes elsewhere if you try to respond to it once it surfaces.

— Invest in research and development, suggested Steve DiMeo, President of Mohawk Valley EDGE, a Utica-Rome area economic development agency. The state has a lot of talent, he noted.

— Take an integrated marketing approach that goes beyond the region, advised Steve Hyde, president and CEO of the Genesee County Economic Development Center, which is developing a 1,250-acre industrial park between Rochester and Buffalo, and seeking to build off high-tech development elsewhere on the I-90 corridor.

— Stop expecting to live on the infrastructure investments of decades ago, and build new grids and microgrids, suggested Charles Wessner, a Georgetown University research professor who is studying the region and its growth. Think big, he added:  The tendency is to do the right thing but on too small a scale. Finally, simplify the regulatory environment.

— Invest in education, said Frank Cioffi, president of the Greater Burlington Industrial Corporation. He noted his state is working to implement universal pre-kindergarten. “We think it is the ultimate game-changer,” he said.

Pete Bardunias, president of the Southern Saratoga County Chamber of Commerce, noted that manufacturing work still is unattractive to many people, and asked how to overcome that bias.

— Cioffi again suggested education as a first step. If high-tech manufacturing — which is clean and pays well, compared with some old-time smokestack industrial work — is presented to children as an attractive option, they are more likely to see it as one. 

— Wessner, too, suggested breaking through the stigma, especially on the part of parents and schools who shape children’s outlook. Field trips are a good way to do this — “these jobs are great jobs,” he said. At another point in the roundtable discussion, Wessner chided company owners for cutting their own workforce training, and fighting taxes to pay for public workforce training, and then complaining there were no qualified workers they could hire. Some minority outreach would be a good thing too, he added.

A ticklish subject was raised: the September indictment on corruption charges of Alain Kaloyeros, the former SUNY Polytechnic Institute president credited with a major role in the success of high-tech economic development in upstate New York.

— DiMeo was among the most heavily affected by this turn of events, as plans for a 1,000-job computer chip factory in Utica collapsed. “Unfortunately, we were one of the casualties of the controversy,” he said. “Last year was not a good year.” That said, DiMeo reported he has not detected any hesitancy on the part of companies he deals with, and said he’s had a lot of interest.

— Relyea said he remains thankful for the leadership Kaloyeros provided. He noted that the rest of the important work SUNY Polytechnic does has not been implicated in the controversy.

— Hyde said he gets asked about the corruption case, which is still pending, and he tells people essentially that the mission goes on with different people at the helm.

— Wessner suggested that Kaloyeros’ replacement have a strong connection to industry, because leaders too strongly rooted in academics often remain focused on academia.

The Georgetown professor is working with CEG, National Grid and GlobalFoundries on a regional study that examines the factors contributing to development and impacts of the Tech Valley ecosystem, lessons learned, and how to sustain what’s been accomplished. The report is due this autumn.

He said federal agencies have joined in the study because of the significance of the semiconductor industry, and marveled at how little some people here appreciate the transformation around them over the last 20 years. People will tell him they see more auto dealerships and hotels and housing developments in Saratoga County, but they don’t see anything coming out of GlobalFoundries.

“You are a model for the nation,” he said.

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