The Chronicle of Higher Education: Government & Politics
From the issue dated February 7, 2003


If You Build It, They Will Come

How SUNY-Albany shocked the research world and reaped a bonanza worth $850-million (and counting)

By SARA HEBEL

Albany, N.Y.

Alain E. Kaloyeros paces the edges of a conference room at the State University

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of New York here, a small dark gray cellphone pressed to his ear. The physics professor-turned-dean is connected to the governor's office, bantering with staff members as if they were old friends.

His voice, tinged with an accent that blends his French, Greek, and Lebanese roots, is familiar at the State Capitol. Indeed, most residents of this region have heard of him by now.

Mr. Kaloyeros's affable but aggressive nature, along with his zest for research in computer-chip technology, has landed him at the controls of what some upstate New Yorkers are calling the most promising economic-development engine since the opening of the Erie Canal, in 1825.

Thanks largely to the efforts, over the last several years, of Mr. Kaloyeros -- as well as SUNY-Albany's president, Karen R. Hitchcock, and New York's governor, George E. Pataki -- about $850-million from private companies and the state has begun pouring into nanoscience research at Albany. The hype began to build in the spring of 2001 when IBM and the state pledged $150-million to upgrade facilities. The crowning success came last summer when International Sematech, a consortium of 12 semiconductor makers, agreed to spend $193-million over five years to establish a center here that will focus on researching the use of extreme ultraviolet light to make faster microchips. The State of New York pledged to contribute another $210-million, and since then more money has flooded in. Last fall Tokyo Electron Ltd., a Japanese company that manufactures tools used to make microchips, announced that it would create its own research center here, its first outside of Japan, providing the university $200-million over seven years. New York State will pitch in another $100-million.

Suddenly, nanoscience research (in which atoms are manipulated to produce advances in technology and other fields) has become synonymous among upstate New Yorkers with the promise of economic good times. Snagging the deal with Sematech, which was formed in 1987 to boost the competitiveness of the semiconductor industry in the United States, has spurred euphoric regional hopes that the consortium's presence will create hundreds of jobs, spawn start-up companies, and entice more college graduates to stick around. The "Sematech effect," after all, led to an economic boom in Austin, Tex., where the consortium settled its headquarters in 1988.

The Sematech deal sent shock waves through the world of nanotechnology research. First of all, Sematech, SUNY-Albany, and New York officials kept their talks mum, and many universities and states had simply looked past Albany as a logical choice for such a large endeavor. But some researchers also just question the wisdom of picking SUNY-Albany over a traditional research powerhouse, such as the Massachusetts Institute of Technology, and voice concerns about whether such a close partnership between industry and a university gives too much control to companies over research priorities.

SUNY-Albany officials, though, see themselves as pioneering a lucrative, intellectually vibrant model for higher-education research, distinguished by their encouragement of companies to nest on university turf. It is no accident, university officials say, that Sematech and others chose SUNY-Albany for their largess, and the academics believe that the windfall is speeding their efforts to elevate Albany's image and reputation above that of a second-tier university tucked into an industrial Northeast city.

Sitting inside a spiffy five-year-old nanotechnology building, two of the coup's chief planners -- Ms. Hitchcock and Mr. Kaloyeros -- verge on giddiness when describing the scope of SUNY-Albany's research facilities.

"Did you expect to see all of this," asks Mr. Kaloyeros, with a broad smile, "in the middle of upstate New York?"

Pairing Up

"All of this" refers, in part, to the nanoscience research facility, sometimes dubbed the "skyship" for its white aluminum sides, green glass windows, and white instrument tower. The building is already packed with three floors of researchers, many clad in white full-body suits, working on more than a million dollars' worth of tools for manipulating molecules and crafting computer-chip prototypes. Outside, construction workers are putting the finishing touches on a second structure, which will house Sematech, and they are making space for a third building, scheduled to be finished this fall.

Mr. Kaloyeros, who leads Albany's graduate school of nanosciences and nanoengineering, and Ms. Hitchcock are recalling how they achieved what may have seemed impossible just a decade ago.

Since she ascended to the presidency here in 1995, Ms. Hitchcock has led the institution on an upward spiral. High-profile research has drawn state aid and federal grants, and in turn led to the creation of cutting-edge facilities and a slew of business partnerships in nanotechnology, as well as in biotechnology. The growing scientific might of the university -- known 15 years ago primarily for its teachers college, business school, and physics department -- now reflects the background of Ms. Hitchcock, who holds degrees in biology and anatomy.

As they talk, the president and the dean nearly trip over one another in their efforts to praise each other for SUNY-Albany's high-tech deal-making feats. The institution's "blend of faculty," Ms. Hitchcock declares at one point, made it possible to build a relationship with Sematech.

"Working with the president makes it possible," Mr. Kaloyeros counters.

