German visitor offers tips from tech valley

PHOTOGRAPHER: Stephen Williams

The GlobalFoundries computer chip plant will bring opportunities to attract high-tech businesses, but the Capital Region can’t expect to emulate how other tech-oriented regions developed, Capital Region officials and business leaders were told Thursday.

“You have a challenging time ahead of you, and you have to find your own way,” said Martin Gillo, former economic affairs minister for the German state of Saxony, who spoke Thursday at Hudson Valley Community College’s TEC-SMART building.

Gillo was in the region to impart some of the lessons learned in Germany’s Silicon Saxony as it developed from the former East Germany in the 1990s.

Gillo and David Lawrence, a consultant from Hillsboro, Ore., visited the Capital Region this week at the invitation of the Center for Economic Growth to discuss the region’s preparations for the arrival of GlobalFoundries.

Gillo compared the arrival of the big computer plant in the Capital Region to becoming a parent for the first time — you can prepare for it, but after the birth “then everything changes.”

“Be prepared to look at the world in a whole different way,” he said.

Gillo said GlobalFoundries can have a long and productive relationship with the area, but only if people don’t start to take the corporate giant — what he called a “bear” — for granted.

“After 10 years, the tendency is to take the bear for granted, and that’s very dangerous,” Gillo told an invitation-only audience of about 150 people at TEC-SMART.

GlobalFoundries is building a $4.2 billion computer chip fabrication factory at the Luther Forest Technology Campus. It is scheduled to open in 2012, and directly employ 1,400.

Regional economic development officials are now trying to figure out the best ways to prepare for, and appeal to, the dozens of medium- and small-size companies that will come here because of the chip plant.

They will come, both Gillo and Lawrence said.

“We have five giants, 1,200 small- and medium-sized enterprises and a total of 44,000 employees [in high-tech],” Gillo said about the state of Saxony. “I can tell you that that will be here in five to seven years if you do things right, but the progress is not linear.”

Gillo is a former manager of AMD’s manufacturing facilities in Dresden, which are now owned by GlobalFoundries. He was economic affairs minister for Saxony, and now serves in the Saxony state parliament.

Gillo said there will continue to be chip factories in the United States and Europe because of their productivity, and because the U.S. and Europe provide better protections for intellectual property rights.

Lawrence said GlobalFoundries’ decision to locate in Malta is significant because of the worldwide competition for such facilities.

“The reason GlobalFoundries’ investment is so profound is that domestic investment in a fab is really very rare,” said Lawrence, who was deputy city manager in Hillsboro when Intel was building chip plants in that western Portland suburb in the 1970s and 1980s. The area became known as “Silicon Forest.”

The fact that it will be a foundry plant — making chips for many different customers — should give GlobalFoundries stability during industry downturns, Lawrence said.

Capital Region leaders spent more than a decade preparing for and trying to land a chip plant, with much uncertainty and public skepticism remaining until GlobalFoundries broke ground at the Luther Forest Technology Campus last summer.

“You’ve sort of climbed that first steep hill, and the question is what you do now,” Lawrence said. “Do you go down into the valley, and then look for that next steep hill to climb?”

Dennis Brobston, president of the Saratoga Economic Development Corp., met separately with Gillo and Lawrence on Wednesday, and also attended Thursday’s presentations.

“The message I heard was to be prepared, and that you really have to go out and promote the area,” Brobston said. “We really have to step up the marketing, because the state isn’t doing it. We have to do it.”

Gillo said people in the Capital Region need to realize how lucky they are to have GlobalFoundries coming, bringing with it new manufacturing jobs.

“In this time of economic uncertainty, having a beacon with deep economic pockets that can provide some certainty for 10 years is something a lot of regions wish they had,” he said.