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Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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Overview

Over the last two decades, a broad partnership of public, academic, and industry leaders in the Albany, New York, region have built “Tech Valley,” a cluster of the most advanced semiconductor manufacturing operations in the world and one of the nation’s preeminent centers of nanotechnology R&D.1 Developed around the nucleus of significant state and private sector investments in nanotechnology research facilities, Tech Valley has already drawn major semiconductor firms and organizations to the New York’s Capital District.2 The impact of this cluster on regional economic development and employment has attracted widespread attention. Forbes magazine has ranked the region as having one of the nation’s highest concentrations of high value jobs.3

As a part of its study of state and regional growth strategies, the National Academies STEP Board convened a conference in Troy, New York to learn more about how New York’s Capital District is renewing its economy. The conference brought together the leading academic institutions and the state’s business and political leaders, along with high-level U.S. government officials and others positioned to help drive innovation, business formation, and growth. These participants brought their own unique perspectives on the

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1Members of the cluster include SUNY-Albany of the State University of New York, and one of its campuses, the new College of Nanoscale Science and Engineering (CNSE); IBM, the initial industry member to engage in the Albany region; the SEmiconductor MAnufacturing TECHnology consortium, of SEMATECH, formed in 1987 as a public-private partnership to strengthen the U.S. semiconductor industry; GlobalFoundries, one of the world’s largest and newest semiconductor production facilities; and Rensselaer Polytechnic Institute (RPI), the country’s oldest technological research institute.

2“New York’s Capital District, also known as the Capital Region, is a region in upstate New York that generally refers to the four counties surrounding Albany, the capital of the state: Albany County, Schenectady County, Rensselaer County, and Saratoga County. Often the other counties of the Albany-Schenectady-Amsterdam Combined Statistical Area and Greene County are included, especially for economic and demographic compilations and regional planning.” Source: Wikipedia.

3See Forbes, “The Best Cities for Jobs,” May 2, 2011. The Brookings Institution has also recognized the region as having the highest concentration of clean-tech jobs in the nation. See Mark Muro, Jonathan Rothwell, and Devashree Saha, “Sizing the Clean Economy, National and Regional Green Jobs Assessment,” Washington DC: The Brookings Institution, 2011.

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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Box A
Albany’s Industrial Tradition

The current flurry of activity in and around Albany, NY might not surprise those who view economic development through the lens of history. Albany was first claimed for a European power by Dutch explorer Henry Hudson in 1609, it is the longest continuously chartered city in the United States. Rapid regional growth began during the years after the Revolutionary War, when new residents sought its political stability and the advantages of life on the Hudson River and trade with New York, only a few days’ sail downriver.

The city became the state capital in 1797, and in the 19th century a hub of transportation and industry. In his conference keynote address, U.S. Rep. Paul Tonko vividly described “the blue-collar workers of the Erie Canal,” “the capacity for work as part of our DNA,” and “the banks of the canal giving birth to a necklace of mill towns” that became the epicenters of invention and innovation. Joseph Henry, regarded by many as the foremost American scientist of the 19th century, built the first electric motor while teaching at Albany Academy; the corporate headquarters of General Electric has long been located in nearby Schenectady; and Erastus Corning 2nd, member of the famed Corning glass company, was Albany’s longest-serving mayor, 1942 to 1983. “This was the cradle of the industrial revolution,” observed Rex Smith, editor of the Albany Times-Union and moderator of the conference panel on the New York Nanotechnology Cluster.

From 1810 until the Civil War, Albany was one of the 10 most populous cities in the country. It had the largest lumber market in the nation in 1865, and the Mohawk and Hudson railroad was the first steam-powered train line in the country to run regular service. In 1908 Albany opened the first municipal airport in the United States, and it was one of the first cities anywhere to install public water, sewer, natural gas, and electricity.

As the automobile came to dominate transportation and steel dominated industry, however, Albany’s fortunes declined along with the traffic on its canals and rivers. During the 1950s, ‘60s, and ‘70s, the population dwindled, as it did in other cities of the northeastern “rust belt,” falling from 130,000 to below 100,000.

accomplishments and growth of the nanotech cluster in the Capital Region and its contributions to the innovation ecosystem throughout New York, while also identifying future needs, challenges, and opportunities. This volume summarizes the unique presentations from the conference and provides an overview of key issues raised over the course of this event.

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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REVIVING THE REGION

The revival of Albany did not begin until the early 1990s, a result of conscious efforts by members of a “triangle of technology”: Rensselaer Polytechnic Institute (RPI) to the north in Troy, the corporate headquarters of General Electric in Schenectady to the northwest, and the R&D center of IBM in Yorktown Heights to the south. New projects were funded at SUNY-Albany’s spacious site near downtown, which gained focus with then-Governor George Pataki’s decision to wager the region’s success on nanotechnology. A key strategy, according to Pradeep Haldar of the College of Nanoscale Science and Engineering (CNSE), was “to partner with industry instead of doing it ourselves.” Recalling how far the region has travelled, Dr. Haldar noted that there was “virtually nothing” on the current CNSE site, and little of interest in Albany at that time.

Building the Research Base

The development of Albany’s nanotechnology cluster began with the founding in 1993 by researchers at the University at Albany’s Physics Department of the Center for Advanced Thin Film Technology (CATFT). Established to expedite the commercialization of thin-film technologies, CATFT developed a significant network of nanoelectronics, nanotechnology, bioelectronics, and telecom companies in New York. Supported initially by a $1 million grant from the State, CATFT attracted over $200 million by 2001 in funding from federal, state, and private sector partners.

Through the leadership of Alain Kalayeros, then a physics professor at the University at Albany and director of CATFT, the School of Nanosciences and Nanoengineering at the University at Albany was established in 2001. In April of that year, New York State selected the University at Albany to host the Center of Excellence in Nanoelectronics and Nanotechnology (CENN), with the requirement that every dollar of the state’s investment be matched by $3 in private sector investments. Using $50 million in funding from the state and $100 million from IBM, CENN built a state of the art 200mm/300mm clean room facility for research, development, and prototype manufacturing.

In 2004, the University of Albany launched the College of Nanoscale Science and Engineering (CNSE) to train a specialized nanotechnology work force. Under the leadership of Alain Kaloyeros, CNSE had grown from an initial enrollment of 10 graduate students to over 300 graduate and undergraduate students today studying curricula in NanoBioscience, NanoEconomics, NanoEngineering, and NanoScience. It operates 800,000 square feet of facilities space which will be augmented by another 500,000 square feet:

Table 1 lists these and other major milestones in the development of the nanotechnology cluster in the New York Capital Region. It shows that the public

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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TABLE 1 Major Milestones in the Development of CNSE*

Year Description Initial Investment (Millions of Dollars)
2001 Center of Excellence in Nanelectronics and Nanotechnology (CENN) is announced at UAlbany 150
2002 International SEMATECH Research Center 405
2002 Tokyo Electron (TEL) established the TEL Technology Center America. Its first R&D center outside of Japan. 300
2004 College of Nanoscale Science and Engineering established, awarded first Ph.D.
2005 ASML established research center for next generation lithography 400
2005 Multi-partner Center for Semiconductor Research was established to improve next generation chip design, demonstration, and testing. The university-based R&D centers brought new partners to the CNSE including AMD, SONY, Toshiba, and Applied Materials 500
2005 CNSE established a collaborative center for
nanolithography research with AMD, ASML, IBM, and Micron Technologies
600
2005 Applied Materials establishes a CNSE-based research center 300
2006 Institute for Nanoelectronics Discovery and Exploration (INDEX) is announced. Partners include Harvard, Yale, MIT, CalTech, Columbia, Georgia Tech, RPI, Intel, AMD, IBM, and Texas Instruments 435
2006 Vistec Lithography Inc relocates its global headquarters and manufacturing from Cambridge, UK to Watervliet Arsenal Campus in neighboring Watervliet, NY and R&D operation to CNSE 155
2007 CNSE partnered with Einhorn Yaffee Prescott to establish the National Institute for Sustainable Energy marking CNSE’s expansion into alternative energy technologies 3.5
2007 International SEMATECH announced it will relocate its headquarters from Austin, TX to Albany, NY 760
Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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Year Description Initial Investment (Millions of Dollars)
2008 IBM announces expansion of operations at CNSE and throughout upstate NYS 1,640
2009 CNSE announced new undergraduate degrees in Nanoscale Science and Engineering
2009 CNSE forms a Computer Chip Hybrid Integration Partnership (CHIP) with SUNY Institute of Technology (Utica, NY) and industrial partners IBM, SEMATECH and Intel. The partnership establishes an incubator to support small and medium sized nanocompanies to support innovation, education, and commercialization of computer chips solutions in Upstate, NY 225
2010 M+W Group announces it will relocate its U.S. headquarters to the Watervliet Arsenal Campus and expand its R&D operation at CNSE 250
2010 CG Power, a power transmission company headquartered in India, and CNSE establish the CG Center for Intelligent Power at CNSE for the development of clean energy and smart grid technologies 20
Total 6143.5
Sources: AT Kearny Report. (2007). Delivering on the promise of New York State: A strategy for economic and growth and revitalization. Available at <http://www.atkearney.com/index.php/Publications/deliveringon-the-promise-of-new-york-state.html>; Office of the State Comptroller. (2010). Fuller road management corporation and The Research Foundation of the State University of New York: Use of State Funding for Research into Emerging Technologies at the State University of New York at Albany: Nanotechnology. Report Number: 2010-S-4. Available at <www.osc.state.ny.us/audits/allaudits/093010/10s4.pdf>; CNSE website (cnse.albany.edu); Playing big role in a tiny world. (2001). Albany times union, Albany, NY 5 Jan. 2001: A1. New York State Newspapers. Web. 24 May 2010; Chip facility bound for Albany: $403M research center expected to attract hightech firms, jobs. (2002), Albany times union. Albany, NY, 18 July 2002: A1. New York State Newspapers. Web. 24 May 2010; $2.7B boost for Tech Valley. (2005). Albany times union. Albany, NY, 5 Jan. 2005: A1. New York State Newspapers. Web. 24 May 2010; Big hopes pinned on science of small; Planned expansion of UAlbany nanotech venture seen as economic boost. (2007). Albany times union. Albany, NY 11 May 2007: A1. New York State Newspapers. Web. 24 May 2010; A sweet IBM deal; $1.6B expansion could create new jobs upstate. (2008). Albany times union, Albany, NY, 15 July 2008: A1. New York State Newspapers. Web. 24 May 2010.
*Reprint of Table 1 from p. 552 of Laura I. Schultz, “Nanotechnology’s triple helix: a case study of the University at Albany’s College of Nanoscale Science and Engineering,” Journal of Technology Transfer, 36(5):546-564, 2011. With kind permission from Springer Science and Business Media.
Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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investments of approximately $900 million over a decade at CNSE have been matched by over $5.2 billion in private investments by industrial partners.4

