Becoming the Next Semiconductor Industry Hub: Part 2

The NY SMART I-Corridor, a consortium of partners from Syracuse, Rochester and Buffalo, is one of just 12 groups to receive a federal Tech Hub award and the only Tech Hub focused the semiconductor industry. The federal government saw local leaders’ strategy and existing regional assets and determined the NY SMART I-Corridor region has what it takes to be the next globally critical semiconductor industry hub. 

To support this growth, the federal government awarded the NY SMART I-Corridor Tech Hub more than $40 million for initiatives and projects that will help us grow and ensure all residents have access to opportunity. 

On Part 1 of our Tech Hub conversation, CenterState CEO’s Chief of Staff Ben Sio, OneROC President and CEO Joe Stefko and Buffalo Niagara Partnership President and CEO Dottie Gallagher joined Talk CNY to discuss how the NY SMART I-Corridor came to be. On this episode of Talk CNY, presented by NBT Bank, we are joined again by Ben, Joe and Dottie to talk about the projects and work ahead as our region tries to reach its goals.

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Host: Katie Zilcosky LinkedIn

Transcript

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This is Talk CNY, presented by NBT Bank, a semi-monthly podcast by CenterState CEO, central New York's premier leadership and economic development organization. Join us as we meet the people and explore the projects driving the regional economy forward. This is to Talk CNY, presented by NBT Bank. I'm Katie Zilcosky, director of communications at CenterState CEO, and your host for Talk CNY. The New York SMART-I Corridor, a consortium of partners from Syracuse, Rochester, Buffalo, and Ithaca is one of just 12 groups to receive a federal Tech Hub award and the only Tech Hub focused on the semiconductor industry. The federal government saw local leader strategy and existing regional assets and determined that the New York SMART I-Corridor region has what it takes to be the next globally critical semiconductor industry hub on part one of our Tech Hub conversation CenterState CEO's Chief of Staff Ben Sio, OneROC's President and CEO Joe Stefko, and Buffalo Niagara Partnership's CEO and President Dottie Gallagher joined Talk CNY to discuss how the New York SMART-I Corridor came to be. On this episode, we're joined again by Ben, Joe and Dottie to talk about the work ahead as our region tries to reach its goals. At the end of the last episode, we talked a little bit about why people should care about the Tech Hubs designation, and one of the big reasons is the projects that it is going to fund that are going to take very physical shape in our communities. So could you tell me a little bit about the projects that were funded through the Federal Tech Hubs program? Sure. Katie, let me start and I'll then turn to Dottie and Ben to talk through. I'll start by talking about the Workforce Project, which is being led by Monroe Community College here in Rochester. But we were really intentional, and you'll see this as we talk through the various component projects, to have a Rochester institution lead one, a Buffalo institution to lead one, a Syracuse Institution to lead another. So that really, that kind of geographic parity in governance and component project implementation has really been a bedrock principle of our partnership, our collaboration from the very beginning. So the workforce investment is going to be into a program that we are calling Step Up. As I said, this is led by Monroe Community College, but not for just Rochester or the college, but on behalf of the entire I-Corridor. The goal here is to create a unified front door for employers to access newly developed semiconductor talent. We know that workforce talent availability, talent development is a real pinch point for employers, not just here in our region, but this is a national challenge that we're facing. One of the real opportunities that this program presents to us is to leverage a transformational $200 million investment that the state of New York included in this year's adopted budget. So the goal of that is to essentially replicate the very successful Northland Workforce Center model that's a center based in Buffalo across the upstate corridor here in New York, with an initial flagship investment in Syracuse to directly support Micron and other semiconductor suppliers. By leveraging that $200 million state workforce investment, it's going to allow us to layer in EDA and commerce dollars to build out a curriculum and industry partners that are focused specifically on producing that technician talent that employers in this sector are in such desperate need of complimenting that workforce development investment will be investments at each of our chambers of commerce across the corridor to make sure that we are not just producing the talent, but we're actually being very intentional about placing that talent at employers that need it and maybe for the supply chain investment. I'll hand things over to you, Dottie. The supply chain project is called SCAN, the Supply Chain Activation Network. That is being led by the University of Buffalo, the management school there, and Dean Iyer there has a very long history in supply chain work. In short, it's basically identifying everybody who's supplying this semi industry right now in the region and talk to them and help them expand to take advantage of the coming opportunities. And then maybe even more importantly, identifying companies that are here that may have adjacencies, they don't even realize they have to the supply chain. So for example, they may be currently working with chemicals that are key in that industry or have specific types of equipment. They may not even understand that they have the opportunity to pivot and grow into this opportunity that's coming in the region. And so the way it's going to happen is we are literally reaching out to all, I think 400 or so companies are on the list and really saying, Hey, did we get this right? Do you want to grow and expand? Is this an opportunity for you? And then marrying them up with the manufacturing our regions, which is another federal program that will help them actually get the technical resources to actually do it. So our EDO's, our economic development organizations will do the initial outreach and we'll follow up with this technical assistance. And UB is doing it for the entire