Ms. Hitchcock looks sternly at Mr. Kaloyeros. "Enough, Alain," she admonishes, though her face quickly melts into a warm smile. "You can see why he's so successful at what he does."

The dean catches on: "You mean butt-kiss?"

Mr. Kaloyeros, 47, came to the university in 1988 after getting a doctoral degree in physics from the University of Illinois at Urbana-Champaign. He first caught the eye of Ms. Hitchcock in 1993, when she was still the university's vice president of academic affairs. That year, Mr. Kaloyeros helped convince the state to establish a Center for Advanced Thin Film Technology at SUNY-Albany with the goal of moving more research advances from the university into the marketplace. The state provided $1-million annually over the next decade for the center, which was to be matched by private dollars. Mr. Kaloyeros, whose specialties include using thin-film technology to improve the circuitry of microchips, was named the center's director.

Ms. Hitchcock says it was clear then that he shared her belief that universities need to develop strong, broadly based research that includes the study of fundamental problems as well as work that develops practical applications. What's more, he appeared to have the charisma -- and the clairvoyance -- needed to work well with industry officials and to stay a step ahead of their needs.

Winning Over the State

Mr. Kaloyeros leans back in his chair and crosses his arms as he explains how, in the mid-1990s, it was rare for SUNY-Albany and other research institutions in New York to receive more than $100,000 annually from state lawmakers for research projects through the normal appropriations process.

But in 1997, officials from SUNY-Albany and nearby Rensselaer Polytechnic Institute went into a meeting with state lawmakers armed with $15-million of requests for nanoscience-related operations. "We said, screw this $100,000 investment," Mr. Kaloyeros recalls. "To the credit of the state, they recognized the need."

A year later, university officials began to work closely with advisers to Governor Pataki, as SUNY-Albany became one of four primary sites -- along with the Georgia Institute of Technology, MIT, and Stanford University -- for a national research "focus center" program established by a U.S. Defense Department agency and a semiconductor association to address long-term challenges to increasing the speed and performance of computer chips.

Mr. Pataki recognized the economic-development potential of the state's universities. The governor and his advisers were also aware of the nanoscience work being done by Mr. Kaloyeros and SUNY-Albany and were impressed by the focus center and other programs they were bringing to New York. A 1999 report published by the National Science Foundation that Mr. Kaloyeros and the governor's higher-education aide brought to Mr. Pataki's attention tagged high technology and biotechnology as emerging industries. With upstate New York experiencing a sluggish economy, the report piqued Mr. Pataki's interest.

The governor, known for his fiscal conservatism, has regularly been criticized for proposing austere budgets for public colleges and state student-aid programs. But Mr. Pataki has proved more generous with higher-education research endeavors. In his 2001 State of the State address, the governor announced that New York would spend $250-million over five years, and pull in $750-million from businesses, to create "centers of excellence" for specific research at campuses in Albany, Buffalo, and Rochester. (More centers have since been established at other campuses.)

In Albany, IBM served as the initial partner for a nano-electronics center. The company, which had just built a computer-chip-making plant 100 miles south of Albany, 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-millimeter diameter. That size is the emerging industry standard and will allow companies to make higher-power computer chips than they can with 200-millimeter wafers. New York State added $50-million.

"IBM's investment opened the door," Mr. Kaloyeros says, "to give us credibility for attracting other investments."

The Overture to Sematech

The pitch to Sematech was made that fall, the day before September 11. Leaders from the consortium were coming to Albany for a university-sponsored symposium on global nanotechnology. After their plane touched down at Albany's airport, SUNY-Albany officials prodded the visitors to make a small detour on their way to the conference, to the campus's nanotechnology complex, a mere 15 minutes away.

Sematech officials went along. Most of them were already familiar with the skyship's laboratories and equipment, but many were pleasantly surprised by the scope of the university's development plans and by the depth of the state's financial support. From there, they sped an hour up Route 87 to the symposium at the posh Sagamore resort on Lake George.

Inside the hotel's ballroom, which was packed with 300 people, Governor Pataki was seated next to Louis Tomson, a developer from New York City, and the two were discussing fuel cells. But Mr. Kaloyeros quickly worked to connect the governor with Robert Helms, Sematech's president.

"I was like, 'Lou, would you please move?'" Mr. Kaloyeros recounts telling Mr. Tomson.

Mr. Tomson did, and after lunch Mr. Pataki and Mr. Helms chatted for another 45 minutes about a potential partnership. That talk helped convince Mr. Helms and Sematech officials that state leaders were committed to pouring money into research at Albany. Shortly after the symposium, Mr. Kaloyeros says, "We got the governor's directive to engage with Sematech."

The next 10 months of discussions with Sematech were limited to a small group of players: Mr. Kaloyeros and Ms. Hitchcock, Mr. Pataki and his higher-education aide, and about five people from Sematech.