IBM’s Early Investment

IBM, which had a major research facility in Yorktown, NY, played a significant role in the development of the regional cluster. As noted above, IBM was the initial partner for the nanoelectronics center at CNSE. It had just built its own 300 mm wafer fabrication facility in East Fishkill, but saw sufficient potential at Albany to pledge $100 million over three years to help construct the nation’s only university-based facility to design and manufacture ultrathin 300mm wafers, to which the state added $50 million. IBM’s role in this has been absolutely critical,” said Michael Liehr of CNSE. “Without its presence, and its collaborative nature, CNSE would not be what it is, and Global Foundries would not be here. That is a sustainable advantage that has enabled us to be what we are.”

Growth of the Cluster

Adding to this critical mass, International SEMATECH announced in 2002 the development of a $405 million research center, followed by an announcement by Tokyo Electron Ltd of the development of a $300 million research center in the region. During and after 2005, new investments by microelectronics companies in the Albany area snowballed. In 2005, ASML, one of the world’s largest makers of semiconductor manufacturing equipment, announced a $325 million investment in Albany. IBM, Advanced Micro Devices, Micron Technology and Infineon joined in a $600 million consortium ($180 million provided by the state) to integrate the technical capabilities of the companies to develop lithography, a project dubbed INVENT. In September 2005, IBM and Applied Materials committed to joint new investments of $300 million in nanotechnology research in the Albany area.5 In 2008, IBM concluded a $1.6 billion deal with New York State that included establishment of a 120,000 square foot, 675-employee, R&D center dedicated to semiconductor packaging technology that would be owned and operated by CNSE.6 In 2010, SEMATECH indicated it would move most of its remaining workers from its base in Austin, Texas, to Albany or replace them with new hires.7

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4Laura I. Schultz, “Nanotechnology’s triple helix: a case study of the University at Albany’s College of Nanoscale Science and Engineering,” Journal of Technology Transfer 36(5):546-564, 2011.

5“U Albany Ready to Organize Itself in Nanotech Research,” The Daily Gazette February 26, 2006.

6“Region Wins $1.6 Billion IBM Pact,” The Times Union July 16, 2008.

7“Key SEMATECH Program, Jobs Moving to New York,” Austin American-Statesman October 13, 2010.

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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The Arrival of GLOBALFOUNDRIES

The groundbreaking in Malta, NY for GLOBALFOUNDRIES’ large fabrication facility in 2009 was a major development, one that validated and capitalized on a variety of state and private sector investments. The State played a critical role by providing an initial incentive of about $680 million in tax exemptions to offset the expenses of developing the GLOBALFOUNDRIES site. This was followed by the Empire Zone Benefit Program, which complemented additional investments by GLOBALFOUNDRIES. Additional reasons for locating the plant in the United States, observed Mike Russo, included strong intellectual property protection and access to supply chains. The benefits of this strategy include as many as five thousand direct and ancillary jobs. He said that some 200 companies have either located in the Capital Region or have increased their hiring since the arrival of GLOBALFOUNDRIES.

Dr. Ajit Manocha, the Chief Executive Officer of GLOBALFOUNDRIES, noted in his keynote address that his company began operations in December 2011 by producing 32 nanometer silicon-on-insulator chips for IBM, with which it has a close working relationship. Within a year it had launched 48 nm, 40 nm, and 14 nm semiconductor chip technology as well. He noted that chip features as small as 14 nm are very difficult to realize, comparing it for illustration with the width of an average human hair, which is about 75,000 nanometers. This ability, he continued, is a result of not only GLOBALFOUNDRIES’ expertise, but also its close relationships with IBM, CNSE, RPI, the community colleges, and other partners. “This is called a true partnership,” he said, “and because of it we have been extremely successful.”

The Role of the State’s Leadership

The state’s leadership has played a key role in reviving the region’s fortunes. As GLOBALFOUNDRIES’ Mr. Russo observed, “The state made the strategic decision as long ago as the mid-1990s to invest in this [nanotechnology] sector, led by then-Governor Mario Cuomo and State Assembly Speaker Sheldon Silver.” The original investments led to development of CNSE, and under Governor George Pataki and State Senate Majority Leader Joseph Bruno. Subsequent investments grew into the “richest public-private partnership in history” to bring in a big semiconductor fabrication facility. He noted that the political leadership had understood the value of the project to not only the regional economy, but also to national economic security. Current Governor Andrew Cuomo has continued to support this effort, recognizing its long-term benefits for the region, state, and the nation.

This willingness by the state to wager the region’s success through substantial and sustained investments is a distinguishing feature of New York’s nanotechnology model. As noted above, IBM and SUNY-Albany cooperated in the early 2000s to create the world’s only 300-mm wafer nanoelectronics R&D and prototyping complex. The state followed up with large-scale grants to

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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develop research infrastructure for semiconductors, initiatives which were met with a strong matching response from industry and, in some cases, the federal government:

  • The state provided $85 million of a total public/private commitment of $185 million to create the center of excellence in collaboration with IBM.
  • The state committed $100 million to a $300 million-total project with Tokyo Electron Limited at the Albany Center of Excellence to develop semiconductor manufacturing technology.
  • The state invested $35 million to support the Interconnect Focus Center for Hyper-Integration, concentrating on nano-scale interconnect technology, a project co-funded by DARPA and the Microelectronics Advanced Research Corporation (MARCO).

THE FOCUS ON NANOTECHNOLOGY

The decision by New York’s political, academic, and business leadership to focus on nanotechnology reflected both their vision and a willingness to accept some risk in investing in a rapidly emerging technology.

A Platform Technology

While activities that fall under the term nanotechnology are many, said Timothy Killeen, vice-chancellor for research at SUNY, the CNSE decided to focus on building structures at the nanoscale. “When you can do that,” he said, “you open up incredible new areas in sensors, photonics, biological systems, and fluidics. The challenge is getting more expensive, but the promise lies in multiple applications.” In retrospect, Nanotechnology was chosen not only for its cross-cutting nature, but also because it reflected the passion and influence of SUNY-Albany’s Alain Kaloyeros, a physicist specializing in materials science who was active in the field and argued tirelessly and persuasively for its adoption. His skill in advocating his vision was a key element in bringing together the state, industry, and university partners.

A Growing Market

This focus on nanotechnology appears to be paying off. According to Thomas Guevara of the Economic Development Administration, the worldwide market for nanotechnology products in 2009 was about $254 billion, and by 2020 is estimated at about $3.2 trillion. The United States is forecast to hold a little over a third of this share—which could provide an enormous number of

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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Box B
The Region as a Focus of Development

Early planners of the Albany revival concentrated on building a technology cluster led by business. In this they followed the model of the “legacy innovation hubs” around the country, especially Silicon Valley, Route 128 outside Boston, and Research Triangle Park in North Carolina. Many other regions have also begun to build new clusters, including northeast Ohio, Arkansas, Hawaii, and Evanston, Illinois.a All emphasize strong leadership, shared investments in infrastructure, supply chain growth, public-private partnerships, and links with national research laboratories or other assets. The principle drivers of these clusters, as described by RPI President Shirley Ann Jackson, have been innovation, trained people, and financial capital.

Jason Miller, Special Assistant to the President for Manufacturing Policy, stressed the importance of diverse and complementary strengths. “What is most important in building a technology cluster such as Albany’s,” he said, “is that multiple actors join in solving challenges. I am talking about government at all levels, the private sector, the academic institutions, and the organizations.”

Fortunately, by the time the cluster in Albany began to take shape, its organizers had many models to draw from, and experienced leaders in both technological innovation and economic development. When Governor Pataki convened a group of stakeholders to formulate a plan for economic resurgence, he had abundant precedent in focusing on an integrated effort in R&D, sustained investment in education, and a commercial strategy built around a Governor’s Center of Excellence.

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aSee National Research Council, Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century, C. Wessner, ed., Washington, DC: The National Academies Press, 2013.

jobs for those with the required training.8 Recent investments—IBM’s $2.5 billion fab in East Fishkill and now Global Foundries’ $6.6 billion fab in Malta—reflect this growing market.

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8M.C. Roko, C.A. Mirkin, and M.C. Hirsam, eds., Nanotechnology Research Directions for Societal Needs in 2020, National Science Foundation/Word Technology Evaluation report, Springer, 2010.

