Replicable Results: Could Albany’s Nanotech Success Be Repeated?

Written by Wilder Fleming on . Posted in Economic Development, Technology.

Gov. Andrew Cuomo, right, talks with Alain Kaloyeros, the chief executive officer of the College of Nanoscale Science and Engineering at the University at Albany, during a meeting of Cuomo’s Tax-Free New York plan in early June. (AP Photo/Mike Groll)

Of all the government-sponsored efforts aimed at making New York a high-tech hub, none has achieved the runaway success of the University of Albany’s College of Nanoscale Science and Engineering (CNSE).

What started in 2001 with an initial investment of $50 million from the state and $100 million from IBM has grown into an 800,000 square foot, $14 billion complex boasting an industrial-size clean room and some of the most cutting edge equipment for developing nanotechnology in the world. Over 250 companies—Samsung, Intel and GlobalFoundries among them—now partner with the college, and many have moved their operations to the region or to the complex itself. Today the cumulative $1.3 billion invested in CNSE by the state has been matched by over $16 billion in private and federal funding.

Now Gov. Andrew Cuomo is hoping to bring this kind of success to other regions with START-UP NY, which aims to lure qualified companies to the state by allowing them to operate in and around SUNY campuses tax-free for 10 years.

But questions remain about whether CNSE’s success can be replicated elsewhere, or if it came about as a result of unique factors.

The state initially provided $1 for every $2 of private investment in the complex, but no tax breaks were provided. And while Nano was one of five state-sponsored “Centers of Excellence” created in 2001 as part of the effort to harness the joint powers of industry and academia, investment in the other four locations has paled in comparison.

The distinguishing factor may come down to one man, CNSE’s vice president and chief executive officer, Alain Kaloyeros.

Hailing from Lebanon, Kaloyeros immigrated to the United States, obtained his Ph.D. in an obscure branch of physics from the University of Illinois in 1987 and was recruited by then Gov. Mario Cuomo as an associate professor at the University of Albany. He began assembling his own lab equipment, scavenging parts from colleagues, and eventually convinced Assembly Speaker Sheldon Silver to give him $5 million in order to continue his research on computer chips.

“He doesn’t function like a normal academic,” said David Shaffer, a senior researcher at the Rockefeller Institute of Government who conducted a case study of Kaloyeros and CSNE a few years ago. “He came in with a much larger vision of what could be done, and a willingness to utilize a tool kit that’s routine in business but not so much in the academy.”

As of 2006 CNSE had received $1.2 billion in private investment, while all the other centers combined had attracted only $135 million. Not surprisingly, CNSE had commanded well over half of the total $586 million in state funds allocated up to this date as well.

The Capital Region has weathered the economic downturn better than the rest of upstate New York, due in part to the infl ux of high-tech industry to the region. GlobalFoundries moved its headquarters to the area in order to be in proximity to CNSE, and the company has plans to open a new cutting-edge microchip production facility some 20 miles north of Albany.

Shaffer noted Kaloyeros’ relentless mission to sell his vision to the companies with which he wished to partner, and said he pushed his students to do the same. In Shaffer’s view, companies like IBM crave access to universities, where scientists are paid to experiment in ways that might not be worth the risk for private fi rms. And in so-called “technology clusters,” where academia and industry co-mingle, professors can make industry connections and cross-pollinate with scientists who work outside their own narrow fi elds of study, opening the way for innovation and business opportunities.

“It turns out that high-end private sector companies really needed someone to do this for them,” Shaffer said. “And Kaloyeros came along with the brains and the energy to do it.”

Such interactions have been going on in Silicon Valley and along Route 128 in Boston since the 1950s, albeit more organically. But in the 1980s the federal government began providing seed funding for so-called “Industry/University Cooperative Research Centers.” This spurred more programs, whose success provided a blueprint for local policy makers to fund their own research clusters in the interest of spurring economic growth. States like Texas, Oklahoma, South Carolina, Arizona and Michigan have all implemented similar initiatives.

But New York has been late to the party, due in part to the fact that state laws prohibit public-private partnerships, unless the Legislature grants special approval. In the case of the CNSE, lawmakers allowed the nonprofit Research Foundation for SUNY to lease land to a private nonprofit, which managed the property.

Cuomo’s START-UP NY aims to get around these laws by use of a “notwithstanding” clause in which the Legislature repealed a prohibition on leasing state-owned land on SUNY campuses.

Kaloyeros, who rarely misses an opportunity to praise the governor, supports START-UP NY wholeheartedly. But he says the thinking in the SUNY culture needs to change to meet the new demands of a 21st century university.

“It will take a new way of thinking on the part of traditional academics, a realization that the ivory towers and silos of the 20th century no longer apply in the 21st,” Kaloyeros said. “The growth of CNSE is a clear illustration that it can work, and the governor’s strategic START-UP NY blueprint is an important step in the right direction.”

Kaloyeros has previously been critical of his colleagues at SUNY, asserting that other Centers of Excellence, such as the one in Buffalo, spent their funds lobbying in Albany rather than investing it strategically.

Shaffer thinks that START-UP NY could be just what Buffalo needs.

“They haven’t developed the center of gravity the way Nano has, but they’ve got an awful lot going on there,” he said. “It has the potential to click one day, particularly with effective leadership, but START-UP NY could also be a substantial help.”

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