After Albany Molecular Research Inc. held its initial public offering of stock a decade ago, Thomas D’Ambra could barely hire scientists fast enough to keep pace with his chemical research and development company’s rapidly growing list of biotechnology and pharmaceutical customers.
But it was a short-lived boom, abruptly undone by the Sept. 11, 2001, attacks and the recession that followed it. As the nation’s economy slowed, many biotech and pharmaceutical companies opted to send their research and development contracts to less expensive outfits in China and India, resulting in a domestic slowdown in demand for those services. Even as the slowdown claimed many AMRI rivals, D’Ambra did not cut his staff.
“We kept everything the same as we weathered the last recession, and we basically got punished for it from Wall Street,” said D’Ambra, AMRI’s chairman, president and chief executive officer.
Now, as D’Ambra navigates through the recession that started in December 2007, his commitment to AMRI’s work force is not changing. His steadfast position is largely due to the company’s global research and development network, established in the wake of the last recession.
AMRI’s payroll resiliency is a trend that has played out throughout the Capital Region’s professional, scientific and technical services sector. As most of the region’s primary job growth engines — including the construction, retail and state government sectors — stalled in 2008, the science and technology sector continued growing.
AMRI ended 2008 with 760 employees in the Capital Region, up from 710 in 2007 and 530 in 2001. Even with economists forecasting the recession to last another year, D’Ambra said AMRI will continue hiring scientists in 2009 and will likely have to consider establishing more U.S. laboratory and manufacturing operations.
Although the science and technology sector shrank slightly during the years of the 2001-2002 and 1990-1991 recessions, local industry experts said they expect it to continue making gains through the current economic downturn. The sector’s outlook remains bright, with research and development playing a critical role in the long-term viability of AMRI customers and members of the computer chip consortium Sematech at the University at Albany.
“That’s the last thing they’re going to cut because they realize their competitors are going to keep spending,” said Michael Fancher, vice president for business development and economic outreach at UAlbany’s College of Nanoscale Science and Engineering.
R & D spending increase
U.S. spending for research and development enterprises this year is projected to increase 1.75 percent to $383.5 billion. Minus the impacts of inflation, spending will actually decrease 1.6 percent, according to a December report by the Battelle Memorial Institute.
Battelle, a Columbus, Ohio, nonprofit applied science and technology company, attributed this year’s forecast decline to a 2.9 percent decrease in federal support and a 1.3 percent drop in institution funding in inflation-adjusted dollars.
Global research and development spending, however, is projected to rise 3.2 percent in non-inflation adjusted dollars. And even as research and development spending slows domestically, industrial support of academic research is expected to increase slightly, along with international collaboration.
The collaboration trend would bode well for the NanoCollege, where a host of international technology companies conduct research. They include International Business Machines in Armonk, Advanced Micro Devices in Sunnyvale, Calif., Vistec Semiconductor Systems in Weilburg, Germany, and Tokyo Electron in Yokohama, Japan.
“In spite of the detailed historic data that are available, there is a growing need for more detailed information on the expanding role of international cooperation,” Battelle Senior Research Scientist Jules Duga said in a statement.
As though on cue, the day Battelle released its 2009 research and development forecast, a German manufacturer of chemistry applications for the nanotechnology industry announced it would expand its operations at the NanoCollege. That announcement came less than a year after the Berlin-based Atotech established at the Albany campus a $5 million research and development program for the exploration of advances in copper plating process technologies.
By the end of this year, Atotech will employ 22 workers in Albany. Two of those employees will be the company’s worldwide and U.S. sales executives.
Atotech Vice President of Semiconductor Technology Robert Preisser called the NanoCollege the “perfect place to locate” his company’s executive sales force because of the facility’s “access to unparalleled intellectual and physical resources and a growing number of global nanoelectronics companies.”
“At a time when the world has become more global, the need for these companies to work close together has increased. So that’s why they’re clustering here,” said Fancher.
When Fancher started working at the NanoCollege in 1997, the fledgling school had only six employees and about 30 graduate students.
By the time the NanoCollege was named a Center of Excellence in Nanoelectronics in 2001, 72 people worked there. Last year, that figure reached 2,200 and it is projected to hit 2,500 this year. A vital component of the research many of those workers conduct incorporates the 200mm and 300mm computer chip wafer facilities in the school’s 450,000-square-foot facility off Fuller Road.
It was AMRI that planted the seed for “Tech Valley,” the name for the 19-county region coined by the Albany-Colonie Regional Chamber of Commerce. D’Ambra’s company sought the chamber’s assistance in attracting qualified workers to the area. The chamber’s solution was a branding campaign, which was unveiled at AMRI’s headquarters in 1998.
When “Tech Valley” made its debut, the Capital Region’s professional, scientific and technical services sector consisted of 22,700 workers. By 2007 that figure climbed to 28,100, according to state Department of Labor statistics.
The science and technology sector still accounts for only a fraction of the region’s private sector, which averaged 340,500 jobs in 2007. But the 5,400 jobs the science and technology sector added to its ranks between 1998 and 2007 accounted for 20.6 percent of the private sector’s net growth during that period.
The Labor Department will complete the sector’s final and revised job tally for 2008 in March.
The lion’s share of the science and technology sector workers come from the research and development field. Others work in everything from computer systems design services to architecture and engineering services and legal services. Veterinarians and photographers are even lumped into the sector.
In many ways, the science and technology sector’s gains have helped offset losses in the manufacturing sector. Manufacturing has bled 5,800 jobs in the nine-year period starting in 1998, ending with 23,000 workers.
Manufacturing’s decline largely left the region with a service-oriented private sector. Up until last year, the retail and leisure and hospitality sectors were among the region’s leading job growth drivers — a trend often criticized for replacing high paying jobs with low-paying ones.
“It’s a transition from the old manufacturing economy to the service economy, and this is the high-wage portion of that,” Labor Department Market Analyst said of the science and technology sector’s labor gains.
The 2007 average salary for a worker in the science and technology sector was $64,000, compared to $58,000 in manufacturing. The average for all jobs regionwide was $42,000. But unlike the “old manufacturing economy,” today’s high-wage science and technology jobs require a significant amount of education and training.
“In terms of replacing jobs for high school graduates, it doesn’t help that, but in terms of high-wage jobs it does,” Ross said.