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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A Strategic Industry

The first sector to feel a substantial impact from New York’s commitment to nanotechnology was the semiconductor industry. In 1993, Alain Kaloyeros helped persuade the state to invest in semiconductors by funding a Center for Advanced Thin Film Technology at SUNY-Albany. This choice was a natural one for planners of a world-level technology cluster, given the involvement of IBM and the enormous importance of semiconductors in transportation, environment, energy, consumer products, and defense.

Indeed, Mike Russo of GLOBALFOUNDRIES called semiconductors “the most strategic industry on the planet,” one that it is exceeded only by aerospace among U.S. export sectors. According to Ken Adams of the Empire State Development Corporation, the industry shipped over $110 billion worth of products in 2010, and employed almost 200,000 people. New York State has invested about $1.3 billion in building the sector, beginning with a “down payment” of $150 million for SUNY-Albany’s Nanotechnology Center of Excellence, often called SUNY NanoTech.

Long-Term Prospects

Some have warned that the “age of semiconductors” is drawing to a close as the feature sizes of semiconductor chips approach the dimensions of atoms. According to Gary Patton of IBM, however, the innovations that have led the industry past such technological “brick walls” in the past are likely to continue. Speaking at the conference, he described the pattern of growth for the semiconductor industry as periods of steady improvement that end at a technical brick wall, only to experience a disruptive innovation allowing the industry to enter another period of improvement—until the next brick wall.

In the 1980s, for example, IBM built its system with bipolar transistors, which were very fast but power-hungry. Complex packaging reduced power demand, but engineers soon met a power limit, which was overcome by planar CMOS technology, including a new lithography tool for patterning smaller features. Around the year 2000 came the gate oxide limit, a key roadblock at about three atomic layers. This feature could not shrink any further, he noted, because “atoms don’t scale.” It appeared that scaling had ended—until the use of “silicon under strain” was shown to accelerate the movement of electrons in a wafer. “Strain engineering,” along with dynamic random-access memory, allowed placement of billions of transistors on a chip, and enabled the power, memory, and cost gains of personal computing and smart phones for the past decade.

The primary driver of this growth, he said, is economics. The price of a transistor has fallen since 1980 by about five orders of magnitude, while the relative consumption of integrated chip transistors has risen by about six orders of magnitude. As engineers make smaller devices, consumers have better

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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Box C
Partnerships as a Three-Legged Stool

Most speakers at the Albany conference seemed to agree with Dr. Patton’s optimism. As Andrew Matonak, president of Hudson Valley Community College put it: “We have great evidence that things are happening here in the Capital Region.” Several participants quoted President Obama’s 2013 State of the Union address as they expressed the conviction that Albany is doing something of national significance: “How do we attract more jobs to our shores, how do we equip our people with the skills needed to do these jobs, and how do we make sure that hard work leads to a decent living?”

The answer, said numerous participants, lay in the workings of a cluster dynamic they referred to as a three-legged stool. In her conference keynote, RPI President Shirley Ann Jackson observed that, “Scientific discoveries and technological innovations all rest on strong collaborations among academia, government, and industry. And all three legs are closely linked: The higher education institutions and their globally competitive research; the state government and its agencies; and the investments of private industry. Over the years, especially since the end of World War II, this three-way partnership, with the federal government as the key partner, has created an innovation ecosystem that has driven the U.S. economy. This is the way original ideas from Rensselaer students and faculty can lead to commercial success—but only when academia, government, and the private sector play their respective roles.”

performance and lower cost, which enables more applications and larger markets.

Today, said Dr. Patton, we have reached another “inflection point” indicating the end of planar CMOS technology, which prompts some people to assume the “game is over; “if so,” he added, ‘it would seem that Albany is putting its eggs in the wrong basket.” Dr. Patton disagreed with this prognosis, seeing further innovations in the form of 3D devices, 3D chip stacking, and “finFETs,” a new transistor design that allows even smaller microprocessors and memory cells. The present barrier, he predicted, would be followed by another around 2020 that requires devices at the nanoscale, such as carbon nanotubes and silicon nanowires. He was confident that once again, the innovations will be there. “And they will bring us true wearable electronics, for example, and connectivity everywhere, and scaling through materials innovations.”

ACADEMIA AT THE CORE OF THE CLUSTER

In 1997, Alain Kaloyeros and other professors from SUNY and RPI met with state lawmakers and laid out a vision for the next generation of

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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semiconductor chip design, supported by advances in nanotechnology, as a regional economic driver. They made it plain that such a vision would require the state to step up its investment in R&D by well over an order of magnitude. Their emphasis on commercialization, and forecasts of the economic potential of nanotechnology, caught the interest of both the governor and the statehouse, where everyone felt the public’s pressure to revive the region’s moribund economy. Remarkably, the lawmakers agreed, and provided some $15 million in grants.

Over the next year, university and state leaders developed more regular and trustful relationships. This closer collaboration helped the University at Albany secure a designation as one of four national research “focus centers,” which had been established by the Department of Defense and the Semiconductor Industry Association to improve the speed and performance of chips.9 At the same time, SUNY’s Center for Environmental Science and Technology Management opened. With these developments, New York Governor George Pataki saw more evidence of the potential for economic development growing out of the universities, and both the state and IBM continued to strengthen the Albany campus with funding for infrastructure, postdocs, and other needs.

Building the College of Nanoscale Science and Engineering (CNSE)

Over the next several years, Alain Kaloyeros, and others came to the conclusion that the development of nanotechnology at SUNY-Albany required a core institution to provide leadership. Their idea found acceptance, and the College of Nanoscale Science and Engineering (CNSE) was created to fill that role with Dr. Kaloyeros as the head. “With a publically organized and managed partnership like this,” said Dr. Killeen, “the core is usually a university; it’s unusual for a college like CNSE to manage it. But we try not to go back and look at old models. This is a new one.” The governor continued to advocate for matching funds with the support of the state assembly and senate.

As Dr. Killen recounted in his presentation, the CNSE campus then began to grow quickly with the International Center for Nanolithography, a large public-private partnership, in 2002; the arrival from Texas of International

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9The Focus Center Research Program (FCRP) “is administered by the Defense Advanced Research Projects Agency (DARPA) and the Semiconductor Research Corporation, DoD provides $20 million in funding and leaders from the semiconductor industry match that amount, for a total of $40 million annually that is used directly for university research in physical sciences. Industry partners include Applied Materials, Freescale, GLOBALFOUNDRIES, IBM, Intel, Micron Technology, Novellus Systems, Raytheon, Texas Instruments, United Technologies and Xilinx.” Semiconductor Industry Association, “The Focus Center Research Program, A Public-Private Partnership,” July 2012. Access at
<http://www.semiconductors.org/clientuploads/One%20Pagers%20July%202012/Focus%20Center%20Research%20Program_FINAL.pdf>.

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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SEMATECH in 2003; NanoFab South in 2004; the Center for Semiconductor Research, another public-private partnership, in 2005; the Institute for Nanoelectronics Discovery and Exploration in 2006; the Computer Chip Hybrid Integration Partnership in 2009, along with NanoFab East and NanoFab Central. In 2011 the NanoFab Xtension consortium was formed and construction began on the world’s first 450mm wafer production facility.10

CNSE itself has also expanded at a very rapid rate. It officially began with less than a half-dozen faculty and about three dozen students in one building. Today it teaches about 300 students at the bachelor’s, master’s, and PhD levels in nanoscale science or engineering, “the first time this kind of major has been offered in any college,” according to Dr. Haldar. It also offers majors in nanoeconomics and nanobioscience, but prides itself on being “truly interdisciplinary, with no silos.”

With the 450mm wafer expansion, the CNSE will have close to 150,000 square feet of clean rooms, more than any other college or university, and doubly attractive to global companies. “This will mean that the Capital District will be the hub for developing the next generation technology of these larger wafers,” predicted Dr. Killeen. According to Dr. Haldar, the ability of CNSE to manage these multiple projects and collaborate effectively with a fast moving industry has played a key role in its success.

The total investment in infrastructure over last dozen years has been about $14 billion, said Dr. Haldar. With the Global 450 Consortia announcement in September 2011, New York State put up $400 million as an opening contribution, and was rewarded by $4.4 billion in pledges from IBM, Intel, TSMC, Global Foundries, and Samsung. In addition, Intel announced that it would establish its East Coast headquarters in Albany to manage its 450mm development. As a result of this consortium, Albany-based enterprises will be able to work with leading-edge companies on a variety of semiconductor and related technologies. “We want to be a one-stop shop,” said Dr. Killeen, “from the lab to the fab.”

SUNY’s Focus on Economic Development

Building on these successes, SUNY is seeking to sustain and broaden its mission to foster regional development. In her conference remarks, SUNY Chancellor Zimpher noted that SUNY in recent years has focused on economic development as “a defining aspiration for the system.” According to Dr. Zimpher, “It is also a stake in the ground. We are not only for innovation and entrepreneurship, but we can contribute to a healthier New York, an energy-smart New York, and an educated New York, because we have campuses within

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10Timothy Killeen, “New York’s Nanotechnology Model: Building the Innovation Economy,” April 3, 2013, symposium presentation.

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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30 miles of every New Yorker.” She noted that SUNY’s objectives also form an important part of Governor Cuomo’s NY SUNY 2020 plan, which includes more funding for academic research and innovation hubs. “With a system like ours,” she said, “you can reward campuses that choose to grow in high-need fields” related to workforce demands.

Echoing this point, Dr. Killeen noted in his remarks that because of its enormous size, the SUNY system can be a powerful force in economic development. Its impact on local and regional economies is estimated at about $19.8 billion. It carries out nearly a billion dollars’ worth of sponsored research each year, and employs more than 2,000 high-tech employees. It supports six centers for advanced technology, including CNSE; eight centers of excellence; and 17 business incubators. Through the Research Foundation for SUNY, it plays a significant role in developing public-private partnerships at the CNSE.