In dozens of hush-hush meetings -- held in Austin and in Albany, and at airports in between -- the state, the university, and Sema-tech hashed out a business plan. Mr. Kaloyeros points to a black podlike speaker phone on the deep-cherry-colored table in the skyship facility's conference room to note how many of the negotiations were conducted over the winter and spring.

Some conversations, which ranged from a few minutes to four hours long, were "more aggravated than others," Mr. Kaloyeros recalls. There were some Friday afternoons, as many as 10 along the way, on which he says he thought the deal was collapsing.

Cutting a Deal

State officials went back and forth with Sematech on dollar figures. University and Sematech officials say they stumbled over the specifics of intellectual-property rights, who would control research developments and who could share in the fruits of that research. Motives were sometimes questioned as draft after draft was drawn up: "Even if there was a typo, somebody would not be willing to give you a break," Mr. Kaloyeros says.

By March, though, Sematech had proposed several research programs. The ideas were then narrowed. Eventually it became clear to Sematech officials that what they really needed was a research center focusing on extreme ultraviolet-light technology. That seemed like a perfect fit for Albany's 300-millimeter-wafer facilities and its expertise in the interconnections of microchips. And IBM could contribute its strengths in lithographic research to that field, consortium officials say.

Still, some had lingering doubts about the desirability of SUNY-Albany as a partner in a megaresearch project. In late June, Sema-tech's executive steering-council members visited the campus to get a clearer picture of the university's capabilities and the scope of the project.

"There were some skeptics across the industry who asked, Why is Albany building a 300-millimeter facility? and What are they going to do there?" says Dave Anderson, Sematech's director of corporate relations. Many Sematech officials didn't doubt SUNY-Albany's potential, he notes, but for those council members who were less familiar with the work being done at Albany, the campus visit raised their comfort levels. They felt more confident in Albany's potential after seeing the scope of the facilities being constructed and hearing more about the grand plans of SUNY-Albany and the state for supporting research there.

On July 18 came the earth-shattering news (in Albany, at least). Sematech, SUNY-Albany, and state officials convened at the skyship's rotunda and announced a $403-million partnership. The atmosphere was festive. Nearly 400 people, packed into the first floor of the rotunda and lined along the railings of two levels of circular balconies overlooking the podium, cheered as Governor Pataki trumpeted the good news. A gleeful Ms. Hitchcock and Mr. Kaloyeros presented Mr. Pataki with a framed New York license plate reading "MR HITECH."

"This means almost literally that the future, the 21st century, is being developed in upstate New York," the governor said, "and the centerpiece is going to be right here."

Sematech, which will eventually bring about 30 people to Albany, will manage the joint research project, define the technical scope of the work, and help conduct the research. The university will control the facilities, help staff the project, and contribute $160-million in cash to the project as well as $120-million worth of equipment and intellectual property.

News of the announcement was splashed across the front pages of the next day's editions of The New York Times and the Albany Times Union. "The future is now," one Albany headline proclaimed. Articles talked of "lofty hopes" for the region and testified to the "magnetic" power of Sematech in Austin.

An Encore

The same month the Sematech announcement was made, Mr. Pataki toured the new IBM chip-manufacturing facility in East Fishkill, N.Y., with Mr. Kaloyeros and others. The governor asked where the plant's tools were made and noted that he wanted to woo an equipment manufacturer to New York.

So the same players in the governor's office and at the university who negotiated with Sematech went to work. After three months of phone calls and meetings, Mr. Kaloyeros flew to Japan last October to meet with Tokyo Electron officials. As soon as he arrived, he says, he had a feeling that things were going to work out.

An aficionado of Starbucks, he was craving his favorite -- venti-size nonfat latte -- after the long flight. As he left the airport to take a train into Tokyo, he spied a Starbucks branch at the foot of the stairs. "I thought, If I'm getting all my wishes today, this is a good sign," he says.

By November, the deal was set and the rotunda scene was repeated. This time, the governor came to announce the $300-million state and university partnership with Tokyo Electron.

"Due to our success with Sematech, we are the envy of many states and nations," Mr. Pataki gloated in his State of the State address this year, "and after that important announcement, many wondered what we would do for an encore. They are not wondering now."

Welcome to Geekland

Despite the large size of the Sematech agreement, and its role in drawing Tokyo Electron to Albany, consortium officials feel compelled to play down some of what they say is "hyperbole" about their partnerships' likely effects on the semiconductor industry, and upstate New York. As one spokesman put it, "We are the seed, not the oak."

Some university researchers go further, voicing concerns that the partnership is not only overhyped but misguided. SUNY-Albany, they say, may be building up its facilities, but it would take more than a decade for the campus to be able to consistently compete for the very top graduate students and professors that flock to traditional powerhouses, such as the University of California at Berkeley. Some also question the wisdom of building a research program so heavily controlled by industry desires.