quarter. I mean, Joe, you talked about these being led in each market, but the work that's being done in supply chain here in Buffalo, well, that same work led by UB will be done in Rochester and in Syracuse and across the footprint of the New York SMART-I Corridor. So those 400 companies I mentioned is actually across the quarter just managed by UB. The same is true in workforce, led in Rochester, but managed across the corridor as well. And then we also have work in innovation, and I know Ben, you're the chief innovation officer here of our little group. So I just promoted you if you didn't notice. I like that. Can we update the website, guys? So I think there's a trend and really important to take a step back was what was the intent? What do we actually apply to do as a community or as a set of regions, as part of Tech Hubs? There's a lot of Tech Hubs chatter out there about bleeding edge, bleeding edge R&D on very specific parts of an industry or achieving thousands of patents and a unique thing that unlock future growth. And we took it a little bit of a different approach. I think that's emblematic of the C3 project. So the C3 project is run by Syracuse University. It includes all of the Tier one, Tier two and other research institutions, not just within the broader region, Buffalo, Rochester, Ithaca, Syracuse, but also partners with groups in Albany like New York Creates, SUNY Poly's around the table. So took it a little bit of a broader focus, really intending to become a front door for industry, interested in partnering with the research and innovation assets at all of these institutions. We have some of the best research and innovation assets in the country in Upstate New York, and we recognized very early on that companies, especially small midsize companies, weren't accessing and utilizing those resources as much as they could be and as much as they should be as they think about opportunities in the semiconductor industry. So what this ties back to the broader theme though, is we're not actually talking here about creating the next advanced chip in our region through this partnership. What we're talking about here is figuring out ways that companies that are in the space that are located here right now can be more innovative in anything they do in this space, in their manufacturing processes, in their actual product, in their own R&D activities. And companies that move here, we can help them be as creative as possible, and companies that are interested in transitioning into the semiconductor industry that also need to do R&D work to transition in, we can give them the support necessary to do it. What's really cool about the C3 project, which is as we said run by Syracuse University, is it offers also a kind of collective IP framework for coordination among these different institutions, which in my experience and to my knowledge, we haven't done across these institutions before. So you talk about the collaboration that has happened between Buffalo, Rochester, and Syracuse among this group. You take it a step further, and all of these public and private institutions across this region that traditionally don't work together are now partnered in offering this common program and have all come on board understanding the of them. These three projects, I mean, I'm sure they both fill gaps and build on existing infrastructure that exists already in these areas. So can you talk a little bit to where the gaps are that these projects are filling and what exactly they're building off of to be successful? Sure. Well, Katie, I think you kind of summed it up in the question there, right? Did the projects individually and collectively seek to Number one, fill critical gaps that exist between where we are today, where we expect to be over the next few years, and that end vision of building out a truly world-class and globally competitive semiconductor and related supply chain cluster, right? So there's filling gaps and then at the same time there's investing to accelerate what's working, right? So I think you can just, I'll go back to the workforce example, the workforce component project example. So within that Step Up program, we know that there's a gap in terms of the talent that employers need and the rate at which we're producing that talent. At the same time, we know that we have demonstrably successful models, a model in the region, at least in Buffalo's case, that if replicated can help us to fill that gap, right? So we were really intentional as we approached each of these component projects to not go in with the perspective of, well, let's create a new organization, some new overhead infrastructure to deliver this program. And part of that was out of a desire to be as efficient and quick as possible in standing these programs up. But part of it was just the sheer recognition that while it's a significant federal investment, when you spread it across the entirety of this upstate corridor, this broader ecosystem, those dollars don't go as far. So we were really intentional about looking for ways was working while at the same time trying to fill key gaps. And I guess if I was going to add a third thing to fill gaps and build on what's working, it's capitalized on opportunities that we haven't fully capitalized on today. And I think the Supply Chain Activation network project is a perfect example of that, where we know we have this history of advanced manufacturing, we've got a whole universe of legacy manufacturers across this corridor, many of which have held on through some really lean years. This is an opportunity for us to be really targeted about identifying those based on their scale, their equipment, their current capabilities that have an interest with the right technical assistance and capital investment to make the pivot into this space, into this growth space in a way that helps us fill those gaps. So again, that was really the thought process that we went through in each of these component projects. Sorry, go ahead, Katie. No, you go ahead, Dottie. I was just going to add to what Joe said, and $40 million to build a building or something would've been, quite frankly a waste of resources. The organizations that are all delivering on these projects are people who know how to do this work. This funding is actually paying for additional capacity to use their own expertise that they're using, doing this work in other industries and really focusing on the semi opportunity