Research Infrastructure to Nurture Start-ups and Support the Supply Chain

Dr. Killeen added that SUNY’s leaders are conscious of the potential power of the nano cluster to advance several parallel missions. “By leveraging its partnerships with business and government, CNSE supports the acceleration of workforce training and commercialization leading to job creation and economic growth.” At the center of the CNSE-SUNY paradigm is the presence of industry partners co-located on campus, and the installation of expensive infrastructure that attracts companies and enables an open innovation ecosystem. To help launch and develop spinoffs that form on the site, CNSE maintains a business incubator, with the support of the New York State Energy Research and Development Authority (NYSERDA). 11

“With the larger companies here,” said Dr. Killeen, “we can nurture the smaller startups in place, instead of losing them to other regions. In its public-private partnerships, the CNSE operates as an inter-regional technology hub that provides infrastructure and consulting that would not be available to most small technology companies. Rather than replicate research that the companies do themselves, CNSE stands ready to help with the more difficult pilot/prototype research and the manufacturing scale-up phase. In most situations, small companies have to borrow money to build a factory before they have a market for their product. The CNSE provides the equivalent of a factory for small firms to work on the proof of concept, development, and scale-up.”

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11Established in 1975 as a public benefit corporation, “NYSERDA offers information and analysis, programs, technical expertise, and funding aimed at helping New Yorkers increase energy efficiency, save money, use renewable energy, and reduce their reliance on fossil fuels. NYSERDA collaborates with businesses, industry, the federal government, academia, the environmental community, public interest groups, and energy market participants to reduce energy consumption and greenhouse gas emissions.” Source: Wikipedia.

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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He added that the transition from research to development has always been difficult, time-consuming, and high-risk work. “The reason is that 90 percent of the cost and risk occur after the research phase.” The college’s state-of-the-art infrastructure “allows it to support not only short-term manufacturing challenges, but to involve the supply chain in the development phase, and to catalyze consortial activity for long-term research.”

Another important part of SUNY’s strategy is its affiliated corporations that can achieve goals beyond the reach of SUNY or its research foundation. At the same time, they provide a dedicated corporate structure to ensure alignment with SUNY’s missions of research and education. The first of these, Fuller Road Management Corporation, was incorporated in 1993, at the outset of discussions about the nascent innovation cluster. Fuller Road manages a land lease with SUNY, designs and constructs facilities, provides financing for construction, and issues debt for facility construction, with the research foundation as the credit tenant. It also provides access to research programs and facilities, owns and operates the facility itself, and leases office space to industry.

Institutions of higher education in Albany and elsewhere in upstate New York have also created numerous partnerships. One is a $40 million agreement recently announced between Albany Molecular Research Inc., a drug discovery, development, and marketing company at the SUNY-Albany campus, with the BN Medical Campus of Buffalo and Niagara. Also, CNSE has created a new partnership with SUNYIT, or SUNY Information Technology, which is constructing the Quad-C Campus in Utica. CNSE is moving into photovoltaics as a member of the Solar Energy Development Center, at Halfmoon, New York, about half-way between CNSE’s campus and GLOBALFOUNDRIES site in Malta. And most recently the Smart Systems Technology Center is being developed at CNSE to explore micro-electro-mechanical systems (MEMS), in partnership with Lockheed Martin, at the Syracuse Electronics Park. “We have helped more than 200 companies like these,” said Dr. Haldar, “which have raised over $200 million in funding.”

Collaborative Programs at Rensselaer Polytechnic Institute (RPI)

In addition to CNSE, semiconductor and other high tech companies locating in the Albany area have benefitted from the presence of the nation’s oldest technical university, Rensselaer Polytechnic Institute (RPI) in nearby Troy, New York.12 In her conference keynote address RPI’s President, Shirley Ann Jackson, emphasizes that the institution’s core mission is the preparation of students for careers in the sciences and engineering. RPI is also very active in

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12Rensselaer Polytechnic Institute was founded in 1824 by Stephen Van Rensselaer and Amos Eaton for the “application of science to the common purposes of life” and is the oldest technological university in the English-speaking world.

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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forging collaborative programs within the Albany cluster. Its Computational Center for Nanotechnology Innovation, CCNI, was established as a $100 million partnership with IBM and New York State. Each partner contributes one-third of the cost, allowing it to host one of the world’s most powerful university-based supercomputers. The CCNI has had 800 discrete users and 25 corporate partners.

For 10 years, beginning in 2001, the Rensselaer Nanotechnology Center hosted the NSF Nanoscale Science and Engineering Center for the directed assembly of nanostructures. Directed assembly is a fundamental gateway to the eventual success of nanotechnology because it allows the control of functional properties and ultimate applications of nanomaterials for use in electronics, medicine, and consumer products. 13

RPI hosts the Molecularium Project,14 which educates students from kindergarten through college in the fundamentals of physics, chemistry, and biology.15 It also built the Center for Biotechnology and Interdisciplinary Studies with funding from New York’s Genesis Program, the New York State Office of Science, Technology, and Academic Research (NYSTAR), and the New York Department of Health and Mental Hygiene. Finally, she said, the Rensselaer Interconnect Focus Center, also supported by Empire State Development, works collaboratively with universities and businesses globally to increase the power and speed of computer chips at the heart of the nanoelectronics revolution.

SUSTAINED SUPPORT FROM THE STATE GOVERNMENT

In his conference keynote, U.S. Representative Paul Tonko noted that an unusual feature of the Albany cluster has been the limited participation by the federal government. Although he identified several federal programs that he said are contributing valuable support to developing the region’s innovation ecosystem—including the EDA’s iHUB at SUNY-Buffalo, which connects entrepreneurs with the university, and the more recent DoE participation in the photovoltaics research program—Mr. Tonko noted that the state had recognized the value of this cluster of business and research, and had taken the lead in making substantial investments to develop the research infrastructure and the higher education base in the Tech Valley.

Importantly, the state’s role has been sustained by a bipartisan consensus through successive state administrations. Speakers, including Ken

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13Shirley Ann Jackson, “New York’s Nanotechnology Model: Building the Innovation Economy,” April 3, 2013, symposium presentation.

14One its website, the objective of the Molecularium Project is described as “expanding science literacy globally by exciting young minds about molecular science through experiential learning and unprecedented visualizations in immersive and interactive media.”

15<http://www.molecularium.com>.

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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Adams and Mike Russo, noted that the state’s leaders have understood not only the value of strong R&D in the areas of nanotechnology and semiconductors, but also the need to offer a consistent and favorable business environment in attracting or establishing SEMATECH, the GLOBALFOUNDRIES facility, the Global 450 Consortium, and other initiatives.

The Role of New York’s State Development Agencies

In his conference remarks, Ken Adams of the Empire State Development Corporation noted that the state government has been a prime mover in support the nanotechnology sector, he said. Over the years it has invested approximately $1.3 billion in this sector, beginning with $150 million in the Nanotechnology Center of Excellence, $100M to specific companies several years ago, help for Tokyo Electron’s R&D program, $75 million for the state-of-the-art 300mm wafer clean room, and $20 million to help relocate SEMATECH from Austin, “which was huge news in 2011. When you bring the leading industry research consortium here, with its 100 or so high-tech jobs, it says something about our global position.”

The Empire State Development Corporation, he said, had found that state incentives could not only attract private industry to the region, but also that they could incentivize multiple investments after they arrived. “If you think about that $1.3 billion in investments, this has had a leveraging effect in attracting or supporting over $20 billion from world leaders in the industry.”

Drawing on state data, Mr. Adams said that about 20 percent of state’s high technology workforce, or about 12,000 jobs, were now located in Tech Valley, including various partnerships. One example was IBM’s $2.5 billion fab in East Fishkill, New York. The latest investment, GLOBALFOUNDRIES’ $6.6 billion fab in Malta, New York, “showed the tremendous power of leveraging the parts of this three-legged stool.”

By the time GLOBALFOUNDRIES expressed interest in an Albany site, the state government had gained substantial experience in partnering with technology enterprises of global scale. According to Mike Russo, New York has managed to provide GLOBALFOUNDRIES with almost $680 million in tax exemptions to offset the expenses of developing the Malta site for the multi-billion dollar investments in its fabrication and research facilities. This was followed by a state Empire Zone Benefit Program, which used a grant formula based on such outputs as capital expenditures and number of jobs created. “To our knowledge,” said Russo, “this is the largest public-private partnership in history.”

Speaking at the conference, Frank Murray of NYSERDA noted that his organization was a partner in helping guide innovators during early commercialization. Mr. Murray noted that this agency, founded to carry out

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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certain core missions, such as consulting on energy efficiency, has developed into become a critical part of the overall economic development team.16

Two other state-funded centers for advanced technology have been active throughout the emergence of the cluster. The Center for Automation Technologies and Systems (CATS) and the Center for Future Energy Systems are both supported by Empire State Development’s Division of Science, Technology and Innovation (originally known as NYSTAR). This division funds Centers for Advanced Technology (CATs) around the state. At RPI, for example, is the Center for Advanced Technologies and Systems. NYSTAR also funds 10 Regional Development Technology Centers that work with SMEs. It also supports high-performance computing at RPI’s Computational Center for Nanotechnology Innovation, a joint $100 million investment by the state, RPI, and IBM.

Dr. John Wen of Center for Automation Technologies and Systems at RPI acknowledges that there is always a debate on “how best to balance applied research, which usually has a company-specific focus, with the basic research we know is the driver for innovation and long-term discovery. The key is that industry tells us what’s important. That is like gold for researchers,” because it allows them to focus their energies on what is most relevant.

