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Technology and Culture 42.2 (2001) 236-264

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Regional Disadvantage
Replicating Silicon Valley in New York's Capital Region

Stuart W. Leslie


"New York's Tech Valley"? To a skeptic, or a venture capitalist, that slogan, coined by the Albany-Colonie Regional Chamber of Commerce, might sound more like wishful thinking than a realistic plan for regional development. 1 To outsiders the Capital Region of New York more often symbolizes the achievements of the first American industrial revolution, not the promises of the second. Troy may have been the "Silicon Valley of the Nineteenth Century," as P. Thomas Carroll dubbed it, home to Rensselaer Polytechnic Institute (RPI), the best engineering school of mid-nineteenth-century America, and to some of the country's biggest high-technology enterprises, including Burden Iron Works, Gurley Precision Instruments, and the Watervliet Arsenal. 2 Today its economic future looks as bleak as the view from RPI on a winter afternoon. [End Page 236]

Just a quarter century ago, however, local politicians, corporate executives, and academic administrators sincerely believed that the right strategies and investments could once again make Troy a center for high technology. Led by Jack Welch, chairman of General Electric (GE), the region's largest high-tech employer, George Low, the dynamic new president of RPI, and Hugh Carey, governor of New York, the Capital Region in the mid-1970s launched a series of bold initiatives consciously borrowed from the experience of Stanford University and Silicon Valley: academic "steeples of excellence"; corporate-funded interdisciplinary centers in strategic engineering specialties; a business incubator (which even Stanford didn't think of); a technology park; and--the culmination of their vision--a state-funded Center for Industrial Innovation (CII), which now bears George Low's name.

Yet for all they accomplished in transforming RPI, they could not overcome the regional disadvantage that kept them from competing effectively with emerging high-technology centers in other parts of the country. 3 Their failure provides striking confirmation of the arguments advanced by economists Michael Fogarty and Amit Sinha about the difficulties that older regions encounter in trying to imitate Boston's Route 128 and California's Silicon Valley. 4 Without a strong regional industrial base to capture and hold the innovations being generated by CII and its other steeples of excellence, RPI ended up exporting its best ideas and best graduates to other places, including Silicon Valley itself.

Low and his backers had the right plan in the wrong place at the wrong time. Long before it became fashionable, Low was talking about restoring American competitiveness through an increased emphasis on manufacturing research, productivity, and innovation. Before other states jumped on the bandwagon, he was trying to convince New York politicians and industrial leaders that an investment in academic infrastructure would be essential to match competitors in other regions and other countries. In some respects, he appreciated the secrets of Silicon Valley's success better than the men who had built it. Yet even Low could not foresee just how quickly the economic climate of New York would change, how suddenly the economic giants he had counted on to realize his vision--GE, IBM, Kodak--would be fighting for survival in a new world order where the very notion of an economic [End Page 237] region would become problematic. Low's corporate partners would survive, and some, notably GE and IBM, would eventually thrive, but they would do so in part by shifting their resources to other regions. 5

Low and his allies also tended to overestimate the importance of the research university as a catalyst for regional economic development, a common enough mistake then and now, and to underestimate the importance of a comparable investment in business infrastructure and in the institutional "intermediaries," as Fogarty and Sinha call them, essential to making the vital link between R&D and manufacturing. They learned the hard way that even a very strong engineering school with committed corporate partners could never be more than one component, though a key one, in a successful regional economy. As Richard...


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