in a way that we can get to market very quickly. And we're excited about that piece of this, and I think that has built a lot of trust among all the partners too, that we're investing in the players that are here and really trying to get to the targets as quickly as possible. I'd say the only thing we haven't talked in a ton depth yet about, but it is very much related to this line of thinking, is the equity commitments and the equity components that we made to all this. Every single one of these projects has an individual and unique and very aggressive equity related goals to make sure that when it comes to workforce development, but it also comes to the companies we are serving. We are being intentional and strategic and focused on bringing these services, bringing these opportunities to businesses that don't traditionally benefit from these investments. As we were developing the overall application, we actually had a red team that worked just to make sure that our application and our focus and our projects answered the call and answered the needs that we had seen in our community was traditionally underserved individuals and population. So it is a huge commitment we've made. We don't talk about it probably as much as we should, but it's absolutely kind of a bedrock to this effort and to the partners we have around the table to how we are constructing our governance work to make sure that we succeed on those goals. And build wealth in those communities. We are going to talk more Tech Hubs in just a moment, but we're going to take a quick break here and have a word from our presenting sponsor, NBT Bank. I would recommend NBT Bank to any business. My name is Chris Palomino and I'm the president of Atlas Fence. Chris had decided to purchase Atlas Fence from the previous owner. He had previous connections at NBT Bank. NBT Bank provided me equipment financing doubling our entire production workforce. It's important to me as a business owner that the decisions of our banking relationship are made locally. Welcome back to Talk CNY, presented by NBT Bank. I'm Katie Zilcosky, director of communications at CenterState CEO, and your host for Talk CNY. This is Tech Hubs, part two for Talk CNY. I'm here with Ben Sio, Dottie Gallagher and Joe Stefko. Thank you all for being here with me today. Pleasure. Thank you. So I'm sure anyone listening up through these two parts and many minutes of discussion is now wondering when they are going to start seeing some of this vision come to life. So can you give us a little bit of a timeline of when something physical may start taking shape in communities across the New York SMART-I Corridor? Yeah, so Katie here at OneROC in Rochester, we had this very conversation with our board at our quarterly meeting a couple of weeks ago, and I shared, I kind of feel like the dog that's been chasing the car for three years and the dog finally caught the car and now we have to figure out what we're going to do. I mean, look, the very simple answer to your question is we now have to activate the strategy that we proposed to EDA and commerce. And that involves not just ensuring that we are coordinated across our component projects, the three component projects that we talked about, but at least as importantly initially is standing up a representative governance framework that has geographic parity across our multiple metro partners here. That will be a key focus over the next, I would say, three to four months at the same time, just in a very ministerial sense, we're in the process right now of finalizing the actual award with EDA and commerce. So that contracting piece has to take place, and then the sub-award component needs to be nailed down. I would say it's our hope that we have activation across the component projects probably at the earliest around the end of this calendar year, maybe more likely the beginning of Q1 next year. But we all feel this shared sense of urgency to get these pieces in place and move forward. Now, the Tech Hubs vision and collaboration isn't projects that were funded through this first award. Are there certain projects or initiatives you'd like to see kind of pop up or be developed alongside these component projects in order to really take advantage of the momentum going on? Well, yeah, absolutely. One that jumps right to the top of the list for me is an initiative that was included in our phase two proposal, which EDA wasn't in a position to fund, and that is something we call the Scale initiative. This is really focused on investing in sort of the top of the funnel, if you will, for the semiconductor and rated related supply chain space, investing in startups, early stage ventures, making this a place where we're not only retaining those early stage ventures that are playing in that space, but that we're attracting those here. Successful, economically successful regions are creating more firms than they are losing. And so we know that that is fundamentally a key part of the strategy. So while it's not included in our final EDA award to support the tech hub, it is something that we are actively looking, engaging with other potential funders to underwrite and stand up, and we would expect to do that in concert with the other three component projects. So that's one that jumps right to the top of the list for me. This effort will take continued cooperation and collaboration from a very large group of partners. There are over a hundred partners that make up this consortium. So how are you planning to stay in touch and make sure that you guys are all heading in the same direction and reaching these goals together? I think day by day, week by week, month by month throughout this process, we have been building trust. We have continued to work in really good faith. You can talk a good game about trusting one another. You really have to be able to walk the talk. And I feel great that as a broad corridor, our organization certainly as lead conveners in this effort, but really throughout the entire consortium, folks have, as Dottie alluded to in the first episode, left their politics and parochialism at the door and really see the true regional benefit of this. But we need to be intentional about continuing to nurture that. We need to be intentional about cheerleading for one another and seeing the wins that happen in Buffalo or Rochester or Syracuse as collective wins for our region. I'll owe Ben $5 for using the phrase yet again, but