The Center for Economic Growth (CEG), a private regional economic development organization works with these and other partners “to advance the ability of the region and its assets to succeed in the global marketplace.”17 In his conference remarks, CEG President Michael Tucker said that he found a decade ago that there was wide support among businesses for cluster-based growth and has been promoting it ever since. “Clusters increase the productivity of companies,” he said, “and enable them to be more competitive locally, nationally, and globally. They do this by capturing the important knowledge linkages among technology, skills information, marketing, and customer needs.” The CEG offers a suite of services in sales, marketing, family business advice, startup assistance, business acceleration, productivity, and new market expansion.

Implementing Strategic Plans and Multiple Partnerships

Some version of Governor Cuomo’s Regional Economic Development Council is found in most states, but the one in New York has developed a new way of doing business from the ground up. Each of the state’s 10 economic

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16Frank Murray, “New York’s Nanotechnology Model,” April 4, 2013, symposium presentation.

17The Center for Economic Growth website notes that “CEG receives funding and resources from Empire State Development’s Division of Science, Technology and Innovation, which works to facilitate the integration of innovation and technology throughout New York’s economic development efforts, the National Institute of Standards and Technology (NIST) / Manufacturing Extension Partnership (MEP) and National Grid.” Access at <http://www.ceg.org/>.

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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Box D
Partnering to Market the Region

A broad-based effort to market the region around the world, titled NY Loves Nanotech was developed in the late 1990s by the Center for Economic Growth (CEG) with support from the National Grid, many local economic development organizations, universities like the University at Albany and later CNSE, RPI, and many regional businesses in the nanoelectronics field. The goal of this effort is to advertise the region’s growing industrial capacity and to position to support semiconductor manufacturing as well as leading-edge research and development and thus attract more firms to invest and relocate in the Albany Capital Region.

The initiative involves targeted sales calls to key industry leading companies, comprehensive electronic marketing, public relations, trade show and industry conference participation, and the hosting of key industry events in the region, such as the World Semiconductor Council’s Annual Meeting in 2012 in Saratoga Springs.

Through NY Loves Nanotech, the region and the state have developed key industry relationships and have raised global awareness about New York’s commitment to growing a vibrant nanotechnology cluster and ecosystem that could and would compete globally for investment. NY Loves Nanotech now involves participation from academic, industry and economic development partners and regions across Upstate New York, consistent with Governor Andrew Cuomo’s strategy of leveraging key state investments to bring technology-driven companies and employment across the entire Interstate 90 corridor in New York State.

regions develops its own strategic plan; the state then looks at each and decides how best to support it. “This stimulated a tremendous dialogue among stakeholders,” said Mr. Tucker, “that otherwise might not have taken place.”

SUNY’s Dr. Killeen has also seen advantages in the public-private partnerships entered by the state, such as the Micro-Electro-Mechanical Systems (MEMS) center in Rochester; the Smart Systems Technology and Commercialization Center in Canandaigua; and SUNYIT, the Institute of Technology at Utica. “All of this,” he said, “is the innovation system that is rooted in academic institutions with entrepreneurial flair, with early career scientists and students involved, high school students, strong major partnerships with big-time industry, and open doors to other components of the industrial spectrum.”

The state has further taken steps to directly assist technology companies. It has created 10 innovation “hot spots” as well as support for existing incubators through a competitive funding process; these allow

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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companies to receive tax benefits for up to five years if the stay in the state. It is also creating a $50 million innovation venture capital fund to address the shortage of VC firms in the region.18 Finally, it supports the Innovation New York Networks, groups of seasoned professionals who volunteer their time to serve as mentors to startup companies.

The new $300 million photovoltaic manufacturing plant in Halfmoon, said Dr. Haldar, is also attracting many private-sector participants. The challenge, he said, is to help the industry make the major transition from crystalline silicates to indium-gallium-arsenide materials. Nearly 20 industry partners have signed membership agreements, and some plan to move to New York to participate. “The focus is less on basic research than on technology development and the translation to manufacturing,” he said. “We’ll work at the scale where industry needs to be.”

THE ROLE OF THE PRIVATE SECTOR

Along with academia and government, the private sector has been a key leg of New York’s partnership “stool,” as described by Dr. Jackson. As noted above, speakers such as Gary Patton of IBM, Dan Armbrust of SEMATECH and Mike Russo of GLOBALFOUNDRIES described the scope of the private sector contributions to the economic revival of the New York Capital District.

IBM Corp.

New York State has long been a site for “captive” production of semiconductors for internal use by IBM, which has operated production sites at East Fishkill, NY since the 1960s. As Dr. Patton said, although IBM’s capabilities in microelectronics were typically state of the art, the company recognized that as the costs and risks associated with microelectronics escalated, even a firm with IBM’s resources and scale would be required to rely to an increasing extent on external sources of supply and collaborative arrangements to ensure a stable source of state-of-the-art components for its information technology products and systems.

For IBM, locational factors also favored New York’s Capital District. IBM’s Senior Vice President and Director for Research, John E. Kelly, a driving force behind the emerging nanotechnology and semiconductor cluster, had local roots, having earned a bachelor’s degree from Union College in Schenectady, and a master’s degree in physics and a Ph.D. in materials engineering from RPI in Troy. In addition, IBM already had a considerable history working with SUNY at Albany on a variety of research projects and had hired numerous graduates from the institution.

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18Ken Adams, “New York’s Nanotechnology Model,” April 3, 2013, symposium presentation.

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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Building on these foundations, IBM and SUNY-Albany in the early 2000s cooperated to create the world’s only site of a 300-mm wafer fabrication plant and nanoelectronics R&D and prototyping complex.19 The state provided $85 million and IBM provided $100 million of a total public/private commitment of $185 million to create the Center of Excellence in Nanoelectronics and Nanotechnology (CENN).20

In his conference remarks, IBM’s Gary Patton said such collocation and collaboration is essential from a design perspective as well. “This is very complex stuff,” he said. “Why has IBM not gone the route of a fabless company, just buying the technology it needs? For one thing, the technology we develop for IBM isn’t available anywhere in the world. Second, this 14 nm and 10 nm technology becomes so complex you have to look at co-optimizing the entire stack, from the atoms to the devices, to the circuits, to the Watson system. Many of our fabless partners come to us and want to engage with Albany. They can’t just wait for us to deliver a technology; they need to get in early, give us their requirements, and work with us hand in hand.”

Building on IBM’s momentum, a series of new investments by microelectronics companies have been made in the Capital Region. In 2005, ASML, one of the world’s largest makers of semiconductor manufacturing equipment, announced a $325 million investment in Albany. IBM, Advanced Micro Devices, Micron Technology and Infineon joined in a $600 million consortium (with $180 million provided by the state) to integrate the technical capabilities of the companies to develop lithography, a project dubbed INVENT. In September 2005, IBM and Applied Materials committed to joint new investments of $300 million in nanotechnology research in the Albany area.21 GLOBALFOUNDRIES announced plans to build a $3.2 billion semiconductor wafer fabrication plant in Malta, NY in 2006, the culmination of over eight years of talks between the company and state economic development officials.22 In 2008, IBM concluded a $1.6 billion deal with New York State that included establishment of a 120,000 square foot, 675-employee, and an R&D center

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19Significantly, the state’s funding of nanotechnology research at the University at Albany enjoyed bipartisan support. Key players were Republican Governor George Pataki, Republican Senate Majority Joseph Bruno, and Democrat Assembly Speaker Sheldon Silver.

20“IBM Executive Shares Vision of High Tech Future,” The Times Union February 23, 2003. IBM “pledged in April 2001 to pay $100 million over three years to help construct the nation’s only university-based facilities that support research in the design and manufacture of ultrathin silicon wafers with a 300-milimeter diameter.” “How SUNY Albany Shocked the Research World and Reaped a Bonanza Worth $850 Million (and Counting),” The Chronicle of Higher Education February 7, 2003. College of Nanoscale Science & Engineering, University at Albany, “Center of Excellence in Nanoelectronics and Nanotechnology (CENN),” <cnse.albany.edu/LeadingEdgeResearchandDevelopment2/CenterofExcleence.aspx>

21“U Albany Ready to Organize Itself in Nanotech Research,” The Daily Gazette, op. cit.

22“For Planning Growth, the Future is Now—Changes that AMD Could Bring to the Region Must Be Anticipated, Executive Warns,” The Times Union March 25, 2007.

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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dedicated to semiconductor packaging technology that would be owned and operated by the CNSE.23 And SEMATECH is moving most of its remaining workers from its base in Austin, Texas, to Albany, New York.24

According to CNSE’s Michael Liehr, IBM’s early and steadfast role as a champion has been absolutely critical for the emergence of the Capital Region as a global center for the research and production of nanotechnologies. “Without its presence, and its collaborative nature, CNSE would not be what it is, and Global Foundries would not be here. This, sustained advantage has enabled us to be what we are.”

SEMATECH

One model for the collaborative activities and structures in Albany is SEMATECH. Formed in 1987 with headquarters in Austin, Texas, SEMATECH united the competing U.S. semiconductor manufacturers in the face of intense competition from Japanese chipmakers. As its share of world market share dipped below 50 percent, the industry was sufficiently alarmed that it agreed to cooperate together and work with the government on product quality and trade.

As Dan Armbrust noted in his presentation, SEMATECH was part of a multi-pronged response, coordinating pre-competitive research through Semiconductor Research Corporation, manufacturing through SEMATECH, and cooperating on an innovative trade policy with the U.S. Government.25 Designed as a public-private partnership and funded jointly by the Department of Defense and the semiconductor industry, SEMATECH is widely credited with helping the U.S. semiconductor industry regain its world leadership.

