In recent months, New York's Capital Region has received some unusual attention from the nation's media.
Unusual, because the attention is not about the activities of state government, but about a burgeoning high-technology industry. From Forbes to Newsday, articles talk about an upstate transformation-a transformation that now means 1,000 tech companies, 50,000 employees, and a $2 billion annual payroll. The seventeen counties along New York State's eastern boundary have united to present themselves as Tech Valley.
At the center of the transformation is a new branch of International Sematech, the consortium of ten semiconductor companies based in Austin, Texas. International Sematech North, as the Albany location is known, has already opened part of a $403 million semiconductor research and development center focused on developing 300-millimeter chip wafers. At least 250 scientists and technicians will work here.
Four months after the Sematech North announcement last year, Tokyo Electron Ltd. said it would create a $300-million, 220,000-square-foot facility adjacent to Sematech. The company is the world's second-largest manufacturer of computer chip-making tools.
Other recent developments include:
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IBM is constructing a $2.5-billion computer chip fabrication plant in East Fishkill, N.Y.-the single largest private investment in New York history. It also is moving researchers to Albany from some of its laboratories 100 miles south and has agreed
to donate about $100 million worth of equipment and
intellectual property to Albany Nanotech.(One of the forces behind Tech Valley is John Kelly III '76, senior vice president and group executive of the IBM Technology Group. Kelly, who grew up in the Capital Region, recently joined Union's Board of Trustees. President Roger Hull says of him, “He knows the area. I think what he is driven by is an understanding of what technology can do to revitalize a section of the state.” Kelly, for his part, says, “Growing up in this area, I always believed that there was a tremendous capabilities in the universities.”)
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General Electric is investing $100 million in GE Global Research in Niskayuna, next to the city of Schenectady. The center is the world headquarters for several GE industrial businesses and is the site of advanced research and development.
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Albany Molecular Research, a pharmaceutical research firm founded with four researchers, has expanded over the past few years to 150 employees.
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Saratoga County is planning the Luther Forest Technology Campus, which will encompass 1,350 acres.
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According to the Center for Economic Growth in Albany, the Capital Region gained more than $1.8 billion in technology research and development investments in 2002. In June, the Milken Institute, an economic think tank, ranked the Capital
District thirty-seventh among the country's 200 largest
metropolitan areas in producing jobs and good wages.
The institute credited the region with developing a diverse economy and strong partnerships between the state and its universities.The region's colleges and universities are contributing to the pace in a variety of ways. The State University of New York at Albany, where Sematech North will be located, is creating a Center for Excellence in Nanoelectronics and a School of Nanosciences and Nanoengineering. Rensselaer Polytechnic Institute recently broke ground for a Center for Biotechnology and Interdisciplinary Studies.
Union is involved in
several ways:
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The College's U-Start is a high technology business incubator designed to spawn new entrepreneurial ventures. In U-Start's intern program, student volunteers provide part-time assistance in projects selected by tenant companies, such as product testing and evaluation. U-Start also has a mentoring network in which experts from local businesses offer volunteer assistance in such areas as marketing, quality control, and business plan development (see separate story about Tree Top Solutions).
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In the classroom and laboratory, the Center for Converging Technologies (CT) at Union is creating programs to prepare students to understand both the new technologies and their global implications. The Center brings together faculty from engineering and the liberal arts so that students graduate with an understanding that goes beyond that provided by a traditional disciplinary major (see separate story for several examples).
Doug Klein, professor of economics and director of the Center for CT, says, “As technology reshapes our world, the forces of change are increasingly emerging at the boundaries of traditional disciplines. As examples, between biology, mechanical engineering, ethics, and computer science lies bioengineering; between physics, chemistry, biology, and materials science lies nanotechnology; and between computer science, economics, sociology, the arts, and psychology lies pervasive computing.”
John Corey '76, president of the Clever Fellows Innvovation Consortium in Troy, N.Y., and a member of the
CT Board at Union, adds, “High-tech leaders must span the chasm that traditionally separates the worlds of liberal arts and business from that
of science and engineering. Union's specialty of engineering in a liberal arts environment provides context and relevance for cutting-edge technologists, and comprehension and access to the engines of change for humanists.”
Lyn Taylor, president of the Albany-Colonie Regional Chamber of Commerce, adds, “The Capital Region is exceedingly fortunate to have a wide range of outstanding colleges and universities. As one of the oldest and most respected institutions in Tech Valley, Union will be one of the key drivers in the economic and cultural future of the region. Union's rich history of liberal arts and engineering will play a pivotal role in proving the critical knowledge and skills that a technology-based economy demands.”
In recent years, the College has compiled an enviable record of financial support for its CT initiatives. The National Science Foundation has made seven awards, ranging from the institution-wide (support for CT planning) to the specific (support to buy a laser confocal microscope). IBM made a gift valued at $1 million, which included such research tools as a Veeco atomic force microscope, and other awards have come from Albany Molecular, the Booth Ferris Foundation, the Hewlett Foundation, and the Mellon Foundation.