this is all about building a new muscle memory as a region. If I've said that once, I've said it 10,000 times in the last... We're. Going to chip in and get him a tattoo that says that actually. Who's. To say, I don't already have one, Dottie. But. This is about building a new muscle memory. This is a new paradigm in how we're going to work together. And I think what makes this collaboration this particular effort so powerful is that this is not a transactional collaboration. This is really intended to build a new way forward for how Upstate's metros work together, not just around this opportunity, but more broadly because we know this is just the most recent opportunity of many to come. There's a saying that I learned when I was too late in my career, but progress goes as fast as trust, as the trust that you have. And I think we are all really, really aware of that, the way the projects layer in terms of parity and leadership, and also parity in terms of how they're being implemented. So it's the economic development organization in each region. It's the chamber in each region, it's the manufacturing extension partners in each region working together that will help layer in that trust both horizontally and vertically. And the governance structure is actually bringing everything together. I mean, I don't want to minimize the challenge that you're bringing up, Katie. These are a hundred organizations with people with lots of different personalities and their own challenges that they have. And so I think there's a lot of wins here for all of us, and we have to keep the band together. So I think we are spending a lot of time talking about how we build the depth of that trust as we begin what is going to be a very long journey to realize the opportunity. I think Dottie also hit the nail on the head, though we were very intentional. About that. Isn't that usually what I do? It happens all the time. I don't even know why I mentioned it. We were very intentional when we set this up to say, how can we scale, accelerate, add capacity at existing organizations who are already embedded in these communities? Yes, they may not have the expertise that they need to be successful in the semiconductor industry, but we can hire that expertise. We can gain that expertise. What they already bring to the table is the networks. They bring the systems, they bring the relationships with each other so that we don't need to set up a new organization to go out and find semiconductor suppliers. We've got the organizations around the table that know them or know how to get in the door with 'em or know their neighbor that can So that was by design. So in terms of scaling up and being able to bring all those partners together, I think we're actually in a really good position to do that rather swiftly and be able to offer programs and services quickly, which is what everybody's been asking for. I think that our biggest challenge is going to be the deluge of opportunity and demand that's going to come in and just figuring how we can triage that and support all the interests that we're going to get. And the people that want to be involved, and finding ways to plug in that interest and engage folks as we're sort of standing up this grant. So for someone who does have interest in the Tech Hubs program and wants to be involved in this process maybe in a deeper way, how would they do that? We don't know what we don't know yet in terms of the ways that people can plug in. However, we've committed to really being very, very open and transparent and communicative. So there'll be ways for people to hear about what's going on and have a line of sight to what's going on. And I think that there will be ways that evolve that we will need help from all different parts of the community. But Joe, you probably have a more articulate answer than that. No, I think the only thing I would add to that, Dottie, is there are going to be ample opportunities that exist across those three component projects that we talked about, right? So if you are an employer in this sector that is seeking those technician skills to fill existing or anticipated openings, we're going to connect with you through the Step Up program and make sure that you are engaged in helping to formulate the curriculum and that you're providing an on-ramp to those graduates of the Step Up program. If you are a Tier 1, Tier 2 Tier 3 supplier, if you, you're a Micron or one of the other semiconductor fabs ecosystem, and you have an innovation challenge, you're going to be connected to the R&D that's taking place on our university campuses through the C3 program and through this unified IP architecture. So that we are going from Lab to Fab as quickly as possible, and as Ben said, helping to push the bleeding edge of innovation within the semiconductor manufacturing space. And at the same time, if you are a Tier 1, Tier 2 Tier 3 supplier that is looking to grow, looking to scale, or if you're currently adjacent to the space and looking to move into the space, we're going to connect with you through that SCAN initiative. So as Dottie said, we don't quite know yet what we don't know, but I think as we get toward the end of 2024 and move into Q1 of 2025, as these component projects begin to gather speed, we're going to have ample opportunities for companies to connect with the component projects. And one more piece, and maybe the most important that I left out is through the workforce project. If you are an individual in our region, if you are looking to upskill, if you're looking for a career shift or if you're currently on the economic sidelines and looking for desperate economic opportunity, that Step Up program is going to provide an on-ramp to steal the State's acronym to build your skills and create a career pathway within a space that is growing, that's vital to our community, vital to our broader region, and vital to our national and economic security. So this is all about supporting those in our region and continuing to expand opportunities for them. Well, Ben, Dottie, Joe, thank you all so much for your time today. It was great talking to you. Thank you Katie. CenterState CEO's podcast Talk CNY, presented by NBT Bank is available on clickcny.com and all major podcast platforms. After each episode, you can join us on Click, where we'll continue to talk about this topic and provide additional resources and links. 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