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23“Region Wins $1.6 Billion IBM Pact,” The Times Union, op. cit.

24“Key SEMATECH Program, Jobs Moving to New York,” Austin American-Statesman, op. cit.

25“While many believe that SEMATECH contributed to the resurgence of the U.S. semiconductor industry in the early 1990s, it was by no means the only element in this unprecedented recovery. For example, time [and the necessary earnings] for the industry to reposition itself was provided by the 1986 Semiconductor Trade Agreement, [which stopped Japanese dumping in United States and third markets.] The U.S. industry also repositioned itself, profiting from shifts in demand, i.e., away from DRAMS (where Japanese skill in precision clean manufacturing gave significant advantage) towards microprocessor design and production (where U.S. strengths in software systems and logic design aided in their recovery.) Arguments about which of these elements were most decisive probably miss the point. The recovery of the U.S. industry is thus like a three-legged stool. It is unlikely that any one factor would have proved sufficient independently. Trade policy, no matter how innovative, could not have met the requirement to improve U.S. product quality. On the other hand, by their long-term nature, even effective industry-government partnerships can be rendered useless in a market unprotected against dumping by foreign rivals. Most important, neither trade nor technology policy can succeed in the absence of adaptable, adequately capitalized, effectively managed, technologically innovative companies. In the end, it was the American companies that restored U.S. market share.” National Research Council, Securing the Future: Regional and National Programs to Support the Semiconductor Industry, C. Wessner, ed., Washington, DC: The National Academies Press, 2003, page 81.

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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Some of the most important transitions for SEMATECH came in 1994 when it withdrew from federal support; in 1995, when it decided to form and orchestrate a subsidiary for 300mm wafer conversion; and in 2000, when it voted to expand the membership to international companies.

By 2001, Albany was eager to offer SEMATECH its own 300mm facility if it would move its headquarters from Austin. On the day before the September 11 attacks, Governor Pataki began discussions directly with Robert Helms, then the president of SEMATECH, about such a plan. The talks, often complex and contentious, continued for the following 10 months, involving the governor and his higher-education staff, SUNY’s Karen Hitchcock, CNSE’s Alain Kaloyeros, and half a dozen representatives of SEMATECH.

After dozens of meetings, an issue emerged that brought the negotiations into strong focus: the oncoming need for a full-scale research program on EUV, the next-generation lithography technology using extremely short-wavelength ultraviolet radiation. Such a program would tax the ability of any single SEMATECH member, but would be a good fit for a consortium using Albany’s 300mm wafer facility, its expertise in interconnections of microchips, IBM’s strength in lithographic research, and most important, Albany’s desire to support the collaborative working style that would allow many companies to benefit and share the costs. On July 18, 2002, the 12 leading chipmakers pledged $193 million to develop EUV in Albany, and the state contributed $210 million.

Upon arrival in Albany, SEMATECH created a new manufacturing subsidiary to focus on manufacturing collaboration. It then expanded its membership further to include supply chain companies. Most recently it has entered into a partnership with CNSE to demonstrate the 450 mm platform, and to launch PVMC, the Photovoltaic Manufacturing Consortium.

“[SEMATECH’s] mission now is no longer confined to research,” said Dr. Armbrust, “although it does research. Instead, it specializes in bridging research, development, and manufacturing. We emphasize technology that our members prioritize. They say we believe that this is going to go into manufacturing, but we have gaps in the infrastructure, and we help with that. That mission differentiates us from everybody else.”26

GLOBALFOUNDRIES

The new GLOBALFOUNDRIES fab in Malta, located some 30 miles from Albany, is the most recent addition to the Albany cluster. After breaking ground in 2009, production began eighteen months later; there are plans for a further expansion of the facility. At the conference, Mike Russo described the

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26Dan Armbrust, “New York’s Nanotechnology Model,” April 4, 2013, symposium presentation.

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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presence of the “world’s most advanced” fabrication facility as the “anchor tenant” of the Albany technology cluster.27

It also comes with an unusual pedigree, said Mr. Russo, having emerged from a deal in 2009 between Advanced Micro Devices (AMD) and an investment fund owned by the government of Abu Dhabi called Advanced Technology Investment Co. (ATIC). Until then, Abu Dhabi had depended on petroleum reserves for some 70 percent of its revenue, and this agreement grew out its desire to diversify its economy, especially into technology. AMD agreed to transfer its manufacturing operations to ATIC in phases through the creation of GLOBALFOUNDRIES, which would operate as a pure-play foundry, while AMD continued as a “fabless” semiconductor producer.

The fab itself has developed rapidly. “Semiconductors are seen as a key component of the future economy,” said Mr. Russo “And we are at the leading edge of this in our collaborations in the 450mm-wafer transition, 3D stacking, and extreme ultraviolet technology. The fab in Malta is right now producing chips at 28- and 14-nanometer sizes, and will soon reach 10-nanometer size.”28

He said that it takes three to four months to make each wafer, and yet Fab 8, as the facility is known, has already reached 60,000 wafer starts per month; the goal is 80,000 starts. He emphasized the flexibility of Fab 8, which easily re-formatted in response to changing development needs or market conditions. Already it has been modified to increased production for the mobile phone and tablet markets. In addition, GLOBALFOUNDRIES has decided to make a $2.2 billion addition to the facility with a new Technology Development Center adjacent to the foundry itself. Mr. Russo emphasized the importance of this “lab-to-fab” arrangement, with engineers, technicians, and researchers able to confer easily and the allowing manufacturing feedback to inform development. The activities of Fab 8 have already strengthened the company’s revenues, which expanded by 31 percent in 2012.

Mr. Russo noted that the benefits of joining the Albany cluster the arrangement are already apparent. It has allowed the company to become the “first truly global foundry,” referring to its distributed worldwide presence. GLOBALFOUNDRIES now includes not only the new Malta facility in North America, but also Chartered Semiconductor Manufacturing, a pure-play foundry in Singapore; a 300mm fab in Dresden, Germany; and a planned facility in Abu Dhabi, giving the company proximity to customers in most regions of the world.

This geographic dispersal reduces the vulnerability of semiconductor production facilities to disruptions caused by natural disasters. This is especially true for semiconductors, most of which have been produced in the “ring of fire,”

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27Mike Russo, “New York’s Nanotechnology Model,” April 4, 2013, symposium presentation.

28Mr. Russo said he had calculated that 10 nanometers is “about the distance a fingernail grows in five seconds.”

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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the perimeter of the Pacific Ocean where earthquakes are common.29 A wide manufacturing footprint is also beneficial in regard to issues of trade, control, security, and intellectual property.

GLOBALFOUNDRIES’ location in Malta offer physical advantages as well. The site rests on a 120-foot thick cushion of glacial sand which reduces the potential threat of tremors caused by earthquakes or other shocks. This is critical for a modern fab, where even mild vibrations can disrupt delicate operations at the nanoscale. Other basic but important advantages include access to reliable resources of water, natural gas, and electricity, all upgraded to satisfy foundry requirements.

Mr. Russo described the broader impact of the fab on the region’s development potential. “To meet its own needs, the company had to bring in natural gas, a 30-mile water line, and electricity upgrades,” he said. “It’s very costly to bring in big infrastructure, but once it’s here, it helps economic development throughout the region. The same effect is being seen for the educational system and the innovation ecosystem as a whole.”

Among the region’s advantages, he said, were the rich talent pool at RPI, CNSE and SUNY-Albany; the fiscal support of the state government; the support of the broader community; and the partnership with IBM and other leaders of the industry. In return, he said, the region benefits from some 2,000 direct jobs on the site, soon to grow to 3,000, with an average salary of $87,000; more than 200 companies that have grown or located in the region; and the rapid growth of partners and other members of the supply chain. “A decade ago,” he said, “CNSE was beginning to grow, but we had few companies besides IBM. Today a great many of the world’s leading firms are here.”

Mr. Russo expressed particular pride in GLOBALFOUNDRIES’ relationship with the building trades in a region known for strong labor unions. “The trades have been very progressive,” he said. “We’ve laid our cards on the table with them from the beginning and began working with them to develop training curricula for the fab environment. We had to teach them what a clean space it. It’s a totally different animal, building these large fabs. And we have to make sure the labor is available when we need it. We’re very proud that we’ve been able to reach an agreement on the original project which has amounted to the largest private labor agreement in the history of this country.”

STRENGTHENING EDUCATION AND WORKFORCE TRAINING

Several speakers noted that strengthening the Capital Region’s high-technology labor force is essential to sustain the development of the Albany

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29For example, the Tohoku earthquake and tsunami disrupted Japanese semiconductor production in 2010.

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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Box E
The New Fab Model and the Benefits of Clustering

Traditionally, the semiconductor business has been dominated by integrated device manufacturers (IDM), such as Intel, Samsung, Texas Instruments, Micron Devices, and AMD. Initially, many of these firms competed at every point of the business: systems, design, assembly, packaging, chip technology, automation tools. In the 1990s, however, the IDMs began to fragment when it became too expensive for them to undertake every step of the supply process. Today, with a new fab costing as much as $10 billion, a new industry structure has emerged that features many more fab-less semiconductor firms and “fab-lite” firms, which focus on design and stand-alone fabs, or foundries, which focus on manufacturing and other links in supply chain.