Aside from the direct involvement in the growth of Tech Valley, the colleges and universities contribute to an ambience favorable to this kind of education-intensive growth. There are more than 65,000 college and university students in the Capital Region, and, of course, the institutions offer thousands
of events, from cultural to athletic, each year. The Places Rated Almanac, which rates 354 areas in the country by a variety of factors, has the Albany-Schenectady-Troy area third on its list of best educational communities-behind only Raleigh-Durham-Chapel Hill, N.C., and Boston, but ahead of such metropolitan areas as Chicago, San Francisco, St. Louis, and Washington, D.C.
Mark Walsh '76
“We may have gotten the evaluation wrong,” said Mark Walsh '76 of the collapse of the technology market, “but we didn't get the value wrong. We didn't get the value wrong of what [technology] means to your life and my life.”
Speaking at a Tech Valley Summit in Albany in late April, the entrepreneur and venture capitalist in online applications explored the three-year slide of the technology market, made some predictions about connectivity, and did some cheerleading for technology initiatives in New York's Capital Region. His remarks came at a two-day meeting that brought together several hundred of the region's technology, business, academic, and government leaders.
His talk, “From Phoenix to Ashes to Phoenix: The Power of Technology Cycles,” described factors in what he called “the largest single monetary loss of wealth in the history of mankind.” First, he said, was the “land-grab belief that the Internet buzz opened fields that we must claim.” Investors followed the earlier financial model of cable television, when the value of entertainment companies exploded. “Think of compressing that knowledge curve of cable television…this is why you saw a lot of financing.”
Another element was the flawed analysis that the Internet and technology were bringing new money into the marketplace, he said. “In fact, it was just moving current transactions over to a new pipeline.”
Walsh said that the tech market is now in the “punishment phase, which gets back to FUD-fear, uncertainty, and doubt.”
Also, Walsh said, we did not predict how quickly consumers would adopt “this new technological wrinkle called the net.” So-called “old economy companies” reacted and started to use the Web to find new vendors and save money. “They started doing business the way they used to do business, but better. Financial results began to matter again, and there needed to be an 'E' in the P/E [price to earnings] ratios for a lot of these companies.
“The next chapter,” said Walsh, “is connectivity of everything to everything.
“What if inventory management of your household or business got better? What if you knew that videotapes were late and you were going to start getting charged for them? What if your refrigerator, your dishwasher, all the devices in your household, were smarter and knew to manage your inventory in a better way? What if things were connected, and what if they knew how to use that connectivity? The mind reels with how cool things could be.”
He predicted that wireless will become ubiquitous. “You will not go to companies, to restaurants, you will not take trains, you will not go in rental cars, you will not go places that aren't, in some fashion, connected in a wireless environment.”
Walsh said the Capital Region is poised to become a center of technological innovation. “I would suggest to you that we sit in a catbird seat because [we] have the motivation, education, tradition, financing, geographical support, the Chamber of Commerce support, and government support to get this done. Timing is everything, and the time is now. From boom to bust to boom, strap on your seatbelts, Tech Valley. It's going to be, in my opinion, one hell of a ride.”
Walsh is managing partner at private investment entity Ruxton Associates in Washington. After graduating from Union, he earned an M.B.A. at Harvard Business School in 1980 and then joined Home Box Office in New York in new business development for the HBO and Cinemax brands. He joined AOL in 1995 and created and ran AOL Enterprise, the business-to-business division of AOL. In 1997, he joined VerticalNet Inc., and as CEO made it the first publicly-traded, business-to-business Internet company.
Tree Top Solutions
Like a mother bird prodding a fledgling out of the nest, the College's U-Start Business Incubator gently nudged Tree Top Solutions out into the real world in September 2002.
The company's founders, Derek Mebus '04 and Dave Ward '02, got their start when they were residence hall neighbors with a common interest-creating web sites. From their hobby, the two grew Tree Top Solutions, a burgeoning local web site design and hosting venture. Mebus is the programmer and Ward is administrator, accountant, and sales rep.
Among their first regional clients are the Chamber of
Schenectady County, the City of Schenectady, the Merriam Insurance Agency, and General Business Solutions. Tree
Top also has clients in Massachusetts, Georgia, North
Carolina, and California, and in Ireland, France, and Australia.
The company is focused on launching its eChamber Suite-specially designed software for chambers of commerce. Tree Top hopes the Schenectady chamber's page will create new clients from among the country's 6,000 other chambers.
Tree Top also offers custom internet application design and development; web site hosting; e-commerce solutions; and custom web programming for businesses of all sizes.
What inspired these two young entrepreneurs? “Schenectady is at a pivotal point,” says Mebus. He cites the creation of a downtown Business Improvement District as a positive step.
Adds Ward, “When we started to build the business, we started to learn about Schenectady and revitalization. We realized that for our business success, it would behoove us to be a part of that revitalization. This job we have is so exciting. We do something different everyday. We're involved in so much beyond just the technology.”
Schenectady is located in the heart of the Tech Valley corridor. Both Ward and Mebus call Schenectady the “next Saratoga Springs”-referring to the latter's transformation from a city resting on its former glory to a vibrant cultural destination. Confidently, Ward says, “The good times are coming.”
Mebus and Ward are still involved with U Start, and they helped start the College's Entrepreneurship Club. They have postings on the Tree Top web site about their intern program. Mebus says, “Our [Union] interns have been great. Last term our interns put together a prospective market database with a list of all the chambers of commerce with analyses of their web sites.” This database will help the partners prepare their sales strategy.