Economic Impact of New York’s Nanotechnology Investments

Abstract

Despite ongoing skepticism in some quarters, the economic payoffs for the Capital Region from New York’s investments in nanotechnology have been substantial, particularly in regard to employment. Indeed, the benefits for the region in terms of jobs, investment, and growth have exceeded all forecasts. The substantial investments required to attract GlobalFoundries to the region have resulted in a great many more jobs than were either anticipated or required. Instead of 1200 jobs, GlobalFoundries actually created over 3500 direct jobs at the Luther Forest site, while preserving some 2000 jobs at IBM’s former operation in East FishKill. GlobalFoundries’ presence reflects roughly $17 billion in private and public investments in facilities and equipment. Moreover, the state and private investments in CNSE created another 4000 jobs within CNSE and its industrial partners in Albany, although this number has recently declined to closer to 3400. Direct employment gains of over 9000 jobs have been complemented by large numbers of indirect jobs, that is, those within the GlobalFoundries supply chain. In an unanticipated development, construction jobs have ranged as high as 3500 at some points, and hundreds of construction workers are still active at the GlobalFoundries site in Malta/Stillwater. The high salaries associated with high-tech employment have also had major ramifications for the growth of the regional economy, thereby creating thousands of induced jobs in sectors as diverse as hotels, restaurants, banking, and retail sales. Depending on the multipliers used, the indirect and induced jobs range from 20,000 to nearly 50,000 with the higher numbers more accurate. Total direct, indirect, induced, and construction jobs attributable to nanotechnology are in the 60,000–80,000 range. In short, the dynamic effects of the initial investments have resulted in massive private-sector investment, thousands of high-quality, high-tech related jobs, while also providing major reputational gains for the region.