In his conference presentation, SEMATECH’s Dan Armbrust noted that this fab-lite structure answers the challenge of production, but renders other functions along the supply chain too costly for many firms. These fab-lite firms, along with fab-less and stand-alone fabs can benefit from clustering with other each other to capture their complementary strengths. This clustering accelerates the movement of new products through pre-proprietary development stages, allowing firms to expect revenues earlier and to move ahead more quickly and cheaply to the proprietary stage, rather than going it alone at great expense. The development of such a cluster in the Albany area is attracting and anchoring a range of semiconductor related firms, thereby strengthening the local economy.

innovation cluster. According to Darren Suarez of the Business Council of New York, the region faces a skills crisis. He pointed to New York State Department of Labor projection of a 135 percent increase in STEM-related computer electronics manufacturing jobs in the Albany area between 2008 and 2018, which is “driven by the growth in this sector.” A key concern, said Mr. Suarez, is that “We are not educating our kids to be college or career-ready.” He showed a chart indicating that only 34.7 percent of graduates are “calculated college and career ready and said that more than 50 percent of students in two-year institutions of higher education must take at least one remedial course. At the same time, Mr. Suarez noted that the “perception that the U.S. has fallen so far behind that we don’t have the ability to close the gap. We don’t believe that. Models like [Albany] can help us to radically change, bringing innovative ideas directly into our classroom and helping strengthen the next generation.”

Building the Technical Workforce

Andrew Matonak, the president of Hudson Valley Community College (HVCC), expressed confidence in the region’s ability to “open a path toward

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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these emerging fields” through a host of ongoing programs and fulfillment of the HVCC mission to be “a powerful provider of on-demand workforce training.” As an example, he cited the Northeast Advanced Technological Education Center (NEATEC), which is funded by the National Science Foundation to train people in semiconductor manufacturing. “We want to make sure we meet the need for a skilled workforce, and we work very hard at that. The community colleges can do this only by working with the school districts, business and industry, with support from the state and federal governments.”

Dr. Matonak’s comments were welcomed by Ajit Manocha, CEO of GLOBALFOUNDRIES, who called HVCC “a great partner and ally of Global Foundries” and praised it for “bringing the education, infrastructure, and research to prepare people for the countless jobs that Global Foundries is creating.” GLOBALFOUNDRIES’ Mike Russo also drew attention to a significant new worker retraining program, the Tech Valley Connection for Education and Job. The program, which helps train and retrain workers through the community colleges in a 13-county area, was initiated by the Center for Economic Growth, in partnership with SUNY. Mr. Russo, GLOBALFOUNDRIES’ representative in the program, called it “the largest education initiative of its kind in the country.” He called it “basically a very large-scale laboratory to try out the most innovative practices, and to identify roadblocks, and eliminate them.”

For its part, SUNY has involved leading educators in the Tech Valley Connection. They have developed a credential for teachers at several levels: those going through certification; furloughed teachers who want to upgrade their skills; and tenured teachers who want to add skills. “For kids who don’t have the benefits of shop courses anymore,” said Mr. Russo, “we started work on an advanced manufacturing pathway for students on an early college high school path. This leverages the trade schools and high school math and science courses.”

Dr. Matonak added that HVCC created a program called TEC-SMART, Training and Education Center for Semiconductor Manufacturing and Alternative and Renewable Technologies. This is situated on the Malta site to take direct advantage of GLOBALFOUNDRIES’ expertise. TEC-SMART includes high schools in 12 New York school districts.

Current Education and Training Initiatives

Conference participants also highlighted a number of other education and training initiatives underway in the region:

  • Darren Suarez described P-TECH, Pathways to Technology and Early College High School, as a partnership among New York City’s Department of Education, the City University of New York, the New York College of Technology, and IBM Corporation. Participating industries and businesses partner with high schools to improve the
Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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  • effectiveness of education and raise the number of individuals who meet job market requirements.

  • Pradeep Haldar drew attention to Tech Valley High School, a new, state-funded initiative to bring high school students to the CNSE campus.
  • Robert Blackman of the Center for Economic Growth made note of other CNSE outreach programs, such as Nano High and Nano Career Days, which bring students from Albany city school districts.
  • Don Siegel, Dean of the University at Albany School of Business, referred to his school’s annual statewide business plan competition. “This is designed for students for the purpose of trying to build an entrepreneurial culture.”

“It’s all a pipeline,” said U.S. Rep. Paul Tonko, “to make sure we’re educating the next generation of people who are going to be needed. Our workforce, our schools, and our colleges, especially our community colleges, are key ingredients to the success that we now taste.”

SUSTAINING THE ALBANY MODEL

If there is an “Albany model” for building an innovation cluster, one key feature might be the strength of each of the three legs of its three-legged stool as referred to by RPI President Shirley Ann Jackson. Another would be the large number of participants. Neither of these features is unique, but taken together these features stand out.

Industry Leadership

Other regions might be able to profit from this strategy as well. But some features of the Albany model are not easy to replicate. In his keynote remarks, Representative Tonko noted that the region has benefited from the long-time presence and leadership of corporate champions like IBM as well as a sustained and bipartisan flow of political support. These advantages have been reinforced, he said, with the arrival of GLOBALFOUNDRIES, which brought to the region thousands of jobs and billions of dollars in investment.

Key Challenges

While highlighting the unique collaboration that distinguishes the Albany Model, several conference participants also identified some of the challenges ahead in sustaining its success.

GLOBALFOUNDRIES’ Mike Russo noted that global competition in nanotechnology is fierce even as the semiconductor business continues to face significant technical and financial challenges. Charles Wessner noted that many

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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countries around the world have targeted the semiconductor industry as a part of their national development strategy. “You have gone around the first lap in the race really well. But it is just the first lap. You also have to make sure you have the support from Washington that you need as you go forward, because you are now playing in the tall grass with the big animals.”

RPI’s John Wen identified four major challenges for effective industry-academia collaboration. Number one is control of intellectual property. Number two is maintaining continuity, which he called “extremely challenging.” He emphasized that the State of New York needs to sustain its substantial investments over the long term. Number three, he added, is the difficulty of reconciling the different timelines of academia and industry. The final challenge, he said, is learning how build effective multidisciplinary teams. RPI’s Jonathan Dordick, further warned that the industry’s dominant presence in and around Albany NanoTech may give industry too much power in determining the curricular and research agendas of academic institutions, and may skew activities toward short-term needs instead of the long-term basic knowledge that must guide the industry in the future.

Other participants, including CEG’s Michael Tucker and Empire State Development Corporation’s Ken Adams, noted the relatively small number of start-ups that have so far been generated around Albany, the insufficient pool of workers trained for high-technology jobs, and the scarcity of venture capital.30

Supporting Start-ups

Even so, a number of conference participants spoke with optimism about the future of the Capital Region. CNSE’s Dr. Haldar drew attention to the growing number of start-ups in the area, and “a network of close to 100 VC firms that are interested in investing in this area.” He also saw value in the business incubator on the CNSE site, supported by NYSERDA, and predicted that the larger companies around CNSE will perform a natural and effective nurturing function for startups. “In the past,” he said, “the successful start-ups would move out of our state and be bought by larger companies on the West Coast or around Boston. Having the entire technology ecosystem here means that our companies can capture that technology.”

Building the Value Network

Several participants described the Capital District as part of a “new paradigm” of partnerships and collaborations, one that is not only effective but

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30New York companies attract only about 4 percent of the total venture capital, while nearly half of all U.S. VC is invested in California. “Cuomo’s $50M Venture Fund Seeds Startups,” Albany, The Times Union January 23, 2013.

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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also essential. The most detailed picture is offered by long-time resident Gary Patton of IBM. “This is something we recognized all the way back in 1990,” he said, “when we started our first technology alliance with Siemens in East Fishkill. Eventually Toshiba joined us, and the partnership migrated into our logic alliance and then our partnerships in Albany, where it has spawned other collaborations. We came to the conclusion that it’s not only about collaboration between process companies, like Global Foundries and IBM; it’s collaboration with the equipment suppliers. And we see all of them now moving to Albany NanoTech. They are finding the benefits of shared investment, shared learning, and the ability to accelerate their process, versus going it alone.”

The model for collaboration, he continued, is SEMATECH, which was “unthinkable at the time” it began in 1987 given the independent mindset and often fierce competition among its members. Today the model is extended to include not only the process firms and equipment makers, but also materials suppliers, all of which are needed to advance the industry roadmap.31 “These technologies are becoming extremely complex,” said Dr. Patton, “and we have to come together to make them work. The equipment suppliers used to do their research back in their own labs, but they’ve concluded that they can’t make these tools function without a close partnership with the manufacturers and access to leading-edge technology. And that’s what Albany provides.”

Developing New Models of Collaboration

Collaboration is essential from a design perspective as well, Dr. Patton said, which explains why IBM is not a fabless company that simply buys the technology it needs. The technology IBM develops for its own needs is not available anywhere, he said. Second, the 14-nanometer and 10-nanometer technology is so complex “you have to look at co-optimizing the entire stack, from the atoms to the devices, to the circuits, to the Watson system.” Many of IBM’s fabless partners want to engage with IBM in Albany, he said. “They can’t just wait for us to deliver a technology. They need to get in early, give us their requirements, and work with us hand in hand. I think we’re at the beginning of a new paradigm in how to do this.”

CNSE, as well, sees great benefits from collaboration. “Our approach,” said Dr. Haldar, “is to sit down across the table from our industry partners and ask them how we can work with you on your short, medium, and long-term goals. The time frame of this industry is not the same as a typical academic institution, so we have to be very responsive. The buildings that go up on our

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31For a review of the history and future strategies of the International Technology Roadmap for Semiconductors, see Bernd Hoefflinger, “ITRS: The International Technology Roadmap for Semiconductors” in Chips 2020: The Frontiers Collection, Berlin: Springer Verlag, 2012, pp. 161-174.