"For a mediocre university to start thinking of doing research for industry is probably not the wisest idea," says Krishna Saraswat, an electrical-engineering professor at Stanford University who has worked with SUNY-Albany in national research focus groups.

Furthermore, he says, institutions need to focus on shaping the nation's long-term priorities on fundamental research problems with wide applications. SUNY-Albany's arrangement with Sematech to help create next-generation technology for companies, Mr. Saraswat says, amounts to "fighting fires" on research fronts that have limited applications and look less than 10 years into the future.

Public-interest groups also worry when state universities embrace such close ties to industry. Those arrangements often place the value of quickly moving research advances to the marketplace over academic values of free inquiry, argues Virginia A. Sharpe, director of the Integrity in Science project at the Center for Science in the Public Interest.

Many researchers and industry officials, however, praise SUNY-Albany officials for their vision and commitment to building highly competitive research facilities. They say it is an unusual approach in higher education, one that focuses on identifying an area of research to pursue and then assembling an aggressive team to win money and equipment to pull in top researchers and key investors.

"That's a very gutsy model," says Jim Ryan, director of advanced materials and process development at IBM. "Investment and commitment can be more important than the fact that you've got the world's leading expert."

And SUNY-Albany officials write off the criticism as sour grapes and insist that "mediocre" is flat wrong: SUNY-Albany, Ms. Hitchcock says, has "world-class excellence" in its niche fields, such as nanotechnology, biotechnology, and sociology. Anyone who questions the value of the Sematech partnership with Albany, she adds, "questions the judgment of the industry leaders whose research and development are their future."

She says she will remain vigilant about the university's relationships with industries and asserts that they will never overshadow the university's "core mission" of open intellectual pursuits. She will not agree to any contracts, for instance, that limit students' ability to publish their findings or students' choice of project type.

"We're taking traditional academic values, and blending them with the needs of partners," she says. "Within the institution, it is bringing with it a new perspective of learning for students and an awareness that what they are doing is not in a vacuum."

"Even though everything we do is in a vacuum," Mr. Kaloyeros chimes in, smiling sheepishly, alluding to the fact that much of nanotechnology research must, literally, be done in perfectly filtered "clean rooms."

Ms. Hitchcock shakes her head with mock exasperation.

"I'm a geek," he declares. "What do you expect?"

Mr. Kaloyeros and his team wear that label as a badge of honor these days. As the governor told an audience at the university last week: "Our geeks are going to out-geek any other person in the country, and the high-tech future of America is going to occur in Albany and New York State."


EMPIRE-BUILDING

The State University of New York at Albany and the State of New York have, for the past several years, been amassing expertise in nanosciences, in which atoms and molecules are manipulated to produce advances in technology and other fields. The goal was to attract researchers, companies, and jobs to the region. Their efforts paid off in 2002, when Sematech, an international consortium of semiconductor makers, and Tokyo Electron Ltd., a manufacturer of tools to make microchips, announced they would spend hundreds of millions of dollars to build research facilities at the Albany campus.

October 1993: The State of New York establishes a Center for Advanced Thin Film Technology at SUNY-Albany and provides $1-million annually over the next decade.

June 1997: SUNY-Albany opens a $13.5-million facility that houses top-quality laboratories and equipment for high-technology research. This is the first of what will become a three-building complex for research and development in nanosciences.

August 1998: SUNY-Albany is chosen by federal and industry officials to serve as one of four primary sites for a national research "focus center" on computer-chip technologies.

January 2001: Gov. George E. Pataki proposes that New York spend $250-million for three high-technology "Centers of Excellence," including a Center of Excellence in Nanoelectronics at SUNY-Albany.

April 2001: SUNY-Albany announces the creation of a School of Nanosciences and Nanoengineering that will offer doctoral and master's-degree programs. The same month, IBM pledges $100-million to SUNY-Albany -- the company's largest gift ever to an institution of higher education -- to support research on the design and manufacture of ultrathin silicon wafers with a 300-millimeter diameter. New York says it will provide an additional $50-million.

September 2001: Conversations between Governor Pataki and Robert Helms, Sematech's president, during a symposium on semiconductor issues lay the groundwork for negotiating a partnership among SUNY-Albany, the State of New York, and Sematech. SUNY-Albany sponsored the symposium, which occurred at the Sagamore Hotel on Lake George.

July 2002: SUNY-Albany, Sematech, and New York officials announce an agreement in which Sematech will create a $403-million research-and-develoment center to expand the study of nanosciences at the university.

November 2002: SUNY-Albany, Tokyo Electron Ltd., and New York officials announce a $300-million agreement in which the company will create a research-and-development facility at the university.


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Section: Government & Politics
Volume 49, Issue 22, Page A16


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