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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campus and the research we’re doing are all timed to meet industry goals and standards. Otherwise industry will leave us in the dust.”

Building Shared Infrastructure

Dr. Armbrust of SEMATECH agreed with the need for collaboration and the value of the cluster. “In Texas,” he said, “SEMATECH pretty much worked on its own. Here the community is pooling its assets to do much more. There’s no way to create what we have here except through shared infrastructure.” New York State’s support for CNSE, he emphasized, has built the infrastructure needed by both academic and industrial researchers. This helps anchor new instrumentation in the region, avoiding the losses that would occur if companies go bankrupt or leave the region. And the private sector has largely accepted this practice, seeing the advantages of so many partners. “By next year, said Dr. Armbrust, “every materials supplier of consequence, most of them from abroad, will be doing significant work in Albany. They choose to invest here to share the infrastructure.”

The concentration of research facilities can, in turn, attract manufacturing. Stephan Biller of General Electric remarked that even legacy

Box F
Investing in the Global 450 Consortium

Housed at CNSE’s NanoTech Complex in Albany, NY, the Global 450 Consortium is a $4.8 billion collaboration is made up of five member companies: IBM, Intel, GLOBALFOUNDRIES, Samsung and TSMC. “The goal of the Global 450 Consortium is to support the industry transition from 300mm wafer to 450mm wafer production. The consortium will leverage industry and government investments, and the state-of-the-art infrastructure at CNSE’s NanoTech Complex to demonstrate and deploy 450mm wafer tools and process capabilities.”a

Describing New York State’s participation in this consortium, Darren Suarez noted that grants are provided directly to CNSE to build the needed infrastructure. “In a way,” he said, “the state is investing in itself. This is a strategy that provides stability. If the state gave that money directly to a company, and the company did not exist here in a couple of years, the investment would be lost. This way, we know the infrastructure will be here and we can offer it to all companies.”

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aCNSE website, <http://cnse.albany.edu/>.

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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companies with traditional products like GE find strong advantages in co-locating their R&D with manufacturing.32 By facilitating information sharing, smart manufacturing can complement smart economic development,

EXPANDING NANO TO THE PHYSICAL AND LIFE SCIENCES

Industrial variety in a region, based on different but complementary technological fields, promotes greater innovation activity and cluster development.33 While early discussions in the conference underscored nanotechnology’s role in semiconductor research, later discussions followed the scope for nanotechnologies to address challenges in biomedical and pharmaceutical research.

The Crisis in Pharmaceutical Research

The pharmaceutical industry, several speakers noted, is severely squeezed between the twin stresses of rising research costs and declining drug approvals.34 RPI’s Jonathan Dordick, for example, suggested that the industry is facing a developmental crisis. At the same time, he and others speculated that the dangers may be sufficiently dire to spark the kinds of “crisis-driven” efforts at collaboration seen among semiconductor firms.

Others voiced agreement with Dr. Dordick’s tone of urgency. Michael Fanter of the CNSE’s Center for Advanced Technology agreed that “pharma is an industry that is screaming for a new public-private partnership. They’re where the semiconductor industry was in the mid-1980s, when those companies came together and said, ‘You know this is nuts. There are too many paths to pursue, and we can’t each do it on our own.’ The industry came together and formed a vision and a roadmap of shared challenges. Many industries are still at the early stage of that, but they have the SEMATECH example to give confidence.”

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32GE recently decided to pull its appliance manufacturing back to Louisville, Kentucky to re-join its research, engineering, and marketing activities. “We can produce appliance products better and cheaper in Louisville than in China,” said Dr. Biller, “because we can discuss manufacturing principles and market research all in the same room.”

33Michael Fritsch and Viktor Slavtchev, “How does industry specialization affect the efficiency of regional innovation systems?” The Annals of Regional Science 45(1):87-108, 2010.

34According to Dordick, between the years 1996 and 2006, a steep upward slope of R&D spending is mirrored almost exactly by the steep decline of new drug approvals over the same period. From 2009 to 2011, he said, fewer than 60 drugs were approved by the FDA, and the cost of approval is now close to $2 billion per drug.

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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The Need for Convergence

Larry Nagahara of the National Cancer Institute spoke about his own institute’s attempt to promote collaboration between the physical and life sciences. He reminded the audience of the famous partnership between Salvador Luria, a microbiologist, and Max Delbruck, a physicist, in the 1940s, whose combined perspectives produced new understandings of bacterial mutations and led to their 1969 Nobel Prize in Physiology or Medicine.

More recently, the concept of “convergence” between the physical and life sciences has been articulated in a white paper by Phillip Sharp and others at MIT, who described a new generation of discoveries in biomedical science. Their suggestion is based partly on the assertions that “advances in information technology, materials, imaging, nanotechnology, optics, and quantum physics, coupled with advances in computing, modeling, and simulation, have already transformed physical science. They are now beginning to transform life science as well.”35

Dr. Dordick of RPI suggested that the time may be ripe for more efforts to explore convergence. For example, RPI already makes a chip that mimics how the body deals with a drug, and calculates how much to apply. “We need to combine big data with nanotechnology and biotechnology for three areas,” he said: “R&D combinations to improve understanding of therapeutic molecules; new visualization tools for not only the brain-computer interface but also the whole body-computer interface; and networks of sensors that are linked hospital to hospital.” He offered a specific example to show how investments in microelectronics can help to develop new, collaborative biotechnology. “The expertise exists. You go to the doctor where your genetic makeup is known; the data will tell you the nature of your disease. We know how to put the molecules together, how they fit into proteins of your body. We make a drug specifically for you; maybe it’s made by bacteria. You’ll have your own drug within a day.”

Adapting the Semiconductor Research Model for Pharma

Brian Toohey of the Semiconductor Industry Association addressed the same question: Can a collaborative research model be built for the pharma industry that is similar to those emerging in nanotech, semiconductors, and biotechnology? “The short answer,” he said, “is yes.” Evidence emerges from recent activities, he said, “such as the use of semiconductors in non-invasive instruments or small inserted devices.” He cited breakthroughs already achieved through collaborations, including the first chemical synthesis of polio virus, chip-based high-throughput DNA synthesis, MEMS DNA synthesis, DNA

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35Phillip A. Sharp et al, The Third Revolution: The Convergence of the Life Sciences, Physical Sciences, and Engineering, Cambridge, MA: Massachusetts Institute of Technology, 2011.

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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“origami,”36 the first synthesis of a bacterial genome, and DNA information storage. He also described hybrid semiconductor/biological circuits in which cellular material provides the intelligent components for electronic circuits. “The crisis,” he said, “may help motivate companies to sit down and have this discussion.”

Dr. Dordick agreed in principle, although warning of several “barriers” to such discussions, including the need to secure intellectual property. “We don’t yet have a model for biotech like the one used by the semiconductor industry,” he said. Mr. Russo of GLOBALFOUNDRIES also saw potential difficulties, but urged both sides to make the effort. “In order to move forward and innovate,” he said, “it’s more than risk taking, it’s sometimes getting out of your comfort zone and your vested interest. Medical devices, pharma, and semiconductors can all look at possible collaboration and the benefits they can find.”

Even amid signs of progress in semiconductor partnerships, however, several voices cautioned against complacency and emphasized the need to sustain the current high level of investment. Dr. Armbrust, reflecting on his long experiences with IBM in East Fishkill and with SEMATECH in Texas, pointed to likely struggles ahead. “I would caution you about complacency,” he said. “We are where we are, and many people are trying to copy us and get ahead of us. It’s time to double down. We have strengths, but we need to continue to invest in those strengths, so that in 10 years you’ll read every day about a new startup, a new spinoff, more venture capital, and jobs. That can be our future.”

IN CLOSING

This conference report provides a first-hand account of New York state’s two-decade long effort to transform its Capital Region into a leading center of nanotechnology research and production. It highlights the large-scale investments in university research infrastructure and the collaborative arrangements with the private sector and regional development organizations that have altered the competitive landscape in the semiconductor industry and built a sustainable basis for the region’s economic growth. This overview has highlighted many of the key issues discussed at the conference. The proceedings of the conference, summarized in the next chapter, provides rich detail of speakers’ descriptions and perspectives on the policies, institutions, and initiatives underway in New York State.

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36The folding of DNA to create arbitrary two and three dimensional shapes at the nanoscale. Resulting models are used to explore such phenomena as self-assembly and self-destruction of drug delivery vessels. Paul W. K. Rothemund, “Folding DNA to create nanoscale shapes and patterns,” Nature 440(7082):297-302, 2006.

Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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Page 34
Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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Page 35
Suggested Citation:"I--OVERVIEW." National Research Council. 2013. New York's Nanotechnology Model: Building the Innovation Economy: Summary of a Symposium. Washington, DC: The National Academies Press. doi: 10.17226/18511.
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New York's Nanotechnology Model: Building the Innovation Economy is the summary of a 2013 symposium convened by the National Research Council Board on Science, Technology, and Economic Policy and members of the Nano Consortium that drew state officials and staff, business leaders, and leading national figures in early-stage finance, technology, engineering, education, and state and federal policies to review challenges, plans, and opportunities for innovation-led growth in New York. The symposium participants assessed New York's academic, industrial, and human resources, identified key policy issues, and engaged in a discussion of how the state might leverage regional development organizations, state initiatives, and national programs focused on manufacturing and innovation to support its economic development goals. This report highlights the accomplishments and growth of the innovation ecosystem in New York, while also identifying needs, challenges, and opportunities. New York's Nanotechnology Model reviews the development of the Albany nanotech cluster and its usefulness as a model for innovation-based growth, while also discussing the New York innovation ecosystem more broadly.

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